Simona Tolcheva

MEDINAH MINERALS INC (OTCMKTS:MDMN) In the Red Again

by Simona Tolcheva July 17, 2014

  • cash: $253 thousand
  • current assets: $909 thousand
  • current liabilities: $391 thousand
  • revenue: $440 thousand
  • net income: $353 thousand

Considering the fact that this is a penny stock, these numbers are somewhat satisfying, especially when compared to other Pink tier companies. However, there are issues that cannot be overlooked.

For one, there are 35 million preferred shares of common stock, owned by the President and CEO of Medinah, Juan Jose Quijano Fernandez. Should he ever choose to convert them, he could turn them into 350 million common shares. That possibility is something to keep in mind when buying company shares, since the resulting dilution could damage the price.

Another peculiar fact is that MDMN is using a residential house as company headquarters. We cannot explain why a company with a market cap of a little over $78 million would resort to using a residential house, instead of actual office space.

In a press release from June 10, the company announced that MDMN has accepted a joint venture offer for the exploration and development of the Altos de Lipangue group, located in Chile. There was a very short-lived market reaction.

And on Friday, July 11, MDMN issued another PR, stating that it has received news that the subsidiary of its joint venture partner AURYN Holding Corporation, has finally been legally incorporated in the country. The partners expect to launch their operations by the end of July this year, and also the first stage of exploration is expected to commence at the end of August. We will have to wait and see if these deadlines are met.

Hopefully, MDMN will share some good news in its Q2. As always, we advise due diligence before investing in this or any other company.

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