The Mining Play

MDMN - 2016-04-04 Weekly Discussion


Last thing I would add, is if you look at the SEC Registrants that trade on OTC (take LBSR as an example although I would steer clear of them), they just got an $8MM equity line of credit, forget the lender. Each time they need funding, they file an S-1, register those shares, upon effectiveness, the shares are sold to the funder (in this case at 5% discount) and are immediately free trading.Obvbiously, the funder is not a long term investor hence the shares will hit the market.


Ok plain and simple no big talk and straight forward that people can understand. These past 2 days 80% of the posts were garbage and all about dilution. After this month Medinah will own 25% of Auryn as everyone is suggesting that a TO is inevitable, now my question is “do you actually think that Auryn will remove the cap on the shares when actually they want to buy them in the near future?” Please do the math and give it a rest till the end of month.


Thank you hulkster!


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Hulkster intersting point you indirectly made. And yes, i am confident that all my posts fall into your 80% garbage category.

I think it is safe to say, we all believe Auryn is comprised on smart mining and business people. Now let’s take a look at the future from Auyrn’s perspective. When and if they come to the point that they want their equity back from MDMN, Cerro, Nuocco… Don’t you think they will analyze the cheapest way to do so? That is, either do a TO for MDMN, Cerro… or make a cash offer for the equity interest held by these companies.

Something to contemplate.


Dear God, please make this year the year I can either stand on my MDMN leg again or have no other reasonable choice to make than to cut it off.


Best post of the decade!!!


Interesting copper output data, Peru leading producer, Chile poised for growth


And what post might that be?


Dear God, please make this year the year I can either stand on my MDMN leg again or have no other reasonable choice to make than to cut it off.


I’m not sure of the logistics/legalistics of this but suppose Masglas bought 675 million Medinah shares in total and the share price remained in the gutter at let’s say 1.5-cents. That’s $10.125 million worth of Medinah shares. Let’s say that the appropriate mining industry valuation metrics set a value for an ownership percentage point of AMC at $5 million or $500 million for the whole mining district. Medinah’s 25% share should have been reflected in a $125 million market cap but instead it was only reflected in a $20 million market cap. The DISCONNECT was about 6-to-1.

A “share swap” might allow Medinah to receive Masglas’s 675 million Medinah shares in exchange for about 2 of Medinah’s percentage points of AMC leaving them with 23 percentage points (92% of the original 25)but only half the amount of shares after Medinah cancelled the 675 million shares. To Masglas it would be a “push” since their stake was only worth $10.25 million and wasn’t budging very much. The point being that even though our markets are corrupt beyond belief the mining industry valuation metrics aren’t necessarily corrupt. There are a gazillion ways to unwind these market DISCONNECTS. All corporations cherish their own shares.

In a sense, Masglas would have INDIRECTLY “fronted” Medinah the amount of cash that it took to buy half of Medinah shares. This “loan” was secured by 2 ownership percentage points of AMC.


Masglas hands Medinah one tenth of their Medinah shares or 67.5 million in exchange for .2 of Medinah’s AMC ownership percentage points. This TRANSACTION sets up a BENCHMARK value for the proper value of an AMC ownership percentage point i.e. $5 million. The existence of the DISCONNECT is revealed to the world and AMC’s remaining stake in Medinah (675 million shares minus 67.5 million equals 607.5 million shares) goes up in value. AMC “levers” the DISCONNECT.


Good thoughts, Uneverknow


Got it Doc.
Trouble is that everyone connected to this is shell shocked and the only disconnect most what to experiance is the one where their shares go bye bye.The old holders will probably never stay beyond a small gain, if any. This stock sucked all the oxygen up.


Good call oldtimer…After over 6 long years, I would be “thrilled” with a small profit, and be gone forever. All I need is .05 and I could walk away forever. And as I once pointed out, would be very happy for everyone, that was willing to stay longer, and were rewarded for their confidence and further patience…


Why don’t we just say that it’s worth $5 billion? Where does the $500 million come from? These are mostly assets that MDMN and CDCH previously owned. Does AMC’s ownership magically transform the value of the mountain or do we need a considerable (as in massive) drill program before we can get even close to those numbers? Anybody, who has an inking of an understanding for the precious metals sector could point to $500M market companies and know how ridiculous the comparison (currently) is. The only other jokers who seem to be drinking the AMC valuation kool-aide is our stellar BOD who (you could claim) value AMC at a $1Billion (10% for $100M). CDCH should be trading at 20 cents using that math but the evil market makers must be keeping it down.

A 10 cent exit for CDCH/MDMN would equate to a $600M valuation for AMC. MUX (a company referenced here often) which is probably a bit rich after tripling in value has the same valuation. I’d love to see Doc or anybody else try to make a comparison between the two companies today. The main disconnect I see is one between reality and fantasyland. All of this can change with time/money/drills. Until then, AMC is a “prove me story”


You obviously don’t have level two. The MM’s are quick to kill any rally in price.


Interesting read underscoring what mot of us know.


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This takes me to an e-bike article
Is what you meant to post is this?


Maybe you can explain how the option for an additional 5% of Auryn was calculated. It seems to me that there is some mutual expectation that the value of Auryn with 5 years or so will be in the range 1 billion. If it weren’t (or there was no expectation of such within a short period of time) then exercising the option would be a bad investment by MDMN. If the valuation was going to be greater than 1 billion within 5 years, then Auryn is leaving money on the table. So if the mountain develops as knowledgeable people expect, what do you think the value of Auryn will be 5 years from now?