The Mining Play

Medinah/Auryn - 2018 Q4 General Discussion

I haven’t seen the signing release appear yet on Hochschild website or on Bloomberg. Might take a couple days

I would not expect Hochschild to post anything until they earn an ownership interest.

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That is the probable explanation for the delay in signing the agreement with Hochschild. I have to wonder if it was MC that may have asked Hochschild to wait until they could say something definitive about the proposed Peru project? The original agreement with Western Troy was supposed to be complete by Dec 3. It is likely MASGLAS/AURYN/AUMC was anticipating the December 4, 2018 announcement of Western Troy and MASGLAS Agreeing to the Letter Terminating the LOI and Associated Proposed RTO. It is even nicer that the announcement for a signed Hochschild agreement came before December 15.

I don’t think the December 15 date is as significant as some shareholders may be thinking so far as unrestricting AUMC shares or conversion of MDMN shares to AUMC shares. It is the anniversary announcing AURYN “selling” title to ADL mining concessions to Cerro. Unrestricting AUMC shares and the conversion for MDMN shareholders is likely a multi-step process that will take time to complete.

I anticipate after all share restrictions are removed and MDMN shares are converted is when we’ll start hearing regular updates and progress reports. I expect a return to information releases similar to the way MC and AURYN released detailed updates prior to 2016. AUMC will be a different company after promotion begins.

Thanks I was hoping Phase 3 was drilling

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No…recall this statement:

"Phase 1 concludes on Friday, October 12, 2018. Phase 2 will begin on Monday, October 22, 2018, and we expect a Phase 3 to be completed prior to the end of 2018.

The aim of these first phases is to establish the targets for drilling in early 2019."

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Since they delineated phase one and gave a clear detailed explanation of phase one, I guess I was a little surprised they did not detail Phase two and three. We know phase two is now also complete and phase three is now on schedule for early January. Taking that into account when would you expect drilling to start?

Now wouldn’t that be something!

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So, in short per the latest news release, following is our status:

LDM - JV contract is signed, and preparing the property for further exploration and drilling, which should commence in 2019.

Fortuna de Lampa and Amarillo - Removing water from tunnels, then will enlarge tunnels, evaluate historical work, and develop a mining plan. Possible production in 2019.

Larissa/Merlin - Fixing chimneys and exit routes. Possible production in 2019.

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So is the Fortuna de Lampa and Amarillo and the Larissa/Merlin all under the Hochschild JV? Thanks…

When do the MDMN shares convert to AUMC shares again?

No one knows!

After this great news our SP is still in the gutter. I remember back in the day any mention on a possible JV being signed the SP flew. Well now we have a signed JV with a recognizable partner in Hochschild.

People are guessing first quarter 2019.

No. They are not part of it.

That’s because this stock is damaged and stigmatized by its past. That probably won’t change until we are trading under one symbol and there are more than sporadic indications of progress. How many past MDMN/CDCH shareholders are buying now?

Plus, there are so many other depressed mining stocks out there with less baggage and risk attached. Only those in the know (if there is something to know), those who have high risk tolerances or those that have no idea if MDMN’s past would be buying now.

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What about the equation that mdmn stock would be worth .0058 upon conversion. Is that still valid or we can throw that theory out the window?

That’s a share conversion rate, not a price. TR explained it pretty well:

Probably should note that as of now:

1 million shares of Medinah is worth $2200.

5580 shares of Auryn is worth $3069(bid) X $5189(ask) which would represent a pretty significant premium for Medinah shareholders.

I’m going to guess we will see an increase in Medinah’s share price in January and significant decrease in Auryn assuming the conversion news comes out so they met roughly in the middle.

I think the conversion won’t be a wash for a number reasons:

  1. Tax selling will be over.
  2. Conversion to AUMC with Medinah going away will be judged a positive by most.
  3. Drilling news, production news etc. might help AUMC’s share price.
  4. Doesn’t appear to be any shares left to sell in AUMC. Newly issued shares to Medinah shareholders may not be immediately liquid.
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Hi K town,

All Hochschild got was “the LDM” but it appears to be an expanded LDM compared to what we had been referring to as “the LDM” in the past. The map of the new Hochschild JV area suggests that the expansion was to the south of the old LDM on the southern side of the ridge crest. Since Hochschild is known for being one of the premier developers of underground mines exploiting gold and silver in epithermal and mesothermal veins, I think it’s fair to assume that something might be brewing to the south of the ridge crest that might involve underground efforts. This is in the region where the work of DeGana et al found and reconnaisance-mapped a massive hydrothermal system in 1996.

