MDMN - 2016-03-07 Weekly Discussion

Doesn’t mean he is gone, although he could be. Just means he has somewhere between 0 and 4.99%

Hi MDMNholder,

I see the Pegaso Nero as an elephant but not as a white elephant as you suggest. If you zoom out and overlay all of the data collected to date including the 3.6 Km of high grade moly found at surface recently and the findings at the “intrusive breccia” and the “tourmaline breccia” which straddle the ridge recently tested (the historic Corrizo and Cobriza Mines) I think a couple of strategically placed successful drill holes might result in a “game changing” event.

We know that the South Road “road cuts” have revealed over 2 Km of porphyritic veinlets/stockworks of which most porphyries are made up of. We know about the Andesitic porphyry of ocoitic texture at the 70 meter level below the LDMC adit 4.7 Km away from the PN. We know that at this andesitic porphyry of ocoitic texture they found nice grades of 3 forms of copper suggesting a super gene enrichment zone i.e. chalcocite, malachite and bornite.
We know about the Cretceous Age of the rock and the contents and sizes of the Cu/Mo porphyries north of us in the “Early Cretaceous Porphyry Belt”. We know of the hyperspectral satellite imaging survey done by C.S. Perez which revealed a 7 Km swath of “about a dozen” intrusives suggested by Perez to be a Cu/Mo porphyry of 7 Km “on the whole”. We know it was located on the southern downslope off of the plateau where the PN is.

The suggestion is that whatever we have in this area we have a WHOLE BUNCH of it. We lack evidence of “continuity”. Perez suggested many hundreds of millions of tonnes just in the top portions of this structure. That’s why I think that a couple of nice long intersections into this structure might be a game changer well before any dirt is removed. With the structure of the deal with AMC and the completed deals with Nuoco and Cerro I would sense that the entrance of a very large Cu/Mo player would provide an exit strategy for Medinah.

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Surely a stupid question, as I’m not an accountant. … but wondering how loans from stock holders increased by about $840k, while out total expenses were only $523k?

Anticipated expenses?

Need to look at the cash flow statement, they paid $99k for investments and $674k in mining investments. Don’t know what those items are, but the cash flow statement is where the details are.

Wiz did and ment Cordova and Cathy Hume. He will put on his blog in the coming days what was discussed

I would not expect anything more from the PDAC than all the news releases on the Auryn website.

I was able to get a question I’ve been pondering for quite some time answered recently. The question was why in the heck isn’t Masglas/AMC all over our market scooping up ridiculously cheap shares and levering the disconnect. It’s FREE MONEY to them when they know that they’re going to exercise the option.

I’m a little embarrassed as to how simple the answer was. There was agreement by AMC on the concept of levering the disconnect by buying cheap shares before exercising the option. This made me feel better. What I didn’t entertain is the notion that there were other forms of LEVERAGE present in a deposit like this for AMC.

I believe that the Pegaso Nero findings has indeed generated a fair amount of interest in the Cu/Mo porphyry by parties familiar with our deposit. I got this confirmed recently. Put yourself into AMC’s shoes for a moment. On a deposit like this they could easily spend $10 million during their option period and increase the NPV of the deposit by $100 million. So where might they get the better bang for the buck, is it by buying truckloads of ridiculously priced Medinah shares after you already own 210 million or by putting money into the ground? Remember that they’re somewhat acting “on the clock” if they are figuring on attracting a major to pay the $100 million to Medinah in exchange for a piece of the action before the option expires.

SO WHAT’S SO SPECIAL ABOUT THE PEGASO NERO CU/MO PORPHYRY BESIDES ITS APPARENT S-I-Z-E?

It is its “vertical emplacement” within the mountain. The very top surface of the average porphyry is 1.5 to 4 Km below the surface of the mountain that houses it (Sillitoe 1974). What is the best indicator that you’re near the bottom of a porphyry or near its centralized “porphyry stock”? It’s the presence of moly. Why?

