Top Find Oscar.... Very interesting. Big times for EVG looking Forward.
China move in Ecuador helps EnviroGold PURE SPECULATION:
Robin Bromby From: The Australian December 30, 2009 10:47AM
THERE should be a broad smile on the face of Brian Johnson, executive chairman of EnviroGold when he checked this morning the news out of South America. Two Chinese companies, Tongling Nonferrous Metals Group and China Railway Construction, have agreed to pay $US653 million ($730m) to acquire Toronto-listed Corriente Resources. The buyers want to get their hands on the huge Corriente copper deposit in Ecuador, which the Canadian company describes as the only major new copper discovery made in South America over the past two decades.
Just hold on before phoning in that buy order: we are not -- repeat not -- suggesting that someone is going to make a bid for EnviroGold (EVG). Its projects are far too early-stage, and small by world standards. No, the impact on EVG is far more subtle - and more important. This deal means that the Chinese -- always cautious -- have assessed the political risk in Ecuador as being reasonable.
Start of sidebar. Skip to end of sidebar. .End of sidebar. Return to start of sidebar. This should add some lustre to EVG which has staked its future on gold projects in Latin America. Apart from its gold project in the Dominican Republic now in development and exploration in Peru, EVG has invested heavily in Ecuador.
In recent months we have seen political uncertainty in that country subside, along with the introduction of a new mining law that has added stability to mining company concession rights there. Back in September, EVG expanded its ground holdings in the country and is now targeting gold production there of 100,000oz a year from 2013.
This is not to say that wheels might never come off again in Ecuador, or that a government could push around an Australian junior while leaving a powerful Chinese entity alone, but overall the news of the Corriente acquisition is a big plus for EVG.
Which allows us an almost seamless segue into Part 2 of the "Great Pure Speculation Postscript" -- begun yesterday in an effort to use this quiet holiday interlude to bring to your attention announcements that were swamped or ignored in the lead up to Christmas.
And talking of South America, Guyana seems the new frontier for Australian juniors. First we had Epsilon Energy (EPS) moving into this former British colony looking for uranium and gold. Back on October 12, you might recall, Pure Speculation reported that Epsilons share price had that morning leapt by 80 per cent on news that some ground prospective for uranium had been acquired in Guyana, and that gold targets were also involved.
We pointed out that Guyana is the only English-speaking country within South America and there is a large geological belt that runs through several countries, but is accessible by foreign companies only in Guyana. Venezuela is no place to invest (as EVG has recently confirmed by scrapping exploration there due to unreasonable government demands) and Brazil will allow only state-owned companies to be involved in uranium exploration.
Now we see Uramet Minerals (URM) joining Epsilon, but only for gold. Uramet has not had a happy year. After the collapse of share prices just over a year ago, the company set about trimming its sails. First, it sold assets and rationalised tenements. Then the managing director was made redundant and directors took a 40 per cent cut to their fees.
But it has managed to keep $2.3m in the bank, and can now earn a 50 per cent stake in a Guyana project by spending $US1m over the next two years. The positive aspect is that this an advanced project and the owner already has machinery on site.
Once the deal is finalised, drilling will begin.
Still, we have seen great plans from Uramet before: in May 2008, its shares soared one day by 250 per cent (to 31c) on news that sampling at its Georgina Basin tenements had identified phosphate. The stock last traded at 5.3c.
