Yes indeed, dudes and dudettes, it's funtime happy hour chez Otto. After a hard day slogging over the markets we can kick back with a bit of R&R. Today's relaxing quiz is Spot The Difference. All you have to do is look at the statements that follow and decide which one is substantially different from the others. All links to original source materials are provided. So on with the show!

1) Made by IAM Gold (IAG) (IMG.to) on July 29th 2008.

The President of Ecuador has consistently maintained his commitment to developing a Mining Policy that allows for and promotes responsible large-scale mining, while providing an equitable sharing of benefits between all stakeholders. The President of Ecuador has indicated his intention to publish the draft Mining Code and conclude the Constitutional assembly process before the end of August.

2) Made by Corriente Resources (ETQ) (CTQ.to on July 31st 2008

Corriente CEO and President, Ken Shannon, commented "While President Correa's office has yet to release a draft of the government's new Mining Law, we remain optimistic that recent dialogue and events continue to confirm that mining will be an integral component of Ecuador's future economic and social development. With over CDN$ 86 Million in the treasury and an excellent Ecuador-based development team in place, Corriente is well-positioned to continue working with the Ecuador Government to develop a responsible mining industry for the benefit of all stakeholders."

3) Made by Aurelian Resources (ARU.to) on July 18th 2008

"An earlier version of the draft law posted on the MMP web site was reasonable," said Patrick F.N. Anderson, President and CEO. "We are confident that President Correa wants to see a responsible mining industry in Ecuador."

4) Made by Dynasty Mining (DMM.to), April 28th 2008

Dynasty Metals and Mining received Ecuador President Raphael Correa and senior members of his cabinet at its Zaruma Gold Project over the past weekend. The President spent several hours meeting with Dynasty senior staff and community leaders. In a public address, his comments in favour of environmentally and socially responsible mining and its importance to the local economies of Portovello, Zaruma and several neighbouring towns were welcomed by a large crowd of supporters.

5) Made by Rafael Correa, President of Ecuador, on April 25th 2008

"Responsible mining will go ahead in Ecuador."

6) Made by Rafael Correa, President of Ecuador, recent conversation with Corriente Resources

"I have a vision of responsible mining that will bring to the Ecuadorian people the benefits of resource development. Mining will go ahead in Ecuador and our role in government is to ensure such development is fair to all stakeholders, including the local communities."

7) Made by Tye Burt, CEO of Kinross Gold (KGC) on July 24th 2008

"We've had a number of meetings with senior government officials and believe that they will be supportive of the direction, which we are discussing,'' Burt said today on a call with analysts and reporters. "We believe the country is headed in the right direction.''

8) Made by Galo Chiriboga, Minister of Petroleum and Mines, May 15th 2008

Ecuador's new mining law will call for community consultation over projects but villagers will not have veto powers to shut them down, Mining Minister Galo Chiriboga said Monday.

"In our opinion we think the previous consultation is important, but it should not be binding," Chiriboga said. "Mining projects in this country will not move ahead until there is a regulatory framework different from what we have now for the benefit of both the state and companies."

9) Made by José Serrano, Undersecretary of Mining, Ministry of Petroleum and Mining, Ecuador

Once the law is in force, they (the mining companies) will be able to start working immediately -- we expect in August by the latest,'' Serrano said. That will allow mining of metals like gold, copper, and molybdenum to start by the end of 2009, he added.

10) Made by Michael Gray CFA, analyst at Genuity Capital, June 25th 2008

We believe Kinross must have sufficient in-country intelligence to propel them to make a bid for ARU at this time “pre-new mining law and new constitution.”

11) Made by Tom Meyer CFA, analyst at Raymond James, April 30th 2008

In our view, this (Ecuador's mining situation) is politics playing out in the press and although we are far from a certain outcome, as a whole we are constructive on the country based on our view that the potential for mining industry investment is too high for the voters and the politicians to ignore.

12) Made by Alberto Acosta, ex head of Ecuador's Constitutional Assembly, April 18th 2008

"The new mining law will favor serious entrepreneurs, not the speculators."

13) And now....roll on the drums for unlucky thirteen....this one made by Patrick Anderson, CEO of Aurelian Resources (ARU.to) on July 25th 2008, just two days after the Aurelian Board of Directors accepted as "friendly" the bid from KGC that was fanfared as valuing the company at $8.20 per share:

"And what if the Mining Law isn't favourable? Or what if it's only favourable to a corporation that can take on bigger risks than we can? There are lots of factors."

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Did you notice? A whole range of informed, responsible and professional analysts, miners and politicians all thinking one way, and the only one that seems to think there's a problem here is the CEO of the company that has just accepted a lower-then-lowball bid on his company. And be clear; the above list does not include the commentaries of rabid righties, loonies lefties or green treehuggers. These are all people with their professions and their professional reputations on the line. And the only one that is afraid of the big, bad mining law wolf was saying that he was confident that the law would be reasonable just two weeks ago!

