2008-03-13, EMNs Investor Survey: A Mixed Bag
EMN’s Investor Concerns Survey Comments
4) Using the following, please qualify the level of concern each of the following issues causes you.
• Be fair with changes, but work stoppage hurts poor workers as well as investors.
• Want my Company to be a Great citizen of ECUADOR.
• Too many uncertainties. Why invest in Ecuador with these uncertainties?
• The environment is a Country matter. It is understood poorly and promoted with threats.
• Ecuador is doing everything to discourage mining companies to invest in the country.
• Integrity & reliability are the most valuable characteristics for a person or a country.
• This has GREATLY reduced my willingness to invest in Equador.
• Tax should be based on profit not revenue.
• Given the current level of uncertainty with the Ecuadorian government and mining, why would anyone invest in their country?
• Investment in mining is risky at best. Investing in a country that is politically apt to take / destroy your investment significantly increases risk.
• Ecuador should have a fair royalties & certainly taxes like all other Nations. It’s their mineral wealth, the people should enjoy some of its benefits
• Inconsistent message, therefore until investors feel secure about Ecuador there will always be doubt about investing there.
• This government will force even investors who are not greedy and want to see Ecuador flourish from its natural resources withdraw their funding.
• While these concerns are legitimate, I think they will all be resolved reasonably and satisfactorily in regard to Aurelian, my chief holding.
5) What is your main reason for opposing the WFT included in the Tax Reform legislation?
• Mining is already high-risk and without the potential for high return - people will put their time money elsewhere.
• Must be based on sliding scale so as to adjust with metal prices.
• Hope they resolve this concern.
• Unacceptable interference in the market system and therefore unacceptable to investors.
• Why would any company risk their capital with these new laws in place. There is no upside opportunity, only losses.
• WFT may be common in oil industry, but it is not in the mining industry. As such, it is another strong indication that something is wrong in Ecuador.
• Renegotiation is not always a bad thing, but this needs to be fair and respectful of previous commitments.
• Tax should be based on profit not revenue.
• Costs are rising so this must be taken into consideration. Jr. gold co's are not prospering, stocks have generally not performed.
• Tax companies to benefit the people, not for political gain. Responsible private enterprise is less corrupt than nationalized industry.
• All of these items are important considerations.
6) The Ecuadorian government has announced it will introduce its first-ever royalties. What percentage royalty do you consider acceptable?
• Should be fair.
• Experience has shown that the lower the overall taxation burden the more vibrant the industry.
• Chile has done very well with foreign investment.
• Cut off foreign investment, it will take a very long time to get it back. I will not be back.
• Since Ecuador has no formal mining industry, it should not, in principle, have a royalty to start in order to encourage foreign investment.
• The amount should be relative to other countries, expenses and particularly the local infastructure existing vs. provided by mining partners.
• Responsible miners must be allowed to benefit from the great risk they take. Governments cannot do this. Private wealth funds these risks.
• Anything over 7% is a cause for concern
8) Have you sold any portion of your shares due to unease?
• Ecuadorian leaders need to get their ducks in a straight line, how else will there ever be jobs? Help the poor, stop the bickering.
• No, but time will tell.
• But I would buy back in or purchase more if I were confident of the political situation.
• I will fully divest regardless of loss if Correa does not himself show the qualities he expects from mining companies. Salazar is a responsible miner.
• I have continued to purchase stock as cash becomes available.
• But I won't further invest in Ecuador until I am sure it is favorable toward miners, and specifically foreign miners.
• I sold Dynasty Metals & Mining even though I like the company because I am afraid of what the government might do.
9) Do you generally agree with the tactics of environmental activists and international green NGOs operating in Ecuador?
• Our experience with Decoin was very negative. I think their motives and methods were very suspect.
• Their primary messages are taken up by missinformation. They offer no feasible productive alternatives for them.
• Needs clarity
• The government should enforce the rule of law with most of the extreme NGO actions. Small not of these making too much anti-development noise.
• They distort the truth and have a long-term negative impact on the population.
• If Ecuador intends to develop a serious mining industry, it must implement measures to mitigate the illegal and unethical activities of NGOs.
• Honest concern and dialog is always reasonable. This is the case where people seek primarily to interfere and intimidate for their own selfish ends.
• The lie, cheat and seem to be working for themselves rather than the good of Ecuador. Their tactics are immoral.
• Many green NGO's are middle class snobs who frustrate the advancement of poor countries by responsible people by trying to force their opinions.
• They are mainly leftist communistic environmental extremists, who probably don't care that much about the environment.
• I think most environmental activists want to prevent development, even at the cost of poverty, disease, and hunger.
