So is this where we lose more equity in the company dilution?
Market Cap, not the value assigned to the mining concessions in the financials (which are worthless). The market cap of the pro forma entity is $50M which still ain’t cheap until these guys show progress.
Why are Les’ shares in CDCH going to MDMN? They should just be cancelled.
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$50M market Cap is just a back of envelope market cap approximated by (7B total shares X .0075). I agree these guys are showing progress and have a plan on how to monetize the claims. MDMN is a minority shareholder in AURYN, and thus, CDCH also. Removing these shares now from present CDCH shareholders represents a 5% haircut (19.5M/350M). You’d realize this if you are still holding your position in CDCH. CDCH shareholders had no skin in the lawsuits and countersuits.
It was primarily MDMN that was harmed by Les’ fraudulent actions and it was also MDMN that had to counter sue for whatever recovery MDMN could from those actions. Also note, the 19.5M shares returned from Les by terms of the settlement awarded by the court are expected to be converted to CDCH shares in Q2 2018.
A Declaration Date announcement before all shares become unrestricted would benefit MDMN shareholders, along with some news on mining progress by AURYN. At the same “valuation” used to compute market cap for CDCH these shares are worth approximately $150 K. If sold into the market, cash from the sale of these could be used to pay for ordering a NOBO list at the proper time for a Date of record facilitating distribution to individual accounts. After all 7B shares become unrestricted removing the 19.5M shares will have very little effect in increasing MDMN shareholder value for the harm done by Les. Before and after share consolidation, 19.5M CDCH shares (of the 7B) represents less than 0.3% of the total shares, insignificant. The cash value of the shares is worth much more to MDMN and it’s shareholders as part of the settlement before the CDCH shares become unrestricted.
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Except there is no bid to support 19.5M shares at $.0075, that is, there is no liquidity in the shares. Trying to sell that many shares at this point would drive the price considerably lower till someone stepped up to soak up the supply.
We also have to change our thinking a bit from the past. Cerro owns the properties which they bought by issuing all those shares to Auryn. So it is Cerro that needs to show mining progress now, not Auryn. And Cerro has $21 in cash as of Dec 31. Until that changes there will be no mining progress.
If there had been more to the purchase agreement announced on Dec 15, 2017 which would have enabled Cerro to take over the progress reported by Auryn in the Oct / Nov 2017 timeframe (recall the ‘constructing the chimney’ announcement), we would have seen it in the Q4 filings. We didn’t. Obviously Auryn has something in mind which they initiated and roughly outlined in the Dec 15, 2017 announcements. But we don’t know all the details or the exact timeline obviously.
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That’s why a maneuver like this would necessarily have to be supported by AURYN with significant mining progress and frequent updates. This would also support the eventual consolidation of the capital structure. As you know, AURYN is still private, CDCH isn’t. Any updates put forth by AURYN would be mirrored as approved in CDCH news releases. As seen in the Q4 (Annual report) filings there was very little specifically about AURYN that wasn’t already announced by AURYN. I think we’ll see it first on the AURYN site before shareholders see it on the CDCH site. This will likely be the case, IMO, until shares are distributed. I think we’ll have to see what Q1 & Q2 has in the way of news, if any.
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Cerro needs money. More dilution via one path (JV) or another (selling shares to get money to start up the Caren) remains a real possibility. I haven’t heard anyone suggest anything else that seems like a more likely path at this point.
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Why would Auryn, a private company, albeit a majority Cerro share holder, spend their own money to make mining progress on properties that they don’t directly own?
Granted something must have taken place to pay the taxes on the properties in March. Because Cerro didn’t do it with $21. We’ll have to see how that shows up in Q1 financials.
If Auryn spends money pushing the Caren property into production they will have to be compensated as would any mining contractor via cash, which Cerro doesn’t have, or shares, or a ‘loan’ which would be have to be paid back via one of these two methods in the future. These details remain to be seen.
