EGX's Timing Couldn't Be BetterI’m very happy to see EGX making some noise over the new Ecuadorian mining laws as it affects them directly and they will be the company that will benefit most. The set-up is much better than it was for Corriente and Aurellian, the other major copper/gold Ecuadorian discoveries that preceded EGX's.
Considering the difference a few improved percentage points that improved extraction methods could yield with this size of a resource, I’m all for doing as much testing as possible to assure the best results.
My favorite part of the article was:
"Ecuador Copper and Gold has a bulk, low-grade deposit so it is important to achieve maximum metals extraction," stated Laing, "The first phase of the metallurgical test work for the Preliminary Economic Assessment for Santa Barbara gave us 86% gold recovery and 64% copper recovery. We believe we can improve on that, so now we are doing additional metallurgical test work to get better metal recovery rates, particularly with the saleable copper concentrates."
Increased recovery rates mean more revenue per ton, which improves the economics of the mine, as the operating costs remain the same. Laing believes the best thing that EGX can do with its time and money is to improve the metallurgy and optimize its mining plans.
Today’s trading confirms what I’ve been observing from watching Level II activity on this stock. The stock attracted a lot of daytraders. It was so cheap that just about anyone could control a few hundred thousand shares. The daytrader footprint is pretty easy to see with Level II.
Over the past two weeks we’ve worked through most of the overhang of those waiting to flip the stock after the PEA was supposed to have been released. Then you get the daytraders that bought in at $.065 and $.07 that we’re working through today.
Gold is rising because of black swan events that even the biggest central banks cannot control, the Ukrainian crisis and the ISIS crisis in Iraq. Neither of these are going to go away. They are fueled by centuries of sectarian animosity that have finally exploded. When you see this type of strength in gold in June, you know something serious is happening and gold will probably have a very strong year.
EGX is now my favorite junior play with Pilot Gold, Roxgold and Brazil Resources taking second, third and fourth positions. I expect it will continue climbing throughout the summer and could be trading much higher when the PEA comes out if gold continues to climb.