The Mining Play

MDMN - 2016-04-11 Weekly Discussion


#41

It is what it is for the moment, folks. Ignore it…there is honestly no reason to watch the ps at this time. Unless, of course, your meds got you too excited and you need something to bring you back to the real world…this is the art of fiction at the roulette wheel called ‘the market.’


#42

I agree with studying the exploration results and following the smart money, but what type of model can be assembled based on the limited drilling and some trenching. Spectral imaging, which is useful for initial stages of exploration does very little for building a GIS database.

Frankly I would happy just seeing a 43-101 for any of the claims, obviously we have to wait for 43-101F until production occurs.


#43

The original agreement called for a 43-101 due by February 2016 if I recall correctly. It’s a bummer we have not seen one yet.


#44

Not enough exploration data to do a 43-101. Those old 18 holes in the ADL, at least 1/3 of them would to be twin drilled to determine legitamacy. AMC is working the near term opportunities first, and then the longer term projects like the cu/moly, ADL


#45

http://www.magsilver.com/i/pdf/Epithermal_Vein_Story-jan232006.pdf

Hi MDMNholder,

Bocanegra’s work on the Caren Mine and the low sulphide epithermal veins seems to be following the model proposed by Buchanan in the early '80s. On slide #11 of their new power point presentation you can see how he borrowed Buchanan’s work on epithermal vein models and related it to the Caren and Fortuna Veins and their relative levels of erosion.

You can see how with Buchanan it’s all about the location of the “boiling level” or “flashing level”. The link above shows how gold is “dumped” in bonanza grade concentrations when the hydrothermal fluids lose pressure rapidly when they encounter faults and cracks so that they can actually “boil”. Jackson’s work explains how when gold thiosulfate concentrations are allowed to boil the gold will disconnect from the sulfur and precipitate out of solution.

In the Merlin Vein area our veins show “banding” which means that these cycles of heating up, loss of pressure and deposition of gold occurred time and time again. Each cycle leaves a “band” within today’s “vein”.

Buchanan’s work was also cited when Bocanegra discussed how this particular low sulphide epithermal vein deposit (LSEVD) was well preserved and the higher levels of the system with a bunch of carbonates are still there and never were eroded. Thus the system is intact. The erosion levels shown in Buchanan’s figure show how lucky we got in that the bonanza grades found just above the boiling level are close to surface as we see in the Caren adits.

Bocanegra has also been stealing things from Greg Corbett’s (Australian very bright geoscientist) modeling of LSEVDs. Corbett’s models are big into the various forms of quartz and chalcedony found at different levels in vein deposits. The argillic alteration surrounding all of our veins is just textbook and Bocanegra has cited how this has helped in delineating all of the vein paths in the Merlin and Fortuna areas.

What blows me away on this particular deposit is how well everything fits the various models. When Alegria decided to test the age of our rock via osmium studies and it came back at 91 million years of age which is exactly the age of the most famous of the deposits in our Early Cretaceous Porphyry Belt then WOW!!! It had always bugged me that our theoretical “twin porphyry deposit” was somehow in the wrong zip code because porphyries are famous for being in north-south alignments in “belts” with other porphyries. Now we know that this porphyry belt does indeed extend down below the Llahuin deposit.

On the last page of the article linked to above notice how this deposit nails the various “first order and second order favorability features” especially #1.


#46

Doc, historic info is great, and like many say, rocks don’t move. But in today’s environment, as you know, unless there is current confirmation, historical results are meaningless. Can’t do a 43-101, JORC or Industry Guide 7 off of old data.

I have found that is hard, at times, to move geo’s that have long history with a property, to come to grips with what it takes for a current Industy Guide 7/43-101. Never can underestimate the old timers, but investors are looking for current data.

That is what is facing the ADL


#47

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#48

The problem is he doesn’t seem to know this. For all of his knowledge of the mountain he doesn’t seem to have any appreciation of what is demanded by the market. In fact, for over a decade Doc’s stance has been the market doesn’t get it but he does. Sure, we can blame it on the market makers or we can take a realistic view of the current environment, find some comps for relative valuation purposes and have an intelligent conversation of where we stand today and what will be required to advance our market cap. But, if we do that than all of his “papers” will need to be revised. It’s a lot easier to continue the novel while changing the plot as we go along. Now we are to believe that no money upfront was advantageous to shareholders for tax related purposes. This type of revisionist history should be read for entertainment purposes only.


#49

Guess who’s back…


#50

Yup the ahole is back! Looks like he/she is going through a different router CSTI


#51

I can’t find fault with Doc since he may be right. The market isn’t always correct otherwise we would not have those stocks that are overvalued and finally collapse and those undervalued that finally break out. I like to look at the market like it eventually gets it right.

