Fellow Investors,

when looking at an investment one should always consider the big picture and how your investment fits into it.

Take the big picture of Ecuador for instance. The country could have a lot going for it if they can get proper governance. What certain people call political instability in Ecuador, I call, healthy political activist by the people who are tired of corrupt government. They are tired of being told one thing and yet the statist quo remaining the same or getting worse. I am of the belief that when a politian lie's and gets elected on a platform that he then disregards they should be booted from office. If there is never a serious consequence for politicians who constantly lie and are corrupt then this type of behaviour will continue untill there is.

Correa so far to me seems to be the man that can and has been given a mandate by the people to get rid of government corruption, the instatutionalized ruling elite that have held back Ecuador for there own personal gain.

If this happens then what has Equador got that can aid their situation. They have oil, however they are not a large producer and there production has remained quite static. Increases in revenue to the government in this area will have to come then because of increases in the commodity itself, higher taxes on it or both.

Oil can only bring temporary prosperity to an area because it is a finite resource. If the proceeds from it are not invested wisely the party ends when the last barrel is pumped.

Equador has agriculture and thier main export of bananas. Things are looking up for farming these days, with higher prices being fetched for soft commodities but once again these days a total agrarian society is not considered a prosperious one. They also have to compete against the likes of Europe and US who heavily subsidize their farming thus even now keeping many agricultural products artificially low.

Equador has been voted the best place to retire in the whole world. With its its natural beauty, friendly hard working people, low prices and beatiful climate it could have a thriving tourism industry. This could employ many people however it is a service industry that traditionally does not pay high wages and does little to educate the general populace. It is also not a highly promoted destination because their past governments have never done so, perhaps this will change in the future.

Equador has no doubt a relatively cheap hard working population. This is a large asset if it can be somehow put to work.

What industry employs large amounts of people, pays high wages while training people on the job, increases the knowledge base of the country through the industry itself plus the many spin off industries that it requires for support, increases countries infastructure, requires large capital investment and technoligical know how and provides long term revenue to governments.

The answer of course is mining.

Now modern mining needs certain infastructure. In ARU case we know that there is a major road system and electrical grid relatively close. What about the other potentially large copper projects though and what infrastructure they may need. Well unless the companies involved are willing to build a smelter in Equador ( highly unlikely ) they would need some means of transporting a copper concentrate out of the country. This would need to be done by ship, thus I find the following information very interesting.

/ HONG KONG: Hutchison Port Holdings, the world's largest port operator, said Thursday that it would spend $523 million to build and operate a new container terminal in Ecuador, as the firm continues to expand Latin American operations.

The Hong Kong-based company, run by the billionaire Li Ka-shing, received a 30-year concession to operate the terminal, which is scheduled to open in 2007, Hutchison Port said.

Hutchison would not disclose the capacity of the terminal, which is located in Manta, Ecuador's second-largest port.

The deep-water port on the Pacific Ocean, will "strengthen Hutchison Port's Latin America network on the West Coast of South America," the company's managing director, John Meredith, said in the statement. "Being the closest port to Asia, the new terminal will benefit from the growing trade activities between the two regions."

When completed, the Manta terminal will have a quay length of 1,250 meters, or 4,101 feet, for container handling and a total area of 63 hectares, or 156 acres, Hutchison Port said. Hutchison Whampoa controls the port operator. /

This happens to be Equadors only deep water port and one must ask himself why the Chinese find the need to operate and expand a deep water port in Equador. Could it be for all the banana's they plan on buying from Equador ( no, hahahahaha ), perhaps the low prices hand made crafts ( no, hahahahahaha ), perhaps oil shipments ( no, present harbours handle that and since their production is not increasing there is no need to expand )

What large cargo ships require deep water ports and what has Equador got that will require such ships. The answer is mineral concentrate cargo vessels that when filled have a very deep draft. Mineral concentrate's like copper are something the Chinese would like to get from Equador and in order to get them they have to build a port that can handle such shipping. They are doing just such a thing, laying the neccesary infastructure in order to start a mining industry in Equador in my opinion.

This appears to me to be the laying of the ground work for the eventual building of a mining industry in Equador in my opinion. This is why I always look at fundimentals and the big picture in my investments and never get worried about who said what. Actions are what matters not words.

Regards,

F.F.