North of the E to W oriented ridge crest in the area of the western plateau (what we’ve known as the “LDM”) it looks like Medinah/“AUMC” has a good shot at a “Lacustrine stratabound/manto deposit”. Since the stratabound deposits in our area are mainly developed via open pits i.e. Lo Aguirre and El Soldado, which is not Hochschild’s forte, this is why the news of a confirmed JV might be suggestive of recently identified epithermal prospects amenable to underground development.

The area of the LDM north of the ridge crest did have promising (epithermal and/or manto type stratabound deposits) that were developed historically via underground methodologies at the “Las Dos Marias” Mine. “NUOCO” drifted an adit in this area and found the same types of copper found in the typical “Lacustrine Belt of stratabound deposits” in Central Chile i.e. chalcocite, chalcopyrite, malachite and bornite but Hochschild is more famous for developing gold and silver deposits so I’m a little bit confused of Hochschild’s role in the copper development aspects but silver is often associated with copper in “Lacustrine statabound deposits”.

In the gold areas at the LDM, ACA Howe and Gordon House noted that even the tailings piles (post-processing discards) from the LDM Mine were running at 5.3 gpt gold which tells us that the head grade there was pretty impressive and/or the processing technology used was not too advanced (trapiche?).

IMO, the elephant in the room for Medinah and Auryn pubco (“AUMC”) is still the Pegaso Nero which may take a consortium of majors to develop (like El Soldado needed). Behind that you’ve got the insanely high grades found at the Larrissa Adit/Merlin 1 Vein as well as at the Fortuna de Lampa Mine over 30 years of production. You need to overlay the 90-plus gpt historical gold production at the Fortuna Mine plus two other things. One was AMC’S trenching program revealing 5,000 meters of epithermal veins near the Fortuna Mine and ACA Howe’s comment that even after 30 years of very high grade production at the Fortuna Mine NOBODY HAS EVEN SCRATCHED THE SURFACE OF THIS EPITHERMAL/MESOTHERMAL(?) SYSTEM. This statement may have been confirmed by AMC privateco’s trenching results.

The LDM is still a potential company builder all by itself as the fate of the other subdivisions of the ADL play out. We need to appreciate the significance of just how complex the geosciences are and the mining industry itself. The pros can run circles around us mere investors. When the geoscientists at a mining power like Hochschild take an interest in the LDM by signing a binding LOI and then perform several stages of development and then come back to Medinah and AMC and say yep “we’re in” then that’s pretty important in corroborating the potential of the project. The willingness to spend a lot of money involving drill target definition followed by drilling makes a strong statement. The anticipated information flow from these endeavors will soon put AUMC “into play” within the mining investment community. We also need to keep in mind “the Sillitoe effect”. We learned from an earlier press release that Hochschild will be following the plan drafted by Sillitoe himself. Before committing to the project, Hochschild was given access to Sillitoe’s findings and after seeing these they said yes. We investors have not been privvy to Sillitoe’s report. Sillitoe was retained to study matters based on a “regional” scale. Hopefully Hochschild’s findings can be used to advance the geomodeling efforts for the entire ADL Mining District.

The macro scene in the current mining industry is a bit of a mixed bag. Investments in the industry have recently been out of favor due to the metals prices failing to gain much traction. However, the reality is that we are at a 25-year low in new mineral discoveries and the Mineral Rerserves/Mineral Resources (MR/MR) on the balance sheets of the majors are at a 30-year low. These realities exist in an industry wherein it is EXISTENTIAL for the majors to constantly replace that which they mine with new MR/MR. With many of the majors having curtailed their exploration programs after overspending on projects back when gold peaked in 2011 this has exacerbated the lack of supply of new discoveries.

Any junior with a bona fide discovery is going to be sitting pretty ONCE THE DISCOVERY HAS BEEN CONFIRMED ESPECIALLY BY THE EFFORTS OF A HOCHSCHILD TYPE MINING ENTITY. The current imbalance between the supply of and demand for new discoveries will make sure that the investors in the company with the discovery will be rewarded. This is not the mining scenario in which fancy promoters will drive up the price of a stock. The retail investors are on the sidelines; the majors needing to replace their MR/MR are not. The trouble is that it costs money (usually through drilling) to irrefutably prove the bona fides of your deposit to interested majors. To me, this explains the true significance of the Hochschild deal i.e. providing a potential catalyst to put AUMC “into play” with information flow while providing the funding capable of proving the bona fides of the deposit to those majors desperately in need of replacing the ounces of MR/MR they are constantly pulling out of the earth.

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Thank you brecciaboy for your detailed answer. Now are we looking to JV with someone else for the Fortuna de Lampa and the Larissa Adit/Merlin? You have said we may need a consortium of majors for the Pegaso Nero so at some point more JV’s should be coming on stream?? Thanks for your reply…

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