Medinah Minerals Inc (OTCMKTS:MDMN) Explodes On Massive Volume

Medinah Minerals Inc (OTCMKTS:MDMN) added 24.40% to its market value on Friday, as investors really started hyping about the company’s newest announcement.

Truth be told, there is a genuine reason for excitement, as the news that MDMN published is actually significant for a change. The gold yield that the geological study suggests is substantial, and if MDMN manages to capitalize on it, it will likely create a lot of value for its investors. However, as things stand now, all the hype may be a bit premature. Why?

Well, as company management mentioned, MDMN‘s “goal is to prioritize the best exploitation targets” – but there’s no real way to know how much time that will take. Investors have not been given even a rough estimation. Will it take months? A year? Five years? Ten?

It is unclear. However, if the company’s achievements to date are anything to go by, it will take quite a while.

The reasoning behind the previous statement is simple – MDMN‘s current financial state fails to impress:

• Cash in the bank – $41 thousand
• Total Current Assets – $787 thousand
• Total Liabilities – $1.8 million
• Loss From Jan-June Operations – $214 thousand
• Net Income for Jan-June – $227 thousand

One thing is worth notice here – namely, the fact that the company is far from operational. So how can it record profit? Well, it’s all explained in notes 6 and 10 that cover the so-called “extraordinary profit”. A look at them confirms the fact that MDMN reported the money it made from selling stock to its associates as profit.

And, suffice it to say that MDMN has printed quite a lot of shares over the last year or so:

• As of June 30, 2014 MDMN had 957.5 million common shares
• As of June 30, 2015 MDMN had 1.3 BILLION common shares

Most of those shares came into existence as a result of conversions of preferred stock, the selling of which the company seems to consider quite profitable. That opinion is unfortunate for its shareholders – especially since the company’s authorized shares were as high as THREE BILLION as of June 30, 2015.

Investors should really take these facts into consideration when dealing with MDMN.