The Mining Play

Cerro/Medinah/Auryn- 2018 Q2 General Discussion ⛰


#308

Remember that MDMN shareholders ( including Masglas connected investors ) were scammed out of 50% of our investment when it was disclosed that the MDMN outstanding share count was 3 billion instead of 1.5 billion due to Les’ antics.

It may be their plan to try and make remediation by segregating CDCH solely to the ADL claims ( because they were not victimized by fraud ) and keeping MDMN as a 23%+ shareholder in Auryn. If Auryn takes on new claims or projects then MDMN will benefit as well.


#309

For everyone’s sake Karl… Just say the words…

Medinah owned 100% of the properties, some have been added and some have been lost… We don’t know exactly how much
WHY

Medinah was selling first then giving our properties away.
Again Why

Medinah gave our properties to whom we thought was a company that was to put our properties into production.
What Happened to That

Medinah was again diluted for some reason beyond our comprehension.
Again Why, Where’s the Proof

The properties were then SOLD back to CDCH…
How many and what value are they
Again, Why, and Why Don’t We Know

Seem’s Medinah has put quite a bit out, We still have no more information than when we started, were still looking for a " Production Partner " .
We have no money, no shares to invest, we own stock in three entities that to our knowledge are completely worthless ( we have nothing to show otherwise). Now we need to get a new partner that will delute us further…

Yet were supposed to have Blind trust that things are going forward…
BLIND is CORRECT

All that to say what Karl is saying… Why, What did this whole thing do for Medinah? and why wouldn’t the company that was going to put this mountain into production merger with our sister company instead of giving them title to properties we had?

It’s time to “Cowboy Up”.

Just for the record, I understand why and where we are at this point but I also understand why Karl is asking questions and throwing up red flags…

Still, scratching my head…


#310

Isn’t auryn selling the properties to cdch? Why are you assuming that after the sale mdmn won’t still own an interest in auryn?


#311

Auryn received 6.65 billion shares plus CDCH gave back their 5% interest in Auryn, Medinah still owns 23.6% of Auryn but many feel that that will also be deluted to a smaller amount.


#312

If I recall, 22 or 23% was the estimate for the final Auryn ownership before the conversion. I expect little if any further dilution beyond that.

There will some property dilution due to JV partner(s) but happily the mountain has multiple deposits that either individually or as a total would be considered World Class deposit.

Some how, some way Medinah’s position in a World Class deposit remains exceptional compared to other junior’s and really just needs Auryn to execute their plans stated last Fall.

It should be very clear to all that Cerro is the vehicle that Auryn intends to make their money on their investment. At some point, they will start to promote and execute JV’s, and start full mining production at the Caren, Fortuna and probably the LDM as well.

I suggest allowing a little more time for the smoke to clear.


#313

Smoke?? More like mushroom cloud!


#314

Smoke ?? This whole thing is like a Cheech and Chong skit.
But instead of Dave" you could substitute… “our money”!
Dave’s, “not here”…!.. neither is our money…


#315

Volume is up, price is up.

At least we’re heading in the right direction at the moment.

oz


#316

Why is my question??? Outside of Golds excellent DD on the recent claim additions. Volume before news???


#317

I confess. I decided to take a loss on my two million shares that I have accumulated over the last 8 years. I wasn’t in a hurry so I put the sell in at 0028 and 003. I took 4 days to sell them. The way I see it, I can now take a 3K tax deduction for the next 13 years, if I live that long. I will probably start buying again after 30 days if the price is still in the 2’s. I didn’t do this because I had any special knowledge- just disgusted and frustrated. I am more mad at myself for not doing this years ago - just to think what I could have done with almost 40K.


#318

I confess, I’ve been buying more - sorry if I’m one of the ones contributing to your misery, but I’m putting money on my belief that the geological evidence we have (1) is good, and (2) will be permitted to flourish and be realized.

Number (1), comparatively speaking, is existent but is a relatively small risk in our case, as we have had reputable professionals (e.g. C.S Perez) tell us we are sitting on a world-class deposit. Also, we have had mid-tier/majors lining up to look at our mountain - I don’t think they waste their time just for the sport of it.

Number (2) above, it seems, is the biggest risk, in my opinion, as we have already been fleeced once - and we are just as amenable to this happening again. Sorry, it’s true, but I don’t believe the principals in control of this deal will do us yet again, but it can happen, so I am prepared.

