The Mining Play

Medinah Minerals (MDMN) - 2016 Q3 - General Discussion (recovered)

Your last sentence is the crux of the whole matter. Were the shares issued to a bona fide purchaser? As of now we don’t know. I am not contesting the fact the market has allowed private placements with large discounts. But how likely would the person committing the illegitimate sale (you know who (kinda like Harry Potter)) be likely to find a legitimate purchaser who either wouldn’t do due dilligence or would ignore the due dilligence it found? In the instant case, with a cap on share issuance, a large discount, MDMN saying the transfers were illegal, and other factors we do not know at this time, IMO it may be difficult for a private placement party to claim they were a bona fide purchaser.

Also, just a quick review of the complaint you attached does not go to the sufficiency of discounted private placements deals. Genderme and its officers were guilty of properly purchasing pink sheet securities at a 30-50% discount, then illegally selling them into the open market. Not a single pink sheet company from which they purchased claimed the discounted sale as illegal and that issue did not have any bearing upon Genderme’s liability.

My point is that in this instance MDMN has said the transactions were illegitimate. Quoting the news release

"…On August 23, 2016, MEDINAH determined that there have been ongoing share issuance discrepancies with what was reported on MEDINAH’s 15c211s regarding the actual outstanding shares. Today we contacted the SEC and FINRA and are filing formal complaints regarding these discrepancies.

_The current 15c211 as filed on August 15, 2016, can no longer be relied upon. The Company will be filing corrected quarterly statements as soon as practicable. Although the investigation is not complete, it appears that the representative of Medinah Mining Chile was engaged in the sale and/or allocation of primary shares without the knowledge of past and present Directors and Officers of the Company. Additionally, it does not appear that these inappropriate transactions were for the financial benefit of MEDINAH. The Board is continuing its investigation and will not stop until satisfied that all important facts are known."

This fact changes the dynamic. With MDMN saying the transfers were illegitimate and not for the benefit of MDMN, the burden will shift to the private placement to prove they were the bona fide purchaser. The private purchaser will have to prove what it knew at the time to make its purchase legit. I am saying its the private purchaser’s burden, not MDMN’s, thus making it easier and more likely to successfully clawback the wrongfully sold shares or their true market value. MDMN would still have some liability to the private placement because it all happened under its watch, but the transactions may be voided. Further, if the private placement did not have the appropriate authority to sell the shares (if they did actually sell them), then they would be guilty just like Genderme.

It’s not a nice or easy process to go through, but I feel MDMN has a bit more leverage in this instance due to how the illegitimate shares were issued. Depending upon haw hard Auryn/Masglas/MDMN wants to go after any private placement, especially with the MDMN’s current share price, it may be more financially beneficial to the private placement to settle, especially if Auryn/Masglas/MDMN can use the settlement as ammunition against you know who.

On a side note, this potential leverage can be strengthen, IMO, by MDMN immediately switching attorneys in the Nevada court action and issuing discovery to co-defendant Les Price. I would love to see what his email account(s) hold since January 2016.

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HA HA. Yes, predictions suck, but I’d rather read about them then misleading statements that are regurgitated from Canada. If you really are tired of it, turning off theminingplay may be the best solution.

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I agree with your overall analysis, but I can tell you that the toxic debt firms (excluding individuals) don’t do DD, are accredited and only care discount and whether is enough volume to dump shares as quick as possible.

For the individual, it may be tough to prove scienter and they may and probably did rely on the reps and warranties told to them by les et al.

You could be correct, or it could have been to a close friend from whom a favor was asked. Unfortunately, at this point we don’t know. We can hope, but we don’t know. Fortunately, ignorance rarely works as a defense. It’s time for Auryn/Masglas/MDMN to hit hard, don’t pull any punches. No honor among thieves exists. You push hard enough, someone will crack. They also need to disclose the further fruits of their continued analysis (unless instructed by the authorities not to do so). Full disclosure of the parties involved would go a long way towards reestablishing credibility. You don’t have to give out home phone numbers, but an update stating we have identified 3 or 5 or whatever number of transactions with the following person(s) entity(ies) which are of a questionable nature. We have turned all relevant info over to the SEC and will institute appropriate legal measures against these entities to recover/void these transactions.

We just need someone who has any ability to communicate to Auryn/Masglas/MDMN to get moving on the discovery requests against Les. You just know some juicy tidbits will come from it.

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I am 100% with you on “the misleading statements that are regurgitated from Canada”, but these statements should be a thing of the past. I want to hope no one is gonna talk/listen to Les anymore.

As I said, seeing if we get into production on schedule, how the South America convention goes and what kind of reassurances we get from the information meeting on October 1st has nothing to do with Canada, but rather it has everything to do with Masglas/Auryn.

