Medinah Minerals (MDMN)

[RD759]

I have done a little research. The ADL claims are located near a small town called Lampa. The ADL claims owned by Medinah Minerals cover a very large area. There has been a small amount of drilling and some expert analysis done on the property. All to the positive. Chile is a mining friendly country, the claims are at an altitude to be mined year round. Again all towards the positive. In addition to the ADL claims they own the LDM group of claims, which, according to company updates they are currently mining but have yet to publish results.

ADL looks good on paper, but get too close and you'll find it's not wearing anything under its kilt... All of your statements are true, up to a point. The problem is that no one has seriously (and independently) looked at this deposit since ACA Howe in 1999. The few holes drilled defined a rather poor, small and patchy breccia pipe. The numbers for the pipe look good to the untrained eye, but begin to apply a mining model and development costs and things change quite rapidly; without a very good idea of potential recoveries it's impossible to gauge whether the pipe would be viable in today's market and so a great deal of work would be required to get to a stage where you could begin to quantify things properly.

Other areas of the ADL have potential and have been subject to reports, all of which have had the best possible spin and extrapolation well beyond what would be allowed for a listed company, but again no further work has been undertaken to substantiate any of the claims made in these reports in over a decade. Historical data suggests that the plateau is mineralised with gold and copper, but whether this is of a level to support more than small-scale artisanal mining is unknown. The company would have you believe that the mountain is Candaleria's richer and bigger twin, but have failed, so far, to add any meaningful data to substantiate the premise that this is a 'World Class Deposit'; but when you have a cult-like following who implicitly believe the mantra without question, I guess there's not a lot of pressure to do so.

LDM, from the photographs, is a tidy little mine; but despite the hype, no one knows what it has produced. A few nice assays (always nice numbers) have gulled the masses into thinking it's a high-grade gold/copper mine, even though the sampling methodology was botched and there's no information on assay protocol or QA/QC. There is no information put out by the company on tonnes produced, the grades of gold/copper that have gone to the mill, stoped ground reconciliations, mill recoveries, tonnes of concentrate produced or details of sales of concentrate. Having worked in a producing mine my first job every morning was to complete the daily production spreadsheet for the previous 24 hours, detailing ore hoisted, ore delivered to the loading pocket from every producing end in the mine (complete with assay grades), the amount/grade trammed from every stope and reconciling that to the stated in-situ grade. From this I calculated the daily head grade and tonnage that went to the mill and then analysed their data to reconcile the mine grade with that of the mill. This information was the bread and butter of the mine and its reason d'etre. There is no way that this kind of information is not available for LDM; if the company is not collecting it (which is unthinkable really), then the mill certainly will be, on a daily, weekly, monthly and quarterly basis. Why they should wish to ignore/suppress this data I'll leave to you.

Both ADL and LDM may be as good as they claim, but without reliable independent data to back those claims you're unlikely to see much movement on the SP. A JV with a reputable company would be the best possible route, but having just come back from PDAC I can tell you that finance within the mining sector is still incredibly weak and most juniors and mid-tier companies are just keeping the office lights on and spending as little as possible; and there's little evidence to suggest that things are going to improve in the near future.