The Mining Play

Medinah Minerals (MDMN) - 2017 Q1General Discussion


#1133

Hi Doc,

If MDMN had up-to-date, reliable and auditable books, and if there was a clear paper trail as to the property transactions and their values purchased in Chile, and it wasn’t enshrouded in fraud, this might have some merit. However, JJ was clearly playing 52-Card Pickup with properties in Chile and his multiple companies, while Les Price was defrauding MDMN for years, cooking the books, pocketing cash intended for Medinah, and who knows what else. I honestly don’t know how Medinah could possibly quantify and claim tax losses when it has been operating as a fraudulent operation for years.

Kevin has said that shareholders should pretty much forget about all previous PRs and filings prior to him taking over as CEO because the fraud has gone on for years (prior to 2012) and nothing put out by the company can be relied upon. At this point, he would know better than anyone posting on this board as to the condition of the books. I’m sure if the accountants and lawyers give it a blessing as legal and reliable, Kevin would/should consider it factoring in what is best for the company. Unfortunately, from what has been communicated by the company, I don’t see this as the current reality and that is what I’ve been trying to express to shareholders in this forum. I can’t see any way the IRS will ever allow tax loss carry forwards in this situation if it even was able to get its hands on an accurate iteration of Medinah’s books (and Les Price’s) and make sense of the transactions made between Price and JJ and Medinah.


#1134

Clearly we are evolving but moving forward.
I agree we will likely never meet the standards for audited financials, and so, a tax loss carryover is highly unlikely. I still think there are some very valid reasons for MDMN to put off repayment of our $2 million loan to AURYN until it is due. Additionally, once all legal matters are satisfactorily concluded we should have a clearer idea of how Medinah intends to wrap-up all matters. There is much information that can and will be released before the end of the year. Getting the F-1 application approved and a prospectus out to the public should clear up the majority of the unknowns presently outstanding. All else is speculation and/or WAGS until we hear further directly from AURYN and Medinah.

From the CEO (in chronological order):

Financials
Medinah has been publishing its 15c211 and quarterly financials on the OTC Markets page for several years. Unfortunately, as we have disclosed, that information is inaccurate and cannot be relied upon. It will take us time to acquire the necessary records to reconstruct the corporate books and restate our filings. We are working on this. Currently we do not have access to all the required information and I cannot give a timeline for how long it will take.
In the meantime, the proper processes, corporate governance, service providers, and systems are being put in place to ensure that going forward we can report on our financial condition in an accurate and timely manner with a level of transparency and truthfulness that is rarely seen on the pink sheets. The Financials page will contain current filings with disclaimers regarding historic information as soon as practical. Our goal is to have an unaudited financial statement posted for 2016 by the end of the first quarter of 2017.


For several years Medinah met the requirement for Current Information under the Alternative Reporting Standard. Unfortunately, due to the previously announced discrepancies and our legal issues with Les Price, Pamela Fitzpatrick, GXK Ventures Inc, and MMC Mines Inc, Medinah has been unable to maintain this standard. Consequently, OTC Markets has moved us from the Current Information category to the No Information category.
Once Medinah is able to produce a quarterly report with an accurate Balance Sheet, Income Statement, and Total Number of Issued and Outstanding Shares, we will file them with the OTC Markets. At that time we expect the OTC Markets to change our category from No Information (“Stop Sign”) to Limited Information (“Yield Sign”). We will continue to file regularly from that point and (if possible) restate some of our previous filings. As soon as we meet the requirements, OTC Markets will move us back to the Current Information category.
Our only asset of significance is our shares in AURYN Mining Chile SpA. Our current financial records are simple and straightforward. In due time, Medinah should be reporting its financial condition in an accurate and timely manner with transparency and truthfulness.


The Sale of Nuoco
While in Chile I negotiated the sale of Medinah’s 15% interest in Nuoco. Medinah published news in this regard that disclosed we received an additional 645,000 shares of Auryn for our stake in Nuoco. The price was determined by negotiation with Auryn. Medinah had little leverage in the negotiation and we were leery of expected capital calls before exploration begins shortly. Given our financial condition, and the fact that via our ownership in Auryn we retain a roughly 28% interest in the Nuoco property, the board felt this was an acceptable deal.

