I think that AMC is MUCH further along in their program than we might expect. Why would you buy that many shares if you’re still testing the waters? Why hire Hochschild’s Luciano Bocanegra (porphyry expert) unless you already knew that you have an “Andesitic porphyry” in the western areas of the Cu/Au variety and a “Monzodioritic porphyry” to the east of the Cu/Mo variety?
What I would suggest instead of guessing if we’re headed down the TO path or option exercising path is handicapping the probability that one or the other is going to occur. Why? It’s because a fairness opinion (FO) is going to be needed whether a TO is involved or Medinah’s sale of their 15% AMC stake is involved and from a shareholder reward point of view the results will probably be very close and based mainly on the terms of the binding framework agreement.
CHF’s “road map” tells us that the DEC IG 7 or NI 43-101 “technical report/F1” is due somewhere around Feb. 1 of 2016 or in about 100 days. Look at the detail needed to fill out one of these reports. AMC just hired a consulting group to author their formal “Environmental Impact Assessment” or “EIA”. These typically take in between 2 and 3 years and have tons of information contained therein including a lot of what is contained in an NI 43-101. You have to already have the design of your various mill processes done in detail you wouldn’t believe. Why would AMC hire these guys unless they already knew they were going to exercise the option? These reports cost a fortune. Why would you be entering into contracts that extend beyond the option exercising deadline?
AMC just hired an INDEPENDENT QUALIFIED PROFESSIONAL (“QP”) to review all of the work of AMC’s geoscientists. Why? Don’t they trust their own stud muffin geoscientists? Does an exchange or investment bank want to read an INDEPENDENT opinion to cover their butts? A lot of things are being TELEGRAPHED by necessity. CHG’s GoogleEarth images represented to me a huge breakthrough in the due diligence process. The Merlin 1 Vein is running parallel to 4 other Merlin Veins as well as the Fortuna Vein. The grades are very similar and off the charts. I had never made that connection that the Fortuna Vein might share a common progenitor as the Merlin Veins. It’s the ACTIONS of AMC that tell us how far along their work is because all sophisticated business people know how to mitigate risks and not let their expenditures run ahead of their position on the learning curve.
Hi Doc,
If AMC is much further along in their program as we may expect, as you alluded to, then they must already have the necessary data to bring this deal to an early conclusion -via PO/TO exercise - after all, they know what’s there more than anyone else so a FO report should already be done otherwise why all this recent traveling to accomplish an outcome? Auryn will do what’s best for them, not us shareholders who have been left to listening to rumors and speculation.
[quote=“Bob, post:104, topic:12”]
Ok, since Auryn has 380m shares locked up, how are they going to secure another 380m to have over 50% to make a successful TO?
[/quote]Bob,
There will be 100s of millions of shares flipped with any price rise that accompanies AURYN disclosures. Some of the things they’ve worked diligently on the past few months will be released, along with news from things accomplished from the NY meetings. Other than possible buying under a structured and approved buying program, AURYN does not want buying on insider information to be a possible accusation. There have been several hundred million shares bought under 4 cents that will change hands rapidly when volume really starts to pick up. This will be AURYN’s queue to spring for as many shares as possible on the open market, IMO. The trick for AURYN will be converting shares acquired on the open market into certificate form.
I see no talk in last several posts about JJ’s shares being purchased. Is auryn finished trying to work with him and just get the shares on the open market or are they still trying to work out the details with JJ’s shares and get them freed up to purchase?
Those shares were sold to Auryn last July per contract.
There is an internal family dispute that caused part of the shares to be locked up/not delivered as required. Rumor is that a mediator was brought in to settle the matter. It is hoped that this is one of the things that was addressed/resolved during all the recent meetings. In any case, those shares are going no where. They are locked up.
Meantime, another storm decided to show up on the mountain today. This one should be all rain with about 1.5 inches expected. It will help melt any remaining snow but will keep the roads too wet for while longer.
Thanks mike. I did understand that but probably didnt make my question clear. They were all talking about auryn getting more shares on open market to get majority and they had stopped even referring to the shares that are in dispute. So i was wondering if that was any part of the meetings or if that had been given up on. Thanks as you answered my question that rumor is they might be talking about that as one of their topics in these meetings. Thanks again for all the info you provide us here, it is very much appreciated
Kevin has no idea. It certainly doesn’t appear like they’re buying much, at least without much aggression. I, however, added a bunch more the last few days.
Some can endure the wait if needed. Where most have the problem is with the price manipulation and information Auryn may be withholding while accumulating and I would agree should be illegal
I personally feel there are shares being traded back and forth by some entity or entities controlling the bid and ask
Its either Auryn, MMs trading real shares or a group of shareholders.
Something is not right.
