I think that’s boilerplate for each concession is valued equally for legal purposes. If there is an issue on one concession that prohibits it from being sold then the purchase price comes down in a pro rata fashion.
It might also have to do with any concessions in the pedimento/manifestacion stage of development, half of which need to be discarded as the transition to mensura is made as per the law, then the purchase price drops accordingly as if all concessions are valued equally no matter what their actual value.
Wow, I think it’s all quite good. A deal will get done. There is too much goodness in the mountain for it to sit there any longer and the main impediment that has been blocking it’s discovery and a normal agreement with an exploration company has been removed.
I guess that is the risk. If, as you say, the $100M was just a placeholder, never expected to be paid, I’m not sure why there is/was any point including that number in the contracts. Again, I’m sure the boys at AMC have told you that we should be PLEASED to accept more of their shares in lieu of cash but that doesn’t mean that MDMN has no leverage in the situation. If AMC is drilling the sheet out of all over the properties surrounding the ADL than there is a real possibility that another entity could “swoop in” and buy the ADL. There is also the real possibility that MDMN would be in a good position to sell the ADL if the option expired. Onlookers will learn A LOT about what the ADL may hold based on all of the activity surrounding it. Additionally, another speculator could buy the ADL knowing that AMC will ultimately be dying to have it.
I’ve never thought that AMC would be giving our dopes $100M but there is a greater likelihood of a tender offer if MDMN stays firm with the actual contract. The market has already told you what to expect.
Thanks Wizard…But that is not the general tone on the board. It just seems like frustration and fear is becoming the general theme, as our stock price is on life support. I have been a shareholder for seven years, and an avid reader of this board since it’s inception. I must admit, I am more confused now than ever. I understand nobody knows the eventual outcome. Plus, any spike in price will most likely be an exit point for alot of shareholders even at a significant loss, who are not willing to see this out, and certainly deserve more…
Does anyone have a ball park estimate of when the “new” contract will be signed and posted for the shareholders? Is there anyway for us to see the new contract before it is signed? It doesn’t seem fair that we have no way to influence both sides to do what is best for the MDMN shareholders rather than for themselves. How about enough cash for a cash dividend so we can possibly move the sp after the deal has been signed?
You two are among our best handful of posters and it is encouraging that you both are circling around what it will take to make the agreement succeed. I think that you both agree about the critical need for both sides to be firm and come to a compromise, perhaps only $25-50 million cash upfront , which could be used for share buyback and dividend efforts. But I believe John is right, MDMN does have some leverage and should not give away the whole shop per the revised contract. The ADL may not have a $ 100 mill value but no cash should not be a serious option. Or else why was the cash payment included in the first place? Hopefully they will reach some compromise on the cash amount.
No permit for that. Also, the grade probably isn’t high enough to truck out especially since I think much of it is chemically bound to sulfur etc. When Auryn builds a heap leach pad…will be good to go at that time.
I’m going to go with MDMNH and Wiz, I think the entire show up till now has been following the script (other than JJ’s shares sale problem). There have been some pretty clear stages to this thing:
ADL - Auryn meeting their $1M spend requirement on the ADL option in the first season. This enabled:
Fortuna exploration - meeting their Fortuna exploration requirements
NUOCO exploration - we can’t be sure what has gone on on the LDM / NUOCO but clearly more than we know explicitly because Auryn has commented on their new “interpretations” and their claim acquisitions in the area speak for themselves. Apparently this was good enough to enable a new immediate option exercise.
The last two enabled the final step: the ADL.
My guess is this was all pretty much following the script in place from the beginning to get us to this point. And then at this point even the negotiations are the final scene of the script. Originally it was probably thought that at this point in the script there would be multiple things that could be evaluated as appropriate at this point:
reverse merger / going public
actual outright exercise of the option
sale of the property to someone with big pockets
Why do you think there were rumors months ago about ‘going public’ and ‘reverse mergers’ and 43-101 reports in Spring 2016 etc. MDMN and Auryn knew the time table to get to the final step to be taken and discussions were already occurring on what the best approach would be.
The $100M set a sort of value floor for evaluating what would be an acceptable approach, IMO still, in large part on the basis of the L.Amigos claims in the ADL option contract and the previous LDMC work (and the MDMN 20% / 30% associated gold production deals), as rough as it was. But it was a place holder setting a reference for the future. In the meantime, the markets did not cooperate. Really the timing couldn’t have been worse in terms of the bear market / gold price for this 3 year time period. Cash and capital became much harder to come by. The USD skyrocketed making $100M just that much more expensive to a deal in Chile. Resource company IPOs became impossible. That in conjunction with the ‘Juan and my son Claro Quijano Rebellion’ almost certainly made that $100M look very different than what was expected 2 or 3 years ago even if the mountain has done its part.
So now the two sides are trying to find a way to make it work under current circumstances which we are told is taking the form of an equity for cash trade - more risk for potentially more reward later. I think the immediate Fortuna / NUOCO deals make it very clear our guys are ready to wrap this up. So I think it is very likely that a deal will get done in April. We do not have too long to wait and see.
There will not be a new contract as some here fear. What we should expect is maybe an adjustment to the formula to exercise that purchase option. It may be as simple as allowing early production and/or a longer timetable term to exercise the original offer in full or early exercise in part ( less than the $100 M) in exchange for a greater interest in Auryn. We do not have to accept anything offered and we can hold our guns, Having said that I believe anything that gives us immediate positive cash flow should be beneficial.
