Here’s the thing with the director’s compensation…
I think we all agree that more than any other time in the company’s history, our directors deserved to be compensated for their efforts over the past 12 months. Without their effort, there would be no more Medinah and none of us would have an investment. If you don’t believe this to be the case, then please stop reading this post and I won’t even entertain further discussion on the matter.
So the directors are entitled to some value (which we can all debate as to what is fair) of fair compensation. This can either be in cash, MDMN stock, or Auryn stock.
I am guessing that most directors would prefer to be paid in cash, particularly those that have enough shares of MDMN already. Cash is riskless, liquid, and offers the greatest flexibility for the recipient. If at this moment you were offered $100k or x number of shares in a private mining company, which would you take? Need I say more? Now, MDMN doesn’t have cash unless they sell shares. MDMN’s shares are limited to about 120 million available for distribution ($500k-$600k). MDMN also needs those shares to pay bills. There are still outstanding legal bills. And they need to find willing investors to buy the shares or flood them onto the open market. So given the company’s limited financial flexibility cash is not an option.
What about the director’s taking MDMN shares? Well, that falls under the same issue as trying to get cash. Legal bills are not going to be paid in MDMN or Auryn stock. So MDMN needs to maintain a currency to pay its debts and future bills. If they’ve used up a good portion of the shares for director compensation, then they have no shares left to pay bills. So how then will MDMN get cash? The only recourse is to sell Auryn shares. Keep in mind Auryn currently doesn’t have a market and there is no guarantee that private investors will buy Auryn stock at a time and price that is conducive to MDMN paying its bills.
That leaves Auryn stock as compensation. Keep in mind that Auryn’s success is not guaranteed, though we shareholders irresponsibly always round up that way. Auryn stock is not liquid at all. There is great risk there, though there is also great reward. I think many shareholders are upset because they only see the reward part of the equation. If Auryn flops or turns into a scam, the directors get nothing. Or the shares could be tied up for 20 years like MDMN was - hopefully not, but 20 years ago there were some of the same shareholders posting today that back then pegged MDMN as a sure thing.
So given this situation, how else would you compensate the directors for saving your investment?
Here’s the only question that comes up for me Rick… Is 1% of Auryn a fair amount of compensation? I honestly don’t know. What I don’t understand is why are they taking compensation in something where there is no known value? It seems to me that in order to compensate someone for something there is a clear value placed on the work done, and I’m all for them being compensated for their work. So what was their work worth, and how do they, and we shareholders, know that the shares aren’t over OR underpayment for the work? You can be sure that if it turns out that 1% ends up being worth more than the value of the work done people are going to complain, especially if it ends up being the difference between shareholders breaking even/profiting or taking a loss on the investment.
In addition to HR’s “spot on” explanation and multiple comments, note (from the Q2):
That compensation is for corporate governance through the anticipated existence of the Corporation. The entire amount has been expensed (at the reported value) in Q1-2017 even though a portion is for future services.
and
The loan will be a 0% interest loan payable in full on December 31, 2021.
The compensation is spread over as many years as MDMN exists and among apparently 4 Board Members and Corporate Officers for all past and future service.
Rick I understand all of that and agree with most of that including that they should be compensated, but on the flip side the scam happened under Goodwin’s watch and even though he eventually uncovered it I believe he failed in his fiduciary duty and should not be reward for something he should have caught from the start. Relating to KT I feel he should have lived up to his original position going in, which I admired and that was that he would not accept a dime until there was positive cashflow.
The Board of Directors (the “Board”) of MEDINAH Minerals, Inc. (MEDINAH) is pleased to announce the appointment of Kevin Tupper as President and Chief Executive Officer of MEDINAH effective immediately. Mr. Tupper will also serve on the Board. Gary Goodin, the former Chief Executive Officer and President, remains on the Board and has been appointed Chairman of the Board. In support of MEDINAH’s desire to limit any further dilution and improve its capital structure, Mr. Tupper has agreed to serve as a volunteer while MEDINAH reduces its expenses and seeks to achieve a positive cash flow
If MDMN has an option to buy 5% of Auryn stock for $50M then 1% of Auryn could be worth $10M. Their compensation should have been in MDMN stock plain and simple. One good point is did they put up their 1% of the capital call and will they have to meet future capital calls. Also are they on the hook for 1% of the loan Auryn made to MDMN. It would have been much cleaner and simpler and would have instilled greater confidence if the took stock in the company they saved. JMO
9.3M traded today and pps moves down,
Why is someone dumping at this point or is this another arranged market trade?
