Ecuador doesn't actually have a border with Brazil, but I do see your point. I think we ought to zoom out a little here, and try to see the bigger picture.

First off, it isn't about gold so much as copper. Without a doubt, more jobs and state income will be generated by copper mining vs gold. Copper is also an export commodity, whereas gold doesn't have to be, and probably shouldn't be, from an Ecuadoran perspective.

The simple fact is, Ecuador uses the US dollar as currency, and that has been falling against gold. So, why export something that's rising in value when it would be better kept in the national treasury as a hedge against the dollar?

And that's where the copper comes in. A windfall tax doesn't affect copper mining the way it does gold, so a big operator can still be profitable, especially if they get a tax credit for mining gold for the treasury.

Isn't this what everyone outside the G-7 has been doing? Swapping dollars for gold? Isn't that why gold's going up? So, what do you do if the dollar is your currency and you have no control over how many are being printed AND you're sitting on a mountain of gold?

Maybe I'm thinking too much here, but I wouldn't be too surprised if CVRD made an offer for the whole package, plus Corriente, as part of a govt. approved deal. I also wouldn't be surprised to see China take over Ascendant's operation somewhere down the road.

Or am I just imagining all this? Worse still, am I giving them ideas? Right now, this govt. looks pretty inept, but maybe there's some method to their madness?

Come to think of it, this ties in neatly with putting the brakes on the oil industry. If you replace oil with copper as your export earner, aren't you ahead? How much oil does Ecuador have left? And like gold, it's getting more valuable with each passing day. Copper you can substitute or recycle. Not oil. Once you use it, it's gone.

Could somebody please shoot some holes in this theory? I'm making myself nervous here. Not that I have any reason to be I suppose. If things go accordingly, we'll be taken out at a fair price and won't ever have to think about Ecuador again...LOL!

(my head hurts)

ebear