Medinah Minerals, Inc. (OTCMKTS:MDMN) Accepts Framework Agreement, Starts Correcting
On June 10 Medinah Minerals, Inc. (OTCMKTS:MDMN) announced that they have once again accepted a joint venture offer for the development of their Altos de Lipangue group of claims located in Chile. The management team was supposed to meet with the JV partners on June 23 and conduct the necessary due diligence but by the end of the week no official PRs were released about the progress of the negotiations.
Yesterday investors finally learned that a binding framework agreement has been signed. According to its terms 85% of the claims will be bought for a minimum price of $100 million while MDMN will retain a 15% equity interest. Such a massive sum of money should have boosted the stock up the chart but apparently investors were not exactly happy with all the terms of the deal. When the PR was issued MDMN almost immediately started losing positions and at the end of the day was sitting 8.4% in the red at $0.08.
So let’s take a look at the rest of the announcement. The joint venture partners are going to pay the $100 million only if they decide to exercise their option purchase agreement. And more importantly they will have 3 years in order to decide whether to do so or not. A $3 million enforceable penalty has also been set up if either of the parties fails to meet the requirements of the agreement.
Such a long period for the option is definitely not something most investors were expecting and MDMN may continue to correct. At the moment the stock is down by 5% sitting at $0.076. Investors shouldn’t also ignore the fact that insiders of the company own 35 million preferred shares that if converted will turn into 350 million common shares.
In early trading today Vape Holdings, Inc. (OTCMKTS:VAPE) are continuing their impressive recovery and are trading over 30% in the green at $2.74. After suffering horrible crashes for two session in a row Windstream Technolog (OTCBB:WSTI) seem to have at least slowed down their fall and are currently down by 4% at $0.94.