ebear, i also own shares of goldcorp, and i agree that it is superior in terms of growth, cost structure and safety. the only reason i didn't mention them is that i was comparing mid-tier producers, and i consider goldcorp to be a major.

Check.

btw, i think i am now actually more sanguine on ecuador than you are, and that is quite a reversal. my reasoning is as follows: the playing field shifted in ecuador when kinross bought/stole aurelian. i don't know whether correa is just feeling his oats because he won a referendum, or he's doing some blustering for his constituents, or maybe he was asleep during his economics 101 class.

My earlier optimism came from a study of the economic situation. People compared Ecuador to Venezuela which was a mistake. Venezuela has a far bigger economy and much more maneuvering room than Ecuador. Ecuador is highly dependent on oil and can't really afford to throw away a chance like the one they've been handed by virtue of lucky geology.

Unfortunately, they've done just that. There's only a few people in the country that seem to understand this, and their voices aren't being heard. Correa is still pandering to the left, playing the get tough with gringo capitalist card. He's gone after the miners because he can't get that kind of traction with the oil co's. (see otto's latest comments)

That may be politically expedient, but it's economic suicide in the long run. Look how much time they've lost already, and now they add to it? It takes years to get a mine up and running, in the meantime no revenue. The opposition to mining is peanuts compared to the resistance he'lll get trying to open the Intag to oil development, which he'll have to do, now that he's killed off mining.

but i think he's about to find out that money goes where it is treated best. until now he has been dealing with small companies like aurelian, corriente and dynasty. aurelian was 100% invested in ecuador, and had nowhere else to go. kinross is not captive to ecuador. it is a much larger company with a diversified portfolio of projects all around the world. if one country (say, ecuador) alters its tax scheme in a negative manner, kinross can invest its money in any number of other projects.

That was my thinking too, and a major part of the reason I felt we should deal with the govt. on the financing/JV thing. Hand them a political victory they could take to the people, then get on with building the mine. That would have provided a model for other small co's to follow and kept the "multinationals" at bay. They could put the "21st century socialism" stamp of approval on the whole deal, and everybody comes away more or less happy.

Unfortunately they overplayed their hand, and now have to deal with the hard reality, which is that only a major will take the risk, and like you say, a major will play hard ball, just like the oil co's have done.

But it's worse than that. With only one or two majors in country, who will a junior sell to? Kinross? After what happened to Aurelian? And who would finance them? Banks won't even lend to each other these days, and they're going to underwrite a project in Ecuador? Yeah, when pigs become F-16 pilots.

My wife made an observation that really sums it up. She said, "thank God for Kinross. Can you imagine the price of Aurelian with this latest announcement on top of all the turmoil in the markets?" She's right too. Tye Burt, bless his tiny little soul, bailed us out of a bad situation. He bought us enough time to cut and run, yet still have a backdoor to the future of FDN via the warrants.

ebear