The Mining Play

MDMN - 2016-03-28 Weekly Discussion

This is starting to get really interesting. We are about to get more of a percentage in a private company with no obligation to pay us anything unless they desire. I knew we would all eventually be rewarded for being part of a WCD. And on Monday we are supposed to get even more great news.WOW

Did you know public companies have no obligation to pay shareholders dividends either?

I’m going to make this one point for the last time and then I’ll let it go.

There is absolutely nothing wrong with a public company owning shares of a private company? Hello? What do you think it means that we owns shares of NUOCO?

AMC is private and has provided more transparency about their operations than MDMN ever has. MDMN is public and none of us know WTF is going on. Nor have all of the reports, rumors, and new releases from MDMN been accurate!

I fully expect AMC to provide regular, meaningful, updates to their shareholders. I also expect they’ll be far more accountable than MDMN EVER HAS regarding their use of funds and accounting. Gee, it’s possible they even have financial reports in compliance with gaap . . . something MDMN never has come close to and never will.

Does anyone here realize what an upgrade this is or am I alone in this matter?

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Well said Wizard. I think the main problem is that we are all sooo burnt out, and stuck like a pig, that we do not want to wait another 6 months to 2 years to be rewarded. I am jealous of the new investors that are coming in now, if there are any. They get to circumvent the past, buy a ton of stock at a ridiculous price, put their feet up, and in a couple of years will “most likely” be rewarded. All of us were just way too early to the party!!!

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not alone. the silent majority I believe concur as well.

Works for me more percentage in Auryn ride there coattails. Now say I do and let’s make some damn money!

I don’t know and I see no point in speculating. Maybe it’s simply exactly what was offered in the update? Maybe MG was right? Maybe it needs to happen before Auryn moves forward? Nobody knows for sure, but that never stops people’s wheels from spinning. I retired from trading about a month ago. I haven’t looked at the markets and have only poked my head in here a handful of times. I can’t tell you how nice it has been to get away from both. There’s a lot more life and fun to be had. :slight_smile:

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CDCH will emerge as the far better play as soon as we hear the details of the new purchase agreement. IMO. I won’t be surprised if the CDCH/MDMN ratio gets well above the old 2:1 ratio. If MDMN ends up with 25% of AMC that would/should value CDCH at 20 cents. I’ll take that all day long. :8ball:

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Curious, but if MDMN ends up with 25% of AMC why would CDCH be the “far better play”?

If that is what MDMN ends up with, It all is straight math at that point.

CDCH owns 5% of AMC…

MDMN owns 25% of AMC, 7.5 million shares in CDCH, 15% of NUOCO (ostensibly another 0.75% of AMC,) 20 million shares of AMP.

We don’t know immediate numbers but for sake of the argument lets say CDCH has 300M issued and MDMN 1.5M issued when all the debts are paid for each company and financials cleaned up. CDCH may have slightly less there. Also let’s assume MDMN’s AMP stock is worthless.

Now we have CDCH with 300M issued and 5% of AMC. MDMN with 1.5B issued and 25.75% of AMC and 2.5% of CDCH.

Fundamentally they’ll have about equal value and should trade at roughly 1:1.

That said, CDCH is going to have far more volatility and will be a much better play for people who are flipping and trading. Only about 40% of its stock is in the public float per the latest filings.

FYI . . . the 2015 financial reports for CDCH are out on OTC.

This one note concerns me.

During February 2016 Cerro Dorado, Inc.’s ownership of Sociedad Contractual Minera
Cerro Dorado Chile increased from 50% to 99.8%. Consideration for the additional
ownership is still under negotiation. The Company also exchanged all of its mining
claims in exchange for 5,000,000 shares (approximately 5% ownership) of a Chile
based mining company.

Why are they saying it’s still under negotiation? LP told others it was done and in other places in their financials they seemed to indicate there is no outstanding obligation for this.


PS. John, you’ve got to play it honestly. You and I both know you can’t extrapolate and say CDCH should be trading at $0.20. There is no way MDMN option at today’s value is worth $100M. And there is no way that today AMC is worth $1B.

Let’s let AMC do go into early production first and do the exploration on the Pegaso Nero and LDM claims before getting nuts. Then at the end of the day (maybe even this year) both companies can be TO’d for north of a dime.

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TMP never suffers a loss of opportunity for math exercises in the name of speculation on the future. I enjoy it myself.

In that spirit, I think one of the important things to watch for in any upcoming announcement is what happens to that 15% of NUOCO currently in the hands of MDMN. If we assume for the moment MDMN ends up with 25% of AMC instead of the 15% proposed in the current Option agreement and the $100M cash goes away, the question remains what did they give up in total and what did they get in total for that $100M:

  1. They get: +10% of AMC (15% to 25%). They give up $100M AND the 15% of NUOCO.
    OR
  2. They get: +10% of AMC (15% to 25%). They give up $100M but they retain the 15% of NUOCO

Come TO time that will be a non-trivial concern if the LDM exploration confirms the theories expressed by Auryn in their Updates.

