ECUADOR GOLD AND COPPER CORP V.EGX

News from ecuador

[arielpls]

NEW YORK, June 5 (Reuters) - Ecuador plans to change its mining law and offer tax incentives to attract foreign investors and spur investment in the stalled sector, a cabinet minister said on Thursday.

The government will adjust a windfall tax, which helped scuttle Canada's Kinross Gold Corp's investment in a major gold mine, and make changes to its mining law.

"These incentives will allow us to offer viable conditions for some projects and overall will help attract investment in all different steps of the process," Strategic Sectors Minister Rafael Poveda told reporters.

These changes should help spur gold, silver and copper projects that have not gotten off the ground because of concerns about heavy taxation.

Kinross last year pulled out of Fruta del Norte, Ecuador's largest gold mine, saying the government had refused to compromise over a 70 percent windfall tax.

The sector has not received any foreign investment for the last year despite a previous government effort to ease fiscal terms to attract investors.

Mining projects in Ecuador face among the highest tax rates of any in the region, with the government's take of around 51 percent, according to a study by consulting group Wood Mackenzie.

Ecuador hopes to reach an agreement in two months with a new strategic partner for the development of Fruta del Norte, which holds reserves of 6.7 million ounces of gold and 9 million ounces of silver.

Companies from Russia, China and Canada have expressed interest.

China's Ecuacorriente, the only mining company that has an active contract with Ecuador, is developing the Mirador project that will require some $1.4 billion in investment.

President Rafael Correa hopes to turn the mining sector into a driver of the country's economic growth. (Reporting by Alexandra Valencia, writing by Brian Ellsworth; Editing by Marguerita Choy)

[gump132]

Good to see the government is moving in the right direction here :) This should have a positive impact on the PEA if the taxes are lowered!

[McColgan1]

I wonder if this was perhaps a factor in the PEA delay.. Hmm? Could it all have been on purpose?!  Increase in resources likely, Lower taxes, probably already talking to companies about buyouts...

[gump132]

I was thinking the same thing haha. Maybe they knew this was coming and it was better to wait for it to be official because it would have a HUGE impact on the PEA. So they make up an excuse to delay it and touch it up some more until that happens. Otherwise they would have to release ANOTHER PEA when the taxes change. I'm waiting patiently, not in a rush to make a buck on this one. It will

[birch1]

Not sure that was the reason, I think the reason was Copper recovery from what IR told me.  Gold recovery was where it should be at.  Anyway, this is oversold.  Not sure why anyone would sell this below $0.10.  Expect financing news soon per NR to take them into next year financially per IR.

[Goldenrules]

I think this is the most positive news I've seen for Ecuadorian mining since I started work for Corriented in 1999. I hope EGX puts out a news release commenting on what this means for Ecuador's third major copper/gold/silver discovery (after Corriente's Mirador and Frute del Norte). When you look at the numbers from the other two deposits, EGX's reserves could easily be larger

[Solidsnake10]

I ahte when epopel say share price but not market cap... so silly. I sold my company at $123123 a share. There was only 1 outstanding share though.

[yohanlee]

What were those stocks trading at before buyout?

[Goldenrules]

When I got involved with Corriente, it was trading at $.50 a share. It began rising when copper started rising.It was mainly a copper porphyry deposit. It traded in the $3. range for years then it accelerated at the time of the buyout. Ecuador was a hard sell, but it didn't have the stigma it had after the default and the Kinross fiasco. Aurelian was trading for somewhere around $.20 when I