TARGET PRICE REVISIONS

Aurelian Resources (ARU : TSX : $5.04) - Hold - Target: Under Review

Comment: Ecuador douses mining upside; downgrading recommendation to HOLD and placing target price UNDER REVIEW.

A surprise mining mandate was tabled and approved by Ecuador's Constituent Assembly late last week. This mandate describes important changes affecting the mining industry and is being promoted as a way to ensure responsibility to communities and the environment. This mandate, however, also contains what we believe are very negative initiatives which, if taken at face value, could profoundly affect Aurelian's ability to advance its current mineral deposits. This mining mandate leads to negative consequences for Aurelian. In particular, it suggests mining holdings will be limited to three concessions, with all others being revoked without compensation. In our assessment, this is simple expropriation and leads to the question: "what's next?" Aurelian's main deposit is Fruta del Norte (FDN) at the Condor project, which comprises the key La Zarza concession. A 180-day stop-work ban to allow for completion of new mining laws will be implemented for all exploration and mining projects. This, of course, would delay advancement of Aurelian's projects, particularly FDN; however, the underlying motivation behind these changes is the main concern. While the overall aspects surrounding this new mandate are negative, we have no knowledge of how this mandate will actually be interpreted or implemented. In addition, we understand there is potential for the mandate to be modified prior to becoming law. Given the recent share weakness associated with news of this negative mandate, but more importantly the unknowns associated with this mandate and its future impact, we are downgrading our recommendation to HOLD from Speculative Buy and placing our target UNDER REVIEW (was C$13.00), pending additional information.