I guess another potential possibility would the sale of a ‘gold stream’ to someone who would thereby provide money which Cerro would use to start up production, probably by hiring Auryn Mining who has all the Caren experience. But that seems very unlikely given the lack of a formal resource, unless Auryn itself has the money and is in the mood for such a transaction. That is all pure speculation of course with no evidence whatsoever.
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It remains to be seen what AURYN’s long term goal is for Cerro and more importantly to kick-start exploitation of the Caren and generate a cash flow. Is AURYN interested in the reputation it is earning in aligning with shareholder’s interest, or just those that own the 65% of AURYN? Is a successful public company in AURYN’s long term interest. I believe it is.
AURYN only has a few million shares until after the restriction is lifted from the 6.65B Shares issued in the purchase/swap of CDCH shares. Debt financing or sweeted with NSR to a streamer or potential mid-Tier/Major JV partner early on? Anybody’s guess until we hear from AURYN via CDCH. There is still a great deal of risk in this “investment” until shareholders hear otherwise.
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There’s nothing “back of of the envelope here.” Simple math ($50M market cap). As it relates to Les. I’d argue he did equal if not a lot more harm to CDCH. How did Les end up with that many shares in CDCH? Good will? I guarantee he didn’t put up any money. Those shares should be cancelled and to those that keep arguing that 20 million shares here or there don’t matter in the grand scheme of things, it seems you haven’t learnt your lesson. All of these shares add up. A billion shares here, a billion shares there, next thing you know, you’re dealing with a worthless investment. I’d love to see a stream financing to avoid further dilution but I haven’t seen enough on a proven resource to attract a royalty type of alternative. If there’s more to the resource than is currently understood in the public market the company should pursue this option.
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Apparently money laundering and fraud, but did not make up phantom shares under a fraudulent CDCH company the way he did with MDMN stock, however there was no lawsuit that pursued this.
The lawsuits were all involved with MDMN and its shareholders, and court awarded MDMN shareholders the shares as part of the settlement terms. I doubt the court saw anything to do with CDCH, and CDCH was very broke, and still is. CDCH is not pursuing any settlement against wrongdoing by JJ or Les.
When CDCH trades at 0.012 the Market Cap becomes $84M - simple math. At this point it is not tied to PPS of MDMN at all, however, if MDMN rises, historically CDCH does also. Management needs to do what it can now to raise PPS of MDMN and get CDCH shares distributed to individual shareholders, a multi-step process.
I agree!
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Huh? How can a market cap be described as “back of envelope”. I thought market cap was simply the market value of the outstanding shares, what about that is “back of envelope”/rough estimation? It’s literally taking one number and multiplying it by another…
I’m surprised anyone even cares or has to ask! It’s an estimate because the calculated value changes daily. The OTC currently has the Market Cap at $48,300,000, not $50M and not $84M. “The defining characteristic of back-of-the-envelope calculations is the use of simplified assumptions.” There are only 350M shares of CDCH that are tradeable. We are in real trouble if people are equating the value of what AURYN is worth on the open market with the value of what the minority interest is trading at today, yesterday or tormorrow.
It only reflects the “Last Guy In” price: When you multiply the number of shares by the share price, all you are doing is multiplying by the price the “Last Guy In” (usually the small investor) paid. This not only is misleading, the resulting number is irrelevant.
If you really want to calculate the “Market Cap” of the company - its real worth - you’d have to calculate what everyone actually paid for their shares and total it all up.
… Market Cap - or changes in Market Cap - are utterly meaningless.
Living Stingy: The Myth of Market Cap
I took Baldy’s comment to mean the value of the concessions ($570,960), as well as the financial statements posted, are hardly revealing of anything meaningful.
