Not investment acdvice, do your own DD. I put fair value of DMM at around $10.

http://www.bloomberg.com/apps/news?p...


Ecuador to Finalize Mining Law This Week, Correa Says (Update2)

By Stephan Kueffner

Jan. 19 (Bloomberg) -- Ecuador’s new mining law willprobably be finalized this week, President Rafael Correa said.

The bill will be submitted to the legislature today with arequest for a minor change before final approval, Correa said ina speech from the presidential palace in Quito. Correa said heplans to ask the National Assembly to change the wording in thelaw to make sure that control of some deposits that were exploredand studied by the government is returned to the state.

Correa is hoping the new law, which reorganizes the industryafter the Assembly banned mining in April, will lure more foreigninvestment to develop deposits in the South American country.

“We don’t have another single day to lose,” Correa said.

Ecuador estimated in the first quarter of last year that ithas some $220 billion in reserves of metals such as gold, copperand molybdenum. Companies will be able to partially restartoperations as soon as the law goes into effect, with fullactivities resuming as soon as regulations to govern theimplementation of the measures are ready, Deputy Mining MinisterJose Serrano said.

“They’ll be able to start work immediately,” Serrano saidin a telephone interview.

Miners Cheer

Several hundred miners cheered as they heard Correa’s speechin Quito’s Independence Square today. Indigenous groups andprotesters concerned that the increase in mining may lead to moreenvironmental damage will hold demonstrations tomorrow againstthe plans to develop gold and copper deposits.

According to the draft law, the government will have theright to declare a deposit a “special mining area,” giving anew state-owned company preferential access to mineral depositsthere for up to four years. The new law will also include a 5percent royalty on sales and ensure that more than 50 percent ofrevenue from mining operations goes to the state.

The law gives foreign mining companies investing in Ecuadorthe same rights as domestic producers and allows individuals andcompanies to freely prospect for minerals. It also toughenssocial and environmental standards.

Companies will be allowed to hold concessions as large as5,000 hectares (12,355 acres), for which they will have to payannual fees of $5 to $20 per hectare, in addition to royaltiesand taxes. Companies with current, suspended concessions willhave 120 days to renegotiate their contracts with the government,and contracts will be based on reference prices as measured bythe London Metal Exchange.

A new government mining regulator will oversee the industry.If a local community opposes a project, the Mines and OilMinistry will have the right to turn it down.

To contact the reporter on this story:Stephan Kueffner in Quito atskueffner@bloomberg.net

Last Updated: January 19, 2009 18:03 EST