The Mining Play

MDMN - 2016-02-01 Weekly Discussion

Would you rather get bought out ASAP and take a lower payout and less risk , or would you rather trust the mountain and let it ride to possibly get a larger percentage of the pie from AMC?

  • Buy me out ASAP
  • Trust the Mountain
  • A combination of the two

0 voters

So “wrap up” and “go public this year” means executing the option this year? Before going public?

AMC now has control of all the surrounding claims and a full option on the ADL. Basically JJ is out of the picture on any of the claims and AMC can begin working in earnest. JJ is a rather large shareholder at this point. Nothing more, nothing less.

http://www.medinah-minerals.com/?p=3429

Hopefully AMC now starts attacking the mountain aggressively! What will become of MDMN is the question.

This is the important section of the news release and the reason for my poll.

After many meetings and negotiations between all parties involved and multiple trips to Chilean Notaria’s, an amalgamation of the NUOCO, Caren and CDCH interests on the ADL plateau occurred. It is important to note that the position of Medinah Minerals, Inc. (MDMN) is currently unchanged. MDMN still possesses a 15% interest in all AURYN production from property claims. At this point, Medinah Minerals Inc. continues in its Option Agreement with AURYN that calls for the payment of a minimum of $100 million US funds while maintaining a non-dilutable 15% interest in AURYN holdings. Based upon the positive results published by AURYN, negotiations are ongoing between the Companies to consider AURYN’s outright purchase formula for the Company’s Altos de Lipangue (“ADL”) property claims at a much higher ownership holding that would enhance Medinah’s long-term prospects.

I take this to mean a greater stake in AMC and less or no cash out now to shareholders until they can produce and dividend some out.

2 Likes
  1. remember Madre de Dios was JJ’s ‘next big thing’ - the gold placer property well south of Santiago which he gave us 30% of for “free”. MDMN is abandoning that gift - to simplify things obviously. NOW: MMC = 0% of MDD

  2. MMC owned 15% of NUOCO which owned the LDM, Mambo, and Columbo claims. Plus MMC owned some remnant of that 30% of gold production from the the one claim of the LDM. NOW: MDMN = 0% of NUOCO.

  3. MMC owned shares of CDCH. There was an option for Auryn to get the two CDCH claims according to 85/15 ownership in the claims. Rumor was the Fortuna option was exercised. But we’ll have to see how the “amalgamation” affected CDCH and MDMN’s ownership of CDCH. A safe guess: NOW: MDMN = 0% of CDCH. Does CDCH then still own 15% of Fortuna? Definitely details to be revealed here.

One can assume that in order to not cheat MDMN in the short term they agreed MDMN should get 15% of Auryn production on NUOCO and CDCH claims and the Caren claim (in addition to the ADL claims) to compensate (in the short term) for their loss of ownership of those companies. That is why MDMN is said to “still” have a 15% production interest although the form of that 15% has changed from, e.g. 15% ownership in NUOCO to 0% ownership in NUOCO and a 15% production agreement.

  1. In regard to MDMNHolder’s #4: Recall the ADL Option is for Auryn to get 100% of the claims in return for 15% of Auryn plus $100M. So MDMN would end up with 0% of the claims and 15% of Auryn post - option. Most likely Auryn would like change the terms to less than $100M. And so as BE stated, the negotiations are most likely for less cash and a larger than 15% of Auryn while Auryn would continue to get 100% of the claims.

So Auryn ends up with 100% of all the claims as they want of course.
MDMN ends up with some % of Auryn > than 15% - still being negotiated

And there may or may not be some additional “private compensation” for NUOCO etc. Or maybe the ownership of the claims goes to Auryn only with the ADL Option exercise - thus linking everything to MDMN SP as reward for all shareholders and insiders. Have to wait and see.

And to tie in those “public rumors”: Auryn would go public, most likely hoping to have 100% of all the properties in hand by then, and MDMN would be waiting on 2 things:

a. the improvement in the PM markets (could be a long time)
b. Auryn’s ongoing exploration and production (have to wait and see what this amounts to)

And in combination these things would “enhance Medinah’s long-term prospects”

Anyway, all IMO. But I agree that if you were to make a “best guess” summary at this point:
less cash to Medinah, 15% of production for some time, and a potentially long wait for a larger reward via Auryn shares trading on a public exchange

It’s definitely riskier and potentially much longer than just getting a $100M check. :frowning:

4 Likes

Yes … but the definition of “the option” is being altered -> so that very likely means less cash more Auryn shares - and so the 7.4 cent “floor” we have been counting on ($100M / 1.5 B shares) will no longer be the same floor.

