Commodities Trading: Watch the country, not just the commodity
Today's Financial News - Posted May 22, 2008
“You get an idea of the fortunes that were to be made when that mine came into production, not just for everyone involved in the company, but also for the locals and indeed for the country. Unfortunately, that country was Ecuador.” — Dominic Frisby
by Dominic Frisby, MoneyWeek
Baltimore – (TFN): In April 2006, Aurelian Resources (ARU: Toronto) made the gold discovery of the century. It was a once-in-a-lifetime find, the kind most miners can only dream of. The stock went from about 12 cents to $10 (Canadian) in under a year. It was called the Fruta Del Norte deposit and geologists will still be talking about it going to their graves.
The latest drilling shows there are almost 14 million ounces of gold in the ground. Given that an ounce of gold costs some $900, you get an idea of the fortunes that were to be made when that mine came into production, not just for everyone involved in the company, but also for the locals and indeed for the country.
Unfortunately, that country was Ecuador.
Commodities Trading: Fortunes destroyed
The Ecuadorian authorities, in their infinite wisdom, passed a new mining mandate in April 2006, invoking an immediate 180-day suspension of all activities on virtually every mining concession in the country. What’s more, they abolished some 88% of existing concessions. In a single stroke those fortunes were all but wiped away.
Aurelian wasn’t alone… Read on to learn how you can protect your mining investments from global politics.
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