Here is what I see missing. The paid in capital for the forgiveness of debt. I guess what I was expecting was to see paid in capital in total in the amount of about $10M from all the loans from all sources CDCH, MDMN and Auryn that went toward operating expenses since the start. But then again I guess CDCH did not aquire Auryn but they only acquired the properties held by Auryn. It probably would have been better if they acquired Auryn. What I was looking for is what has been spent in 2017 and actually before that as well. I was looking for an ongoing operating cost going forward. To me this looks like crap, since there is no recognition of the past expenditures I guess they did not consider the forgiveness of debt for stock as paid in capital. Not sure why it would not be treated that way unless everything was simply expensed. Even if that were the case I believe it should show up in paid in capital. J MO
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The problem is we have no idea where the money we were on the hook for as a loan went to or whether it was spent in total! If it wasn’t there should have been a transfer of the balance to CDCH. But then the way this is structure Auryn simply could have kept the money they said they spent and we are on the hook for it, but the cash remains on Auryn’s books. There should be some reconciliation of the loans and then the exchange of the equity to eliminate the loans. and the value they added to the assets. If they spent $10M on these assets I imagine the book value of the assets should have increased by the capital expenditures. It simply seems as very strange accounting in my opinion.
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Hi Karl,
I recall reading that the cash call was for past expenditures to bring all investors/owners up to date before proceeding with the next phase of Auryn’s plan. Kevin can correct me I’ve misinterpreted or misremembered this.
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Totally agree. There’s been no “quantification” behind this deal with AMC. Mostly transfer of ownership, unmet projections, and further dilution from the first of many capital calls. I’m having a hard time understanding why many folks spent time and money (dilution) for the majority of last year to dig is out of the Les’ fiasco only to be left with a seemingly worthless shell. As Kevin previously pointed out I’m too lazy or stupid to understand the merits of this deal (beyond “it was our only choice”). Someone needs to bring out a much larger flash light.
My only remaining questions: based on their mining plan (I assume they have one) how much more money does AMC think they need to bring this pig into test mining/production? How much would they need to define a formal resource? Given the clear lack of capital, is the game plan going forward to simply wait for the gold/copper markets to appreciate or are they actually seeking $$$ to advance the project?
Answers to some or all of these questions would allow many investors to make an informed assessment of their “investment.” Per my earlier post, I would hope the company can provide some transparency by the end of the year. We seem to be going in the wrong direction.
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You are of course referring to AURYN. 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. This is leaving current MDMN shareholders in the “deep freeze” of an information vacuum based on nothing but speculation. As I recall, AHC had a $10M line of credit initially with a Spanish bank, presumably from Robert Letts Peruvian family connections. Was this the seed money for doing the work on the ALTO by AURYN and paid back with the cash call proceeds? If so, was this planned to clear AURYN’s books for audited financials in the future preparing for transparency of a publicly traded company on a higher exchange? Is AHC insulated from reporting on CDCH books? There is still very strong evidence for Peruvian mining connections involved with AURYN (and MASGLAS?) that may have an influence on the future success of CDCH/MDMN/AURYN. FWIW
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What I was expecting is that the entire Auryn operations including employees, expenses, cash, debts and capital were to be transferred into CDCH. That is what we owned as a percentage of Auryn.
Right now it appears that only ownership of the properties were transfer, So we MDMN originally owned 100 % of the ADL properties, then we owed 26% of Auryn which was more than just the properties and now we will only own 23% of cdch properties, which includes their properties and ours. This definitely looks like a raw deal in my opinion. Why should MDMN give up its ownership in Auryn if they are not willing to transfer the whole company to CDCH.
At least that is how I see it and I believe BE is right!!!
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MDMN has no say in any of this. It is a minority shareholder of AURYN.
Regardless, as a significant MDMN shareholder, I believe this is the best course of action and am glad that is the path they chose.
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Karl,
Perhaps they are structuring it his way for a pending JV? Perhaps there is considerable debt/liability hidden in Auryn which they don’t want to transfer into Cerro? It all does seem odd and concerning.
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