Cautions
The information in this notification contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
The Company’s forward-looking statements are based on management’s current expectations and assumptions regarding the Company’s business and performance, the economy and other future conditions and forecasts of future events, circumstances and results. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances.
Investing in specific mining companies is filled with company risk and geological risk. If you cannot tolerate these kinds of risks, please consider another investment.


#1135

Easy,

I understand where you’re coming from in your posts, but I don’t think you really appreciate how decimated MDMN really is. MDMN currently needs money to pay its bills - primarily legal at this point, but it has debt on its books that needs to be addressed as well. The company has no cash and no shares to use as currency. We’re lucky that Kevin is fronting his services as the CEO and Communications Director, and that he knows how to develop and maintain websites. If only he had a law degree and was a CPA we’d be practically set. I don’t know how Medinah is currently paying its legal bills, but the previous rumor was that Greg Chapin was helping out in that regard. I cannot corroborate that, but someone is paying the legal bills on MDMN’s behalf, but that won’t last forever. MDMN was also lucky enough to have AHC front them a 0% loan. I think this was a complete surprise (and a godsend) to just about every shareholder. I don’t know half of the other financial stresses the company is currently facing. But this is the financial backdrop no shareholder should dismiss or take lightly.

Meanwhile, Medinah has to cope with 4 lawsuits. Regardless of the apparent frivolousness of the ones MDMN must defend, the outcomes and pursuit in these cases is probably more critical than anything going on down in Chile right now. Unless someone (other than Auryn) is willing to cough up money to keep the lights on and defend Medinah in its legal issues, the company’s days as a going concern are numbered. This is the mindset from which I’ve formed my opinions on what the best course of action for the company is going forward. However, I will defer that to Kevin and the fraud investigators who are intimately familiar with the situation at hand.

Down in Chile, Auryn is going about its own business of mining and they have their hands full with their own objectives. It is my assumption that they probably would rather not have an entity like Medinah with all of its baggage “interfering” with their plans to monetize the ADL, but MDMN was a necessary evil due to their ownership of ADL at the time. Medinah’s existence is not their obligation or priority, but due to Kevin’s relationship with Maurizio et al, and due to Auryn/;MASGLAS also having an investment in Medinah, I’m guessing they do have a certain vested interest in seeing it survive.

But Auryn has their own bills to pay, their own visions of expanding exploration, their own debts and their own investors to take care of. They need to start getting short-term revenue to allow them to stop the bleeding as well. Given that, I’m fairly confident that revenue distributions to shareholders is not a current near-term goal of theirs. So that means that MDMN should not be expecting near term revenues from ADL either. I hope I’m wrong, but I simply don’t see it that way.

You know why I keep repeating that “mining is not easy” and “nothing is guaranteed”? Remember how all those NUOCO investors were betting on the LDM glory hole? How did that work out for them? They were duped by a nugget. So were all the MDMN investors (myself included) who made armchair projections based on that as well. Remember Auryn had projections of 5,000 oz in 2016 and 25,000 oz in 2017? That hasn’t quite worked out yet either. And so we wait and continue to incur expenses to KTLO. This is why the longer MDMN tries to keep treading water, the riskier the investment becomes…if that is even possible.

You mentioned the $2 million debt to AHC as an incentive to keep MDMN solvent until it becomes payable in 4 years. Understand that this was pretty much a gift from AHC to MDMN to keep it solvent now. That $2 million loan will be paid off as soon as it is feasible IMO…whether that comes in the form of Auryn shares from the IPO (regardless if MDMN converts its shares to Auryn or not IMO) or from revenues. I personally don’t see that loan as money MDMN can float while it figures itself out. You have to have pretty big cojones to accept a 0% loan that was gifted for your survival and then carry it the entire 4 years while you have the means to pay it off. And don’t forget, Auryn carries a 50% representation on the MDMN board, so in that respect I see them paying off that loan sooner than later, regardless of what MDMN shareholders want or think is best for the company from the backseat.

