Hopefully a little support is returning.
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Iām not so sure giving up 85% of the Mountain is all that bad. I can remember when I believe you but definitely other more knowledgeable mining minds on this board were saying that for a Junior Miner to keep 1 to 2% was an acceptable contract. And we have 15%. Maybe all those years JJ and company would not except a 1 to 2% deal and thus held out for where we are today? Was it worth it or not? I guess weāll find out as things progress. But I like what we have and where we are headed today. And I think we have very good things coming our way as far as MDMN value goes.
1 - 2% equity or FCI?
As usual, there is a misunderstanding of terms. 1-2% means NSR (net smelting revenue) that is 1-2% right of the top/net revenue. What the 15% refers to is equity in privately held company, upon which MDMN has no control over mining costs nor SG&A. AMC could decide to pay its execs $2 million per year each leaving nothing in profit. In which case, 15% of nothing is nothing.
I donāt see them doing the above, but the point is, mining costs and expenses are out of the control of MDMN.
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I can see how that makes a difference. Thanks for pointing that out.
But lets say that Auryn does the right and fair thing(s). They pay acceptable salaries, incur normal operating costs and end up running a nice profitable mining company. In light of those facts, should they come to pass, would 15% be a good and fair shake? Or would it be better than or worse than fair? Iām guessing if the mine runs for 20/30 years and metal prices stay where they are or even improve some. That that 15% could be a substantial amount of money to MDMN share holders.
BB, too speculative of a question. But if it were me, I take the net smelting revenue all day, any day.
I would take the net smelting revenues too, but we donāt have that choice as I see it. So Auryn is who we are going to the dance with. Time will tell what kind of partner they turn out to be. But from all that weāve been able to see. It appears to me that they are honoring the contract and dealing fairly with MDMN as an appreciated business partner. And if Auryn does end up with a majority control of MDMN via buying 51% of MDMN stock. Well I see that as a big plus for MDMN and MDMN share holders.
I think thereās value in the mountain as well. I donāt think itās worth $100M today and I know how many more steps, each with considerable risk, are required to reach sustainable cash flows. When you are dealing with a stock that would rally 440% on just the cash component of the deal, you take all necessary steps to secure 100% of the cash component. The 15% is the kicker.
I still believe a TO is the most likely outcome as thereās no way early stage production opportunities will subsidize the purchase option to a great extent but I admittedly donāt know how a tender would be executed and am somewhat concerned it will involve more shares of AMC vs. CASH. This is why Iām beating the drum.
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Can someone post Level 2 please.Thanks
thanks don
Too early for an NSR. Prove it up first and bring in a major.
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You donāt seem to understand the situation. Weāre not allowing anything. AMC owns the Caren, Fortuna, and 85% of NUOCO.
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Wiz, my thought on the NSR is we get a 2% of any mining development on the ADL. Screw the 15%. As each project comes online, we sell the NSR to a royalty shop for a nice chunk of change based on the NPV/Discounted Cash Flow.
Thus allowing for several decent liquidity events.
A NSR carries through whatever ownership changes occur of the properties. However, a buyer, not wanting a NSR on the property can always pay to have it dropped.
And yes of course, I understand that a NSR is not on the table.
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Maybe itās a way for management/debt holders, original nuoco owners to get a chunk it stream of cash now while the mdmn holder again had to wait. Contrary to popular opinion, I believe our interests are somewhat aligned but not completely. Will not surprise me in the least to hear at some point that certain parties have received a portion of their payday (however our whatever that may look like) with the rest of their portion fully aligned with the shareholder base
Each entities BOD has a responsibility to its own shareholders. So they play the cards in the hand that is in front of them.
I think your problem (and it used to be mine as well) is that we believed half the hype, speculation, false information, and misinterpretation of the Vancouver mill.
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