March 10, 2017
Medinah Minerals, Inc. (Medinah) (OTCMarkets: MDMN) owns 27.5% of the outstanding shares of Auryn Mining Chile SpA. (Auryn). Auryn is a privately held company based in Santiago, Chile.
On February 15, 2017, Medinah’s President & CEO, Kevin Tupper, attended an Auryn Mining Chile SpA shareholder meeting in Santiago, Chile. At the meeting Auryn informed its shareholders of Auryn’s plan to capitalize its debt by issuing a capital call to its shareholders. Any shareholders unable to meet the capital call will retain their current shares but be diluted in their overall position.
To maintain its 27.5% equity position, Medinah signed a Letter of Intent on February 22, 2017, with a private party to finance Medinah’s participation.
Medinah is pleased to report that on March 10, 2017, it signed an agreement with Auryn Holdings Corporation to finance Medinah’s portion of the raised capital. The basic terms of the agreement are as follows.
- Auryn Holdings Corporation will cover the payment of approximately $2,000,000 that Medinah Minerals, Inc. owes to Auryn Mining Chile SpA.
- Medinah Minerals, Inc. will pledge its newly issued shares in Auryn Mining Chile SpA as collateral against the loan.
- The loan will be a 0% interest loan payable in full on December 31, 2021.
- The loan payment date can be extended upon the agreement of both parties.
- Should the shares held as collateral become publicly traded, the loan will convert to an interest only balloon note with a four-year term and a simple interest rate of 4% annually.
- Until the loan is paid in full, the shares remain as collateral securing the debt.
- If Auryn Mining Chile SpA sells or transfers its rights to any other party and Medinah receives shares in another entity because of the sale or transference, the new shares that Medinah receives will serve as the collateral for the term of the loan, effectively replacing the shares in Auryn Mining Chile SpA.
A Medinah representative will attend the upcoming Auryn shareholder meeting on March 15, 2017. We will meet the cash call and retain our current interest in Auryn.
Submitted on behalf of the Board of Directors