How does you WAG work out for the dividends when you include in the $100M option payment?
On that we can agree.
I know people donât understand it, but two months ago with JJ still a MAJOR road block and the possibility of us getting nothing . . . I might have taken a $0.05 a share for all my shares. Today itâs a completely different story.
If one believes what AMC is announcing, the possible near term future yield you can buy for less than $0.02 a share is unreal!
I donât think weâll be seeing much of the $100M option in the form of a dividend. Youâve got finderâs fee, taxes, and debts that come off the top. Then you have to keep some in reserve to cover the cash calls from AMC. I donât know how much that leaves us. Maybe the first penny or two comes from that?
- I really donât know but Iâve long thought that Medinah would have a lot of cost credits to write off against income for tax purposes.
- Debts should be less than a few million. (I believe Iâm being generous)
- Iâm not sure why you are expecting any cash calls from AMC after the option is exercised, but I would be interested in hearing why you believe that to be true. Thanks.
Net Operating Loss Carryforward? Do I remember seeing this on the financials somewhere?
Partnerships can be structured so that some partners are not subject to cash calls - and they can be structured so that income/expenses are allocated in various ways (thatâs why people form partnerships, as opposed to corporations). Of course, we do not know the current form of entity and the tax laws of Chile - there is a LOT we do not know âŚ
First I am not sure if there is a finderâs fee and if there is it may be a fee that Auryn pays or shares with MDMN. I doubt there is a finderâs fee, especially since this was an open bidding process that the Volcan people have been a party of over at least the last three bidding attempts.
Second, there should be very little taxes relating to the sale of the asset, since one is allowed to deduct all the expenses associated with all the years of getting this asset into a sale position, plus the book value of the asset at the time of the sales which comes to about $48 M.
Third the cash flow revenue from Auryn fproduction would also be taxed on the net (minus MDMN expenses) and then once again by the shareholderâs own income tax. The asset sale can be structured as a return on capital where there is no tax on the distribution until you have recovered your original investment.
Like I have said there are many ways to skin a cat from a tax perspective that will reduce or even eliminate the tax. I just canât wait when this discussion become relevant based on fact that MDMN is in a positive cashflow situation and there will be shareholder distributions as a result.
Yes, but I donât think theyâll have $100 million worth.
Iâve heard around $3 million. Donât know how itâs so much. I presume there has to be some accounting for it. I just hope they donât go the preferred share route as thatâs awfully punitive to shareholders.
AMC is private. Depending on how fast they ramp up exploration of the porphyry, developing an open pit at NUOCO, milling, etc⌠It MAY require them to raise funds. If MDMN doesnât want their 15% diluted theyâll need to contribute proportionally.
(Karl: was told there was a finderâs fee involved.)
I assumed that was the case it just does not make sense to me why there would be one. If there is a finders fee it usually amounts to about 5%.
Based on expenses and book value you can easily come up to over $50M to be deducted from the $100M before anything is taxed.
Sometimes I wonder why I spend time reviewing this board and then Iâm reminded when I see posters, like those above, working to share information in an effort to educate, encourage, and enlighten without the overt or covert attacks that some routinely include. Looking above at all of this mornings post Iâm looking at that sharing. Thank you one and all.
" Based upon the positive results published by AURYN, negotiations are ongoing between the
Companies to consider AURYNâs outright purchase formula for the Companyâs Altos de Lipangue
(âADLâ) property claims at a much higher ownership holding that would enhance Medinahâs longterm
prospects"
This clearly opens up the possibility that a higher ownership in AMC may be an alternative to the $100M.
Good post and follow up commentary. There is significant risk in assigning any value to AMC, let alone $180M, at this stage in the development cycle. If people spend a few minutes to better understand the sector they would appreciate the same (Hint: reading this board doesnât count as due diligence). With that in mind, any discussion about taking a larger portion of AMC as payment in kind instead of cold hard cash, ignores some âseeminglyâ obvious issues.
The February 25th update clearly states that the $100million is due from Auryn at the execise of the option. This would suggest that attemps by Auryn to alter the original agreement failed.
The only way there is a finderâs fee is if one of the insiders is grabbing it (wouldnât surprise me). Otherwise, to Karlâs point, a finderâs fee would not be applicable to a deal like this.
Hope so. Itâs very difficult to parse through the language in any of MDMNâs updates and reach any conclusions. Given that both CDCH and Nuoco accepted shares in AMC itâs hard to assume that the same insiders wonât consider doing the same. The market is telling you what it thinks. If/when this changes thereâs no reason for us not to be trading North of 7 cents.
The following lines are copied from the 9-30-15 financial statements (balance sheet):
Mining Properties (Notes 4 and 9) 44,901,363
Loans From Stockholders (Note 3) 2,123,156
Mining properties had a cost basis of almost $45,000,000. If we assume $30,000,000 is related to the Alto, then MDMN would have a $70,000,000 gain at a 30% tax rate (WAG), we would be looking at $21,000,000 in taxes.
Loans at 9-30-15 were $2,100,000 so the Wizardâs guess of $3,000, 000 seems reasonable.
It appears that after taxes (20 to 30 million) and loan payments (3,000,000) MDMN should retain 70,000,000 to 75,000,000.
The corporate tax rate in Chile is currently 22.5% but will increase to 27% by 2017 https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html
According to the 9-30-15 Statement of Cash Flows over $500,000 was spent on mining properties in the first three quarters of 2015. I find this interesting. What are they spending money on?
Pretty sure the taxes on that $100 million would be minimal per how it was structured and existing loss. Certainly much less than what you are suggesting per what I have gotten from Medinah/Les previously.
Is there a loss carryover in there somewhere?
Didnât we hire a consultant or facilitator to help broker the deal? Could possibly involve a commission?
Yes. I would assume. Any advisor would have been paid when the deal was inked. Finderâs fee are involved when one party introduces financing for another party (that pays the fee). These fees range from 3-5% of the money raised. Based on everything we have heard about the Letts and their previous interest in the property I canât imagine that somebody was getting paid for an introduction.
If Lester is telling people there is one it wouldnât surprise me if MDMN is paying him or another insider a few million just because âthey can.â There clearly was no need for an actual introduction.