Medinah Minerals (MDMN)

[DonD]

The truth of what DECOSTA really said is,

"I don’t have a clue what the original plan was but I think that the LDM results might be a game changer. If you’re going to pay the CAPEX at the ADL I would think that you’d almost have to grab the LDM. It would add a lot of years of mine life without increasing the CAPEX very much. If you’re going to take out the LDM you need to do it sooner than later. If you do it later then the value of the LDM and its price tag will go nuts BECAUSE OF the plant and equipment expenditures having been made at the ADL.

Recall that Lassonde article and how it takes an average of 17 years from the commencement of exploration to production. A major doesn’t want to start that 17 year cycle after the ADL Mine is played out in let’s say 20 years. It would rather lock in a mine life of perhaps 30 years now. The costs of production are going up 15% per annum. What are they going to be in 37 years (20 year mine life plus 17 more years to bring any discovery into production) if they successfully find something when they start looking in 20 years?

Your “capital costs” would go way down because your cash flow from the LDM would service a big chunk of the CAPEX. High grade near surface early production opportunities like those at the LDM are worth a fortune to the owners of the majority stake of the next door property. There are a lot of logistics and synergies to consider. I don’t blame Medinah for going in there and picking the low hanging fruit i.e. the super rich ore found in hole #2 but they’re bound to get a tap on the shoulder from somebody sooner than later with a big check in hand. There are just too many majors sitting on tons of cash with nothing in the pipeline and not very many recent discoveries to choose from. Everybody and their brother in the mining community seem to be heading to Chile right now."