PRESIDENT?S REPLY TO SHAREHOLDERS
November 1, 1999
Dear Shareholder:
On behalf of the Board of Directors we would like to thank those of you who gave of your valuable time to attend the Annual Shareholder?s Meeting in Reno. Your enthusiasm, participation and suggestions in discussions regarding the future of our Company were appreciated and taken into consideration.
Shareholder concerns included dilution, major financing, full listing requirements and the short position.
With your concerns and suggestions, and in light of Company goals and objectives in mind, the Board has developed the following strategic plan:
In consultation with our Board?s professionals, Paul Jones and Gordon House, it has been determined that the following drilling program provides us with the best "bang for our bucks." Three drill holes will be completed in the breccia zone in spacings and locations provided by current IP readings. At least three additional drill holes will be completed in the Dos Marias shear zone where high-grade assays were recorded. Results of these findings will expand our knowledge of the ore body.
Both drilling programs would be started within the following 3 weeks. The holiday season in Chile extends for about 3 weeks at Christmas. In order to get drilling results prior to the Christmas break, management has decided to drill Dos Marias first. This will provide for the potential of some spectacular results as well as test new IP targets and shear zone extensions. Financing for this project falls within the budget already allocated and creates the least amount of dilution.
Regarding partners on the project, two options are being considered: (1) a joint venture with a major; and (2) enter into a major funding agreement to bring the project to production. Option 1 is available and provides us with credibility and large promotional possibilities. Obviously, we could lose control of the Company, but majors provide huge followings for junior companies that could dramatically affect the share price. Option 2 to enter into a senior financing agreement in which financing is made available under a debt financing agreement with repayment from production and a condition of equity purchase from the market, provides share appreciation, retention of Company control, and the least amount of dilution.
In the issue of compliance, financials will be completed on time and submitted within the rules, however, the possibility also exists of an association with a NASDAQ company. That would upgrade Medinah to a NASDAQ listing.
If you combined three factors: low dilution by pursuing the Dos Marias short-hole shear zone development first, participation by a major financier to bring up the market and finance the projects into production and merging into a NASDAQ company, you get the following result:
The lowest possible dilution and the fastest market news from drilling results.
All the financing required to bring the projects to production, the repayment of which would be by debt instrument out of gold production, part of funds allocated to a market share purchase.
A NASDAQ merger opens up the company to investors and brokers, many of whom at this point are unable to buy BB shares.
This last scenario addresses all of the concerns expressed so heartily and eloquently by the shareholders: the dilution factor, the association with a major partner or financier and financing by way of debt instruments for larger expenditures.
We have listened to your suggestions and I believe that we have addressed them all in a way that will benefit the company and its shareholders in a speedy and effective manner. Your Board of Directors will pursue the path developed by the suggestions that you have made.
Yours truly,
Larry Regis
President, Medinah Mining, Inc.
It is my sincere recommendation that you register your Medinah Gold shares with the transfer agent. For those who hold their shares in "street form" at a brokerage firm, your accounts may be designated as having the Medinah Gold Shares contained therein even though the certificate has not landed at that firm. Please insist upon delivery of your physical Medinah Gold Certificates. |