The Diluton Issue: Maybe whatever dilution we end up suffering is counter-balanced by the extent of mineralization? Brecciaboy has graciously put this in perspective for us in the past.

Admittedly, the amount of money I’ve been putting into this stock as of late is low (5,000.00’ish), but my average price per share is getting … very low. I plan to throw away invest more in the near future, as I believe the mere official mention of a reputable major (e.g. Freeport) will clean up our image and inoculate us for the future, not to mention cause a lot of volume. Personally, I don’t believe a load of people invested in MDMN because of the stellar reputation of MDMN in the first place - I think they invested because they reviewed geology or knew someone who had (like on this board). As a result, I believe MDMN shareholders are comprised of a very small group of people (7,000 shareholders total?) and is currently an … opportunity which will be realized in the next year 10 years. If it does, I will make out very well, and will be happy.


#319

Hi mrbubba,

In regards to dilution, I’m not sure the point has been made yet that if a JV partner agrees to and follows through on , let’s say, a work commitment of “X” amount of dollars for a 25% stake in the Pegaso Nero, upon completion we shareholders will then hold a lesser stake in the PN subdivision of the ADL Mining District but it will be a PN of a value predicated on the value created by the work commitment. It takes money to block out MR/MR.

It’s OK for each shareholder to indirectly own a lesser percentage (“dilution”) of a more valuable asset. The mining major or mid tier miner has already assumed that their work commitment would indeed unravel more value than “X” amount or they wouldn’t have agreed to the deal. The assumption would be that the major or mid tier miner was sophisticated enough to agree to these terms and the terms met their risk/reward calculations.

The message is that “dilution” is actually a good thing IF, IF, IF the additional value created by the actions or funds of the new party exceeds the ownership percentage lost by the original parties. Without some form of dilution incurred by the shareholders of the corporation owning the assets the asset would remain with a fixed value. In this industry the value is hidden in the ground and it costs money/dilution to uncover it.

The CAPEX budget for the deposit or group of deposits in the case of a legitimate mining district like the ADL will determine what type of strategic alliance partner for which it might make sense to get involved. The super large majors may have a threshold of 2-4 million ounces of gold equivalent in order to even make it worth their while to show an interest. When Maurizio mentioned at the informational meeting that the parties that had already been attracted to the ADL were Freeport McMoRan and 2 parties even larger than them then I think a message was encased therein. Your average mid tier miner probably doesn’t have the RISK CAPITAL to throw at a project like this.

There is also a concept that might be known as “reverse dilution” from the point of view of shareholders of the company owning the assets. As the management team advances along the very secretive learning curve of what is contained within the mountain and where it is located they can lever this ECONOMIC ADVANTAGE and QUIETLY tie down mining concessions located in the direction the ore is trending. Sillitoe’s work no doubt jump started this process.

Just this week, we shareholders appear to have learned that they recently became the owners of perhaps a 12,000 or so hectare mining district instead of a 10,500 hectare. The hectares added were STRATEGIC HECTARES in that they wouldn’t have been added without the levering of the ECONOMIC ADVANTAGE of the party doing the exploration/development. These “pedimentos” are fairly inexpensive to acquire but their annual taxes/“patentes” will go up 5-fold when they become “mensuras” or exploitation concessions 2-4 years down the road. If the average value of these new hectares meets or exceeds that of the older concessions then we actually reversed some dilution.

In regards to “reversing dilution” by either cheaply adding strategic hectares or enhancing value due to the work of others, this process is going to go into high gear when any “massive” exploration effort is undertaken as alluded to by Maurizio in conjunction with what sounds like either multiple JVs with “specialists” in the deposit types featured at the ADL or perhaps a “consortium” of majors and/or mid tiers. As more and more MR/MR is being blocked out more and more institutional investors may take an interest since they now have some coverage from a liability point of view.

Management’s advancing along the learning curve can accelerate throughout time because they can always go back to the GIS database (layers of previously acquired computerized information) with newly acquired information. For instance, if management is drifting an adit in the middle of the mountain and they discover an anomaly they can always go back to the satellite survey or the aeromagnetic survey or the IP/IR surveys and see what the anomaly looked like on those surveys. If they see that particular survey “signature” elsewhere then there is a higher likelihood that this anomaly is located there also.