There is just too much wild speculative on what that revised purchase formula will be for my taste, I just rather wait and see what happens since it is less unnerving at this point.
Best I can tell, the Option agreement is being turned into a purchase agreement with different terms that will be effective(or a different way to look at it…the modified Option agreement exercised) immediately upon signing. April is the best bet for timing.
This Play is wrapping up. Considering the current share price, it is hard not to be pleased with this.
Just a FYI, i don’t think anyone suggesting a cash less option agreement wouldn’t love an executed option agreement along with a huge chunk of change to be deposited into an escrow account that can only be disbursed under a proposal, put forth by the board, along with shareholder proposals put forth by a block of shareholders constituting no less than 15%, and voted upon by any and all shareholders, whether shareholders of record or those that hold in street name.
The analysis referred to above (thank you CHG) is crucial in what course is chosen in upcoming months. Shareholders should have an understanding of not just the history of what occurred due to poor management in the past, but also the extensive progress made the past 17 months in consolidating the mining properties and defining the extent of the mineralized zones. AURYN has made it clear from the start that exploration and progress would be dynamic and unfold as results were revealed. Clearly, some early plans were put on the back-burner because some unexpected promising results on the hi-grade surface gold at the Merlin-Fortuna and the importance of further defining the Pegaso Nero Cu-Mo-Au porphyry. Both of these two areas are being pushed forward this year into Phase II of AURYN’s exploration plan as presented in AURYN’s Altos de Limpangue Project: http://aurynmining.com/project/
Cash and resources were diverted to acquire strategic surrounding mining concessions important to the overall success of the project’s long-term plans. AURYN has no intention of giving up on the ADL. Their plans to eventually open pit the entire ADL Mountain complex has always been part of their very long range planning. It is the shorter near-term plans that have been dynamic to accomplish this task. While shareholder frustration at the length of time many of the remaining shareholders have experienced, the fear being expressed daily on this board is one of the largest factors currently depressing share price, IMO. I’ve been in this for 10 years, have no intention of exiting prematurely, especially when there is the appearance of reaching a conclusion no later than July-August 2017. Everyone should have an exit plan by now, but basing it on fear is one of the contributing factors explaining why our shareholder base is much lower than it was in previous years. I’m planning on having a decent ROI. Only time will tell.
Yes Sir. I am also not exiting until I have a decent ROI. And I will wait as long as I have to in order to get it.And I am already a long.
And I know that investing and emotions are not supposed to be mixed but the ROI to me is now a matter of principal and spite.
AMC will end up with the entire mountain. It’s just a matter of negotiating the best deal possible. Both parties realize there is no reason to wait until the end of the option agreement. As Doc says, there are plenty of win-wins on closing it sooner. The question is how much more of a percentage in AMC do we get and how much less cash to we accept.
What are the bounds ?
On the equity side, let’s assume the max AMC would part with is another 15%. If they did that we would have 30%, NUOCO 5%, and CDCH 5% leaving 60% with AMC. I cannot imagine them going any lower than that.
On the equity side we can give up $100M, but perhaps our BOD isn’t willing to do that. I really have no idea. If that’s what it took I’d find it acceptable, clearly others wouldn’t Anyhow . . .
We can probably now assume that any purchase agreement will involve 100% of the ADL properties for somewhere between 15 - 30% of AMC and $0 to something less than $100 million. As equity goes up, cash goes down.
I imagine the negotiations are rather friendly as it’s simply a matter of figuring out what each party can do so that the whole is bigger than the individual parts. There’s plenty of room in there to find a happy spot for this to close and all of us to finally be able to say, “it’s finished” and now watch this MONSTER of a property show the world what it truly has!!!
Oh, and knowing we’ll finally be able to ring the cash register someday is a welcome relief!
So to be clear, now is it for sure that MDMN will get less cash for more AMC stock?
If yes , this is consistent with a rumor coming from Chapin stating the same thing.
The only things Chapin says is that MDMN will get way less cash than previously planned, like less than half of the $100M.
Doc, I would argue that all of the properties contained in the original ADL agreement with AURYN are (were) in the mensura stage, that is permanent claims “owned” by Medinah so long as patentes (annual fees) are paid and current. I base this on the length of time Medinah has held on to these claims. Your conclusion that the wording is “boilerplate” is what I would also assume to be correct, pretty much the same as Cautionary Statement – Forward-Looking Information is contained at the end of many shareholder updates. Mdmnholder is correct that MDMN concessions already went through that process of pedimento/manifestacion to mensura.
Manifestacion is the process by which a pedimento is converted to a permanent mining claim. At any stage during its two-year life, the holder of a pedimento can submit a manifestacion application, which is valid for 220 days. To begin the manifestacion process, the owner must request a survey (mensura) within 220 days. After the survey request is accepted, the owner has approximately 12 months to have the claim surveyed by a government-licensed surveyor, inspected and approved by the national mining service, and affirmed as a mensura (equivalent to a patented claim) by a judge. Thereafter, an abstract describing the claim is published in Chile’s official mining bulletin (published weekly) and 30 days later the claim is inscribed in the appropriate mining registry. A mensura is a permanent property right that does not expire so long as the annual fees (patentes) are paid in a timely manner. Failure to pay the patentes for an extended period can result in the claim being listed for sale at auction, where a third party can acquire a claim for the payment of the back taxes owed and a penalty.
excerpt from 10K filed 05/02/11 by RED METAL RESOURCES, LTD.
(not an endorsement)