10) Do you think the Ecuadorian government understands the added value mining can bring to the country in terms of job creation, improved infrastructure, and corporate responsibility projects?
• It would seem that from some of the recent press coverage that it's just another money grab. They seem to show a poor understanding of economics.
• It is only the local communities that seem to appreciate the spin-offs.
• The industry in Ecuador is a fledgling - needs support to develop. Government instability and flip-flops are killing it
• Ecuador does not have the money to do it all themselves, but they are not providing a good investment environment to attract foreign investors.
• There is a total lack of understanding within the Government of the technical, economic and market aspects of the mining industry.
• They see it, but many have shortsighted, and self-interested goals whose future consequences hurt the interests of the people for a long time.
• Hard to understand on what the government is basing its actions and rhetoric - hard to discern the difference between rhetoric and action.
• Correa's motivation is entirely political, hot headed and irresponsible toward the poorest in his country, share profits sensibly or loose investors.
• Certainly the president does.
11) Is Ecuador still worth the financial risk?
• We are planning on pulling all our money out.
• The content of the new Mining Law and how it is applied, and the first Investment Agreements signed by the Gov't will be critical.
• This Aurelian deposit could bring 50 years or more of employment and upgrade training for hundreds of Ecuadorians.
• I regret having to say this because I used to think Correa understood mining and the risks investors take - the extreme risk/reward dynamic -but no.
• There has not been a metal mine in Ecuador for 50 years. Because of the graft and corruption. It may be another 50 yeas before we see a metal mine.
• But we need to see signs of improvement in negotiation between the gov. and the mining cos or more positive news very soon.
• I may move on anytime because of uncertainty.
• Seems to be a vein of rational, fair and long-term thinking that makes me hold out hope that they appreciate and will be fair with my investment.
• Hard to predict - depends on what happens.
• As a trained economist Correa should know better than to stifle investment, he will kill his country. Ecuador does not have the oil revenues of others.
• I am fully cognizant of the risks, I am optimistic, and I will stay for the long haul. The rewards are too great not to hang in there.
12. Other investors concerns
• They are turning this into a ‘no win’ situation. They need to start seeing themselves as partners in a business development process and asking what they can do to help, then they will see the money they are hoping for.
• Protection of property rights, and consistent application of Ecuador laws to all.
• On our investment.
• Ecuador must also remain in a fair land use ratios, as does portend each other sector, id est; agri' busi' \ com'ercial \ indust'al \ and residential
• Hope it all happens!
• The time it takes to arrive at a final plan and legislation to enact it.
• One wonders if the government has a hidden agenda with a mind toward making it unfeasible for the current mining interests to continue in Ecuador while opening a backdoor for the Chinese interests.
• If Ecuador does the same thing it did to Oil and Gas in mining industry, who will fund exploration there?
• A fair and reasonable approach will be better for the long-term development of mining. But that's the government's choice.
• There is no confidence that the government will honor any agreement, past or future.
• Forget mining, it does not seem that their thinking has matured to the understanding of valuing and respecting the rights and investments and value of partners willing to help and participate in their growth and success. If they don't care about the welfare of their own people, they'll be even more dangerous towards their partners and investors.
• Major, institutional investors appear not likely to invest in risky political environments. Toning down government rhetoric and taking some positive actions would help Ecuador's economy by encouraging investment.
• Develop royalties, proper tax corporate base and let companies of quality management develop and build for the people of Ecuador, it will create jobs, schools hospitals and wealth to the nation
• At this time, it is most important to get some major mine in operation and producing revenues for the Ecuadorian economy, which badly needs it. The serious companies will help but they need a minimum of respect and support on the part of the country.
• Correa is acting for political gain, not the interest of his country. I invested in Salazar, not other miners, because here was a responsible Ecuadorian company which would benefit it's people and care for the environment, however I do not put large chunks of money into investments for the purpose of loss making while politicians gain at my expense
• I have > $650,000 invested in Ecuador.
• If the NGOs and environmentalists win the debate over mining, several generations of investors will be discouraged from investing in Ecuador.
• I'm concerned by anti-Correa rhetoric on discussion boards. I think frustration should be directed at the cause of the recent backlash against Norte Americanos... George Bush and ignorant Americans.
• Time frame of decisions.
• I am concerned with the socialistic bent of the government. Socialism has not worked to provide solid economies, industries, jobs, or societies over the long term. I am concerned that the Ecuadorian government won't take a long-term view towards it resources and goals to ensure the political stability it needs to succeed.
• I'm still cautious and would like to see Corea stay in power with mining regulations that are fair to the people of Ecuador and to the companies taking the risk to build the mines done in an environmentally safe manner.
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