IMO MDMN does not have the time or resources that allow it to risk its very survival while it waits for Auryn to progress on ADL. You may not agree (I’m guessing you probably don’t), but MDMN shareholders will have a safer and more liquid investment as direct owners of Auryn for all the reasons I’ve already stated in this and other posts. To have MDMN float around in the non-reporting pink sheet abyss with a dismal share structure, debts to pay and waiting for Auryn to come through on the ADL is just an unnecessary, fool-hearty, wasteful risk to its survival.


#1136

The only significant risk at the moment is Auryn failing to develop meaningful gold revenues this year. No doubt this would delay the IPO if they don’t develop and Medinah would probably have to sell off some Auryn stock to stay solvent if our benefactor(s) grows weary of throwing good money after bad. However, the rather doom and gloom paintbrush isn’t really necessary at this time. Our fortunes are improving, not getting worse. If Auryn can intersect the bonanza grade gold from the production level adit, Auryn’s(and Medinah’s) fortunes will change very quickly.

From Kevin:

"The geologists believe they are close to intersecting this vein on level 3. This would be a significant development and greatly improve the economics of Auryn, and thus Medinah. Work is expected to start on this effort the beginning of March."

On the court side of things, it does appear that odds favor a settlement being reached. Most of that garbage could be over rather quickly besides hounding down those that are holding illegal shares.


#1137

[quote=“MikeGold, post:1136, topic:1735, full:true”]
The only significant risk at the moment is Auryn failing to develop meaningful gold revenues this year. No doubt this would delay the IPO if they don’t develop and Medinah would probably have to sell off some Auryn stock to stay solvent if our benefactor(s) grows weary of throwing good money after bad. However, the rather doom and gloom paintbrush isn’t really necessary at this time. Our fortunes are improving, not getting worse. If Auryn can intersect the bonanza grade gold from the production level adit, Auryn’s(and Medinah’s) fortunes will change very quickly. [/quote]

It’s called balance Mike. Something that you (or your unapologetically bullish online persona) would’ve done well to express on occasion over the years. Shareholders should be wary of the risks as well as the potential rewards, so forgive me for not sugar-coating it in a feel-good message. Shareholders have lost too much in MDMN over the years due to not being vigilant. Don’t get me wrong, I love the potential of the ADL and I look forward to Sillitoe’s analysis, results from Auryn’s activities and production to ramp up ASAP. But in the meantime you won’t ever see the very real black cloud that hangs over MDMN with your head in the sand looking for that gold nugget at the LDM glory hole.


#1138

What really gets me is that for years this stock ran up on SPECULATIVE deals and their potentials.
Now we have a real partner who saved our buts and is proving up the property. We’re in more advanced stage than ever before yet our pps won’t budge and now we rely on only FUDAMENTALS which is unusual for s penny stock.
Yes, I realize the dilution factor Les has caused but technically that should have turned what was 50 cents to 25, 20 cents to 10, etc.
Many claim there is not a short position on this stock yet I look back at our stock dividend and how hard it was to get those shares. Scottrade took almost a year to admit and place shares into shareholder accounts those defined.
We’re those shares real? Did they waive a magic wand and suddenly those shares appeared? I really don’t know the actual answer but the fact we just rely on pure technicals now instead of speculative worth in this penny world amazes me now that the ADL is in real miners hands which is why we all invested in the first place.


#1139

There has ALWAYS been shareholders falling over themselves in a hurry to point out the risks and short comings of Medinah. I am no idea why these guys even bother. If they can’t handle risk…they should stick with mutual funds! There is only one thing that kept us from reaching our goals…Les Price issuing all those illegal shares. Happily, how this story ends has not been written yet. The success or failure of our investment now hinges on the mining activities/results on the mountain…exactly where we want the risk to be knowing the quality of the mountain.