What might have made him change his mind? Well, the only substantial change on the horizon between then and now with Kinross dangling several million dollars in front of him and his options. It sure looks from here that he decided to ignore his peers ignore his fiduciary duty to shareholders and accept the first offer that passes his desk as 'friendly'. Not only that, he and his board add insult to injury by gifting Kinross 15 million shares at $4.75 (at a time ARU has plenty of cash on board for 2008 and 2009 operations) that stack the deck of voting shares wildly in favour of the bidder (as well as making them a very quick and easy profit).

Fortunately, Otto is not the only one who has noticed this very strange turn of events. In a message to shareholders today, Aurelian mentioned the following:

"...Aurelian has recently been selected for a full review of its continuous disclosure record by the Ontario Securities Commission (the "OSC") in accordance with OSC Staff Notice 51-703, Implementation of Reporting Issuer Continuous Disclosure Review Program, Corporate Finance Branch. Aurelian remains in the process of responding to the comments raised in the OSC's letter."

Now I'm no legal beagle expert on Canadian law, but luckily I know a few guys that are. Prestigious Canadian law firm Oster, Hoskin & Harcourt LLP can tell us more about this 51-703 thingy. This is the link to the relevant information, and here's the passage that most interests us:

Reporting Issuer Continuous Disclosure Review Program
On June 16, 2000 the OSC released Staff Notice 51-703, entitled "Implementation of Reporting Issuer Continuous Disclosure Review Program, Corporate Finance Branch". The Staff Notice advises that beginning July 1, 2000 the Continuous Disclosure Team of the OSC will implement its Continuous Disclosure Review Program (the "CD Review Program"). The CD Review Program will subject every reporting issuer to either a full, an issue-oriented, or a limited review of its continuous disclosure record on average once every four years. The CD Review Program will also involve insider trade report reviews.

A full review means that the reporting issuer's entire continuous disclosure record for the past year, and its financial statements for the past two years, will be reviewed. Staff will look at interim and annual financial statements, AIFs, MD&A, material change reports, press releases and proxy circulars. Importantly, staff will also review press articles, public complaints, the issuer's website, trading activity, industry data, analysts' reports, transcripts of investor/analyst meetings and internet bulletin boards, as appropriate.

So let's get this straight: There are three types of review, and it just so happens that the OSC has slapped the major full review option on Aurelian's tush, and although it could have run the review at any time over four years the OSC at the exact moment it goes into a friendly M&A deal. Interesting, no?

And as for that review, the OSC is going really deep. Two years worth of financials....all the interims......the PRs......the press.....public complaints (!!!!), trading activity (oh, let's not talk about those insider sales just before the Mining Mandate, Patrick)....transcripts of meetings (oooooh.....conflict city!)...internet bullboards (oh wow! Hey, agoracom...you gonna be famous!). I think we can take it for granted that this is no run-of-the-mill review and the OSC are not going to all this trouble for nothing.

The bottom line: As I've stated before, unless somebody can give me a good answer to two simple questions.......

1) Why accept the current low bid as friendly?
2) What possible advantage is there for Aurelian shareholders to sell 15m shares to Kinross at $4.75?

.........there is every reason to believe that Patrick Anderson and the board of directors at Aurelian is not performing its fiduciary duty correctly. In such a case, the shareholders of Aurelian who are not happy with the pricing of the current offer have good reason to demand the resignation of the CEO and its board. With the stock languishing 20% below the wholly imaginary $8.20 headline offer made by Kinross and endorsed by Aurelian as friendly, the market is shouting loud that the chances of any counter bid are diminishing fast. So if enough people vote against this deal (the current price is close to insulting, and even a Kinross sweetener wouldn't bring it to within a country mile of a fair valuation), and the OSC considers the 15m share placement Aurelian struck with Kinross as suspicious as I do and decide to annul the deal, then the only honourable thing for Anderson to do would be to resign.

There are people to replace him, and there are many ways of ensuring Aurelian shareholders get a much better deal than the paltry one offered up by this board. I have already outlined one scenario, and there are many more. I'm sure the Gold Eagle/Goldcorp deal struck today that valued the (as yet non 43-101 compliant) GEA gold in situ at $140/oz has not escaped the attention of Aurelian shareholders. ARU's 14.1m oz of43-101 complaint resources will certainly be added to once further (and suspiciously delayed) drill results are published and incorporated. If, as most suspect, there are at least 20m oz Au on the table at Fruta del Norte, the present offer puts that gold at $63/oz. Is there that much risk? According to the people quoted above, only the CEO of the selling company seems to think so!