#320

Smart move. 30 days is a millisecond in this investment. Even if the stock doubled from here for whatever reason, and you bought at .006 in 31 days, the tax advantage would offset the opportunity cost. Seeing how nobody knows what is actually going on beyond another company (where we have no ownership), acquiring the rights to inexpensive neighboring hecatares it’s probably a safe bet to sit on the sidelines for 30 days. You may even want to wait until there is resolution on Karl’s primary concerns (which I share) related to what has been disclosed in the latest CDCH filings.

Either way, there’s no disputing the stock has been acting a little better. Maybe MDMN is just arbing back to the correct ratio with CDCH (which hasn’t done anything). Until/unless investors have a better handle for further diliution (related to remaining/forward liabilities, no a JV) this is just a crap shoot.


#321

Here’s some more “pure speculation” and conjecture that may or may not come to pass. More than 51% of shares in CDCH are controlled by foreign nationals which complicates the options from a regulatory compliance issue. One should carefully consider that CDCH and MDMN are both pink sheet companies that have minimum alternative reporting requirements.

Current Reporting of Material Corporate Events
OTC Markets Group encourages companies to make public disclosure available regarding corporate events that may be material to the issuer and its securities. Persons with knowledge of such events would be considered to be in possession of material nonpublic information and may not buy or sell the issuer’s securities until or unless such information is made public. If not included in the issuer’s previous public disclosure documents or if any of the following events occur after the publication of such disclosure documents, the issuer shall publicly disclose such events by disseminating a news release within 4 business days following their occurrence, and posting such news release through the OTC Disclosure & News Service.

It’s apparent from MG’s and CHG’s posts that AURYN has been tying up many claims in the entire region. AURYN, via CDCH, is transitioning from an asset acquisition phase to developing and expanding its current high potential portfolio. Many of these new claims appear to be associated with the PN CU porphyry (and LDM?), which has already been discussed as probable JV targets.

What is the next phase for MDMN and CDCH shareholders? AURYN’s majority interest is not yet free trading, and that’s when shareholders should expect to see the flow of information and promotion, not before, IMO. Early promotion will just rehash the pink sheet history we’ve already lived through and be more harmful than helpful in raising new operating cash, which is a primary purpose of a foreign private company entering the US public market. Entering the US public market must benefit both the US shareholder and the company for which it is going to fund. To be successful AURYN will need to secure regulatory approval for consolidating the capital structure and changing the name of the company. Initially, this will be necessary to have treasury shares (yes, dilution, but at a much higher share price and Market Cap after consolidation and the flow of positive news). CDCH will not release anything concerning mining operations and the plan for AURYN advancing a cash flow until CDCH shares are ready to become marketable, IMO. Because CDCH management will have authority for inking all JV deals there will be renewed interest with any announcement of a JV partner. Generally, I agree with much of Mr. Bubba’s post and anticipate a 5 year time frame for the following events to occur. I would be pleasantly surprised if it occurs sooner.

But I believe significant cash flows or a JV to be a first step for AURYN’s long term planning for moving to a higher exchange. AURYN will most likely be striving to move CDCH to the OTCQB® or OTCQX® tiers of OTC Markets via a strategic spin-off. This is going to be a multi-step process. We may have been looking at a move up to these higher exchanges all wrong. AURYN has recognition in the Spanish speaking markets and fully expects to be able to eventually trade on venture exchange companies via the OTCQB® or the higher tier OTCQX®. AURYN is looking to the future to be dual listed on the Chilean and/or Peruvian markets and use the OTCQX® International tier as an efficient and cost-effective secondary market for CDCH.

I agree with CHG and others that we did not undergo a so-called mini-IPO combining AURYN (a privately held foreign company) by taking control of an already publicly traded company (CDCH) in a reverse merger transaction. This was not the route chosen and allowed for fewer reporting obligations under the alternative reporting requirements. In my estimation a reverse merger was not chosen as a purely strategic move allowing for a future spin-off from AURYN.

The first step of a strategic spin-off is to structure and reach agreement with the publicly traded company as to the number of shares to be issued to that company. Instead, I would guess that AURYN will issue a part of its shares to CDCH shareholders AFTER all CDCH shares are free trading and the company has completed a share consolidation and name change. This will provide the seed money for developing a cash flow from exploiting the Caren main vein/Larissa adit. AURYN is currently being “incubated” in CDCH. When the Caren is producing a positive cash flow a portion of the AURYN shares will be spun-off to CDCH, the publicly traded company, creating a wide shareholder base for the privately held company in the United States. Thus, CDCH will become the publicly traded “parent” company as a wholly or partly owned subsidiary. It is part of a circular ownership model that I had presented quite some time ago.

