Thank you Mike! What will the Cash Call be used for?
Orā¦this is where we start getting diluted
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I wish they will explain it more if they are going to put it in the public.
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It seems they need additional financing to continue mining operations. They have not meant the original production goals which puts them in a cash flow crunch. Cash calls for US S Corps usually means there is a previous agreement in place to provide additional capital. Could be just a formality.
Like I said. This is just a wild ass guess on my part. Iām sure there are more knowledgable people who can comment.
Financing for operations will continue to be secured by MASGLAS until AURYN becomes cash flow positive. The terms of the financing are extremely favorable for AURYN. Any required cash is interest free until July 2017. After that interest will be LIBOR plus 4%, and debt repayment will occur with a portion of the revenue generated by the early production. Capitalization and conservative money management is a key pillar of the AURYN business plan. About | AURYN Mining Corporation
I guess there is something in the agreements we do not know about yet
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is this dilution for us?
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Over the past several months myself and a few other shareholders have been more cautionary than optimistic with this investment, to the occasional dismay of a handful of shareholders. I find myself more in agreement with those maintaining a more measured and cautious tone than those still dreaming of untold riches. Iām sorry if that upsets or dampens the spirits of shareholders longing for this investment to get back on the right track, but thatās my current opinion of where the company is right now and all of the obstacles it still has to clear before my mindset will be changed.
I think a lot of people are still putting the cart way before the horse here. Mining is not easy. Nothing is a given. It is fraught with as much disappointment as it is excitement. Personally, I strive to find the lowest common denominator and try to avoid rounding up my expectations. Yet I still frequently read some posts espousing the best case scenarios as a givenā¦and an expectation. This is not wise IMO, and this is why I try to provide a counter to that overly bullish mindset where appropriate or necessary. Of course, I could be completely wrong. But if Iām wrong, it will be a pleasant surprise, not another disappointment.
All that being saidā¦ As announced, Auryn is holding a meeting to consider a cash call from its shareholders. Medinah is a current (27.5%) shareholder of Auryn, like MASGLAS et al, so it is my understanding that Medinah is under the obligation of its pro rata share of the cash call.
Reminder: Medinah recently sold off its ownership in NUOCO for shares in Auryn because it couldnāt meet its obligations as a 15% shareholder of NUOCO. That was essentially a cash call for NUOCO. But because Medinah didnāt have the means to meet the obligations of being a shareholder in NUOCO, it had to sell its interest in NUOCO in exchange for Auryn shares. This was really the only course of action given Medinahās financial position didnāt allow it to maintain its interest in NUOCO.
Based on this eveningās update from Auryn, Iām assuming the same obligation (cash call) applies to Medinahās 27.5% ownership of Auryn. MASGLAS does not appear like it will be financing the entire operation alone without other investors contributing their pro rata share. And Auryn clearly has not produced revenues according to their original expectations of 5K oz in 2016 and 25K oz in 2017 (i.e. āMining is not easy. Nothing is a given.ā).
Therefore, Auryn apparently needs more cash from its investors to fund operations. Given that, I wouldnāt be expecting dividends to shareholders in the near term, even if revenues start coming in. I would expect Medinahās ownership in Auryn to be diluted or sold off in one form or anotherā¦either through IPO, a sale of some of our Auryn shares, or some other way to meet whatever Medinahās financial obligations may be.
Itās OK to be excited about high grades and new veins and all. I get just as excited as most all of you. However, remember, that it takes time, money, resources and infrastructure to get to the point of producing reliably and regularly. Mining is not easy or a given, regardless of what Les Price has told everyone in the past.
I look forward to Kevin and the BOD shedding more light on this so all shareholders have a reasonable understanding and expectation as to what lies ahead for Medinah and its investment in Auryn.
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Well letās hope as soon as it gets notarized it becomes public and Medinah can shed some light on what this cash call is for and how they are going to achieve it be dilution or something else. Anymore dilution for us and our ownership will be much less than 26% letās hope this isnāt the case. Jmo
I will wait to hear from our BOD on this matter.
Ps Thank you les and JJ SOB
Rick I can appreciate what you are saying and donāt disagree, that being said if many share holders now who feel this way many of the millions of shares sold in the last short while maybe done by these people. I sure hope you are wrong; we deserve something from this investment after being around for 14 years and being lied to consistently.
Thank you for sharing your thoughts Taff
" MASGLAS does not appear like it will be financing the entire operation alone without other investors contributing their pro rata share."
Then they should take this of their web page because it is totally misleadingā¦
Financing for operations will continue to be secured by MASGLAS until AURYN becomes cash flow positive. The terms of the financing are extremely favorable for AURYN. Any required cash is interest free until July 2017. After that interest will be LIBOR plus 4%, and debt repayment will occur with a portion of the revenue generated by the early production.
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Good find Hulk.
Hopefully Medinah provides some clarification on this as soon as possible.
In the meantime, maybe some calculations are in order.
If we assume Auryn is worth $100 million dollarsā¦each percent is worth 1 million.
Seems hard to imagine that Auryn needs to raise more than $10 million to continue through the end of the year especially if they are the verge of cash flow positive as we have been lead to believe.
