Take physic, pomp

To understand just how stupid Byron King is…

…about Ecuador and his take on the political risk aspect of INV Metals (INV.to), even though he claims to be an expert on the place having studied it for years. This is the bit of his reco note yesterday that mentions the issues faced by INV in Ecuador:

There’s one potential issue that I want to
address. Last week, a third-party group in Ecuador filed a legal motion
to place an anti-mining proposition into the upcoming March elections.
In essence,
the idea is to allow localities to pass ordinances that restrict
mining, as opposed to mining being controlled by the national mining

As I understand it, the government of
Ecuador is opposed to “local” meddling into national mining policy. The
matter just went before an Ecuadorean court, which kicked the issue
upward to the
“constitutional” court.

The government of Ecuador and Ministry of
Mines are strongly on the side of resource exploitation. In a recent
press release, INV detailed the estimated “take” to various levels of
in Ecuador, based on the recently released FS:

  • Corporate income tax (25%) — $177 million
  • State profit sharing tax (12%) — $107 million
  • Employment taxes (35%) — $52 million
  • VAT (12%) and import duties (0–5%) — $110 million
  • Royalties (5%) — $108 million.

See here for more details.

According to management, there’s a
high-level government delegation visiting the INV project this week.
Apparently, the government wants to show support for mining, investment,
jobs, development
and taxes.

It’s difficult to predict how “legal” cases
will play out in Ecuador… or anywhere, actually. Overall, a favorable
outcome here — one that upholds national control over mining — would be
good for
Ecuador in general and INV in particular. An adverse decision that
permits local meddling would be problematic but not a showstopper at
this stage.

My fave phrase in all that is “As I understand it”. After all, I can decide the earth is flat or the moon is made of cheese and then pontificate behind any paragraph starting that way.

Meanwhile, we human being who live in the real world know that just about everything that dumbass has written on the subject is total hogwash. It’s honestly difficult to know where to start, there are so many things Byron simply does not understand. Let’s start with the political system in Ecuador and no matter what the national executive might say do or want, they cannot simply walk in and overrule the local. Byron King’s ignorance is writ large above, he simply does not understand what he is talking about. Or how the “third party group” petition isn’t something cooked up just last week, but is the culmination of a process that’s been going on for four years. Or how the vote is not under appeal or doubt, but has been officially sanctioned and happens on March 24th. And how the anti-mine contingent is going to win it. And how that vote will stop Loma Larga from ever happening.

If this blithering idiot wants to waste his own money, well fine. But his ridiculously poor DD is going to flush the money of hundreds of naive followers down the toilet, too.

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