There’s America’s Most Wanted…
And then there’s Chile’s Least Wanted: Medinah Minerals, Inc. (PINKSHEETS: MDMN). No, they’re not wanted for rape, theft or murder; they’re simply not wanted.
As I’m sure you’ll find in your own research, there’s more red flags to this junior mining company than in China and the former Soviet Union combined (that’s a lot of red flags).
A Q&A session from July 5th of 2007 revealed that President & CEO Juan José Quijano Fernández has been instrumental in accomplishing absolutely nothing. One of the questions posed was whether or not the company would conclude a Joint Venture (JV) with a major mining firm that summer.
Senor Fernandez responded explaining that he “is in active negotiations with more than 12 corporations, several of which are combined proposals. [He] is working as quickly as possible to finalize one agreement. With 12 companies involved, projecting a finish date is difficult”.
No kidding. It’s been 3 years. Either his negotiation skills could use some polishing or he’s just full of shit (excuse my French…or Spanish, in this case).
But don’t underestimate the company’s leadership. In 2002 Medinah Minerals’ then CEO, Les Price, was indicted for wire fraud when “he tried to bribe an undercover FBI agent in a scheme to artificially push up the company’s stock price”. Larry Regis, who is now listed as a Director and Secretary of the company, refused to comment on the incident. There’s more where that came from, but we’ll leave the company’s rich history of legal bouts to another discussion.
Despite these known facts, Medinah Minerals’ tragic flaw lies not in its troubling past, but in its unlikely future. Corporate documents prepared by unqualified persons and material announcements kept hidden from the public paint a dark portrait of the company. Here is where you send your kids off to bed, shut the drapes and dim the light. Below is a screenshot of the company’s ‘Valuation Considerations for the Lipangue Deposit by Dr. Jim DeCosta’:
On page 10 of the document the unqualified Decosta reports:
“The drill results at the “Gordon” pipe has outlined a “Measured resource” including 722,000 oz. of gold, 6,500,000 ounces of silver and 180,000,000 pounds of copper”.
The information is seemingly innocent until you realize it is an identical match to the case brought up against the company by the Department of Justice [DOJ] in 2003. Below is a screenshot of a press release reporting on the event:
The unaudited financials provided by the company over the past years show 3 very important things.
First, no outside firm or independent 3rd party has reviewed Medinah Minerals’ statements and deemed them accurate. As far as investors know the accounts could be fictitious or overstated.
That leads into the second important point: assets. Since 2007 Medinah Minerals, Inc. (PINKSHEETS: MDMN) has slowly been writing up the value of its property. In the interests of shareholders, it is managements’ job to explain how the property was improved upon for it to be valued at a higher price.
There is no disclosure or explanation to this. For all we know, since the financials are unaudited, the property may be worthless.
I’m willing to wager the terrain is more valuable to Wile E. Coyote than shareholders without a qualified person to assess the property and an independent 3rd party to audit its merit.
But fret not. As of the last reported quarter the company had $6090 in cash. Ah, that’s $0.0000089 for every man, woman and child holding a share of Medinah Minerals, Inc. (PINKSHEETS: MDMN). This leads into the third point: a lack of tangible assets.
Half a million dollars is owed to the company. What it is owed for and by whom is besides the point – the company won’t be collecting the account receivable. The amount owed has been outstanding at least since last year! If the creditor hasn’t paid within the course of an entire year would they suddenly decide, in the spirit of the New Year, to pay up? The answer is no.
That means their $0.5M accounts receivable is worthless.
Without going in depth on the issue in having a dentist prepare your geological report, the company’s inability to create any shareholder value with their existing assets, or lack thereof (i.e. cash), and notoriously sly management, there is still no explanation as to why Medinah Minerals, Inc. (PINKSHEETS: MDMN) should be trading as high as it is today.
The company’s stock price is overvalued.
As of the close on Friday December 31st, 2010, Medinah Minerals, Inc. (PINKSHEETS: MDMN) was trading for at least $96,000,000. In hindsight, our amigo and CEO, Senor Fernandez, would like to thank all the American investors who stepped up to buy the shares he has dumped into the market over the years.
“Muchas Gracias Muchachos”.
As of December 31st, 2007 there were 565,435,301 shares issued and outstanding. Today there are more than 677M shares issued. Where the money that was raised from the issuance of common stock went is something, all shareholders, have a right to know.
Welcome to Chile’s Least Wanted. Welcome to Medinah Minerals, Inc. (PINKSHEETS: MDMN).