Medinah Minerals (MDMN) - 2017 Q1General Discussion

[Karl]

I also believe we should get a discovery update on the forensic audit of the last 15 years of MDMN’s stock issuance ,

Forensic auditing is a detailed process. Among other things, it includes a thorough review of every share issuance and financial transaction. We will look to make sure each issuance has:
a valid board resolution authorizing the issuance,
bank records validating the payments for shares,
service contracts validating payment of shares for services,
and a cash flow analysis to ensure that the money raised was properly used.

It would be interesting to see when and where the majority of this fraud was perpetrated .

[newleaf]

@Karl

I also believe we should get a discovery update on the forensic audit of the last 15 years of MDMN’s stock issuance

It seems like that update would come in the form of court proceedings? Either way it will be nice to see where the train went off the tracks.

[TheRod]

I wonder if any of the FBI investigators (that looked into the ‘Bermuda Short Operation’) are still involved with the bureau ? I’m sure they’d love to be informed of the current information implicating Les Price in these 'alleged ’ illegalities.

Even if the original investigators are gone, I’m sure that some of their buddies would love to do them a favour by putting Price in jail.

Perhaps some of the US shareholders could send the info to the FBI.
.
.
.

Here are some of the ‘updates’ regarding the scam :

Two years ago Medinah announced that it had arranged financing of US$5mn with a London-based venture capital
provider. That “deal” fell through and the person allegedly behind it, former Medinah CEO Les Price, is awaiting trial on securities fraud, money laundering and other charges in a Florida court in a case dubbed the “Bermuda Short Operation” after the name of the FBI sting operation.

The trial has already been postponed several times and according to House will now start in September at the earliest.

Medinah had been due to start a phase IV drill program at Alto de Lipangue, just north of Chilean capital
Santiago.

Under the terms of the agreement as it was first announced, the fictitious venture capital company was
to receive 25% of the property in return for the funding. Price is accused of planning to sell 5 million Medinah shares to, as it turned out, undercover US federal agents posing as mutual fund managers for US$1 a piece at a time when
they were trading at 6 cents, in return for kickbacks of US$1.5mn.

In August last year [2002], the FBI arrested Price and 57 other suspects after a three-year sting dubbed Operation
Bermuda Short aimed at cracking down on securities fraud. The operation was conducted by the DOJ, the FBI, the US Securities and Exchange Commission, the US Postal Inspection Service, the Royal Canadian Mounted Police and the
National Association of Securities Dealers, and targeted numerous companies.

Price was subsequently indicted on one count of wire and securities fraud conspiracy, 10 counts of wire fraud,
two counts of securities fraud and one count of money laundering.

He was released on bail and awaits trial in a Florida court, although the hearing has been postponed twice
at the request of the prosecution and then again after the judge withdrew from the case in May this year. The delays suggest the DOJ does not have sufficient evidence to convict Price, according to Medinah.

The charges against him are in connection with an attempt to raise US$5mn by selling five million shares at
US$1 each to a “fund manager” calling itself Connelly & Williams, which turned out to be an FBI front.

[TheRod]

SOME MORE :

The DOJ has also claimed that Price, a 65-year-old Canadian, issued numerous false statements and press releases
relating to the company’s Chilean properties.

Next April, Price will complete a 15-year trading ban imposed by the British Columbia Securities Commission for
stock manipulation.

[belmont134]

Good grief.

[TradeRich]

I would rather own my share of Auryn directly… AFTER the share structure debacle is cleared up.

[DoneDeal]

This share structure debacle will have to be done before the IPO. So sounds to me Auryn is confident the share structure with Medinah will get cleared up before the IPO this year. jmo

[Karl]

There is no reason MDMN’s share issues have to be resolved before Auryn does the IPO, All Auryn has to do is issue MDMN its 27.5% of the shares, which in turn can be held in trust until the share issues have been all resolved. I am hoping that you are right that it will happen before the IPO but it is not a road block to the IPO.

[mrbubba]

True, Auryn shares could be held in a trust with MDMN as the beneficiary.

Do you really believe that when this IPO happens people (read newbies) will get excited about buying shares of a company who is the beneficiary of some trust which exists because of alleged improprieties? Will those same people take comfort in the fact that our current CEO, who by all accounts is a nice and honest young man but has absolutely no experience being the head of a company listed on a stock exchange, vouches that all is really OK? I would like to be able to say yes to these questions, but I don’t think so.

[cabezon]

Other than potentially establishing market value, I don’t see why anything would be different immediately after an IPO than it currently is now. MDMN owns Auryn stock, a private company. After IPO, MDMN owns Auryn stock, a publically traded company. Then somewhere along the line after our true mdmn share issues are finalized, Auryn stock can be issued proportionally in exchange for mdmn shares. I don’t think a literal trust entity was implied. Imo.

[DonD]

As. requested:

[Dentman]

So did any Auryn shareholders not meet the cash call?

[DoneDeal]

Yes that would be nice to know since we are 5 days removed from the meeting.

[cabezon]

We own our 27.5 ish % of all of Auryn’s current claims (not masglas) including the other 3/4 not derived from our original claims. That is how we have been compensated for our 1/4 added to the pot. (And the reclaimed Nuoco shares)
I agree we would have to be cash flow positive before dissolving because of that debt, but we will derive that cash flow based on our current share. I don’t see what the 1/4 of claims has to do with it?

