The Mining Play

Medinah/Auryn - 2018 Q3 General Discussion


#404

Hi Mike,

That applies also to the Pegaso Nero for any interested major that wants to hit the ground running during the inception of the mining season. In a recent interview with CER, Maurizio cited the launch of a “massive exploration program by 'specialists” [PLURAL] in the types of mineral deposits featured at the ADL". Hochschild is indeed one of the premier “specialists” in underground mining. Over the last month or so was the typical time of the year in Chile when 2 parties negotiating for a large project agree to lock in a deal in order to use the full season.


#405

Is that 20 market trading days? Do we have a date that trading starts as AUMC - Sept 12?


#406

Don’t know.


#407

And sorry but can someone remind me when MDMN converts to the new AURYN symbol, is that in December when the shares are no longer restricted?


#408

Has anyone been under the impression that MDMN will actually convert into AUMC? Is that even a possibility? It is my understanding that AURYN holds MDMN equity interest in AURYN Mining Chile SpA (AURYN). The restricted shares of CDCHD (Auryn Mining Corporation, “soon” to become AUMC ) need to be distributed back to Medinah Mining the corporation. The exact mechanism for transferring this equity interest back to individual shareholders in a pro rata fashion has yet to be disclosed or announced, other than the estimated .00558 conversion factor.

If it is in the form of AUMC shares, these would need to find their way into MDMN shareholders’ brokerage accounts. A normal process may be in the form of a dividend in which there would be an announcement from MDMN of an ex-dividend date and a date of distribution. Presumably this would be after the restriction has been removed, after which all AUMC shares are free trading. Is there a way for all MDMN shares to be transformed into AUMC shares in some fashion similar to the way CDCH “merged” into Auryn Mining Corporation? Would MDMN just disappear, or will MDMN be left as an empty shell? We have yet to be informed of what the intended process is.


#409

Not sure, but most likely trading days and not consecutive days.


#410

Hi EZ,

As always thank you for your posts. Instead of referring to the Cerro and AMC privateco deal as a “merger” I think we should look at it as legally being an “asset sale”. The old “Cerro” bought the ADL from AMC privateco. They paid for it with 6.65 billion old “Cerro” shares. As I understand it, there is an old “Cerro” certificate with a restrictive legend on it sitting in the coffers of AMC privateco. It has the old 9-digit alphanumeric Cerro CUSIP # on it.

Subsequent to that there was a name change, issuance of a new CUSIP # (since Cerro and Auryn start with different letters of the alphabet and CUSIPs are alphanumeric), rollback, etc. It’s the same corporate vehicle as the old Cerro but it just has a different CUSIP identification #. So now picture a cert in AMC privateco’s coffers with the new name (Auryn Mining Corporation) and new Cusip # for 66.5 million shares (post-rollback). If we refer to it as “AMC” or “AMC publico” we need to keep in mind the “C” refers to “Corporation” and not “Chile” as in the past. It’s not immediately clear if the TA physically cut a new cert or not. This could all be by journal entry.

The various “participant” clearing firms (that own the NSCC division of the DTCC) need to be polled to see how many of the 66.5 million shares they deserve on a 1-for-100 basis on a specific “settlement date”. We will no doubt be forewarned about that date. The TA will either cut them a cert or journal entry the proper amount. The clearing firms only need one omnibus cert for all of their Medinah shareholders. Typically there has to be a cut off date at which Medinah stops trading and the accounts get credited with AUMC shares so that liquidity isn’t impaired.

If AUMC is trading well north of $1 the old Medinah shareholders might get treated a whole lot better than before when it comes to accepting certs, etc. At this point in time AUMC may or may not be trading on the OTCQB or OTCQX. I wouldn’t be surprised if Western Troy’s TSX.V listing is somehow involved but who knows with all of these “Masglas’s” and “Masglas Peru” running around. There are handy linkages between the TSX.V and the various bolsas (stock exchanges) in Lima and Santiago. Foreign investors like dealing in familiar environs and I would assume that Maurizio’s “berry patch” is stronger in S. America versus NA.