Here is a short explanation:

Circular indirect ownership

Circular indirect ownership arises when two entities in a usually complicated corporate structure each part- own the other. One of them can theoretically fully own the other. The other can’t, as this structure would form a closed loop without any ultimate ownership from individuals. But in extreme cases, one entity can own 100% of the other, and be reciprocally 99% owned. The remaining 1% then comes from elsewhere.
https://www.bvdinfo.com/en-gb/blog/compliance-and-financial-crime/exploring-integrated-ownership-circular-and-aggregate

As a first step of such a strategic spin-off AURYN would plan to structure and reach agreement with the publicly traded company as to the number of shares to be issued to CDCH. Once the transaction structure is agreed to the necessary SEC documentation would need to be filed and approved. (Form F-1 registration statement?). This would cover those AURYN shares to be ultimately dividend-ed to the shareholders of CDCH, the publicly traded company.

In an F-1 filing:

The registration statement will set forth information about the spin-off company, its organization, business and properties and the background of the spin-off transaction, to be prepared by counsels for both the publicly traded company and the spin-off company. The publicly traded company will be acting as a statutory underwriter and will need to carefully review, through its management and counsel, the disclosure relating to the spin-off company. The spin-off company will need to include its historical and pro forma financial statements in the registration statement and file its material contracts as exhibits to the registration statement. To the extent the spin-off company does not wish to make public certain terms in its material contracts to be filed with the SEC, the company can make a confidential treatment request with the SEC relating to any sensitive business contract terms. Counsel will work with the company to determine if a confidential treatment request should be submitted.


#322

I wouldn’t even think about averaging down unless I was fairly confident that Auryn’s friends and family were. If I remember correctly, I believe they are in for approximately 200 million shares at about 7 cents…


#323

what i dont understand at this point is I thought Auryn was the money and working partner. WTF did we give the farm away to only sit here and still be poor? I am so sick and tired of this POS!


#324

Good question but a few things to consider. I believe some of Auryn/Masglas original backers walked out of the deal back when Juan was planning games on whether he was going to sell his shares or not. Their initial drill program was a disappointment and developing the Caren took a lot longer than expected. I think they hoped to fund everything with the cash flow from that mine. The wave of new hires last Fall meant that either cash flow was imminent, or that some new financing has been obtained. The recent focus back into the Masglas properties suggest that they were wrapping up mining claims work near the Alto necessary to close with a new JV partner or that cash flow had started from the Caren and waiting to have the money from that before further exploration on the Alto. Hope to get a few more clues from the financials expected this coming week; especially if Cerro puts out something.


#325

If Auryn doesn’t include a portfolio of assets AND a balance sheet (within the CDCH Corp structure) we essentially gave then 75% of our assets in return for a failed attempt to bring the mountain into production.

It was a terribly structured/negotiated deal because it was the only deal and it was negotiated by past (and current) scum bags on the BOD. I can only assume that we will be further diluted on the second attempt to monetize the mountain. Nothing is life nor mining is fre. Just look what happened on the gracious “loan” made to MDMN on the last capital call.

Kevin claims this “interpretation” of events is “lazy/dumb.” Unfortunately, we have yet to see anything refuting this interptetstion. There is no evidence that CDCH/MDMN holders will benefit from the recent consolidation of additional hectares. If everything gets “dropped” into CDCH there could be some real upside. If not, CDCH/MDMN are currently overvalued.


#326

The Alto has a complete gold epithermal system at surface.(Fortuna being the center of it.) We don’t need any more than just that. There is more than enough gold to actually make all existing shareholders in the green if they develop it properly and timely. Any major would love to be partners with Auryn to develop it. I’m sure Auryn hoped to develop it themselves to maximize profits but the principals aren’t getting any younger and neither are we. Let’s hope for a partner announcement.


#327

“There is no evidence that CDCH/MDMN holders will benefit from the recent consolidation of additional hectares”

John this was a post from Decosta last week answering Bubba post

“I wonder if Auryn and friends will regard these new properties as part ours? Or, did we somehow grant them the right to scoop up all the surrounding properties to hold for themselves? Anybody more familiar with these types of contracts should know the common clauses.”

“Hi mrbubba, The standing agreement between Medinah and AMC was that any new acquisitions made within 5 Km of the perimeter of the main concession block was to be thrown into the pot for all to share.”

I don’t remember this being stated by the company