Kinross/Aurelian Deal Dampens Junior Miners' Hopes

As Canaccord Adams analyst Wendell Zerb puts it, Aurelian Resources Inc. (AUREF.PK)  started out as a "fairy tale" story in the junior mining world. The company's Fruta del Norte gold discovery, arguably the best in decades, sent the stock from around C$0.25 a share in 2006 to more than C$40 (pre-split) in 2007.

Fast forward to this year, and Aurelian is being sold to Kinross Gold Corp. (KGC) for half its peak value. Mr. Zerb is a little bitter that the price is so low, and that a rival bid never emerged.

However, in his opinion, the biggest disappointment is that Aurelian's sale is an anti-climatic letdown that affects the entire junior mining sector.

The problem is that big discoveries like Fruta del Norte are very important in drawing capital to the junior mining world, because they get investors excited about the next hot discovery and put their focus solidly on exploration plays. Unfortunately, Aurelian's sale never really pulled that off, making it a missed opportunity.

In Canaccord's "Junior Mining Weekly" note, he wrote:

That said, we don't believe pointing fingers accomplishes much in the Aurelian case. Junior mining is a high-risk, speculative industry and in this case, through a combination of circumstances, the risks associated with [Fruta del Norte] snuffed out the climax to the Aurelian fairy tale.

Comments

[PAUL&&SHARK:]

I will hang you on the tree,and write on your back:

THIS ARE REMAINS OF JUNK HUNGING HERE,THIS BODY WAS A HERO AND HE TOOK HIS DEATH SMILING SO EVEN HIS LAST GOLD TOOTH WAS SHINING

2008 Sep 10 07:03 AM

[DiverCity:]

Paul, you're a strange dude. I attempt to decipher your posts as I'm truly interested in varying opinions on the PMs and related stocks. I can't figure out, however, whether or not you're stupid, being facetious, or simply can't speak or write the English language. Please get a tutor or have someone help you with your posts as they are singularly unhelpful to me.

2008 Sep 10 11:47 AM

[DiverCity:]

Paul, you're a strange dude. I attempt to decipher your posts as I'm truly interested in varying opinions on the PMs and related stocks. I can't figure out, however, whether or not you're stupid, being facetious, or simply can't speak or write the English language. Please get a tutor or have someone help you with your posts as they are singularly unhelpful to me.

2008 Sep 24 11:34 PM