a BIG pinch of salt!

These weird theories are best assigned to fiction

The whole idea isn't worth discussing other than to say that the Govt isn't going to put thousands of people out of work, affect other mining companies and their share prices as well, and make themselves look bad internationally just to give Kinross some kind of edge here.

I'd have to agree with Kerrisdale here.

I think the mining mandate had several objectives.

First, it worked to undermine the Acosta faction. It was their idea, and they came out looking the worse for it.

Second, it really was about taking back concessions, and doing it in a dramatic way that built political support. We saw the same thing with the TV/radio and cellular licenses, the Isaiah Group seizures, and the petroleum concessions. All done in a big way for public consumption. Didn't sell well overseas, but then foreigners don't vote in Ecuador. It was never about hurting the miners - they got caught in the crossfire is all. Ultimately, it was about shaking loose a venal aristocracy that had been running the country since the time of the Spanish. Something similar to Bolivia, just not as banal or overtly racist.

Third, it slowed things down. Think about how much was going on politically with the constitution bogging down, dissent within the ranks, the media on constant attack, the indigenous groups acting up, the dust-up with Colombia and a dozen other things we never heard of. The mandate put mining on the back burner to be dealt with later. It bought time to formulate the law, plus sent a message to foreigners about who was in charge. This may have backfired on them - we got a sense of that with the damage control from Chiriboga, but it did keep the multinationals at bay, as we know all too well. I'm sure the calculation was, "don't worry, they smell money, they'll be back."

Too bad our board didn't see it that way. My guess is they panicked, and took bad advice from Kinross. Legend has it that KB tried to find a buyer, but no one stepped up. Well, if you're going to commit billions of shareholder money over decades, I think you'd probably wait too. See how the mining law shakes out. See if the Constitution passes and if Correa wins the next election. Then bid. It was a big discovery in a tight market, but it wasn't the Holy Grail. You might want it, but you didn't need it to survive.

Why no one on our board considered a partnership with the govt. is a bit of a mystery. They have the means. It wouldn't look right politically for them to suggest it, but it would have worked if we'd done so. Correa could have taken that to the people and said, "Look. They trust us, and want to work with us. There's a middle ground here where everyone benefits." I put this down to lack of vision on the part of our directors, but maybe there were other factors? I wasn't there, so I can only guess.

Explorers typically look to sell a discovery. Building mines is not their expertise. Unfortunately, the Windfall Tax threw everything in doubt and I'm sure stepped up the pressure to find a buyer. That's probably where Kinross came in with the offer to shill. Then the mandate hit and the price dropped through the floor. Obviously they were warned. That's what the insider selling was about. The departure of KB probably came about because he saw more clearly the advantage of waiting, while Kinross probably pressed their advantage with a panicked board, and maybe even changed their plan to acquisition, thinking they could afford it at the new low price. They had nothing to lose. Draw out a counter-bid, or own it now and sell it later. Win win for them. Tye made the right choice. Problem is, he didn't reckon on the hold outs. That's a bit of bother he didn't anticipate, going by his Homer Simpson routine on BNN. (thanks for that, Andrew. You hid the razor, right?)

Anyway, much of what happened to us came about through lack of patience, which I hate to say is endemic in this industry, but works to the advantage of those that have it. Most people, including our board, were looking for a quick flip. It's not just this industry though, it's the way of the world now. Instant gratification. Look around you and tell me it isn't true. So, as an investor that IS prepared to wait, you have to hope the people you're involved with feel the same way. Unfortunately, in our case that wasn't true. They had a lot at stake and decided a small piece of pie was worth bailing on us, even though they could have held on for more. So it goes.

I'm disappointed, but I can't say I'm surprised. I know people too well for that. As for being bitter, worse things have happened to me. I've learned over the years how to protect myself, and to tell myself that when things look too good, they probably are. That's the lesson we should learn from this. I'm not saying just roll over and take it. Bad things were done here and each of us has to decide for themselves how much of it they own, and how much of it should be paid back. That's a personal choice each of us has to make by examining our own conscience and priorities.

Even though I didn't reach my dreams, I still gained from the experience. I learned a heck of a lot about this industry and about a part of the world I may one day visit. I also made some good friends in the process, and I don't consider that a loss at all.

ebear