In essence, the nominal owner of the ADL i.e. privately held “Auryn Mining Chile, SPA” went public. The “reverse split” or “rollback” or “share consolidation” was not your typical “reverse split” which usually has a negative connotation to it. This is because the old “Cerro” with 350 million shares o/s ALREADY OWNED 5% of the asset. The transitional form of Cerro had to have 7 billion shares temporarily o/s in order to make the math work. All but 350 million of them remain “restricted” today. There never was an iteration of Cerro with 7 billion free trading shares issued and outstanding. This does not represent “dilution”. All Cerro and Medinah shareholders still own the same tiny percentage of the ADL Mining District. The past corporate governance miscues of Medinah did lead to genuine dilution.

A different way to think of this is that our individual tiny percentages of the ADL got “repackaged”. Medinah with 3 billion shares o/s and corporate governance issues up the cazoo was never “promotable” to the investment community even when it was just a simple “holding company” with no overhead. The new streamlined vehicle is very promotable especially with guys like Dick Sillitoe and Hochschild as part of the team. Unfortunately, since Cerro was not fully reporting to the SEC under Sections 13 or 15(d) of the 1934 Securities Exchange Act the restriction period is the full 12 months instead of the 6 months for “reporting issuers”.

I think what everybody is trying to figure out is will the share price of AUMC crater when those restricted shares become unrestricted. IMO, absolutely not because Maurizio et al hold about 75% of AUMC’s 70 million shares. Although they will be technically free of a restrictive legend and “unrestricted” they still remain under the partial restrictions of Rule 144 because they are technically “control” shares. These can only be sold in quarterly dribs and drabs after the “affiliate”/“control person” of AUMC files a Form 144 warning us that they are about to release a drib or a drab i.e. a maximum of 1% of the number of shares o/s on a quarterly basis. I agree with Kevin, I doubt we ever see those shares in the public market. “Control persons” desiring liquidity arrange tender offers.

As far as the likelihood of the Medinah shareholders dumping shares once the restriction lapses if you study the share price performance and volume numbers over the last 10 years the average Medinah or Cerro shareholders needs about a 5-8 “bagger” from today’s prices to get back to even. If most of these guys were into taking their losses and gaining a write off they’d have done it by now. They’ve had plenty of liquidity to sell into over the years. Now you have a JV with Hochschild on the books which should provide steady news flow for a long time. Maurizio has never had anything to “promote” nor did he have many promotional bullets. In the development phase of an asset like the ADL, very large amounts of money are going to need to be raised either through JVs or a variety of other means. The share price of AUMC will become the “corporate currency” sitting in your back pocket while at the bargaining table. The incentive to promote as well as the ability to promote have never been present in Medinah’s past. There has never been a corporate entity that was “promotable”. Technically, our hope should be that with good news flow we have pretty much clear sailing until we hit breakeven points for our weary colleagues. We humans are just lousy at taking losses.

On a sidenote, if “CDCHD” is trading tomorrow morning then figure on Sept. 12 or so for being the change over date to “AUMC” i.e. the 20-day lifespan of “CDCHD” referred to “trading days” and not calendar days. The OTC MarketPlace appends a “D” to the 4 letter trading symbol to indicate a “new” entity formed by some type of “corporate action”.


#411

I just got a question as to why I didn’t think the PPS was going to tank when the restriction lifts. I already mentioned the control share issues and people being way, way underwater and that if they were of a mindset they’d have already dumped their shares back when the corporate governance issues surfaced.

A better illustration might be a private placement. A stock’s trading at $2 and a corporation offers a private placement at $1 but there is a 12 month hold. The stock might go from $2 to $3 with some good news. But everybody knows there’s going to be a bunch of new shares coming to market in let’s say 30 more days. Of course the stock is going to retrace back from that $3 figure when all of those new shares hit the market.

The difference is that the private placees had no liquidity in the interim. Potential Medinah and Cerro shareholders have plenty of liquidity right now. Nobody is saying to themselves boy I’m going to dump my shares right after the restriction is lifted. They can sell today and avoid the risk of a dip. Cerro shareholders could sell their CDCHD if they want; they’ve had a nice run recently but they’re still underwater 5 or 10-fold. Yet nobody is selling their CDCHD.

The trading symbol “AUMC” replacing “CDCHD” has nothing to do with it. It will be trading for 3 or 4 months as “AUMC” before the restriction is lifted. I feel that it is the combination of plenty of current liquidity, Rule 144 and “control persons” remaining handcuffed, Maurizio’s goal of building a major miner and us stubborn shareholders being so far underwater that we have “voluntary handcuffs” on until we break even that suggests (no guarantees) clear sailing for quite awhile.

