Mangelsen wrote: “This is penny land and if this surprises you, you should have never invested in the first place.”
I’m not proud of it, but I am one of those people who had no clue what I was doing here.
When I drank the kool aid, I knew almost nothing about the importance of share count (and I still know almost nothing).
I have no idea whether the scenario I’ve laid out below is likely, but I would appreciate an opinion from Baldy or Trade Rich or Wizard, or all three.
I am planning to go to the shareholder meeting, and I just want to know a few basics.
I don’t want to get snowed.
Here’s the scenario I see:
— As Baldy said many many times, Auryn was never under any circumstances going to give $100 million to the crooks at Medinah.
— But Auryn DID want the rights to the mountain, and by signing the three-year, $100 million option agreement, Auryn bought time to figure out a way to gain control of the mountain.
— Auryn management and lawyers were smart enough to stipulate in the contract that Medinah shares were capped at 1.5 billion for the life of the agreement.
— When Auryn’s management and Medinah’s management agreed (earlier this year) to tear up the old contract and enter the new agreement, Auryn’s management and lawyers certainly knew that the 1.5 billion share cap would cease to exist.
— Furthermore, Auryn’s management and lawyers (knowing, as they did, just what sort of shady operators were in control of Medinah) could certainly assume/predict/foresee that Medinah’s insiders were likely to go wild with share issuances, as they knew that we shareholders had approved up to 3 billion shares in 2012, and Auryn had also, for years, had an up close view of Medinah’s insiders in action. (I never did read anyone on this board speculate about this foxes-in-the-henhouse possibility until it was revealed — what, a month ago? — that all 3 billion shares had in fact been issued.)
— Auryn has been thinking long-term — in terms of decades, instead of months or “next week” like me and so many others here on this board have been thinking and hoping — and to Auryn the outstanding number of Medinah shares is all-but irrelevant over the life of the contract (or is probably even totally irrelevant right this minute).
— But Auryn felt that the only way Auryn could secure the rights to the Alto, was to turn a blind eye (at least temporarily) to what Auryn was pretty certain the shady folks at Medinah would do as soon as the 1.5 billion share cap was rendered moot by the new contract.
— In the end, Auryn paid some large cash sum — many millions — to Medinah’s insiders (Auryn also paid the cash costs of keeping Medinah solvent — something in the less-than-$1million range), but in exchange Auryn locked up the rights to what Auryn believes is untold billions of dollars worth of ore on the Alto.
— The key thing Auryn had to do to achieve takeover of the mountain was to throw us Medinah shareholders under the bus and hope that maybe a fair number of us could somehow tuck-and-roll and (when the dust cleared, perhaps several years down the road) might safely (and miraculously) come out the other side.
— Maybe this is the only strategy Auryn could see to avoid paying Medinah’s insiders $100 million (which was never going to happen).
But if there is some other explanation that I am overlooking, I’d like to hear it (from Baldy or Trade Rich or Wizard).
I anticipate being very impressed by the folks at Auryn. But if they did throw me under the bus once, I would like to know that going in to the shareholders meeting.
— madmen