Medinah Minerals (MDMN)

[Hurricane_Rick]

Cash Dividend

There have been several posts scoffing at the notion of a cash dividend from Medinah, and given the company's history and status as a pink sheet stock, I can understand the knee-jerk reaction, even the audacity/suspicion of it coming from a penny stock.

However, unless you're one who has written the whole operation off as a scam or insurmountable failure, the idea of a cash dividend is an option that will be on the table assuming that Auryn follows through with exercising their 85% purchase option of ADL for a minimum of $100 million.

Here are some pertinent facts/events thus far:

* Auryn Mining entered into a JV option agreement to purchase 85% of the Altos de Lipangue group of claims for a minimum price of US $100,000,000.

* Auryn has begun their designated $10 million drilling and exploration work on the property.

* Medinah's historical drill programs from 1999-2001 had estimated approximately $2 billion worth of resources within the limited footprint at the Gordon Breccia. Note that this estimate was based on gold approximately $1500 and based on Gordon House's (P.Geo for Medinah ) resource estimates and was not a formal geological estimate.

* Auryn's current drill program occurring at the Gordon Breccia will serve to officially confirm (through in-fill drilling) and expand (through step-out drilling) House's estimates and will include these results in a formal geological report and Preliminary Economic Assessment for the ADL property.

* Auryn's drill results thus far have been reported as encouraging and have substantiated the continuity of the Gordon Breccia gold zone.

* Auryn has signed a LOI with SCM NUOCO to perform due diligence with the intent to submit to SCM Nuoco a firm offer for the LDM and Mambo mining claims on ADL.

* Auryn has informed MDMN of its intention to purchase shares on the open market.

So Auryn has certainly postured itself as highly interested in the ADL property and has thus far has followed through on their stated intentions and commitments with regards to the joint venture. If (and we all can assign how big this "IF" is) Auryn's drilling and exploration prove that ADL is an economic deposit, it is more than likely that they would follow through with the $100 million minimum option agreement...otherwise they would have just squandered $10 million proving up an economic deposit for naught.

If all of this comes about as contemplated by the parties involved in the joint venture, then Auryn will be paying $100 million minimum in cash to Medinah in order to exercise the 85% option agreement. At that point, what do you think Medinah's options are to do with the $100 million cash?

1) They can use that cash to fund their 15% of costs involved with the JV.

2) They can use that cash to buy more properties and expand the company.

3) If they haven't sold off their interests in CMLDM and NUOCO, they could use that cash to expand those operations if the opportunity exists.

4) They can buy back shares of their stock to reduce the bloated outstanding shares.

5) They can issue a cash dividend to shareholders.

A cash dividend may seem far-fetched to some casual observers at this point in time, but as I've spelled out above, there is a clear pathway to get to that eventual decision point. And so far Auryn has demonstrated a clear intent to continue moving along that path. IMO, if drilling and exploration proves up ADL to be an economical deposit, Auryn will buy out MDMN prior to paying the $100 million option.