If MDMN had to give up $100M and 15% of NUOCO in order to get an additional 10% of AMC, I would consider that negatively because no argument today about AMC cash limitations or wanting to use cash to leverage the property by putting it into exploration etc. can justify having to give up that 15% at this time. In addition it would make your “$1B” required valuation of AMC to justify the Option modification, even worse.

There is no doubt Auryn wants that 15% of NUOCO ultimately. It’s important that we retain it in any new deal, IMO.

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I understand all the above is still speculation, but it is a FAR BETTER COMMENTARY than the useless whining and crying some love to do.

Just saying…

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Good point. My post needs adjusting. I was considering that AMC acquired all of NUOCO for 5% of AMC and not just the 85% of NUOCO for 5% of AMC. If it’s that latter then MDMN still owns 15% of AMC. That’s a big thing. If there is another P beneath there and also the gold and copper we’ll end up with 15% of it that we own outright and an additional 21.25% through a 25% ownership in AMC (should that be the number.) The total benefit of NUOCO’s claims then would increase to 36.25%. Not bad.

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Exactly right. Just goes to show you how badly we’re being railroaded on the option agreement. I understand your point of view and don’t necessarily agree or disagree with it but saying “it’s s good deal” because we are financially insolvent or outmanoeuvred or were never going to get $100M or the market has changed for the sector, etc, etc…is not about a “good deal.” You are suggesting it’s the only deal and I have no doubt our new “partners” convinced you of the same. I guess we’ll never know but, for the long-term holders here it’s a dagger in the heart. At six years I almost feel like a newbie and will happily take the 10-20cent exit (later in the year) but it will still be chalked up as a losing investment for me based on opportunity cost alone.

There hasn’t been a deal struck on this mountain that hasn’t changed from its original form/structure (LDM, Nuoco, ADL, CDCH). The market is waiting for s specific, static, contract to work from. No bid until then.

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Now we get to the point where we can discuss something. :wink:

No, I’m not suggesting that. And no, AMC has not convinced me of it. Why I am insistent on MDMN closing this now with a real (and in my opinion fair) deal that is on the table has nothing to do with those things. It has to do with I don’t want to suffer any more opportunity cost (as you described.) I am fully convinced that the home team has no capacity to get any better deal than is being offered today and if given the opportunity will only make things worse for shareholders. MDMN has proven again and again their skill at destroying equity! I want that to end as quickly as possible. The end of that is on the immediate horizon!

You may be comfortable with MDMN waiting it out, suffering dilution because they don’t have any money, risk losing claims because they don’t know have any property managers and have always paid twice the taxes in arrears, then eventually renegotiating with AMC, getting the 100M as is, or worse renegotiating with some other party. (Frankly, I’m shocked that you would be comfortable with that.) I AM NOT AT ALL COMFORTABLE WITH THAT. AS IN NO SLEEP UNCOMFORTABLE. Yes it’s because I’m over-invested. Nevertheless, I know what 17 years of MMC running things equals.

I’M DONE WITH THAT!

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Letts resigning from the board of Medinah is simply because all the business for the Fortuna, Caren, LDM/Nuoco and ADL has all but been concluded and announced. AURYN now has 100% of the mountain, which is everything they set out to do from the beginning. Letts sat out of any negotiations between AURYN and MDMN. There is nothing left for him to accomplish for MDMN. He likely advised the MDMN BOD to hurry up and wrap the option up, and get JJ out of the picture. As many have said here, earlier is better than later. I wouldn’t be surprised to see some sort of NSR for early gold production directly to shareholders (paid to MDMN and distributed in some fashion), at least until a good mapping of resources results in a TO offer for remaining percentages in AURYN to move the “big boys” in on the project.

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CHG, you’re killing me. I think I just ruined a perfectly good keyboard by snorting coffee.

Midwestern ironic humor at its best, thanks!

Quote from Wizard:

“During February 2016 Cerro Dorado, Inc.’s ownership of Sociedad Contractual Minera
Cerro Dorado Chile increased from 50% to 99.8%. Consideration for the additional
ownership is still under negotiation. The Company also exchanged all of its mining
claims in exchange for 5,000,000 shares (approximately 5% ownership) of a Chile
based mining company.”

This statement was as of 12/31/15. The March 7th update states that the negotiations were completed with no additional cost to CDCH.

The 2015 Annual Report Disclosure dated 4/1/16 confirms this.

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Not disagreeing that it’s done Z, but how can they make a statement as of 12/31/15 that begins, “During February 2016 . . . ?”

I believe its called “Significant subsequent events”. The financial statements are not completed until some time after 12/31/15 and i believe they have to include significant events that have taken place between the acutal date of the financials and the actual publication of same. Apparently at the date of publication, they had not wrapped up the negotiations… JMO

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I did notice that the subsequent event cutoff date was 4/1/16 so not sure why they did not include the resolution of the negotiations. Probably an oversight and why it is included in the Disclosure filing.