Let’s go back to how a porphyry forms. You start with an oceanic plate “subducting” under a continental plate. The friction releases tremendous amounts of heat which melts the local crust (“crustal melt”). The resultant liquid “magma” is buoyant and rises through the rock structures carrying the metals it contains. At the top of the dome shaped “batholith” containing this magma you get a bleb (apophysis) herniating through the roof of the dome where there is a structural weakness. This bleb grows vertically and becomes a “porphyry stock”. The temperature is about 5,000 degrees C. here but about 25 degrees C at surface. The pressures down deep are huge and very low at surface. Everything gets pushed UPWARDS due to the pressure differential.

Depending on the melting points/fusion points of the encased liquidified metals the various metals will solidify and drop out of solution at a level equal to its melting point/fusion point. Moly with an incredibly high melting point of 2,600 degrees C solidifies first and hangs out at the base of the porphyry near its “porphyry stock”. At the PN deposit the base of the porphyry is close to the surface where that 3.6 Km of high grade moly was found. It is not 6,000 meters below surface in a noneconomic location. Melting points of metals don’t lie.

Copper and gold both melt/fuse (solidify from a molten solution) at about 1,000 degrees C. They stay liquid on the trip towards surface much longer. Gold has a tendency to pile up fairly close (within hundreds of meters) to surface often in epithermal veins. Finding the gold grades RIGHT AT SURFACE in the trenches AMC sampled is pretty rare. The gold grades in the Caren Mine (Merlin 1 Vein) at about the 80 meter depth level are pretty much insane,

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Easier just to say that AMC might end up just as cash poor as MDMN.

And at the Fortuna mine the oxidation level generally occurs at a vertical depth of about 20 meters. No wonder the interest in CDCH

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I’d suggest that the answer to this question has been discussed on this board many, many, times. I can only assume that you choose to ignore the message due to the messenger. AMC ain’t interested in penny stock antics. They don’t pay attention to theoretical valuation disconnects due to evil market makers. Their focus is and always has been on the value of the mountain and what it will take to control it.

As soon as AMC lost sight of a clear way to owning a controlling interest in MDMN through the purchase of JJ’s shares their interest in open market purchases went away (IMO).

AMC has now gained control of everything except the ADL. CDCH and NUOCO holders will start to benefit from early production opportunities. MDMN will indirectly benefit as the likelihood that the option will be exercised (or tender offered) is directly correlated to success in the periphery.

Once we begin to see actual results on the ADL, MDMN should begin to reflect the inevitability of the option/tender. Until that time, the market will continue trade at a “wait and see discount”. This is what some might call “a buying opportunity” as the most parabolic stage of a typical mining play occurs during the drilling phase.

Think of the upcoming ADL drill program as a fresh start (after a multi decade delay caused by a bunch of pseudo criminals). Each drill result will breath fresh air into this investment with the final culmination of a TO (IMO). I still think 20 cents is a real possibility.

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Think of the entire MDMN investment, as a fresh start. If one had never heard of MDMN and was introduced to it today. How would one view the opportunities moving forward? I suggest make the entire approach to this investment as a fresh start. It may take some of the bitter almond taste out of the mouth for some? Who knows. Worth a try.

Yes, because ignoring history is always the best plan for preparing for the future.

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So John, if your eventual MDMN SP speculation is 20 cents, based on your previous analysis, CDCH could be 40 cents?

Geez Tex , I’d swear there was a touch of sarcasm in there.
“Those who do not remember the past are condemned to repeat it.” George Santayana

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17 cents for MDMN/ 20 cents for CDCH was the ratio I used but AMC can’t support that valuation today. Not even close. You also have to factor in the $100M variable on the ADL. As many of us have stated from the beginning, AMC has never intended to write that check to the likes of our BOD. AMC would/will need to offer a higher premium for the ADL im the absence of that payment. Another reason why our BOD would be nuts to give up cash for a higher percentage of AMC.

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Auryn was never a factor in MDMN’s history. Changes the entire dynamics of all involved. Plus JJ is out of decision making capacity, so again an entirely different set of dynamics. Holding tight to the past here will only hinder, blur and hurt ones decision making capacity, IMHO.

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“Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning

“Two things are infinite: the universe and human stupidity; and I’m not sure about the universe."

Albert Einstein

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Are day is coming!