Hopefully the won’t let us down.

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The only thing coming from the north is “I didn’t do it” which I don’t believe for a second
Once we start getting a taste of value assigned to Auryn, we should start seeing upward movement
We’ll have at least half of what we thought

Has this been adequately answered by anyone “in the know” yet?
If so, please post again, because I must have missed it.

Totally agree, I think there is a very small group of accomplishes and you know what they say about the weakest link. One will crack and roll, but time is a waisting, turn up the heat.

Change out counsel and let the hunt begin. Wish we had someone in Vegas that could get copies of all the filings, would be most helpful. I have a Pacer account, but as know, fed cases only

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Okanadian claims they paid $100,000 CDN for 100,000,000 shares of convertible series C stock, convertible at $.007 (which conversion term makes no sense to me). In any event they claim they got a very for 100,000 of series C stock, not the 100 million shares that allegedly detailed in the agreement.

They state that Les negotiated the deal, signed on behalf of MDMN Chile and Chapin signed on behalf of MDMN. Guess these bozos never heard of using a attorney for an escrow

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Thanks mdmnholder, exactly what I thought!
So, Okanadian is claiming they bought the entire authorized allotment of convertible series C stock for the bargain price of $100,000? For that amount ($100,000) they could have bought maybe 6-7 Million common shares on the open market. Ridiculous!!! Who do they think they are kidding with a claim like that? As I was stating in my earlier post on the matter, $100K at a conversion of .007 would have bought 14,285,715 common shares (after conversion of 100K of preferred shares, taking into account CDN to US). The big elephant in the room that remains to be exposed is who received the missing 788,200 of the Preferred Shares which are reported to not be accounted for (the apparent “discrepancy” that resulted in a 2,996,448,498 OS), and when did they go “missing” and unreported?

The issue for me is that if money is being provided upfront, preferreds convert at a ratio, (e.g. 100 common for every preferred). I think the complaint is confusing as if u were setting a conversion price, u are really taking about an instrument like a warrant or a option. Need to see the actual document.

I agree the sloppiness in the actual document is what is in question and needs to be seen. The current MDMN BOD is describing a scrivener’s error as responsible. It is certainly not the first. Prior to the “discrepancy” being reported, there were already 3,209,000 Preferred Class C Shares issued and reported as outstanding. There should have only (sic) been 96,791,00 preferred shares available to be issued, not the 100,000,000 preferred shares Okanadian is apparently claiming (and written into the approved “instrument”?). A side issue for me, which I would question, does the conversion ratio of a Class of Preferred shares change each time an option, warrant or “instrument” is prepared and issued? In my original post I cited:
6/30/2012 non-cash transactions
The company issued 7,350 of its preferred shares in repayment of shareholder loans - $1,551,186
Preferred stockholders exchanged 1,550,000 preferred shares for common shares - $30,000

These past filings make no sense whatsoever.

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Has anyone considered moving mining play to Slack App. Or just adding Slack to tool shed?

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Nice block on the bid this morning.

See that is where I see the problem . Les could not represent MDMN in any stock issuance and or Private placement, since he is only a shareholder of MDMN NA and has no authority to issue stock unless granted by the BOD. It has been stated that the BOD past and present had no knowledge this was going on. So some how Less illegally represented himself to the TA having said authority and the TA did not bother to verify it was grant other than maybe some type of illegal document he presented. Otherwise this would not have happened. JMO

When trusting that other BOD claim to have not known about the counterfeit/forgery scheme, that Les also denies any responsibility.

Same here. Not Federal, so no luck. Looking at Clark County clerk’s website, cannot order or get copies online. Have to do it manually at clerk’s office.

I noticed the discrepancy too. Unfortunately, we only have the complaint to review, not any exhibits to the complaint, especially the contract signed by the parties. The only way the conversion ratio makes sense to me would be if the $100k was a down payment and they needed to pay balance of $600k to get to the correct ratio before receiving the 100,000,000 class C shares. Something in that process broke down, thus the hurt feelings and the lawsuit. The complaint does not reference Les as a principal of MDMN, but alleges Les negotiated the terms of the deal on behalf of MDMN and MMC with Okadian’s atty, then Les signed as MMC and Chapin signed as MDMN. But without the alleged agreement attached, we dont know what actually happened.

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Karl, I would be the first to state Les is a, well won’t go there. But playing devil’s advocate, I would not jump to conclusions that the old board/officers had no knowledge of the issuances nor that the T/A acted without proper authority. Without seeing all the documents or getting additional info from current management, no one knows how shares were issued.

However, it does seem clear that Chapin allowed Les to negotiate on behalf of the company. Why MMC had to sign the docs for issuance of shares of MDMN is beyond me.

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