|Updated: 19 May, 2008|
By Charles Kubach, Mine-Engineer.Com
19 May, 2008
In 2006, Dynasty Mining (DMM on the Toronto Exchange) had a Feasibility report completed by several Australian consultants. They (Dynasty) have been working on some claims formerly held by IAMGOLD, and other claims, in Ecuador. Dynasty wanted to spend around $25,000,000 to put in a underground gold mine, and plant to recover silver and gold from some narrow vein ores. The technical reports, drilling, looked very favorable. Reserves showed 1.1 million ounces of gold, and things looked very good.
However the problem with this project, is not the deposit. The normal risk of mining is dwarfed by the political situation in Ecuador. In 2006 (the same year Dynasty completed their report, with no mention of nationalization), the government of Ecuador nationalized over $1,000,000,000 of US oil company, Occidental Petroleum's assets. Actually "nationalized" is not the proper term, but the one diplomats use. Ecuador stole the assets of Occidental Petroleum, just like Venezuela did to many companies, in the true communist style. (Everything belongs to the Government) The fact that Occidental put billions of dollars into the Ecuadorean economy, had no bearing on those that did not understand economics. They can only, like the Pirates that once roamed the high seas, take what they see, if they think they can get away with it. Thievery, on a grand scale.
Virtually no legitimate legal institution in the world would uphold Ecuador's stealing of another's assets in the manner in which they acquired Occidental's assets. However, ignoring political risk, Dynasty Mining proceeded to put $25 million of their investors capital at risk by building Ecuador a gold mine. I have no doubt that the president of Ecuador will thank them as he signs the nationalization of the gold property and seize all assets for some imagined wrongs they committed in their illusory political fog.
Who would feel sorry for Dynasty, after they rewarded a Pirate Country, that steals assets of foreign investors? No one that I know would shed a tear. Governments like Ecuador, should see no foreign investment in their country until they return Occidental's operations and apologize for stealing them. We do not reward terrorists or thieves.
So Dynasty Mining must be engaging in Ecuadorean Charity, by giving the government it's own gold mine with $1,040,000,000 in gold, plus a mine and all of it's equipment. Somehow I do not think the investors were aware they were contributing to a charitable institution, though. But, perhaps they will ascribe to the Christian phrase "It is better to give than receive".
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