Value Microcaps Junior Miners

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DMM.TO use to be my largest holding until I got fed up with the whole Ecuador situation and sold it all and replaced it with axmin (axm.v). While I have kept tabs on DMM's progress from time to time I have not seen anything yet to make me regret my switch into Axmin. Ecuador has the world's worst mining policies and tax regime bar none, with their 3 year+ mining moratorium and 70% windfall tax rate, while axmin's deal with the Central African Republic is one of the most favorable anywhere in the world:
-5 year tax holiday with 30% tax rate after the 5 years are up.
-Government holds no carried interest, but instead owns 20 million shares and 30 million warrants @ 30 cents strike price, so the government's interests are aligned with that of shareholders.

For those looking to do more DD on Axmin:
http://www.siliconinvestor.com/subject.aspx?subjectid=58114

I agree with Otto Rock of IncaKola blog that Ecuador to be avoided:
http://incakolanews.blogspot.com/
Ecuador: Groundhog Day
Let’s keep this short, yes? This came out of Reuters (13) on Friday January 20th, late last week (author’s translation):


Quito (Reuters) – ECUADOR expects to sign the definitive contracts for the mining of multimillion dollar gold and copper projects with the mining companies Ecuacorriente and Kinross during January and February, the Minister for Non-Renewable Natural Resources Wilson Pastor told Reuters on Friday.


The minister said that the Andean nation would receive investment of U$2.8Bn from these two projects and said that the country would sign the agreement with Ecuacorriente at the end of January and with Kinross in February.


Meanwhile we quote from IKN134, dated November 27th 2011:


Vice Minister of Mines Fernando Auquilla said that the contracts between The State and both Kinross (Fruta del Norte) and Ecuacorriente (Mirador) (translated by your author), “..are practically negotiated, we’re in the phase of construction of the definitive document”.


The same IKN134 quoted President Rafael Correa: “In the next few days they will be signed. We are negotiating these contracts very hard..we are also negotiating the forward payment of royalties and with those we will do a series of projects.”


And Federico Auquilla again: “The mining companies have accepted the conditions of the Ecuadorian State and we are completely satisfied.”


All that was followed in early December by Wilson Pastor saying that Kinross would officially sign by the end of that month. Oh well.


As for your author’s opinion on developments and the viability of ECUADOR as an investment destination, those haven’t changed one single iota from the opinions expressed in IKN134 and a couple of times after that piece, too. Feel free to check back but they can be summed up with one word, AVOID. They also differ from a silly piece out of Canaccord last week that tried its very hardest to pump the country to its readership after being invited to look at the excellent rocks Salazar Resources (SRL.v) has to offer in the country (and they are excellent, just a pity they’re in Ecuador). People, the fact is that strong and viable projects are selling at considerable discounts in many places, in countries with good mining acceptance and traditions too (xxxxxxxxxxxxxxxxxxxxxxxx just one prime example that springs to mind) so there’s no reason at all to tack on extra risk by exposing yourself to ECUADOR. Avoid, avoid and avoid once again, because that’s what all exploration companies that aren’t already up to their necks in ECUADOR are going to do in the years ahead, signatures with Ecuacorriente and Kinross forthcoming or not. Even if these elusive deals are signed, the situation in ECUADOR remains far worse than the brokerages pumping their stories to the ignorant would have you believe.