Up 32% on announcement of funding for a project in the Tombstone mining district. I have some serious doubts about how valuable this will be to shareholders based on the information below:
Mansfield Exploration issued 285 million shares to Armada mining for a stated 3800 acres of claims that seem to have some serious questions. They also issued an announcement of an intention to produce silver for a crypto currency yet they do not have any silver production nor any ready prospects to support such an endeavor. I'm not an investor there as it seems that the announcement may be "an intention to support a silver based crypto currency without any silver". Consider the following verifiable information used in support of the above:
1a. BLM records do not appear to list any mining claims in the Tombstone District under Mansfields name. There are 53 total 20 acre claims in the records under the name "Armont". That name does not appear anywhere in MCPI reports however.
1b. Armada controls 85% of MCPI shares
2. Armada retains 55% of most of the claims other than those issued to Mr. Bauska personally for his services, leaving MCPI with only a 45% interest in the remaining.
3. MCPI owes a previous shareholder $881,000 at 10% and is currently in default with no payment terms as of the latest 10-Q which could result in conversion of 881 million shares as noted below. Stidham, the shareholder, previously announced that the conversion clause was no longer suspended, which means a likely 200 percent dilution.
From MCPI's latest 10-K:
"Upon completion of the Armada transaction, the principal stockholder of MMEM common stock will hold 284,580.000 shares (or approximately 84.5%) of the Company’s issued and outstanding common stock. Additionally, a former controlling shareholder holds a convertible Promissory Note with a balance due of approximately $881,000, including accrued interest, which currently has a conversion clause to common stock which has been indefinitely suspended by the Holder of the Promissory Note. The revocation of this suspension could cause the issuance of an additional 881,000,000 shares of common stock, which is far in excess of the Company’s currently authorized shares."
4. The development plans are contingent on the announced $3 million of financing. Based on that, MCPI indicated that production could start in March or April 2018 "after the thaw" (whatever that means since I'm unaware of the ground freezing in the tombstone mining district).
In summary, some quick math shows that if the conversion is exercised, MCPI only controls 1/3 of 45% of 15% of the profit on the claims and must bear all of the production costs. That assumes the project is viable based on the historical data on which the project is based. The only way to avoid 2/3 additional dilution is that that the $3 million is enough to cover production and pay back the $881,000.
I suspect the serious uncertainty this scheme is based on may be the reason to bring the crypto currency angle into the picture, to gloss over a shaky proposition with the lure of Bitcoin type rewards to shareholders that would reap very little even if it materializes. Even if the $72 million of gross mineral production is attained, MCPI would bear the expense and realize gross of $4.8 million (corresponding to the approximately 6 percent share(45% of 15%)) even if their projections are accurate. Since they have on the books a cost of $5 million for the claim so far, the project seems dubious unless they somehow get income or financing to develop deep and do well with it (assuming that the claims are indeed held as stated)
In contrast, another junior mining company, Tombstone Exploration (TMBXF) has patented mining claims of 145 acres and leased lands of 450 acres in the Tombstone mining district, some of which is located adjacent to lands of a major copper producer and has deep copper deposits per ZTEM analysis. Drilling results were announced along with further plans on the stardust property. In addition TMBXF holds an interest in Eurogas and in potential proceeds of Eurogas lawsuit against Slovakia.
In all I recommend a look at TMBXF as an alternative in the tombstone mining district and among junior mining companies.
Of course that's just an opinion, but it is based on the above verifiable information and comparisons.
Jacob J. Rosenblum on what every lawyer knows.
“If the facts are against you, hammer the law. If the law is against you, hammer the facts. If the fact and the law are against you, hammer opposing counsel."