#1140

Yes it is nice to have a ethical real partner, but I would qualify the statement that they saved our buts, only because if they had lived up to the original agreement of paying us $100 M in cash we also would not be in the current situation, We would have cash and we probably would have discovered the Les Price fraud much sooner. Which also leaves the question as to when the majority of the 1.5 B fraudulently issued shares actually occured before or after they resuctured the purchase agreement! JMO


#1141

You’re right about one thing. We would have all been a lot better off in mutual funds (or cash for that matter) than this debacle. But you’re really going to say only one thing has kept us from reaching our goals? You don’t think any of those failed “deals” had any negative impact on this? Or any of the other numerous missteps and “next weeks” along the way.

And there have always been shareholders falling over themselves to pump sunshine even when presented with evidence of numerous red flags. Who has been proven right thus far? Hint: not the sunshine pumpers.


#1142

Gold moving up, mdmn moving down once again significantly on a few thousand $s
Fundamentals my a$$


#1143

As requested:

currently 0.0052 x 0.0059


#1144

Ahhhhh … the $100 Million up-front payment that disappeared into the night.

I would really like to find out one day WHY it went bye-bye, and I don’t believe it had anything whatsoever to do with Auryn not trusting MDMN management to do the “right” thing with the money, as such little issues can be dealt with the appropriate handcuffs.

Could it be that there was something else going on? I think somebody needs to look into this issue too … amongst others.


#1145

Hi Rick,

As usual lots of good points! My gut says that most of the hooliganism here from an accounting point of view involved the inappropriate issuance of shares. From a tax loss carry forward point of view, whether JJ was overpaid or underpaid for a nearly impossible to value greenfield group of mining concessions either way he was paid “X” amount of shares at a time when those shares were trading at “Y”. To Medinah that was the acquisition cost. I can’t see where the tax authorities would be in a position to worry about whether the deal was good or bad for Medinah or JJ.

I wouldn’t think that Les had a reason to fudge on the exploration and development costs as well as on the annual property taxes, etc. Both the US and especially Chile are fairly generous when it comes to writing off the costs of acquiring, maintaining and developing mining properties. This is one of the reasons Chile is attractive to North American mining entities. Hopefully those records are intact. Both EY and PWC have written nice summaries on the tax issues related to mining in Chile.

On the practical side, if there is a gigantic tax loss carry forward I have no clue how we could take advantage of that in Medinah’s current circumstances but I think we need to keep an open mind that it MIGHT be out there because that money was indeed spent.


#1146

[quote=“mrbubba, post:1144, topic:1735, full:true”]
Ahhhhh … the $100 Million up-front payment that disappeared into the night.

I would really like to find out one day WHY it went bye-bye, and I don’t believe it had anything whatsoever to do with Auryn not trusting MDMN management to do the “right” thing with the money, as such little issues can be dealt with the appropriate handcuffs.

Could it be that there was something else going on? I think somebody needs to look into this issue too … amongst others.
[/quote]Not quite the cloak and dagger answer you’re hoping for, but I encourage you to ask the CEO directly rather than dreaming up your own worst case scenarios. Here is Kevin’s responses…

My responses inline.

Sincerely,

Kevin Tupper
President & CEO
MEDINAH Minerals, Inc.

On Tue, Mar 21, 2017 at 10:56 AM,
Hey Kevin,

I have a couple of questions regarding the original Auryn $100 million ADL option agreement if you’re able to answer and provide any detail that will be helpful so that I understand and/or can clear up misunderstandings of other shareholders.

  1. Can you comment on the circumstances and timeline whereby Auryn did not exercise the option and then Medinah later entered into the ADL purchase agreement? The implication that has been made is that Auryn was not being ethical in not following through with the original $100 million option which would’ve provided MDMN with much needed cash only to later enter into the current purchase agreement.

