By Stewart Bailey

April 18 (Bloomberg) -- Aurelian Resources Inc., planning to develop Ecuador's largest gold deposit, plunged for the second day after the government said it may suspend mining and confiscate some concessions.

Aurelian dropped C$1.48, or 20 percent, to C$5.88 at 10:56 a.m. in Toronto Stock Exchange trading, after falling 14 percent yesterday. A close at the current price would be the shares' biggest two-day decline since December 2002.

Ecuador's President Rafael Correa is seeking to take more control of the country's metal deposits as prices for gold, copper and other minerals trade near records. Yesterday's announcement follows moves by the government to renegotiate contracts with oil companies and take a greater portion of profits.

``The government sees the margin expansion for mining companies because of the prices, and they're saying `Let's get our hand in the cookie jar, too,''' Tom Winmill, president of Midas Management Corp., which owns Aurelian shares, said in an interview. ``When there's clarity on the law, a major gold producer is going to come in and pay a pretty price for it.''

Aurelian, based in Toronto, discovered a deposit in Ecuador last year holding an estimated 13.7 million ounces of gold and 22.4 million ounces of silver, the biggest such find in 2007. Correa said companies that had conducted exploration and were prepared to start production would have to wait six months while the government bolstered regulation under the new law.

Aurelian Chief Executive Officer Patrick Anderson and spokeswoman Marla Gale didn't immediately return phone messages seeking comment. The company said yesterday it hadn't determined the impact of the proposed changes.