The Mining Play

MDMN - 2016-05-02 Weekly Discussion


#341

Even though I’m fairly confident in saying that Greg was the cleanest shirt in the dirty laundry I won’t be shedding too many tears in seeing that he’s moving on. One more step in the right direction. He along with other insiders and Kleen were able to secure 5% of AMC after a few million dollars of missteps in advancing the LDM. Another circumstance where poor execution was somehow rewarded with considerable upside while MDMN shareholders lost another asset.

It seems unrealistic to assume that Gary is going to be pushed out of his role now that he’s involved in AMC but hopefully this was more of a bandaid solution while a more permanent MDMN BOD is lined up. Once he and Vital are out of the picture, our picture becomes that much brighter. People who understand the Medinah Gold fiasco, will understand the same.


#342

Some people are just not satisfied with anything,


#343

What is the need for a BOD that consists of more than a CEO/Director now that MDMN has become primarily a holding company for an eventual TO from AMC? We do have a few shares of CDCH which are of future minor value. And then there is the matter of the existing entanglements through AMNP with JJ, Claro and Gary Goodin (CEO of AMNP and a recently appointed BOD member of MDMN) as the major control persons, not to mention Greg and Vittal. http://www.otcmarkets.com/financialReportViewer?symbol=AMNP&id=146199
Also, as noted in MDMN’s current Quarterly report released May 13, 2016:

On March 6, 2015, the Company received a share purchase offer from American Sierra Gold
(AMNP) to purchase the shares of AMG owned by the Company. The Company received 20,000,000 shares of AMNP in exchange for its interest in AMG, and indirectly for all of the JOTA Property.
http://www.otcmarkets.com/financialReportViewer?symbol=MDMN&id=155023

MDMN is also holding 20M shares of AMNP now as an asset. All existing MDMN BOD members have a continued appearance of a conflict of interest that is not currently in the best interests of shareholders. When will that change? Is AMC or Masglas going to involve itself with AMNP next? I think it’s already been noted here previously that AMNP owns 100% of the Pangue and Caren placer properties (valuable?). There are apparent entanglements from MDMN’s past that shareholders should at least be aware of.


#344

All of that is being looked after as well. As much as anything can be put right it will be if it all possible. Moo.


#345

Assuming there are no naked shorted shares, we each own

0.0000000186 % !!!

Rod :slight_smile:


#346

Greg, we can never fully express our appreciation for the many times you personally provided finanacial bailouts which literally keep Medinah in business and our investment as shareholders solvent. I have personally watched you place the needs of the shareholders ahead of your own and for that we will forever be in your debt.


#347

Yea right, what motivated the structure of “done, done, done…”, maybe greed. Certainly not shareholders interests.


#348

Also noted in the current Quarterly Report was the share count as of March 31, 2016:

C. Beneficial Shareholders
Other. The ownership or management or anyone known to the issuer who beneficially owns more than 5% of the outstanding shares as of the date hereof:
Name, # Of Shares Beneficially Owned, & % Owned
Cede & Co. 906,504,556 (67.2%)
Compañia Minera Altos de Lipangue Limitada 109,936,500 (8.2%)
Juan Jose Quijano Claro 92,864,713 (6.9%)

Cede & Co. is the nominee name for The Depository Trust Company, a large clearing house that holds shares in its name for banks, brokers and institutions in order to expedite the sale and transfer of stock. The Company believes that The Depository Trust Company is the largest security depository and post-trade financial services company in the world. Cede & Co. is commonly referred to as “Street Name.” Other than those listed below, the Company is not aware of any individual shareholders who hold 5% or more of the Company’s Common stock.
Compañia Minera Altos de Lipangue Limitada is a corporation owned and controlled by Juan José Quijano Fernández, a former director of the Company. The Company believes that the shares referenced above may be subject to the transaction described in Item 6) A Business Development, under the heading “Material Agreement Regarding Future Share Issuance.”
To the best knowledge and belief of the issuer, no broker, dealer or any other person associated with a broker/dealer is associated directly or indirectly with the issuer.

One can infer that 17.7% of shares (approximately 239 million) are currently held in certificate form.


MDMN - 2016-05-16 Weekly Discussion
#349

Hi Kevin,

Thanks again for all you’ve done. There’s a different way to look at this scenario. When you factor in that Medinah owns a 36.25% stake in the 4 Nuoco properties (15% on their own plus 25% of AMC’s 85%) which make up one fourth of the mountain because of their residual 15% of Nuoco they never sold to AMC in essence Medinah has a 28% stake in the mining district as a whole, Masglas has a 63% and both Nuoco and Cerro have a 4.5% stake.

At the end of the day, Masglas’s profits will be associated with their 63% of the action plus whatever percent they own of Medinah multiplied by 28%. For instance, if they owned half of the Medinah shares (14% of the profits of the district) then their profits will be tied to a 77% stake subject to the TERMS AND CONDITIONS of the agreement. In the MOU press release, Medinah cited several “free carried interests” that were part of the deal. It appears that Medinah is responsible for ZERO of the “mining costs”, ZERO of the “operations costs”, ZERO of the further exploration expenditures, ZERO of the future drilling costs, ZERO of the tax encumbrances and ZERO of the costs for the purchase of further mining concessions around the mining district. They will, however, receive 25% of the “action” on any new annexations. I do sense that Medinah needs to take a portion of its portion of the mill check and pay off its pro rata portion of TRANSPORTATION costs.

