Aurelian Resources Was Stolen By Kinross and Management But Will Not Be Forgotten
The company whose shareholders were better than its management
Message: From Otto........
Saturday, July 26
Aurelian's CEO has suddenly changed his tune
Another rich Canadian actorThe volume is already being turned up on the Aurelian/Kinross deal cacophony, so rather than repeating my stated opinions on the issue (read 'em here, here, here, here and here if you can be bothered) let's have a look at the opinions of the people that really matter and see if there's anything we can learn. The place to go is the centre of the storm, Aurelian's CEO Patrick Anderson. In this linked report published today in Canada's National Post (NP), Anderson is quoted as saying the following:
"And what if the Mining Law isn't favourable? Or what if it's only favourable to a corporation that can take on bigger risks than we can? There are lots of factors."
"And what if the Mining Law isn't favourable? Or what if it's only favourable to a corporation that can take on bigger risks than we can? There are lots of factors."
"I think Kinross is well-positioned to work with the government in ways we never could. They've got experience in jurisdictions the Ecuadorian government quite likes such as Brazil and Chile, and a great [corporate social responsibility] reputation in those countries."
These were the only two direct quotes from Anderson in the report, but the rest of the note seems to have been influenced by the conversation the reporter had with the CEO. You'll get the feeling from the intro which goes:
Aurelian Resources Inc. was in a tough spot before Kinross Gold Corp. came calling. The company's Fruta Del Norte gold deposit in Ecuador ranks as one of the best discoveries in decades. But its stock price was floundering because of the huge political risk in Ecuador and the lack of a firm mining code in the South American country. The Ecuadorian government is working on a Mining Law that appears to be favourable to the companies, but that law is likely months away from reality, if not longer.
For the record, I don't think ARU was in a 'tough spot'.I think the stock price was floundering due to perceived political risk and price manipulation in Canada, not due to any true 'huge political risk'. I don't think the new law is 'months away'. In fact I'm 100% certain it's ready now and being sat on by Correa until the constitutional referendum is over. Which is a bummer, but what can you do?
So although I strongly disagree with the inference of the NP article's intro, such prose is only attributable to Anderson via the reporter as filter. Therefore let's concentrate on those direct Anderson quotes. "What if the mining law isn't favourable?" were Anderson's words. It's a fair question (albeit rhetorical). However, the same Patrick Anderson was quoted as saying the following just seven days earlier, on 18th July:
“An earlier version of the draft law posted on the Ministry of Mines and Petroleum's website was reasonable. We are confident that President Correa wants to see a responsible mining industry in Ecuador”
If we assume that Patrick Anderson was being honest in both occasions (and I certainly hope for his sake he was being honest in both, but particularly the second one as it was part of an official company press release), his confidence suddenly melted into doubts and fears as soon as the first takeover bid was made. In less than a week. Strange coincidence in timing, no?
As for the second quote, it may well be true that Kinross is well positioned in Ecuador, and it may also be true that Kinross enjoys a great reputation in Brazil and Chile. However, Aurelian has always, always laid claim to its own great reputation in a country far more pertinent to this issue, namely Ecuador. Is ARU suddenly saying that its own reputation isn't good enough? If that is the message, then it would seem the company has been hoodwinking shareholders all this time.
Also interesting was this report from Bloomberg on Thursday which has the CEO of Kinross saying that there are "no surprises" in the new mining law and that KGC has had a number of meetings with the Ecuadorian gov't and officials. How would KGC know that the new mining law contains no substantial surprises and ARU claims ignorance? Is it just me, or can anyone else see a glaring hole in these side-by-side statements?
There is a lot more noise on the stock from bit players, and if I wanted this post could turn into a 5,000 word rant about it all. Just as one example, the Haywood analyst covering ARU calls the Kinross offer "reasonable", when that same firm blatantly manipulated the market back in April by issuing a sell recommendation and a $1.40 share price target on ARU, then on the very same day buying blocks of shares from those that panicked at $3.50. Does Haywood seriously think its opinion counts any more?
As said, just one example of the BS noise and chatter around ARU now. But my previously stated belief that ARU has chickened out and accepted a lower-than-lowball bid as friendly due to sheer cowardice has only been strengthened today by the obvious doublespeak from its CEO. As mentioned previously, I do think a counter bid is possible. Not probable, but possible. However, if it comes it will not be due to the skills of Aurelian management, in fact quite the contrary. Any counter offer would come despite the total stupidity shown by the board of directors at Aurelian.
The bottom line is that Kinross is laughing at you, Anderson. They saw you sweating, threw in a lowball and you caught it. Stick to geology next time, cos you are no businessman. In fact, not even the suffix "-man" applies from where I'm sitting.
So although I strongly disagree with the inference of the NP article's intro, such prose is only attributable to Anderson via the reporter as filter. Therefore let's concentrate on those direct Anderson quotes. "What if the mining law isn't favourable?" were Anderson's words. It's a fair question (albeit rhetorical). However, the same Patrick Anderson was quoted as saying the following just seven days earlier, on 18th July:
“An earlier version of the draft law posted on the Ministry of Mines and Petroleum's website was reasonable. We are confident that President Correa wants to see a responsible mining industry in Ecuador”
If we assume that Patrick Anderson was being honest in both occasions (and I certainly hope for his sake he was being honest in both, but particularly the second one as it was part of an official company press release), his confidence suddenly melted into doubts and fears as soon as the first takeover bid was made. In less than a week. Strange coincidence in timing, no?
As for the second quote, it may well be true that Kinross is well positioned in Ecuador, and it may also be true that Kinross enjoys a great reputation in Brazil and Chile. However, Aurelian has always, always laid claim to its own great reputation in a country far more pertinent to this issue, namely Ecuador. Is ARU suddenly saying that its own reputation isn't good enough? If that is the message, then it would seem the company has been hoodwinking shareholders all this time.
Also interesting was this report from Bloomberg on Thursday which has the CEO of Kinross saying that there are "no surprises" in the new mining law and that KGC has had a number of meetings with the Ecuadorian gov't and officials. How would KGC know that the new mining law contains no substantial surprises and ARU claims ignorance? Is it just me, or can anyone else see a glaring hole in these side-by-side statements?
There is a lot more noise on the stock from bit players, and if I wanted this post could turn into a 5,000 word rant about it all. Just as one example, the Haywood analyst covering ARU calls the Kinross offer "reasonable", when that same firm blatantly manipulated the market back in April by issuing a sell recommendation and a $1.40 share price target on ARU, then on the very same day buying blocks of shares from those that panicked at $3.50. Does Haywood seriously think its opinion counts any more?
As said, just one example of the BS noise and chatter around ARU now. But my previously stated belief that ARU has chickened out and accepted a lower-than-lowball bid as friendly due to sheer cowardice has only been strengthened today by the obvious doublespeak from its CEO. As mentioned previously, I do think a counter bid is possible. Not probable, but possible. However, if it comes it will not be due to the skills of Aurelian management, in fact quite the contrary. Any counter offer would come despite the total stupidity shown by the board of directors at Aurelian.
The bottom line is that Kinross is laughing at you, Anderson. They saw you sweating, threw in a lowball and you caught it. Stick to geology next time, cos you are no businessman. In fact, not even the suffix "-man" applies from where I'm sitting.
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