I like to view MDMN as a biotech stock with a lot of promise since I have a lot experience with them. MDMN has gone to the FDA a couple of times with it drug application, but it has not been accepted,simply because the FDA keeps asking for more data, the manufacturing process, a development plan, and cashflow analysis before they sign off on the approval… Eventually the promising drug ( Auryn mining operation) is approved, but before that date the stock has had a few big ups and downs along the way . Right Now MDMN is preparing to get in front of the FDA with their industry 7/43-101 specification which should be our last major hurdle to approval. Once the FDA see what we got they will give us the approval and all lights will turn green. In the biotech world it is usually at the last minute after the approval process before the stock really breaks out. JMO


#52

John,

This is not a difficult concept. Like I said, 43-101 F-1 technical reports are indeed the gold standard for the presentation of geological information. No arguments there. Junior explorers use them to attract mining majors to enter into strategic alliances as well as attract investors. Medinah has already landed a wonderful partner that is buying our properties. Medinah did this without spending tons of money/shares on a 43-101 during a time period in which the metals market wasn’t rewarding MR/MR on a 43-101.

Now the issue is how to best attract investors to Medinah now that they are a shareholder in AMC. Masglas is going to do what they’re going to do with or without allocating tons of resources into cranking out a monster 43-101. THAT BOAT HAS ALREADY SAILED AND MASGLAS IS CALLING THE SHOTS NO MATTER HOW LOUDLY YOU SCREAM WE NEED A 43-101 TO ATTRACT INVESTORS.

If I were running Masglas, blocking out tons of MR/MR via allocating probably $100 million into massive drilling campaigns would be stupid when you have the high grade near surface early production opportunities that we/they have. In this current down cycle in the metals market, enormous amounts of MR/MR are only attributed a value of about $10 per ounce.

In Medinah’s rather unique situation, it is my opinion that they can attract new investors much more efficiently by receiving quarterly checks from Masglas and buying back shares followed by distributing overly generous cash dividends because of the lousy share price. The 18 holes Medinah drilled are too old to go onto a 43-101. There is a 10 year cut off mark. AMC has only drilled 15 holes to date totalling 4,000 meters. The overall goal in mining is to get your ore into a mill or smelter and get a check into your bank account. AMC could probably stay busy for the next dozen years doing just that on the early production opportunities. Overly generous cash dividends because of a lousy share price will attract investors much more predictably than MR/MR in a down cycle like this where nobody will give you any credit for your MR/MR.


#53

Doc, I agree with your theory, however, the market is valuing MDMN based on what is know today, which is not much. Realistically, all we know about Auryn/Masgals is they have put together a talented mining crew, have funded some exploration and plan on being in production on the Caren soon. Heck they could be moving dirt at this point, but we don’t know it.

The unknowns are many, what is the financial condition of Auryn/Masgals? Do they have access to capital? What is the economic projections for the Caren? What is their strategic plan for the next 2-3 years? Do they plan on paying out divies in the near term? If so, how much? What about the cu/moly? Is there a timetable for public listing of either Auryn or Masglas? Are the “points” transferable (i.e. can they be sold), is there a right of first refusal?

I could on, but all the unknowns don’t exactly give potential new investors confidence, especially given MDMN’s past track record.

But yes, a steady stream of divies would be great for the stock price.

BTW, correct me if I am wrong, but isn’t a 43-101 F-1 for companies that are in production vs the exploration stage?


#54

Hi MDMNholder,

They’re for any property deemed to be “MATERIAL” to an issuer whether they be in the exploration, development or producing stages.


#55

Hi MDMNholder,

A lot of us want answers to those and other questions but how could AMC answer those until they formally OWN our properties. Remember the “done, done, done” debacle where news leaked out at an AGM 4 or 5 days before Ulander no showed at the notario. We’re at the MOU stage of the process before the notario process commences. He’s going to grill both parties on a line by line basis and make sure all parties interpret the english and spanish versions of the contract line up and everybody’s on the same wavelength.

If Medinah or AMC were to put out some sexy details at the MOU stage and it doesn’t pass muster at the notario and the share price moves then everybody is in deep kimshi because AMC and associates own a lot of our shares and the regulators could accuse AMC of lieing intentionally in order to offload some of their shares.


#56

I don’t think you’re going to find much disagreement with this opinion but, as this point, you/we don’t have the slightest idea for the quantity or timing of these “dividends”. Assuming a $500m-$1b valuation without these details is akin to cashing a lottery ticket before the numbers are drawn. Needless to say a 4000tpm operation isn’t going to move the needle (initially) even if we assume we get 25% of the cash flow (unlikely).

Point being, a $80m valuation for Maglas TODAY isn’t necessarily absurd. We all hope/expect it will look absurdly low in retrospect. Lots of work to be done before that happens.


#57

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#58

Yes, I was wrong, the F-1 is essentially a mine plan of operation from what I gather looking at the table of contents

https://www.bcsc.bc.ca/Securities_Law/Policies/Policy4/PDF/43-101F1__F__June_24__2011/


#59

That TO sure would look good about now so this Medinah Cancer can be removed


#61

It’s not that difficult:

  • Largest long time holding opinion around here was it will take money to move to get this thing going. Now it’s not even in the cards.

  • Disconnect? If there’s one, it’s just getting larger. Explain that.

  • No 43-101? Is this a Auryn screw-up? I’m doubting it. My bet is more of less information for us.

Yay team! :confused: