Aurelian Resources (ARU)

[Rocketred]

COASTPORT CAPITAL (V-CPP) $1.10 +0.05
AURELIAN RESOURCES (V-ARU) $28.50 +0.50
David Coffin, who edits the “Hard Rock Analyst” along with his brother Eric, is just back from world travels that took him to an investment conference in New Orleans, up to another investment conference in Quebec City and then down south to spend a fair chunk of time in a very timely fashion in Ecuador.

What has happened in Ecuador and the election of Rafael Correa and the huge sell-off in stocks that are based there such as Aurelian Resources (ARU), Corriente Resources (CTQ), Lateegra (LRG) and the like—Dave was probably in the right place at the right time to gauge what might happen next. And at about this time, he suggests “we are probably close to if not at a bottom.”

First of all he compliments the good folks of Ecuador for seeming to come up with the perfect political compromise of electing a strong president who might be a bit left-ish, but also a very strong congress, that’s right-ish...

He also suggests that this is a political group that wants economic progress of the country, more so than fiscal problems.

In summing up his thoughts on Ecuador, he writes, “we see no reason to run from the district at this point”. He continues, “one aspect of the new mining law that hopefully finds a broader use is that it requires operators to sit down with local village and tenure holders to sort out agreements before any serious work is done on a project.” Kind of makes sense, doesn’t it?

Seeing as he’s gone that far, and with lots of good background information in the Hard Rock Analyst, we ask Dave our favorite question—so after all this travel, what do you like? Or better yet, what do you love?

First of all he likes the Aurelian story, particularly at these prices. After all, that’s a huge sell off. Just look at the chart to the left. He thinks it is probably currently at a bottom, although he suggests in the New Year, once people are past a certain tax point, there might be some profit taking as well then.

In the meantime he suggests that considering the size of this megadiscovery by Aurelian, it’s just a matter of time before either Newmont or Barrick buys them out, he thinks. Both these companies work in nearby Peru and should have a good handle on the area. “They are probably just waiting for metallurgical results and politics to settle out” he suggests.

If he could only buy one stock today, the answer to that he says is Coastport Capital (also in Ecuador). He suggests they have two strong projects—La Plata, which is on the northern end of a VMS trend that has been drilled before on another resource cycle by Cambior. While those results are not 43-101 Compliant, the numbers at the time were just under a million tons of 4% copper, 4.8 g/t gold, 54.4 g/t silver, 4% zinc and a dash of lead.

Drilling earlier this year has confirmed much of that resource and has discovered new zones in the area that further drilling will tell us if it’s of interest, or not. Obviously these are good grades, but so far a little tonnage-challenged.

What excites Dave Coffin is their Shyri project which he writes, “a series of separate target areas near the Quimsacocha gold deposit being drilled off by Iamgold.” It appears he suggests that they have at least four targets there, but the Gama target is the one that seems to be attracting most notice. Initial results in the surface work has returned up to 3.4 m of 1.5 oz/ton gold and 641 g/t silver in the Masucay vein.

For those following the Coastport play, the Hard Rock Analyst goes into it in some depth and is probably must-reading. To receive a subscription, go to www.hardrockanalyst.com.

The only fly in the ointment Dave says is the share structure between Cornerstone and Coastport, but he would be disappointed he says, that the stock not triple should drilling results come up with what he currently expects. After their last pick of Strateco, this is interesting to hear.

Other stories he finds of note at this time include Shear Minerals (SRM) whose diamond results in the Canadian Arctic have brought that stock some following. Dave says if the next 20-tonne bulk sample comes up with similar results, this project is pulling itself together to becoming a viable deposit.

He’s also intrigued with Atna (ATN) which continues to fair slightly better in this market and he points to the $30 million that Barrick has to spend on the Pinson project and he simply thinks Atna at this point, is undervalued.