These 63 and 28 percentage points of “the action/profits” are not at all created equal when one party’s percentage points have added “encumbrances” and responsibilities attached. The “end profits” attached to these percentage points will be quite different as Masglas needs to take its portion of the check from the mill or smelter and go pay off a bunch of expenses that Medinah need not pay.

Somewhere along the line the investment community is going to have to assess a VALUE for Medinah’s “package of assets” including 28% of the action PLUS all of the freebies contained in the TERMS AND CONDITIONS. Recall that the MOU press release also stated that further negotiations on or around the notary appearance date might be engaged in so put an asterisk for now on these “freebies”. If you apply industry standard costs for various mining activities like taxes, “mining costs”, etc. Medinah and AMC’s “profits” might be very closely aligned for the next perhaps 25 to 30 years UNLESS MASGLAS DECIDES TO DO SOMETHING ABOUT IT.

If Medinah’s share price were to trade at a severe discount to what 28% of the action PLUS the value of all of these “freebies” would justify in mining terms, then I would think that Masglas would quietly gobble up everything in sight in order to raise up their percentage of Medinah ownership and therefore their share of 28% of the profits. Nobody has better visibility of the FMV of 28% of the action than Masglas.

If Masglas had an interest in using the Medinah corporate vehicle in order to go public via a reverse merger then after gaining 50.1% of Medinah they could simply tender for the whole Medinah enchilada. Any tender would be subject to a FAIRNESS OPINION both to protect Masglas and Medinah. If there is still a gigantic disparity between Medinah’s market cap and the FMV of 28% of the action subject to the agreed upon TERMS AND CONDITIONS then the FAIRNESS OPINION would reveal this disparity. A 28% piece of the action/profits with a whole bunch of free carried interests thrown in (if the MOU press release is accurate) is “worth” a lot more than a 28% “working interest” in the mining district. If Medinah is entitled to a 25% stake in all further annexations by AMC then the FMV of Medinah’s perhaps 27.5% of the action (adjusted downwards because they won’t earn the full 28% of the action at these new annexations) at that time will go up markedly.

This generosity by Masglas should not be that shocking because Medinah did take Masglas off of the hook for not only $100 million 18 months down the road but also the “cost of capital” related thereto. After what Masglas has discovered, I think it fair to say that their chances of exercising the option at the option expiry date were significant. Is the market savvy enough to realize that Medinah is getting a whole lot more than 28% of “the action”? I don’t know but I’m pretty sure Masglas does. In retrospect, I think it’s the lousy share price that led to the design of this “win-win” solution. Masglas can recoup its “generosity” by simply buying ridiculously cheap Medinah shares. They don’t care if their overall profits come DIRECTLY from their 63% of “the action” or INDIRECTLY from their percentage of ownership of Medinah shares at the finish line if from a “net profit” point of view the two are almost equal.


#350

Peter, many of us have grown tired of the misrepresentation of Done, Done, Done. At that time, Medinah had successfully secure a potential partner. An AGM was held to present the details. Greg’s comments were in reference to Medinah position only. No different than someone placing their house up for sale and getting an acceptable offer. The necessary steps from Medinah’s perspective were finished. If the potential buyer doesn’t honor their committment in the transaction then you don’t sell your house to them. The blame was squarely on Medinah’s potential partner’s side, period. Your post is either out of ignorance or you have an agenda. The persistance of this misinformation is annoying to many of us.


#351

Chilledog, don’t include me in “many of us”.
It’s all history now but…
If the due diligence of members of this (or the old MDMN board) uncovered a dubious Ullander and what appeared to be his shell game then why could our BOD not do the same. IMO the “necessary steps” were not completed. I think this bothered a few shareholders, and they ended up being correct.
Would you hold up the sale of your house for 90 million shares in a non trading "a la Mossack Fonseca"company that had no assets.


#352

Jim, there is no free-carried interest. Read the MOU from AMC and the last update from MDMN on May 1st. MDMN gets 25% of AMC the same way CDCH got 5%. They will have shares in AMC nothing more, nothing less. In addition to that they own 15% of the shares of NUOCO. Nothing more, nothing less. You cannot merge the two because they are different claim blocks.

There is no “mill check”. MDMN gets a check when AMC distributes profits to its shareholders. A good number of us don’t believe that’s going to be every trip to the mill or even every quarter to start.


#353

I think they were completed and advised against, but JJ entered into the agreement anyway. People really don’t understand how hamstrung MDMN was with JJ and LP in control of MMC and JJ having half the property.

As you said though. It’s all behind us.

It’s going to take some time for this to move significantly (moo). But it will move. We have the goods, but nobody in the sector is getting rewarded without production. We’ll get there soon enough.


#368

gold back up to $1288. $1308, the 2015 high, is the magic number. Perhaps we will take another run at it here. I expected the summer doldrums to keep the POG fairly flat for a while but there is so much going on out there, perhaps it just can not wait.


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