Roberto, I think the good parts are:

  1. Auryn is clearly past the point of no return
  2. Auryn seems genuinely to want to put the mountain into high-grade gold production

I will wait for more details before declaring this good or bad. There are still many potential permutations. But BE’s comments about ever shifting sands of this investment are right on. We are at $0.017 cents because every contract since Partner A has turned out to not be reality. And though in this case we have a real competent funded option-partner and progress is being made the contract itself is now being materially renegotiated, meaning, we still after all this time can not value our investment in the short or long term.

One would expect to hear from Auryn tomorrow or Tuesday at the latest, IMO.

8 Likes

Every body trusts the mountain, its management we don’t trust. We need a watchdog/attack dog.

2 Likes

From what I’ve been told (and I have no way of verifying it) the problem has been JJ, 100%. For the longest time he had full control of MMC and also control of enough of the surrounding ADL claims that nobody could do anything with the mountain.

It’s taken a lot of patience, shares, and AMC to fix that. Now, FINALLY, it looks like the project can get developed.

I suppose for those of us who were here back in the day, it was either this path or insolvency with JJ getting everything.

:::: at least that’s one side of the story ::::

2 Likes

People need to understand Auryn owns Medinah shares Im sure they are going to see this on our side since they’re shareholders as well NO? What happens with the shares they own?

JJ no longer has the veto vote. If our existing BOD decided to tell Auryn to pound sand upon any request to rework the contract they certainly have the power to do so. Especially now, given Auryn has made a move for all of the surrounding properties. As previously stated, it’s nearly impossible to come up with a scenario where shares in Auryn are preferable to $100M. Sooooo, if the cash option is such an obvious route why would our BOD include those comments in today’s update? What is the BOD receiving in exchange for considering yet another change in a “concrete agreement.” As long as common shareholders don’t roll over, again, and demand transparency to the back room concessions, it will be less likely that we get steamrolled, again.

Mgold is right on one point. All of these actions/updates/developments do point to an expedited resolution in MDMN and CDCH (which I love). I just don’t have much interest in receiving shares in a private/soon to be public, impossible to value, illiquid RTO. But that’s only because I’m not getting any concessions.

10 Likes

OK, am I the only unicorn riding nut case who sees the phrase “based upon the POSITIVE RESULTS published by Auryn…” ?
But most of you seem to think we are going to somehow get a lot less value.
Just maybe it is not the 100 million that is the main problem, maybe it is the SCALABILITY that has them in a quandary. That is not to say we will get the whole 100 mil, but it sounds to me like they have to figure a way to give us MORE value based on the scale up and good assays. Maybe a mix of cash and higher ownership.
This is my delusion for today, so you don’t need to say it.

6 Likes

Maybe I am way off base, but here is a scenario I haven’t seen on the board. If this is already out there I apologize. From today’s update

“At this point, Medinah Minerals Inc. continues in its Option Agreement
with AURYN that calls for the payment of a minimum of $100 million US
funds while maintaining a non-dilutable 15% interest in AURYN holdings.
Based upon the positive results published by AURYN, negotiations are
ongoing between the Companies to consider AURYN’s outright purchase
formula for the Company’s Altos de Lipangue (“ADL”) property claims at a
much higher ownership holding that would enhance Medinah’s long-term
prospects.”

If you reread this passage it clearly states the MINIMUM we can receive is $100 million and 15% interest. It goes on to state “BASED UPON THE POSITIVE RESULTS PUBLISHED BY AURYN, NEGOTIATIONS ARE ONGOING” isn’t it realistic to believe we have exceeded this MINIMUM level with what has been discovered and publicly disclosed? Therefore maybe Auryn is on the hook for more than $100 million and would like to offset the additional cash it is now liable for based on the “FORMULA FOR THE COMPANY’S ADL PROPERTY CLAIMS”. It is my assumption that what they are finding in the mountain has increased the amount of cash they must pay to exercise the option and they would rather give up more ownership instead of cash in excess of $100 million.

Maybe I am off base and please correct me if I am. This just seems plausible given what was written in the release. I know this has all been a nightmare. Maybe our fearless leaders made a good decision…

FYI I have no sources for this information simply reading an update and drawing conclusions.

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Also, is it possible the $100M will be replaced by increased production interest which goes up as the mountain proves up?
I would rather see this as opposed to Auryn shares.