[peter]

deleted by poster

[easymillion]

@cabezon

I agree we would have to be cash flow positive before dissolving because of that debt, but we will derive that cash flow based on our current share. I don’t see what the 1/4 of claims has to do with it?

Some shareholders did not think having a cashless transfer of ownership based on our original $100M option for Medinah’s ADL mining concessions was a fair deal. Contrary to this idea it was very fair if one considers the size of AURYN’s currently owned concessions, but due to lack of proven resources, reserves, and production cash flow there are those expressing a lack of value in the claims before such value is conclusively shown. Paying back that $2 million loan prior to it’s due date would not allow value of the equity to properly be shown to it"s potential. We need to hold on to that 27.5 ish % equity in AURYN as long as possible rather than paying our debts off at the earliest possible date just to distribute AURYN shares directly to current Medinah shareholders.

[easymillion]

@Hurricane_Rick

The intended outcome of Auryn’s IPO has not been publicized or specified as of yet. The conversion of MDMN shares to Auryn shares is considered speculation at this point, though with a rather high degree of certainty IMO. As I’ve previously stated before in this thread and Ihub, if anyone can provide a logical reason why MDMN should continue to exist once all legal matters are settled and once Auryn IPOs, then I’d love to hear it. And I will ask the MDMN BOD that same question when the time is appropriate.

I can think of no common sense, logical or productive reason for MDMN to hold public shares in Auryn, adding an unnecessary layer of ownership in an entity as damaged and handicapped as MDMN is to its current shareholder base.

Rick you have held and expressed this same view on numerous occasions. It is apparent that you will not be easily swayed from this view. 4 days ago a respected poster stated a value of AMC at somewhere between $20-$30M (tops) with the current level of development. At current level of ownership, that would value Medinah’s equity at $7-10 million (an arguable value). Add to that it has been stated on this forum that only about 1/4 of AMC claims are derived from Medinah’s claims, which actually may decrease that $7-10 million further in the eyes of AURYN’s BOD (if IPO comes in undervalued). Currently, AURYN is treating Medinah very favorably, owing largely to Kevin’s efforts. If Medinah is dissolved as a corporation, that $2 million dollar loan to AURYN becomes immediately payable and Medinah’s equity is decreased with fewer AURYN shares available to Medinah shareholders. Pay the loan off much later, not at the time of an IPO.
If Medinah is dissolved as a corporation, assuming all legal matters have been concluded, all of the legal expenses incurred would also be payable.

Medinah is pleased to report that on March 10, 2017, it signed an agreement with Auryn Holdings Corporation to finance Medinah’s portion of the raised capital. The basic terms of the agreement are as follows.
Auryn Holdings Corporation will cover the payment of approximately $2,000,000 that Medinah Minerals, Inc. owes to Auryn Mining Chile SpA.
Medinah Minerals, Inc. will pledge its newly issued shares in Auryn Mining Chile SpA as collateral against the loan.
The loan will be a 0% interest loan payable in full on December 31, 2021.
If Medinah is dissolved as a corporation, assuming all legal matters have been concluded, all of the legal expenses incurred would also be payable.

How many free trading shares of AURYN’s IPO shares would be available for “dividend” distribution to current shareholders after clearing Medinah’s books? It would be better not to have an exit event dissolving Medinah before the loan is due at the end of 2021. Letting AURYN’s value mature as long as possible before resolving Medinah’s debts would be more advisable, IMO. These are reasons I see for having posted:

@easymillion

Once an F-1 Application is secured, there will be “sellside sponsorship, coverage, fanfare, dedicated market markers" and liquidity as is customary for an IPO. Further, Shares in AURYN’s publicly traded company will have several classes of shares designed to raise revenue and retain ownership/control as previously described in order to promote growth for the benefit of all shareholders. MDMN will remain a company until the litigations are concluded which will likely be several years, at a minimum, IMO.

Some funds from the IPO share sales will be proportionately distributed to the equity owners, but primarily used to secure equipment for accelerated exploitation and exploration. A portion will necessarily go to MDMN’s treasury and will take care of legal expenses. More importantly, as time goes on and AURYN’s publicly traded company gains value, there will be an opportunity for Medinah to structure dividend payments at times differently than AURYN distributes any dividends. AURYN’s majority owner, MASGLAS may not wish to distribute profits in the form of dividends as readily as Medinah may wish to see a ROI for it’s shareholders. I don’t see a “buyout” of MDMN until after all legal matters are settled. AURYN will have proven up a much greater value to the claim property by then.

[lnd1]

Holy Moley!! It sounds like many years before we will get anything. I’d rather see us do some heavy publicicty about the future of MDMN on the OTC or IHUB to start the sp to rise, asap.

[brecciaboy]

Hi HR,

The only reason I can think of to keep Medinah around is to throw some income at Medinah in order to burn up their tax loss carry forward. Many, many years ago it was at $18 million. Today I would think it’s somewhere around perhaps $30 million or so. To me that’s one of the main reasons why early production opportunities leading to early cash flow are so important for Medinah.

[easymillion]

@brecciaboy

tax loss carry forward

Sounds like another good reason that HR should possibly reconsider his position of dissolving MDMN sooner rather than later.