The Mining Play

MDMN - 2016-04-11 Weekly Discussion

Anyone has an idea when the news will be coming next week-beginning or end of the week? I hope there will be some publicity.

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no trades today so far or my level 2 is not working? if indeed no trades so far the drying up of shares would only make the sp go higher faster once we get some good news.

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John, (or anyone else who feels they have the knowledge to answer this),

A .20 TO would be a cost of around $280M for Auryn. How much valuation do you think they need to prove up before they’d be willing to pay that for our shares?

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Hi RainMan,

…Or the significance of the near surface early production opportunities and the cash flow they could generate as well as an expected parabolic increase in permitted production tonnages per day changed the overall plan. Instead of bringing in a major sooner than later and dividing up the mountain based on a fairly static NPV, an expected dynamic increase in NPV has changed the plan for Masglas/AMC to “fly solo” without a major or big financiers as long as possible so that this wave of NPV enhancement can be ridden a little longer in order to decrease the inevitable dilution when the big bucks are needed. Medinah was in a position to make this adjusted plan a reality for Masglas and from the terms outlined in the MOU signed (tons of free carried expenses) perhaps they milked it fairly well.

Whether this ends up as a tender offer or when any such tender offer might be realized the reality is that in the short term Medinah is going to be sporting a neon sign indicating that buying shares in Medinah represents a very inexpensive way to access percentage points in a cash flowing huge mining district run by very qualified mining professionals. If the projected increase in the NPV of Medinah’s assets and “free carries” through time represents another wave, Medinah may want to ride that wave for a while or at least only entertain TOs factoring in that projected flight path. With mining costs averaging somewhere around a 17% per annum increase the value of those “free carries” will grow in a similar fashion through time.

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Hey Rich, simple math, collectively we own 35% of Auryn, so that 35% has to equal $280 million.

$280 million divided by .35 = $800,000,000

So Auryn would need to value the property at a minimum of $800 large to justify paying $280 for our 35%.

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Ahhhh, simple math… my favorite kind. Thank you mdmnholder!

Hopefully the “Billions” apparently already estimated according MDMN’s last update will be enough to make a TO worth it to everyone. I think I’d personally be happier for MDMN to be a dividend machine for us, but after all this time I can’t say that I’d be opposed to a buyout as long as we get a fair price.

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I’d add “only way”. Meaning Auryn’s not going public. Medinah is the only path to the riches of the Mountain.

But that $800 large was all related entities, to get $280 milly for just MDMN’s 25%, the value needs to be a minimum of $1.12 billy. :scream:

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Where did 35% come from? I understood 25% + 15% of Nuoco, did I miss something? TIA.

150000 @.0138 Oh Boy :frowning:

That was my mistake, I added MDMN’s 25% + Cerro’s 5% + Nuoco’s 5% for 35%. See my last post for the MDMN’s 25%. I didn’t factor in the 15% of Nuoco.

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I’ve been thinking of Auryn owns 210 million shares of Medinah with a cost basis of around .075 would it not make sense that as soon as the contract is signed A)they purchase more shares gain control and do a TO of around .15-.20 benefit them more than B)not buy anymore shares and offer a TO .15-.20? Just thinking here I would go with A they get more $$ in the end if this mountain truly hold the riches.

Fortunately, U.S. law encourages them to think of parties other than themselves. This is what valuation experts/fairness opinions are for. And, they are not limited to considering only the holes than have been drilled. There is such a thing as “inferred” resources. Personally, I’d rather hang around while dividends are paid, holes are drilled, and value increases. If you’ve been paying attention to the smartest geo around here (brecciaboy), you would know it will NOT take that many holes to confirm that we’re dealing with at least one porphyry - the challenge will be to prove its extent/longevity. But, you can be confident at this point that what we’ve seen bears all the badges of one heckuva mine, most likely historic (three times larger than Chiquicimanta?). The idea that it’s not worth us hanging around whilst they prove it up, because it’s not worth it, or because of the opportunity cost is … well … let’s just say uninformed. That’s why they drill, and it happens all the time. Investors step up to the window, put their money down, and wait for the professionals to do their work.

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100x was me, can’t resist!
J.

Did we receive a FO when we gave up the LDM?

Did CDCH issue a FO when they gave up 5% of the Fortuna?

Was a FO issued when we gave up $100M for an additional 10% of AMC?

Will a FO been issued when AMC ultimately tenders for MDMN?

Here’s a hint. The answer to all questions is the same.

Another suggestion.Read up on inferred resources. This seems to be another area where you lack basic understanding.

The opportunity cost conversation (which started more than a year ago when prices were at a level where many people are now willing to exit and before the HUI doubled in price) is an individual, case by case situation. Those arguing for an early TO are understanding the realities of our current situation and AMC’s inevitable move to “reclaim” the 30% of the mountain. This isn’t an individual situation, its an economic one that you have no control of.

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I’ll agree that I am not an “expert” on the resource categories, but I do understand enough to know that it is something less than indicated and measured. Maybe YOU don’t. By the way, I would like to know your educational credentials - do you have a high school or college degree? Any training in the field of geology? It’s pretty obvious.

That’s right, keep beating the TO drum, giving absolutely NO thought to the step-by-step process of developing a resource over time (apparently you didn’t know too much about that). You were saying when AMC first started out that MDMN wouldn’t last 6 months before it was taken out, as if YOU had some control over the situation. And here we are now. Hmmm … I’m thinking I don’t need YOUR opinion, as it has proved useless. There is such a thing as integrity (look it up).

Looking forward to your presentation at the AGM. That’s a joke. Like my sense of humor?

I’m certainly not an expert but I invest in the space both privately and publicly and employ actual experts to enhance my returns and reduce my risks. As far as I can tell there are no experts or actual geos contributing to this board. However, if I’m going to offer an opinion on this board for the 500+ readers, I make sure that I have a basic understanding for what I offer, so as to avoid the risk of looking like well…you know.

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Looks like MDMNHolder addressed your question. The simple math (if we assume a 28% all in stake in AMC and 1.5B shares outstanding) is $1.07 Billion of value. However assigning value is a bit subjective. Inferred resources don’t carry an economic value and cannot be included in things like a PEA, as an example. However, I don’t think AMC is going to wait around until they have over a billion in proven and probable reserves before they initiate a TO. If the early production opportunities start to bare fruit AMC could be motivated to act earlier. IMO, a 20 cent TO is pretty much off the table. It’s hard to imagine a scenario where Masglas delineates that substantial of a resource before taking us out.

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I guess since you’re so unhappy about this investment and your inability to get out of it expeditiously, your “experts” must not have done a good job. You might want to consider making some changes. Good luck. By the way, if the opportunity cost is so high for you, just go ahead and sell now - why not? I mean really, management really is that incompetent and fraudulent, as you say, so why don’t you just pick up your marbles? At least I have this going for myself - when I first got into this investment I had already been into pinkies before, and I knew what to expect. You obviously did not. I’m trying to think of somebody in his right mind who would actually lend any credibility to what you say, but I’m having a hard time. Management is incompetent and fraudulent. Quick TO and go. That’s all you can say. I guess it does make sense that you’ve had others pulling your strings all along. Oh well, I was looking forward to your PUBLIC indictment of management at the AGM - I guess it won’t be happening now.