John, I don’t think anyone is getting concessions.

2 Likes

Good to hear. Then there would be no reason to rewrite the existing contract. That being said, rumour has it that NUOCO insiders accepted shares in Auryn. Did MDMN only get credit for the 15% equity we are owed or did the FCI (the main source of value) make it into the equation? Did JJ receive shares in Auryn for his Madre property in exchange for giving up his CDCH “phantom 50%”? These are the side deals/concessions that should be disclosed.

I have no idea. Like I’ve said, here’s to hoping the pattern has been broken and we’re all about to make a ton of money. CDCH’s deal, which will need to be announced next week, might be a good precursor of what to expect.

As long as things are transparent and somewhat fair I’m a happy camper. One can dream.

5 Likes

It seems the lawyer they hired for legal advise is quite competent. Everyone is jumping the gun without facts.

Director
LatinLawFirm
octubre de 2004 – actualidad (11 años 5 meses)
providing legal and business depelopment advice in Latin America to several international clients since 2004. Successfully concluded some US$ 400 million in business transactions,including purchases of the Pascua-Lama gold project royalties for International Royalty Corporation and the purchase of an interest in the Algorta Norte Iodine Project for Toyota Tsusho Corporation

Legal Advisor for Chile
Xstrata Copper
octubre de 2004 – diciembre de 2005 (1 año 3 meses)

Legal Advisor for Chile
Mount Isa Mines
mayo de 2001 – septiembre de 2004 (3 años 5 meses)

Associate
Geographe Corporate Advisory
junio de 1999 – septiembre de 2002 (3 años 4 meses)
responsible for developing business, succeeded in the sale of the assets of a Chilean mining company for a UK client
Estudio Arturo Alessandri

Of Counsel, Natural Resources & Environment
Estudio Arturo Alessandri
enero de 1999 – diciembre de 2000 (2 años)
responsible for the mining and environmental law practice at this traditional law firm in Santiago, Chile
CODELCO
Advisor to the VP, Exploration and Mining Associations (VEAM)
CODELCO
abril de 1997 – diciembre de 1998 (1 año 9 meses)
responsible for expanding the exposure of CODELCO to the international mining arena

Business Manager, South America
Mount Isa Mines
marzo de 1996 – abril de 1997 (1 año 2 meses)

International Legal Advisor
Placer Dome
diciembre de 1993 – febrero de 1996 (2 años 3 meses)
responsible for coordinating global legal advice to Placer Dome Exploration Inc. In such capacity I was exposed to many jurisdictions from Kazakhstan to Indonesia with an emphasis on Latin America

Corporate Secretary
Placer Dome South America
julio de 1989 – noviembre de 1993 (4 años 5 meses)
Responsible for the legal affairs of Compañia Minera Mantos de Oro (La Coipa) and Compañía Minera Zaldívar in Chile

http://www.latinlawfirm.com/ his website

Yes hulkster that is a big list of clients.

Like CHG stated Auryn should be coming out with an announcement of news this week. Since Medinah can’t disclose much maybe Auryn will

My take is there is a scale and formula above the $100m cash option. If
exploration results exceeds the basis on which the $100m was determined the $100m goes up accordingly. AMC has asked MMC to consider paying the excess in AMC stock rather than cash.

“Companies to consider AURYN’s outright purchase formula”.

3 Likes

[quote=“cornhuskergold, post:5, topic:836”]
Rumor was the Fortuna option was exercised. But we’ll have to see how the “amalgamation” affected CDCH and MDMN’s ownership of CDCH. A safe guess: NOW: MDMN = 0% of CDCH. Does CDCH then still own 15% of Fortuna? Definitely details to be revealed here.
[/quote][quote=“Baldy, post:16, topic:836”]
Did MDMN only get credit for the 15% equity we are owed or did the FCI (the main source of value) make it into the equation? Did JJ receive shares in Auryn for his Madre property in exchange for giving up his CDCH “phantom 50%”? These are the side deals/concessions that should be disclosed.
[/quote]I agree, we’ll have to wait to see the official AURYN release and what the Days response may be. See further comments under the CDCH thread.

"AURYN’s outright purchase formula"

reads like entirely different language from

"option to purchase 85% of the Altos de Lipangue group of claims for a minimum price of US $100,000,000, in an all cash transaction, upon the final exercise of the Joint Venture Option Purchase Agreement"

But I obviously like your interpretation a lot more

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