The Mining Play

MDMN - 2016-04-11 Weekly Discussion


#21

Yes but he normally shows up a couple of hours into the trading day, but we will see.


#22

He was there at open but then disappeared, not that he won’t be back.


#23

Check out the chart for mssg. Some of the stinky Jr’s are moving. Hope we catch that one day soon.


#24

Sorry mxsg


#25

Not to mention some of the big guys charts
CDE. We make finally be seeing the start of a PM market emerging.


#26

You are right he is back this time with CDEL for the 1.8 M shares at .015.


#27

Hi Lean,

I think you’re forgetting what a “clawback option” like this is. This doesn’t mean that the optionee is “willing to pay $50 million for a 5% stake” TODAY it means that they have the OPTION to pay that amount for a 5% stake OVER THE NEXT 5 VERY, VERY BUSY YEARS. It’s a freebie that may have incredible value down the road. If Alegria hits an interesting intersection or two into the Cu-Mo porphyry, today’s value of that option will go up very rapidly as too would the universe of players interested in acquiring it.

This entire TRANSACTION changes the paradign for an investment in Medinah. Before any deal is executed, Medinah has a management team that is what it is and about 4,000 hectares of very valuable land that is not open pitable. After the deal, they have 28% of the “action” (includes Nuoco) for an open pitable mining district run by a bunch of mining professionals.

After the deal, Medinah represents an extremely inexpensive way to buy percentage points of the now open pitable mining district run by those professionals. I’ve already outlined all of the “free carried interests” involved. When factoring in those FCI’s I’d estimate that Medinah actually carries about one third of the" effective action" for the entire mining district. This option scales that up to a potential 38% of the action but only after it becomes obvious that 5% of the action is worth over $50 million. The question arises as to what it would take for that to happen.

To Masglas it hardly matters because if 5% of the action is worth over $50 million then they’re very happy campers. The 5% clawback option on top of Medinah’s “effective” (if that’s the correct word to use) one third of the action is a potential cherry on top especially to a mining major in need of replenishing MR/MR.

Medinah will soon have a neon sign on it stating that if you like this management team and the prospects for this now open pitable mining district then we are the pathway for you to buy percentage points in the project very inexpensively. The TRANSACTION itself makes the project open pitable. I don’t think many majors would be willing to make a move until the property was fully consolidated by a TRANSACTION like this. Nearly every porphyry deposit on the planet is mined primarily by open pit methodologies. Like I stated earlier, I just can’t picture Medinah management by themselves pounding the table demanding an option to pay $50 million for an “extra” 5% of the action over the next 5 years.


#28

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#29

Can someone answer the is question:

How did Auryn get the Caren claims? TIA


#30

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#31

I think the last rumor that circulated was Volcan had the Caren claims for quite some time. Again, this a “rumor” posted some time ago.


#32

Thank you mdmnholder! Can you direct me to where we can pull the claims map to see who the owners where originally?
I’m just curious how Auryn could own this property out of the blue. TIA


#33

I can’t direct you to a claims map, but I know Doc, MG, CHG or Wiz would know. There is probably a map on the Auryn Blog that Wiz put together.


#34

I think we might see MDMN sell the 5% option for cash sometime soon . . . . . .


#35

Hi Andy 2,

SERNAGEOMIN’S website has a lot of the data you seek. In a nutshell, this property was owned by an outfit called SCM Minera Mantos Azules Chile which I believe was controlled by some very powerful Peruvian folks. They had an initial relationship with the Quijano family involving what was described to me as a “work permit” at first but later a sale occurred involving once again some powerful Peruvian folks that may or may not have differed from the original group.

They did their work in the vicinity of what is now called the Caren Mine on the northern downslope of the plateau. These are the 3 adits (one portal has collapsed) you can see on the Google earth images with 3 different roads accessing them. As is now public, the grades they found there were insanely high. The Caren Mine is where Medinah’s Merlin 1 Vein exits the mountain to the north at about 80 meters depth below the plateau. There was obviously a surface outcropping somebody noticed and they drifted 3 adits and found lots of goodies.

With that mine serving as the “hub” the Peruvians simply negotiated the purchase of everything around it in more or less concentric circles. First came the Nuoco and Cerro properties to the west, north and east and later the Medinah properties (scheduled to close in about 12 days) to the south, east and west.


#36

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#37

I am thinking the seller is back. Our share price is disgraceful…


#38

Lean,

You and your colleague suggest that you can’t confirm the presence of a disparity between Medinah’s current market cap (about $20 million) and the NPV of their assets after the deal is inked until an enormous amount of drilling is completed. That’s fine, more power to you. I just happen to disagree with you in the strongest of terms.

You don’t have to wait for another 500 drill holes on this deposit to confirm this disparity. You’ve chosen the wrong valuation methodology for this particular situation and this deposit. When I was getting trained in this industry my mentors said to put as much time into choosing the valuation methodology as you do into calculating the valuation. I did a 70 page paper a few years back for the Medinah shareholders reviewing the various valuation methodologies available and which ones, according to the world’s most respected geoscientists, should be used at the various stages of development of a deposit.

Don’t get me wrong, an NI 43-101 F-1 “Technical Report” is the gold standard in this industry for valuing deposits THAT ARE ALREADY FULLY DRILLED OUT. In the interim timeframe, P. Geos and P. Engs can simply study the totality of the information gathered to date and placed into their GIS Database. The data that will be inputted into the F-1 sits in the GIS Database TODAY. The statistical accuracy of a thorough study of the contents of the GIS Database TODAY will not match or exceed that of a properly executed F-1 WELL INTO THE FUTURE. BUT IT DOESN’T HAVE TO IN ORDER TO GAUGE IF A MARKET CAP IS GROSSLY OUT OF ALIGNMENT WITH THE GEO-FACTS. Your allegation seems to be that until an F-1 lands on your desktop you’re totally in the dark and then voila the light turns on.

In the interim timeframe before an F-1 lands, I’d rather study exploration results, models and the actions of the “smart money” that knows what’s going on. AMC bought 210 million shares and stopped their buying at the 10-cent level when Medinah’s market cap was about $135 million or almost 7 times what it is today. Since that time they’ve been trying their best to land a 350 million share block with so-so results. Also since that time, AMC’s MASSIVE trenching program increased the linear dimensions of veins making it to surface on a small portion of the land from 400 meters to over 5,000 meters. The grades found at the VERY SURFACE are much higher than the average gold grade in porphyries. I’m assuming that they already knew that the grades in their Caren Mine next door to the Medinah deposit were very high.

The hyperspectral satellite imaging study done by Perez already told us that whatever is inside of the “about a dozen intrusives” he found in a 7 Km SE to NW swath across the southern downslope off of the plateau we’ve got a whole bunch of it. We now have a good handle on what we have a whole bunch of. Alegria’s clever demanding of a time dating of our rocks has confirmed that our porphyry structures are indeed about 91 million years old and that our deposit represents an extension to Chile’s “Early Cretaceous Porphyry Belt” that nobody had thought existed. We know all about what the 9 deposits occupying this belt are made up of. AMC’s geoscientists have confirmed that the stratabound copper deposit that Nuoco found in the LDMC adit is a dead ringer for the open pit Lo Aguirre deposit immediately to our south. I wont’t bore you with what they’ve found at surface at the PN.


#39

The selling continues:

4/12/16 Buy-743536
Sell- 2,141,446-sold mostly at the bid.


#40

OUCH!!! That’s Terrible