The option agreement was just that, an option agreement. Suppose it remained in force, where would MDMN be today (even without the falsified reporting?) How was Medinah going to pay taxes on its claims? It had no more money and no room to issue shares. In my opinion there is no way Auryn or anyone else would pay $100,000,000 for the claims that Medinah owned that are now part of Auryn’s claims. Incidentally, people continue to forget that Medinah’s holdings amount to less than a quarter of the land Auryn actually holds.

Now, in light of the fraud, it would have even been worse. So in a way, we were fortunate that Auryn offered to consolidate all the claims without the option and that Medinah shareholders now own 25%+ of the whole rather than having a worthless option and 3 billion shares.

  1. Can you provide a general chronology of the share counts as they were before and after the fraud was discovered? I believe there was a picture of a poster at the Shareholder Meeting that detailed the share counts. If you have that picture, can you please forward it?

Yes, this has all been posted publicly. I have attached the image that was shown at Auryn’s Shareholder Information Session which shows what was reported to the public vs what the transfer agent’s records actually showed. This was an ongoing problem. My suspicion is it has been occurring since the mid 2000’s or earlier. I believe the first time the shareholders received an accurate count of shares issued was when we reported it on August 23, 2016.

Thanks,
Rick

Rick

Sent from my iPhone


#1147

If douchelander also would have lived up to his original agreement, we wouldn’t be in the current situation.


#1148

Karl,
Please refer to my last post to MrBubba for answers to your concerns from Kevin.

If anyone has any questions about anything about the company, I encourage you to get them directly from Kevin (from-the-ceo@medinah-minerals.com) rather than pondering out loud in this forum. If you don’t think you’re getting the truth from him, then I don’t think anyone can help you get the answers you’re looking for.


#1149

Somebody knows something smells bad as we have seen this seller constantly dumping. 1.5 million on the ASK .0059


#1150

Rick I am very well aware of that, But it does not change the fact we gave up $100M purchase option for an additional 10% of Auryn. If Auryn never had the wherewithal to pay us on that option we could have simply thrown them out, after spending all their money on drilling and purchasing our shares. Not suggesting that was the right thing to do, but suggesting that was a very good negotiating club. Yes, I do believe Auryn never had the money to exercise the option, but I do not see why our management agreed to a no cash deal. I believe that Management was simply piss poor at negotiations. Management should have at least got $5-10 M on any deal, because we all know MDMN had absolutely no cash flow to cover operating expenses. Actually going forward there should hardly be any operating expenses, so it could have cleared the debt off the books and provided us a nice cushion. I know this topic is neither here or there at this point, but I do not believe Auryn was all that ethical to make a purchase offer that most of us knew they could never live up to. Then we sell them Nuoco, once again for no cash and a 1% increase in Auryn, when we all know we need cash , but then they did come through in the end with a $2.0M loan so we do not get diluted on the cash call. Yes I was extremely happy when that happen and it did restore some of my lost confidence in Auryn, but at this point I trust no one. Trust is something you earn it is not given and I believe after the last Auryn gesture they are starting to earn some of my trust but they still have a long way to go. Just like I thought it was all too convenient that Letts sat on our board until the renegotiated purchase of ADL and then he disappeared. Auryn is not lilly white in this whole mess and in fact I believe they contributed to a lot of it other than Les’ fraudulent share issuance activity!

The last point is Kevin’s answer did not answer my question which remains when was the majority of the fraudulent shares issued before the renegotiated purchase of ADL or after. The only reason I ask that question is because I do believe the renegotiated deal had something to do as a motivating factor with the fraud. Just a guess on my part, and that is the only reason I ask that question.


#1151

BTW I have been adding stock today at .0052. After the last run to .0095 I believe we are close to the bottom and we might soon see a reversal. It would sure be nice to get some positive news on either the property or on the status of the discovery process and efforts to claw back further shares relating to Les’ fraud!


#1152

Kevin sent me a time line of the share counts which was posted publicly at the Shareholder Informational Meeting, but I was unable to load it from my phone to the forum and I inadvertently deleted it. You can ask him for a copy if you wish as this is your curiosity, not mine. I’m just trying to help.