I think our self defense mechanisms block out in our minds just how far underwater we are or have been. All of those shares Maurizio and friends bought back at 7-cents are currently a 20-bagger away.


#412

Even though I think we can both agree that one’s cost basis should never have an impact on buying/selling decisions, it’s hard to ignore the emotional biases that run investment decisions. This is one of the many factors driving an inefficient market for the likes of Howard Marks/Ray Dalio to take advantage of.

I would disagree with one point. Typically, when someone is a “20 bagger away” from breaking even there is less of a tendency to hold one’s losses as they are basically considered wiped out with almost no chance of recovery. I don’t think there will be a big sell off with the restriction lift either but to think that the Auryn friends and family are going to hold until AMC hits a $2 Billion + market cap (their breakeven) is just more crazy talk. I’d say its more likely they have either mentally or actually written off the investment at this point.

This point is not accurate. Both MDMN and CDCH faced another wave of dilution when the “loans” Maurizio agreed to make to the company’s for the last cash call expired with the finalization of the new “merger”. MDMN and CDCH’s piece of the pie shrunk again (previous agreement was an interest free loan until Dec 31 2021).

The good news would be that any dilution moving forward will impact the consolidated entity.


#413

Looks like Hochschild is in the house! :slight_smile:

https://aurynminingcorp.com/gallery/

From left to right – M. Cordova (AMC CEO), W. Rodriguez (HM Senior Geologist), I. Burstein (HM VP of Exploration), A. Neyra (HM Field Geologist), and R. Medina (Exploration Manager).

I had the pleasure of meeting Sr. Burstein when I met Maurizio the first time in Toronto. Great guy!


#414

Thank you Kevin! Do you know what adit that is in the background on picture 1?


#415

Who is the guy with the long hair with the piece of paper in hand?


#416

Better yet is that paper on Auryn Website?


#417

It looks like a treasure map to me!:ok_hand:
:laughing:


#418

U have 4 people looking really intently at that paper…


#419

Maybe since we see the Hochschild folks on the property the JV agreement has now been SIGNED?


#420

Apologies for chopping up your post DOC, but to make a point, I look forward to shortly seeing a public company that becomes promotable as AURYN Mining Corporation (AUMC). I expect all news and announcements will be coming forth on the Bussiness Wire and the AURYN Mining Corporation website. I don’t expect we’ll see the larger picture of exactly what is happening on the mountain. AURYN Mining Chile, SPA is still very much a private company at this point in time. There is unlikely to be much news appearing on the private company website, unless perhaps in association with MASGLAS. It appears there will be much greater liquidity as regular PRs promoting progress on the ADL again start to appear under the AUMC banner.

It will be quite interesting, if as you suggest, AUMC uplists on the OTCQB® or OTCQX® exchanges. This may happen after work progresses and all AUMC shares become unrestricted in order to gain access on the international markets. (post edited)


#421

Right now all I see is progress and that is something positive, I may start to make my way to a front row seat.:grinning:


#422

For sure it is one of the LDM adits. (They call it the “Maria” entrance which I haven’t heard that name before.) I don’t recall if it is the one to the Paul Jones gold vein or a different one.

Note this from the website also: “The Hochschild team finishing up their due diligence and reviewing work plans.”

So it isn’t clear how dated these photos are or if Hochschild really is still doing their due diligence.


#423

“Medinah is pleased to report that on March 10, 2017, it signed an agreement with Auryn Holdings Corporation to finance Medinah’s portion of the raised capital. The basic terms of the agreement are as follows.
Auryn Holdings Corporation will cover the payment of approximately $2,000,000 that Medinah Minerals, Inc. owes to Auryn Mining Chile SpA.”

Since Medinah has secured the cash call till 2021, why does Medinah have to R/S ? Why can’t it stay as a holding company with the 26% for the time being? if progress is made with hochschild and the mountain turns up valuable than the shares of Auryn along with Medinah’s will go up. There is about 118 million shares before it reaches 3 billion which should be enough to cover the expenses going forward. Cerro shareholders got screwed big time with the reverse merger and R/S. The stock needs to go to 5.00 minimum for most shareholders get their money back. Medinah is a different entity maybe there is another way around before the same thing happens. Please feel free to elaborate…