LAS VEGAS--(BUSINESS WIRE)--On Tuesday, April 5, 2016, Medinah Minerals, Inc. (OTC PINK: MDMN) reports the signing of a Memorandum of Understanding (MOU) with AURYN Mining Chile SpA.
This MOU articulates Terms and Conditions agreed upon by the parties regarding the sale of MDMN’s Altos de Lipangue group of mining claims. This adds to AURYN’s previous holdings and will now encompass an area in excess of 10,000 hectares that has been determined by numerous mining professionals as a potential “world class” project.
The MOU is subject to minor clarification points and formal contract signing in Santiago, Chile before a Ministry of Mines Notary to fulfill Chilean law requirements. This transaction will be formalized by the parties during the week of April 23-30, 2016 in Santiago, Chile.
This MOU provides that AURYN acquires and assumes all rights as well as the encumbrances of the mining claims owned by Medinah Mining Chile (“MMC”), and known as part of the Altos de Lipangue Project, in exchange for a 25% equity stake in the AURYN Mining Chile SpA’s capital structure.
Furthermore, AURYN has also granted an option to MMC/MDMN Company to acquire an additional 5% equity stake in AURYN’s capital structure for U.S. $50,000,000.00. The option is for a five (5) year time period that formally begins after the signing of the Sales Contract before the Notary. The option period is exercisable by MMC/MDMN, at its sole discretion at any time within the option time frame, with designated payments to be determined among MMC/MDMN and AURYN Mining Chile, SpA.
This MOU, in conjunction with AURYN Mining Chile SpA’s three (3) previously reported acquisitions of other proximate junior mining exploration entities, effectively amalgamates 100% of Altos de Lipangue (“ADL”) Project claims.
Of note, MMC remains as a 15% shareholder of S.C.M. NUOCO, a Chilean Company in which AURYN Mining Chile, SpA holds the remaining 85% interest of the stock issued. MDMN, under the MOU Terms and Conditions, would have 36.25% of all production from the NUOCO claims (25% of AURYN’s 85% = 21.25% + its original 15% holding = 36.25%).
Through the provisions of the MOU, AURYN Mining Chile, SpA will assume all responsibilities and liabilities of the entire ADL Project. On March 31, 2016, all land use and mining claims taxes, corresponding to calendar year 2016, were paid by AURYN.
Upon memorializing the MOU into a formal contract, AURYN Mining Chile SpA will further its negotiations to add specific surface rights of adjoining mining claims in order to continue its extensive exploration program leading to production on the denominated Pegaso Nero target.
Upon formal completion of the MOU, all previous Option Agreement contracts, and addendums between the parties will be deemed as cancelled.
AURYN Mining Chile SpA, after expending millions of dollars towards exploration, drilling, trenching, excavating, and assaying thousands of samples, is confident that this Sales Agreement Contract will be mutually beneficial for the parties involved. AURYN will continue to bear all exploratory, drilling and operations expenses to prove up all of the Altos de Lipangue Project mining claims.
AURYN Mining Chile SpA has already secured required environmental permits that allow production operations on the ADL this year. Additionally, AURYN has initiated several applications for expanding production goals with each of its acquisitions on the Altos de Lipangue Plateau. Chilean Mining Laws demand applications for increased production tonnage as well as environmental impact issues from mining operations. AURYN has already made several anticipatory applications, in this regard, to the Chilean Ministry of Mines.
As the 25% equity owner of AURYN Mining Chile SpA’s capital structure, MMC/MDMN will now benefit from their share of production rewards from several properties, not previously owned, including the Fortuna de Lampa (CDCH), Caren, Pegaso Nero, Columbo, Mambo, and the LDM/NUOCO claims. MDMN would also have a like 25% equity holding in other properties that AURYN may add to its portfolio.
AURYN Mining Chile SpA has multiple world class P.Geo’s, Geologists, and Mining Engineers that have analyzed the data from their ADL drillings and trenching discoveries and determined that various claims targets are assaying results referred to as Bonanza Gold finds. Several Mining Engineers and Mining Geologists have also reported the evidence of Copper and Gold Porphyry structures on the Altos de Lipangue Plateau that are yet to be fully drilled and explored. Recently, AURYN officials uncovered a 1.7 kilometer gold vein at surface that they assayed over one (1) meter intervals. The results of these activities, as determined by the AURYN geological team, have expressed US billions of dollars of commodity values. AURYN Mining Chile SpA has initiated site locations for early stage production activities on the Altos de Lipangue Plateau. Further, AURYN has conferred with Enami, Chilean state production/processing locations, concerning transportation and receivership of the high-grade (Bonanza) gold to their facilities.
After having endured many years of struggles and challenges as a Company, the Medinah Minerals, Inc. Board of Directors considers this MOU to be very significant and a major milestone event. In addition, given the very difficult commodity markets, the global rout in the market cap of the world’s junior and major mining companies, and the collapse and drying up of capital for the junior mining industry, MDMN is extremely pleased to have a well-funded, professionally run and highly competent partner in AURYN Mining Chile SpA.
MDMN effectively becomes an Asset Holding Company. All percentage cash flows resulting from production on the mineral-rich Altos de Lipangue Project claims will be disseminated to MDMN by AURYN Mining Chile SpA on a quarterly basis.
Further, the Company’s goals are to look at the real possibility of issuing cash dividends, and initiating share buyback programs. Medinah shareholders will share in the free-carried Altos de Lipangue Project production revenues for many, many years to come.
The Board of Directors will undertake necessary steps to determine cost, a location, and a date in the near future for a Company Shareholder Meeting.
Cautionary Statement – Forward-Looking Information
This news release may contain certain “forward-looking statements” within the meaning of the United States Securities Exchange Act of 1934, as amended. This forward-looking information includes, or may be based upon estimates, forecasts and statements of management’s expectations with respect to, among other things, the completion of transactions, the issuance of permits, the size and quality of mineral resources, future trends for the company, progress in development of mineral properties, future production and sales volumes, capital costs, mine production costs, demand and market outlook for metals, future metal prices and treatment and refining or milling charges, the outcome of legal proceedings, the timing of exploration, development and mining activities, acquisition of shares in other companies and the financial results of the company. There can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially and substantially from those anticipated in such statements. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that mineral resources will be converted into mineral reserves.