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MDMN Blog provides investor due diligence and commentary regarding Medinah Minerals.
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Must Read Due Diligence
Medinah has posted the most recent geologist’s assay of copper ore from the LDM/NUOCO mine. The ore is being shipped to the Til Til mill for processing. Cornhuskergold from The Mining Play forum writes the following: The report of 5.3% copper is fantastic. Big open pit mines mine stuff from 0.25% and up. Something like 1% or 1.5% is considered “high grade”. See Nevada Copper who is literally constructing a 2100 ft deep vertical shaft to get at a 35Mt pile of copper ore that is “high grade” averaging 1.5% (http://www.nevadacopper.com/s/Home.asp)
An opportunity to profit from something usually exist because of one or two things. Either a) very few people are aware of it, or b) very view people understand it. In Medinah Minerals case, I believe it is both. Traders make money off the concept of divergence. Basically it means the price is going one way while the indicators are going another. For MDMN, we are in a state of fundamental divergence and it is an opportunity to profit.
The ADL / LDM Property Complex via Google Earth with some geological commentary. In Aug / Sept – Auryn Holdings will begin a diamond drill program.
As recently announced, Medinah Mining Chile reported the signing of a binding Framework Agreement with Peruvian JV partners (aka AURYN Holdings Corporation), directed most notably by two of the Letts family – Peru’s first family of mining. The Framework Agreement terms involve the sale of 85% of the Altos de Lipangue group of claims for a minimum price of US $100,000,000 in an all cash transaction upon the final exercise of a 3-year Option Purchase Agreement. Medinah Mining Chile will retain a 15% equity interest in the properties. Also of note is that this Framework Agreement is binding with a $3 million penalty upon either party failing to comply with the terms of the agreement. Specific terms of the agreement have not been provided yet so it may be a bit premature to speculate too far into the details of the terms. However, we can make a few inferences regarding the nature of the deal based on what has been disclosed thus far and also looking at the terms of other deals in the mining industry and what they encompass. Given there is a “minimum” earn-in price of $100 million in the ADL deal, this implies a sliding scale of valuation presumably based on resource estimations from drilling and exploration with $100 million being the floor. At this point we don’t know what the upper threshold of the monetary contribution is for the 85% earn-in is…or if there are progressive tiers, though that seems probable. Since the only reliable methodology […]