If Medinahās cash call is 26%ā¦this would be $2.6 million. Assuming Medinah has no money, it seems reasonable that they could meet this by selling a small percent of the Auryn interest to Auryn or another party. 2.6% = 2.6 millionā¦so the damage could drop them down to 23.4% No big deal?
Seems to me a little strange that Auryn would try to squeeze Medinah as this point since individuals associated with Auryn have invested a lot of money into Medinah and they will never get any of it back if they squeeze out Medinahās interest in Auryn.
Probably worth just waiting for some clarification before speculating further. Kevin, what gives?
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Rick I couldnāt agree more,
I think itās a proactive move by Aurynās board to get shareholders on the same page prior to getting hit with fees from Masglas in July, this is my own opinion of course but would think there will be a couple of scenarios put on the table for our board to mull over to decide which is best for Medinah or even the ramifications that could be placed on Medinahs shareholders. Before anyone starts with endless worst case best case scenarios, I would wait for a little more clarity.
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[quote=āMikeGold, post:875, topic:1735, full:trueā]
Seems to me a little strange that Auryn would try to squeeze Medinah as this point since individuals associated with Auryn have invested a lot of money into Medinah and they will never get any of it back if they squeeze out Medinahās interest in Auryn. [/quote]
This is why I believe that the upcoming IPO will lead to (or is intended for) a consolidation of all ownership under Auryn and MDMN (and CDCH) will be no more. Yes, this is my speculation, but as Iāve said in the past, once Auryn goes public, there is no reason for MDMN to exist anymore as a separate entity. It creates an unnecessary ownership layer when instead we could all be direct shareholders of Auryn when it is publicly traded. At that point any future dividends that we all are hoping for one day will flow directly from Auryn to us as individual Auryn shareholders.
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I donāt think we should expect to hear anything from Medinah until after the March 15 meeting since nothing has been decided yet. Yes, the unknowns will probably cause a lot of angst and speculation until then, but as promised, Auryn and Medinah, are being upfront and open with their communication.
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No Zotron, this is not where we start getting diluted. We have already been diluted by 55% through Les/JJ/John Does which of course we found out about last August. Yes, I believe we will suffer further dilution to meet our cash call obligations. Masglas is not required, to my knowledge, to carry MDMN as a dependent exempt from their responsibilities as an owner and I would not expect them to do so. While were told in the past that our deal was to be exempt from dilution, I cannot remember which particular agreement of which this was to be a component or even if that was just more bluster from Vancouver. I do not have the time at present to research this, possibly someone else can but such words reek of LP and defy fundamental business acumen. Rickās posts are grounded and appropriate and are sound advice for all shareholders.
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Well it didnāt take them long to change the About page they took of the quite a bit and the financing with Masglas.
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Since last year and upto this morning the about page had Masglas financing through July, 2017 and the 4% libor until the debt was to be paid through production, so what has changed so suddenly?? I am sure Auryn didnāt find out that they were running out of money yesterday? why not schedule the meeting last year? why so quickly?
Could this along with the four truckloads that were sent to enami have anything to do with this? Whereās the money from the four tuck loads? And they chanhed the About page right after my post about the financing, coincidence?
Auryn obtained an intercept of 28m @ 11.5g/t Au, 31g/t Ag & 1.62% Cu. āThis vein cut off after 4m and appeared 42m away,ā Cordova explained. The results for the intervening meters have yet to be published but are expected to double the previous ones.
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The funding in the form of a $10,000,000 line of credit from Banco Sabadell for the first stage of drilling and exploration on the Altos de Lipangue project was secured in July 2014.
AURYN Holding Corporation has secured a line of credit for US $10,000,000 (ten million dollars), from Banco Sabadell, to fully fund AURYN Mining Chile (AMC) through its first stage of drilling and exploration on the Altos de Lipangue project.
ā¦AURYN Mining Chile (AMC) reports that the drilling and exploration program budget will be fully funded by AHC through AMC. Additionally, the drilling and exploration expenses are above the minimum US $100,000,000 purchase price detailed in the previous Framework Agreement.
This release was jointly approved by the parties.
http://www.businesswire.com/news/home/20140711005861/en/Medinah-Mining-Chile-Announces-Status-Mining-Option
Apparently, now that we are past the first phase of exploration and drilling, that $10,000,000 loan is now due to be paid in full. IMO Alternatively, AURYN may have decided that now is the time to ramp up production with more men and equipment for phase 2 prior to an F-1 to get the production figures needed for a prospectus before years end. At any rate, a cash call is unwelcome news at this time , unless Medinah and CDCH are explicitly exempted (doubtful) from all production costs when shares in AURYN were exchanged for claim titles. Could a conflict of interest exist with Raul Solar and Italo Volante sitting as Independent Directors in Medinah Minerals?
Are AURYNās majority owned shareholders (i.e. MASGLAS) actually looking at the IPO as a funding vehicle to bring in their other mining projects? If so, MDMN and CDCH are likely to be history sooner than later. [quote=āHurricane_Rick, post:877, topic:1735ā]
This is why I believe that the upcoming IPO will lead to (or is intended for) a consolidation of all ownership under Auryn and MDMN (and CDCH) will be no more.
[/quote]
If this is true, then we are being assimilated on the cheap.
Interesting statement, especially since we sold Nuoco to avoid a cash call!
BTW I recall that are interest in Nuoco did not have a capital obligation as it was posted here once before!
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