AMC owns 7,000 hectares already and has a preferential option over MDMN’s 3,000 hectares.
It’s the only logical choice to me John. This is MDMN. There is no guarantee that MDMN will ever receive $100M. AMC has enough land to mine for a decade without worrying about the porphyry or MDMN’s Merlin claims.
It’s quite possible the increased percentage we receive on all those claims in light-grey offsets the lack of receiving $100M. In addition, IF the porphyry is economical, the increased percentage in the sale of it could also offset the $100M.
Aside from that MDMN is flat broke and in essence is in a death spiral. Yesterday they had $250K in bills due for taxes and surface rights. If not paid, the tax is double, immediately! In fact, we’ve been paying double the taxes for years because we pay them late all the time. Raise $250K, there’s 25+ million new shares issued. And as you know, those will come into the market driving the price down further. And so on.
I haven’t even begun to discuss the contract and why it’s beneficial for MDMN to close this now!
We both know at this time, MDMN’s land is not worth $100M in it’s current state of development. Nobody would give them that for it until they put some work into it. They’ve got no money to do so and no expertise to do so. AMC has already met their side of the option. If AMC feels it’s worth more than $100M to them, then they exercise some time down the road. If they don’t feel it’s worth it, they don’t exercise and we get $0 and we have no percentage in ANY of AMC’s claims except the 15% we own in NUOCO.
Is the above likely? No. It’s more likely that AMC goes into production, makes a crap load of money, proves a big porphyry and simply buys MDMN cheaply and never exercises the option. And the only way they would do that is if they know that the porphyry is worth it. At least if we have a greater percentage, we’ll get more than the $100M valuation for it at the end of the day AND we start receiving revenues on the Caren and Fortuna. Doing a deal now de-risks both sides of the equation (both for AMC and for MDMN.)
Would I like to see some cash in the deal? Yes. Does it matter to me? No. And the truth is, as Mike said yesterday, give me all the percentage in AMC I can get and let them keep the cash because they are FAR more likely to deploy the cash in a more appreciative manner than MDMN.