This activity took place when the POS was dumping. I sure would like to know why the seller is selling.and who is doing the buying!
I picked up over 4 million shares today and plan on buying more. Just a shareholder like you, as a matter of fact I met you at the Bellagio. No arranged Mkt. trade no shenanigans.
What value can be assigned on any given day?
Things started to unravel earlier than just last year.
From Q2:
Stock Issuance Changes 2017
Common Stock
• 03/13/2017 – 57,000,000 shares cancelled by agreement with a private investor.
• 03/13/2017 – 37,364,063 shares cancelled by gift from a former director.
• 03/13/2017 – 75,157,222 shares cancelled by gift from a former director.
• 06/21/2017 – 50,000,000 shares issued with legend to Okanadian Management Corp. in settlement of
legal dispute. Preferred Non-Voting Stock
• 03/13/2017 – 227,000 shares cancelled by agreement with a private investor.
• 03/13/2017 – 1,600,000 shares cancelled by gift from a former director.
• 06/06/2017 – 580,000 shares cancelled by agreement with a private investor.
2016 Common Stock
• 05/09/2016 – 2,090,000 shares cancelled in a return of shares from a private investor.
2015 Common Stock
• 02/04/2015 – 2,200,000 shares cancelled from return of Greg Chapin Directors’ compensation.
• 03/16/2015 – 10,000,000 shares cancelled for improper issuance.
• 05/08/2015 – 5,000,000 shares cancelled for improper issuance.
• 11/05/2015 – 32,000,000 shares returned and cancelled in conversion to preferred shares.(?)
Additionally, it does not appear that all shares are accounted for at the time the Q2 was prepared:
As part of the settlement, Leslie Price must turn over all of the stock he owns in any of the
following companies to the benefit of Medinah Minerals, Inc.:
• Medinah Minerals, Inc.,
• American Sierra Gold Corp.,
• Cerro Dorado, Inc.,
• AURYN Mining Chile SpA, and
Pamela Fitzpatrick must turn over all of the stock she owns in Medinah Minerals, Inc. for the
Company’s benefit.
There is no simple math to determine what you are asking. I can look at it quite differently. The $50M buy-back for 5% of AURYN is an imaginary hypothetical, upon which you are basing your $10M value for 1% of AURYN. Not going to happen in the real world.
I look at a few additional factors …
It works out to the equivalent of more than 5.2M shares of MDMN for each BOD member averaged over an assumed 5 year period, or about $26K/year at today’s market price of MDMN. Assuredly, if shares appreciate 10X or more over that same 5 year period, many will be complaining of “over compensation”. Shareholders don’t know exactly how much time or work the BOD did, but at this point, it is likely to turn out very good for them with AURYN’s success going forward. AURYN has no assigned value at this time.
What I’d like to see happen:
The AURYN share structure could be structured in a non-dilutive fashion with an approved F-1 application and a real IPO instead of a reverse merger of some kind.
Perhaps I didn’t explain the result clearly in an earlier post.
What I described earlier would provide immediate cash to all three companies ($46.5 M).
-AURYN would have cash to expand exploitation rapidly ($32.5M).
-MDMN would have cash to buy back shares on the cheap while the share structure is bloated ($11.6M). Decreasing the share count will increase the value of each share, including those held by AURYN (300M shares+?).
-CDCH would have cash to distribute a dividend to shareholders (this would work out to 0.00775 per share dividend if all $2,325,000 were distributed as a dividend)
Yes, this is just a hypothetical also, but one I would like to be considered because it has a postive outcome for all shareholders. There’s no benefit to dwelling upon the past. MDMN is invested in AURYN, and AURYN moving forward is the only future current MDMN shareholders have for a ROI.
Simply, Kevin taking payment in Auryn stock gives me additional confidence (which may not be high yet) that Auryn will be around to be worth something.
Anyone who knows Kevin and knows all he did to save this investment knows that what you just wrote is pretty much as despicable as it can get and something I would expect from a troll on Ihub. Comparing Kevin to Les says more about you than it does he. And anyone liking that post should be equally ashamed.