Medinah Minerals (MDMN)

[Hurricane_Rick]

If Auryn gains control, why would they want to make this deal more expensive?

It's not a matter of making the deal "more expensive". It's a matter of paying a fair market price for the property based on quantifiable values that would result from drilling and exploration and the resulting geological report...and the eventual Preliminary Economic Assessment (PEA). In all likelihood, if Auryn tenders an offer, it would be subject to a fairness opinion given Roberto Letts' involvement as director of both Auryn and Medinah. In addition, since the purchasers of the first 150 million shares of MDMN have been described as Auryn board members and associates, they too would undoubtedly wish to be protected from any accusations of wrongdoing by having Auryn employ a fairness opinion.

They will tender for the balance of stock at a cheap price

No. They will tender at a fair market value price based on the results of drilling and exploration as I noted above. Keep in mind that the first 150 million shares were not purchased by Auryn Mining Company or Auryn Holdings Corporation, but specifically "the Board of Directors of AURYN Holdings Corporation and associates" as specified in Auryn's February 4, 2015 release. While their personal holdings contribute to Auryn gaining control of MDMN, these are individual shareholders that wish to see an ROI just like any other common shareholder. They're not going to squander their personal investment so that corporate Auryn can get MDMN/ADL "on the cheap" as you say. They bought MDMN shares anywhere between the upper .03s and .10 with a probable average around .075 (give or take a penny) based on looking at the chart over the past year since Auryn's involvement.

With 1.35 billion outstanding shares and a contractual cap of 1.5 billion shares able to be issued, the $100 million minimum option agreement puts a .074 share price floor on MDMN (.067 if all 1.5 billion shares are issued and outstanding) and doesn't even consider the remaining 15% ownership that Medinah Minerals Chile would continue to have in Auryn Mining Chile or MDMN's interest in LDM/NUOCO...which all must flow through to MDMN's valuation. If Auryn wants ADL, there is no avoiding this transaction regardless of the ownership structure of MDMN North America. So the "cheapest" Auryn could get away with would be .067 + the value of Medinah's interest in LDM/NUOCO + 15% of MDMN's resulting ownership in Auryn Mining Company. As mining joint ventures option agreements are typically structured, if a deposit is proven up to be economical, the latter percentages of ownership become more expensive to acquire given the amount of risk that has been mitigated based on drilling and exploration results. So if ADL is proven to be an economical deposit, it is likely that a fairness opinion would/could/should find the final purchase price to be north of .15 at a minimum, though there are too many unknowns at present for anything more specific than a ballpark figure.

Worst case they decide they don't want it and dump their stock if they can.

And Auryn would be out $10+ million in drilling and exploration costs, and Auryn board members and associates would be out $11+ million they spent on their 150 million shares minus whatever they can sell their shares for, and they would be out any further investment dollars they made in MDMN between the February 4, 2015 announcement and whenever/if ever your hypothetical worst case scenario event occurs.