Good posts for the most part fellas.  As some of have pointed out, this is not the time to turn on each other, so if you're feeling overly emotional maybe take a breather...

That said, I'm a little hot under the collar and need to do a little rant myself.  No need to read this through, I just feel like "letting it out". 

We have heard for months now comments regarding royalties, windfall taxes and phrases like "companies can not be allowed to make more than the country" with regards to mining.  Personally I have always disregarded the possibility of a windfall tax as to me it's the equivalent of saying "we don't want investment, leave us alone in our poverty".  It's like cops putting up the police tape around a crime and saying "move along, nothing to see here".  Like towns in Northern Ontario and Quebec (examples that I'm personally familiar with) the economic fait of Ecuador lies in mining.  Where else are they going to build wealth, what industry do they think would possibly ever want to move there? I don't see Research In Motion moving to Timmins or National Bank picking up and relocating to Val-d'Or.

Unfortunately I'm taking the Soto article at face value and assuming it is true.  Although he has made some unpopular remarks in the past, he seems to be plugged in and writes what he is told.  While it is very possible the govt had the story floated to gauge the reaction I think it's best to expect the worst and be surprised should we receive a better outcome. 

For me it marks the end of what I believe could have been a prosperous time for the Ecuadorian people.  They are sitting on one of the world’s most abundant untapped plethora of natural resources and seem content to watch this commodity cycle fly by them.  Although I WILL NOT SELL A SINGLE SHARE of Aurelian, I also will never invest another penny in this country.  I'm pissed and I really don't understand how anyone wouldn't be.

I won’t sell Aurelian, an investment in Aurelian is still sound in my opinion.  I have spent the last 24hrs running numbers setting different levels where the windfall could be applied.  It's all back of the envelope type work, so it's crude to say the least as even the slightest adjustments in capital expenditure, cost per tonne, the value of money throw you all kinds of different internal rates of return- buts its all I have, so that’s what I'm forced to do. So far I can say that anything above $400 gold and we're good as we're worth around $10 if the windfall is applied at $400.  Kick in the windfall at $800 and we're worth just over $20...etc.  So yes I will continue to hold as I don't see how it is possible to lose here.  We have a proven resource (well inferred but you get my drift), and we almost certainly know that Aurelian will see this through.  If you've got a strong heart and a cabinet full of sleeping pills it's probably a great move to add here, for me, I have enough and I'll just sit and watch how it all plays out.  Likewise if company XYZ announces they have a property in Ecuador that looks promising, I won’t even bother to read the NR.  There are plenty of exploration companies working in favourable mining climates both politically and geologically that my money will find from here on(not to spam but CPQ and LGC are two that I've been busy accumulating over the past month or so, and both imo warrant a look if you're so inclined).

In other words I will see Aurelian through as I view it as an investment, but there is no way I will gamble in Ecuador going forward.   Aurelian, IamGold, Dynasty and Corriente will see their deposits mined, their shareholders will make money imo but country has taken away the ability to be viewed as a way to leverage your money when you believe a certain commodity will rise in value.  This leverage being the number one reason we invest in exploration companies rather than the commodity itself.  So no junior will enter Ecuador going forward, certainly any that do will not receive capital from the markets which will inevitably kill what once looked like a burgeoning industry.

So yes, I believe all will be well in the long run for Aurelian and others with proven deposits BUT that does not excuse this kind of BS.  Just as I took liberties with Alberta I do the same here.  These ignorant SOB's have their heads so far crammed up their arses it's not even funny.  Companies take our money and invest in finding discoveries in good faith.  The money they invest is directly or indirectly our hard earned savings.  Whether companies find a discovery or not they create vast sums of wealth for the locals in terms of employment both directly and in a support spin-off type way.  Their work, if a discovery is made, creates an economical boom for the areas surrounding their success.  They miss and our investment is lost.  For this assumed risk we deserve an unimpaired opportunity for gain.  Taking this away under the guise of Socialism or whatever is absolutely unacceptable.   Fark, even China understands this and allows foreign investment to flourish within its boarders.

My hope is that the economist within Correa wakes up before it’s too late.  It's my belief that he is well aware of everything I have written above but is under pressure from disenfranchised very visible groups within his country.  The people of Ecuador no doubt have a realization of how impoverished they are compared to those within the developed world.  They want their piece of the pie.  It's easy for the uneducated to be left to think and believe that the was out is to take in the form of nationalizing and windfall taxes etc.  Correa needs to step up and educate them. 

Not to preach, but would it not make a hell of a lot more sense to: 

Take all taxes and royalties out of the picture.

Put into place strict environmental policy equal to the most stringent in the developed world.

Force foreign mining companies to pay wages that they would have to pay in their own home countries.

This would create a mining boom like no other ever seen on this planet.

Within 10 years they would have a skilled workforce of likely 500,000 people (total population of Ecuador is 11million) making an average of US$60k each.  

These employed and very well off persons would create prosperity country wide.  They would want modern homes, buy goods, eat at restaurants, buy cars, and buy educations for their kids...  In other words an economy with next to nothing today, in ten simple years would be elevated to one of the fastest growing and certainly most thriving economies in the world.  This would mark a man like Correa in history as a genius, this would be what I would call a revolution.  How a person like Correa that is generally regarded as being smart with his economic background can not see this is beyond me.  Should he follow down this proposed windfall tax regime history will remember him as yet another thug who raped his nation.  The time is now and the decision is his...

Regards,

Buck