I’m hoping that the most frustrated of our shareholders can make the transition from will AMC and or their associates launch a tender offer or exercise the ADL option to it’s obvious they’re going to do one or the other but WHEN might it occur is the question. As far as the WHEN question due to the atypical structure of this deal perhaps the question could be restated as WHEN might AMC need “OWNERSHIP” of these mining concessions and HOW might they go about attaining OWNERSHIP.
The table is already set for their acquiring OWNERSHIP of the 4,500 or so hectare ADL group of concessions WHICH INCLUDES A SIGNIFICANT PORTION OF THE MERLIN 1 VEIN (see CHG’s Google Earth images). The mere exercising of the ADL option gives them 100% “ownership” of these “ADL concessions”. Attaining OWNERSHIP of the 4 Nuoco properties is a bit more complex but that was addressed by AMC’s lawyers drafting an option for Medinah to acquire the 85% of “Nuoco” that they don’t already own. The pathway for OWNERSHIP of the 4 Nuoco concession groups is therefore directed through OWNERSHIP (or possibly VOTING CONTROL) of Medinah. THIS IS A CRITICAL ISSUE AS IT MIGHT DETERMINE AMC’s NEXT MOVE. In Chile, the LEGAL TITLE to mining concessions is usually housed with a mining firm’s “Chilean subco” (like AMC or MMC) that has at least 2 BOD members prequalified for their “DL 600” credentials. This provides favorable tax treatment and the ability to move capital in and profits out of the country. It is not clear how the OWNERSHIP of Cerro’s two properties will be dealt with. An “asset sale” to either Medinah or AMC might be one route. The pattern to date has been to house the assets desired by AMC within Medinah while Medinah takes a 15% retained stake in the overall project in addition to cash remittances.
As far as the WHEN issue, I would suppose that any investment banker wanting to get involved financially will mandate OWNERSHIP for collateral purposes as well as to mitigate any future risks in regards to OWNERSHIP issues. A listing on an exchange involving an IPO would probably necessitate OWNERSHIP. AMC bringing in partners might also. I’m not sure what the meetings in NYC are all about but it certainly isn’t too early for AMC to be lining up financings as the expenditures are probably going to accelerate markedly.
The recent announcements of AMC not only retaining an INDEPENDENT QP (qualified professional) to a udit all of the work of AMC’s geoscientists (try to think of who might mandate this step) as well as hiring of a firm to do the “Environmental Impact Assessment” (EIA) FOR THE ENTIRE PROPERTY. These studies typically take 2 to 3 years which extends past the option exercising date which might send a message.
If the agreed upon formula to determine the amount of any overage over and above the $100 million “purchase price” has a threshold number of ounces being blocked out before the meter starts clicking then this might affect the WHEN issue. I noticed a critique suggesting that the share price is low partially because AMC won’t allow the release of the formula for any overage over the minimum amount. The formula will no doubt involve the number of ounces in the 5 different categories of reserves and resources probably over and above some threshold limit and how much bonus is paid per ounce in the various categories. The formula wouldn’t do us any good until we had a 43-101 in our hands and we could do the math. I wouldn’t expect the release of the formula until the SEC IG 7 or NI 43-101 is released. Even with an option in place, I wouldn’t want to publicly broadcast any information like that which could be used by a potential competitor for these assets.
I’m seeing criticism that AMC is bad because they are selling shares in order to pressure Quijano into a deal with better terms (despite the fact that a deal is in place already) and also arguments that AMC is bad because they’re witholding information while buying shares. You can’t have it both ways. There exists truckloads of information that suggest that the certainty level of a tender offer or an option exercising is perhaps around the 99% level. Even the minimum cash amount represents 7.4 cents per share in CASH. Even a novice mining investor could probably assume that the NPV of a 15% stake in a project of this scale over the course of perhaps 30 or so years will dwarf the upfront cash amount. WE HAVE ACCESS TO MORE INFORMATION THAN WE MIGHT THINK WE HAVE. Releasing the details of the formula would not cause a blip in the share price. The concept of holding back some ammunition until an AUDIENCE IS DEVELOPED and credibility is established might resonate for some.
What we currently have is referred to as a “capped market”. The market trades as if there are 3 or 4 billion shares in existence. This is despite the fact that the “float” is being sucked up and converted into RESTRICTED SHARES in a paper certificated format.
Ah, I see. My “buying” referenced in that post refers to 150 million shares that they already acknowledged that they bought over a year ago and the 230 million they acknowledged they bought from JJ and family. I have no knowledge of what they have or haven’t bought outside of that.
What items would you call potential material non public information in Medinah Land that might move the market? Is there anything that might move the market in addition to exercise of option and/or buyout? Nothing good we hear seems to help at all.