Here is the entire post for those interested. It might be a little over the heads of some but well worth the read. As for who he is...he is just another shareholder of MDMN like I am. Nothing more and nothing less. He has his opinions just like the rest of us.
I've never sensed as much human pain in this investment as I now sense. From a mental health point of view, I think perhaps we shareholders should entertain the concept that from the point of view of the "will Uhlander fund or not?" situation perhaps we've successfully arrived at the "who really cares?" stage of development. I think that the recent developments at the LDM have earned us this peace of mind for anybody willing to tap into it. Don't get me wrong, if a big check lands tomorrow that's wonderful. But what are the possible ramifications if he can't or doesn't step up to the plate in a timely manner? The pertinent questions might be what are the Alluvia shares worth? Is the AuVert technology for real? Are there ADL back up offers waiting in the bull pen? Are there any "drop dead" dates in the near term at which he can be put officially in default? Should we just concentrate on increasing the value of the LDM (and therefore the ADL due to proximity) and try to execute a superior deal or outright sale on the ADL later on?
In trying to determine the relative importance of the ADL and the LDM to Medinah's success AT THIS PARTICULAR STAGE OF DEVELOPMENT you might think of it in terms of how success is defined to a company like Medinah in the junior exploration sector. I would proffer that success is achieved with gaining access to significant positive cash flow. This is an extreme rarity in this sector. This "success" brings with it negotiating leverage with any party since the option of going it along suddenly appears. Significant positive cash flow should also address any previous credibility issues as it is pretty difficult to merely stumble upon it and Medinah is the most obvious "credibility play" imaginable.
The anticipated length of time that this LDM cash flow might occur is also critical (perhaps 15 or so years for the LDM skarn?). So too is the ability to ramp up these levels of cash flow i.e. go after others of these "Spanish tunnels" or move into open pit mode. At this stage of development, access to cash flow is often predicated on the presence or absence of high grade near surface early production opportunities like those fortunately available at the LDM.
Receiving a check from the sale of Alluvia shares or from receiving 51% of the first $18 million tranche ($9.2 million) would obviously be wonderful. But in order to gain insight into the relative importance of the 2 properties again at this particular stage of development of Medinah we need to gain an insight into what kind of cash flow might be coming out of the LDM both now in the underground pre-open pit phase and later in the open pit phase. These numbers will allow us to take pen to paper and at least crudely estimate the net present value (NPV) of the LDM via a discounted cash flow (DCF) analysis. This will represent a due diligence breakthrough because it would also provide a benchmark valuation for the ADL after you take into account the relative sizes.
The last update suggested that we're now at the point where we're meeting with "noted experts" and getting ready to hand the keys to the LDM over to the big boys from an operational point of view. It's important to recognize that the LDM development has forwarded us along the learning curve for the ADL in regards to the metalurgy of the ore and the reliability of the IP/IR and satellite findings, etc. In essence, the ADL geo-modeling is being advanced through the development efforts at the LDM. The LDM development efforts provides a key to interpreting the historical data acquired in regards to both the LDM and the ADL. We now know what a green squiggly line on the IP/IR studies represents in reality.
Open pit production provides access to economies of scale and the cost per ounce to produce gold and copper drops immensely from underground methods. Thus the grades needed to be classified as an "economic" deposit drop also. Conversely, the profits can go up considerably when you're mining a high grade near surface deposit with bulk methods.
Once an NPV is estimated at the LDM then one needs to consider whether the grades at the ADL might be expected to be slightly higher or slightly lower than those at the LDM. The relative sizes of the 2 properties then would need to be evaluated (perhaps the ADL is 30 to 50 times larger than the LDM). The mining concessions amalgamated together at the ADL now cover about 15,000 hectares or 58 square miles. Keeping these relative sizes in mind and the homogenous nature of porphyries you can see why every assay coming out of the LDM is incredibly important. Recall from inclusion body analyses that the ADL and the LDM share the same underlying intrusive as their parent. They're both part of what the satellite imagery analyst described as a "7 Km by 800 meter wide swath of about a dozen intrusives....definitely a world class deposit". This still holds no matter what Uhlander had for breakfast.
At the ADL positive cash flow for the first couple of years will come sporadically in the form of annual payments and perhaps early production opportunities unless and until such time that a major takes a swipe at the whole enchilada. The drilling process at the ADL, no matter who ends up doing it, should provide a constant flow of information. This isn't "cash flow" but for some investors it does put the ADL and therefore Medinah "into play" in the mining sector.
What gaining access to significant positive cash flow does is it takes pressure off of the share price currently dictating shareholder emotions. Unfortunately, share prices in our markets are easy to manipulate downwards. With cash flow, management gains the option to reward its shareholders with oftentimes generous qualified cash dividends. The more manipulated downwards the share price becomes the more valuable the dividending out of a given amount of cash becomes on the all important "percentage of share price" basis. The preferential tax treatment of dividends is also a bonus. Whether a shareholder gets his reward from share price appreciation (capital gains) or via dividend distributions doesn't matter to most. It's the gaining of access to significant positive cash flow that needs to be the focus because in these markets it becomes the prime determinant of shareholder "success".
If we can get ourselves to a cash flow focus and a patient wait and see approach to the ADL funding backed up by a "who really cares?" mindset for mental health reasons then perhaps we can start concentrating on silly little concepts like grade, tonnage, metallurgy, infrastructure, NPV, access to power and water, 4,000 meters of existing tunnels, 4 access roads, low elevation, etc.
AI
