April 21st Update Continued...
All in all, morale is higher than a kite. When you can't be the proverbial fly on the wall in the boardroom, what we have learned to do is to study the moves of those that are in the know. When the Wall Street behemoth that cleared and settled $70 trillion worth of trades last year can't answer the opening bell against a scronty little mining company from Southern California, then something's cooking!
In regards to the recent purchase of a quarter interest in the main property for $5 million, we have mixed emotions. We enjoy the credibility enhancement it has given management, but we think the price is way too cheap. If Gordon does what we think he will do, namely to hit a giant porphyry in the next hole or two, then the purchaser's $5 million is going to look like $100 million in about 2 seconds. We are going to trust management's decision, the group in question will obviously bring other talents to the party also. One can't help but think of the $5 million that Newmont Mining invested in Argentina Gold right before they went nuts. People that have the ability to write $5 million checks also have the ability to do very thorough due diligence. One should always follow the big money because it's usually smart money. We'll be interested in seeing if this cash infusion makes any of our interested majors a bit jealous. This entire deal has always been a "credibility" deal. Face it, what are the chances of finding a mining company that just made a very significant discovery, with a built-in short position approaching 400 million shares sold by short sellers that are totally trapped, and the stock trading at a lofty 8 cents. Does it sound too good to be true? Well, at first blush it does, but if you've hired several independent geologists to go check out the property, and all of them came back with rave reviews, and if you spent 4 and a half years doing shareholder censuses to irrefutably prove and quantify the short position, then you can mitigate the risk of buying a stock that sounds too good to be true.
People are still asking when are the bad guys going to cover. Our gut feeling is that most of the firms will sleep right past the dividend record date, and allow us to "tax" their short position by 20%. This is not only our guess, but our hope. The level of arrogance and the use of the defense mechanism of denial are in high gear right now out there. We just received a phone call from a brokerage firm that is extremely short this stock, and I still can't believe what I just heard. How dare this little Medinah Company come onto their turf and dictate how this Wall Street game is played. We were told where to shove the law books, because there is an unwritten law out there that is above and beyond the law books. The impression we got was that after the young broker studies hard and passes his Series 7 Test, he lands his first job. On day 1, somebody puts his arm around him and tells him to forget everything you learned about "good delivery" and other myths, and I'll tell you how things are really done. This type of arrogance is unbelievable. How dare Medinah ask brokers to follow the rule book!
One aspect of this situation that shouldn't be overlooked is the legal leverage piling up on these criminals. I think a case could be made that the single biggest asset of Medinah right now is the legal leverage that the short selling firms and individuals have generously provided to the company and its shareholders. Every brokerage firm that sleeps through the April 25 deadline will have yet another snapshot taken of their illegal actions frozen permanently in time. How about all of those shares that are about to fall into the "null and void" category, do these people think that they're going to get those shares back onto the playing field without the regulators noticing? How many of those 48 brokerage firms that were caught illegally short Medinah by not being able to provide their shareholders the Medinah Gold certificates two years ago, will also get caught in this April 25 snapshot in time? Since our last update more bogus certs have landed, be on the lookout. All purchases made before Wednesday April 25th's close will earn the free dividends. Have at it!
Now as far as current events go, all 158 brokerage firms that own Medinah were ordered to submit their list of shareholders, their individual shareholdings, and the home addresses of all shareholders, to the Transfer Agent by close of business yesterday Friday, April 20. The date of record for these certificates is as of April the 2nd. This would then allow the T/A about 10 days to reconcile accounts before the all important April 30 deadline, which has to do with not only the dividend, but also the date in which inactivity on the part of brokerage firms will lead to the extremely important "null and void" status of certificates.
In order to avoid any confusion, keep in mind that the lists being sent in by the brokerage firms are dated "AS OF APRIL 2, 2001". Medinah Mining became Medinah Minerals, however, on 3/1/01, thus we are fortunate to get a sneak peak at all of the trades in March, when 20 plus million shares were sold despite the fact that virtually nobody had any "real" certificates of Medinah Minerals yet. Now, we have an extremely large favor to ask of all the shareholders. Please,please, please, send to Russel Godwin's office a note detailing all of your shareholdings held at a brokerage firm as of April 2, 2001. Include the name of the firm and the clearing agent if applicable. This includes Medinah Mining shares and Medinah Minerals shares bought after March 1 that settled on or before April 2/01. We can then compare this truthful picture of our share disposition with the lists tendered to the company by the various brokerage firms, not that we would expect them to do something silly while under this extreme duress. Do NOT send in any information regarding REGISTERED shares of Medinah Mining that you mailed in to the T/A for conversion, but only address shares held for you at a brokerage firm, even though you may have requested their registration. This is confusing, but very important. Another date to keep in mind is June the 1st. This is called the "dividend distribution date". The only reason it was delayed until June the 1st, is due to the fact that our T/A is totally swamped with all of these other projects going on. When the clock strikes midnight on April the 30th, we want to aggressively determine whose shares unfairly fell into the "null and void" category, and which shareholders unfairly missed out on getting their name onto the list of those to receive dividends. This is why this effort of the shareholders is so very critical to quickly follow through on. The June the 1st date is only a date of convenience, the action starts at midnight on April the 30th. The press release of Friday, April the 20th, announcing the dividend, was very explicit and well written. Study it for the details of the dividend.
So what's going on behind the scenes over the last couple of days with this April the 20th deadline. The two best words to describe matters, although they are insufficient in addressing the magnitude of matters, would have to be "TOTAL CHAOS". In a nutshell, we have been playing this intense chess game at times against an empty chair. The average brokerage firm has paid no attention to what we have been doing and requesting over the last 50 days and they have been caught flat-footed. The people in the back offices have not addressed our situation, partly because it's confusing and they haven't ever done this before, and partly because they work from 8 to 5 and human nature tends to have us postpone tough or confusing jobs until tomorrow, or to place the task onto somebody else's desk. Well after 50 days of procrastination, we have some "drop-dead" dates now on our doorstep. The Medinah shareholders have won which is good, but the victory was by default. But hay, a win is a win!
The next phase of our battle involves the identification of which of the 80% or so of us actually bought bogus shares and which of us bought real shares. Once this is done, we'll enter the "buy-in phase" which is what all of you have been looking forward to, and we thank you for your patience and efforts throughout the preliminary phases which are not as much fun. A lot of the buy-in phase will be of a very mechanical nature, involving brokerage firms buying in hundreds of millions of shares that market makers shorted them. Our job will be to keep the heat on constantly, mainly through our State District Attorney's Offices. Securities laws prescribe that our brokerage firms should have "bought in" our certificates 10 days after the sellers of the shares failed "good delivery", which is 3 days after the trade date. Our brokerage firms didn't do this. The direct result of this dereliction of duty was a massive "bear raid" on the company and its shareholders, causing 4 and a half years of pure ####. Enough said.
We'd like to take this opportunity to welcome our new partners from "across the pond". We've heard a lot of good things about you, and we look forward to building this corporation with you, and we hope to have a mutually beneficial relationship with you.
Please fax or E-mail your numbers and name of firm to Russell Godwin at Fax # (604) 687-4611, or E-mail to www.rgodwin@rgm.com We thank you in advance for your prompt attention to this extremely important matter. None of the above should be construed as a solicitation to buy any securities. |
