Peter Marrone, chief executive of Yamana Gold Inc., called the Kinross-Aurelian pact "a great deal for both companies" and said Yamana has no interest in a counter-offer. That is because Ecuador does not fit the profile of countries Yamana wants to invest in. "We've always gone to jurisdictions that have significant mining pedigree. But more importantly where there's established infrastructure, where the capital costs are very manageable because of that established infrastructure ... That's the profile of the company and I wouldn't want to deviate from that at this point," Mr. Marrone said.

peter marrone has done a great job at marrone, but i think this is one decision he will regret. he talks about capital costs being manageable in other countries, just one day after they released disappointing earnings. the reason for their poor result is that yamana has a bunch of small high-cost (near $800/oz) mines in brazil, which they admit are further impacted by the strength of the local currency.

but he just passed up the chance to buy a huge, low-cost mine in a country where they would be paying their bills in depreciating us dollars. he has paid high prices for small mines, but isn't interested when the mother lode is on sale at a bargain price. maybe it's taking them longer than expected to digest their meridian acquisition. yamana can afford to be selective because they are going to double their production in a few years, but most other gold companies don't have that luxury.

there are a lot of producers who have declining production profiles and/or can't replace their reserves, and there is only one fruta del norte, so i still think it is only a matter of time before the law of supply and demand kicks in, and another company makes an offer for aru.