RE:RE:Let's find middle ground- name the negatives of this projectThere are obviously some negatives or EGX wouldn’t be trading at this level, but the negatives are almost entirely external—Ecuador’s issues, terrible gold price and gold sentiment etc. I think EGX has broken a few too many PEA promises, which really screwed the day traders. However, the fact that the company realized what they were up against and didn’t waste resources promoting the story before they had the PEA and were ready to take it on the road, along with the delays that carried us through the worst gold period in decades, will probably turn out to be great luck for investors who have had the sense to buy at these levels.
I understand the PEA will be closer to a feasibility study as they are doing a lot of additional work. This will be more than enough to begin discussions with the current interested parties and again, there is some definite interest.
As for the Indigenous protesters, I’m pretty sure it will work out just as it did for Corriente. The Indigenous population was very supportive of the Corriente project as it would provide jobs. However, some Canadian NGOs got involved and managed to organize some of the locals, but progress won out in the end. The country is very poor, the indigenous people play a key role, but they want jobs like everyone else and they want to modernize and Correa knows this.
I don't think the low grade is an issue as majors know that porphyries like these are some of the largest deposits on earth producing some of the lowest cost gold, because of the silver and copper credit. It would be nice to see them drill out some of the other porphyries, but I get the sense that they want a fairly rapid sale, but who knows.
EGX doesn’t need to worry about the negative gold sentiment as that’s just a western thing. Their partners are eastern (Chinese) and they love gold. They are looking for resources and just like they bought out Corriente, they will probably buy EGX. A rising gold price in the early spring would ensure investors get a better price for the company.
Gold is caught in the middle of the ongoing global currency war and the United State’s desperate attempts to maintain dollar hegemony. This has created some once in a lifetime bargains. EGX is one of those, in my opinion, based on the a comparison of resources, share structure and buyout price of both Corriente and Aurelian resources. Whatever happens, EGX will be bought out for a lot more then $.06 a share.