ECUADOR GOLD AND COPPER CORP V.EGX

One Theory

[Goldenrules]

Here is my theory on what is happening with EGX. I ran it by Cathy and she thought it made sense.  She only hears bits and pieces from Glenn, but if I were too far off, I think she would have pointed it out, however I don’t want to put words in her mouth. I'm basing this on what I see happening, on what I've seen happen in the past with other buyouts and on several conversations I had with Jeannie who was at the time keeping in touch with Glenn.

Glenn is definitely trying to sell the company. The buyers wanted more info than a PEA provides. The PEA provides info on the economics of the deposit, but not a lot of info on the geology. This is why the PEA was supposed to be closer to a pre-feasibility study this time around according to Jeannie. Tt was what the potential buyers wanted at the time. I assume they are the same people Glenn is currently meetng with. The current delay and need for the recent financing was probably because of the new info required by the buyers. Most of the money raised since last May has gone towards this.

I’m certain he is in negotiations as I know he has no interest in developing the property. If this theory is close, then the current rise in gold is definitely going to help the cause. I believe gold is now beginning its long awaited resumption of its bullish trend. The only thing stopping it this year has been the rising U.S. dollar. Although it’s obvious the dollar rose because it is the cleanest shirt in the dirty laundry hamper, institutional investors seemed to have been buying the recovering U.S. economy story until the Fed finally admitted that maybe things are not so rosy.

There are so many developments in the gold market that support a rising gold price for some time to come. The new more transparent physical platform that is to open in April (see Andrew McGuire’s recent King World News interview), the large-scale bullion accumulation by the East, the Chinese Russian moves away from the U.S. dollar (Asian Infrastructure Investment Bank) etc. These are huge geopolitical developments that are accelerating the movement away from the U.S. dollar, gold’s arch enemy.

I’ve always felt that EGX would sell for the best price in a rising gold market, so the past four years were not a good time to sell it anyway.

Of course, I wish Glenn would inform shareholders of what’s going on, but if my theory is right then everyone is probably tied up with non-disclosure agreements. As shareholders, we could probably help our own cause by taking advantage of this very strange news blackout and bidding the company up, but this ultimately won’t matter as the buyout price will be based on economics of the deposit and the price of gold.

I know a lot of people in the Toronto mining industry who know Glenn personally. He is not about to destroy his entire reputation and career by screwing shareholders and if he did have bad news, he wouldn’t be delaying it as he knows he will have to release it eventually and the longer he delays it, the worse it will look on him. If he weren't in negotiations, then the PEA would be used to interest potential buyers. They would have had a booth at the PDAC, after all, it was all about Ecuador this year and only a fool with one of the biggest gold-copper-silver deposits for sale would have missed that opportunity. The PEA provides enough info to interest buyers, but probably not enough to sell the company, more info and confirmation of a rising gold price are necessary for that.

It’s not like the PEA is going to have a lot of negative surprises as Aura and the potential investors have already seen the thing I’m sure and they saw the first draft in May or else they wouldn’t still be interested. I believe this is about getting more information and that takes time. Nobody likes this kind of thing, but if this is what they need to do to sell this deposit, then I’m willing to wait. Buyouts are still the best way to make money in this market and I'm spending my time looking for the next big opportunity to move into once the EGX sale is completed.

[birch1]

I'm thinking/hoping you are right.  I have been sitting on this pig for some time.  I like Aura buying and financing, but at what point do they just take over here given they have controlling stake.  That could be a positive or a negative.  I don't know.  I got lots, so I have a little concern over this whole thing.  I hope they are working on a buyout as I

[nightcrawler000]

Hey Golden. Thanks for the great post. Your insight was missed! I was curious if you had a conversation with Cathy about the "news" that was supposed to come out in a week or two. Not that she would know, but in your opinion, was she aware of something that did not materialize? Also, there are lots of reports that traders still expect a further decline in Gold price before the bull

[Goldenrules]

I don’t think Cathy knows any more than we do, in fact, she has said on more than one occasion that we know more than she does (probably because we are the ones who have been contacting the lawyers and the lab). What I posted yesterday was what I concluded after speaking with her. She agreed that this is probably as good a guess as any, but it is just my opinion. As for gold, we may get some

[jjwilson]

"I don’t think Cathy knows any more than we do, in fact, she has said on more than one occasion that we know more than she does (probably because we are the ones who have been contacting the lawyers and the lab)." Is anybody else bothered by this statement?  I don't disagree with you Golden but shouldn't the investor relations person know more about the company than the

[Goldenrules]

I'm not bothered by it given the circumstances. Cathy obviously knows a little more because she is the one that is actually in touch with Glenn, but as I said, she is only getting "bits and pieces" of information lately. . She, like the rest of us, is being frozen out by this news blackout, but that's what happens when negotiations are ongoing. If they are in negotiation with a