SRL, up approximately 40% ytd, is poised to blast past 5-year resistance of 17 cents any week now.  A continuation of this move, as momentum traders jump onboard, will carry price upward toward 30 cents in a hurry (then beyond).

Tuesday evening I talked with Freddy Salazar using WhatsApp.

WhatsApp is an awesome application that connects you with anyone you’d like to talk to on the planet!  Assuming both parties have a decent internet connection and the app (free to download) you can communicate freely, for free, any time and any place.  I use it frequently with great results. Freddy sounded like he was right down the street, in Quito, Ecuador.

One of the key takeaways from our conversation is that Salazar is returning to its roots – prospecting.

Thanks to Adventus’ (ADZN, TSX-V) checkbook, Salazar can allocate exploration dollars to its 100%-owned projects, while Curipamba is being fully-funded to production.  A renewed focus on 100%-owned projects is great news for SRL because discoveries are where the big money is ultimately made.  With $5.1 million cash in the bank and cash flow, to the tune of about $1 million this year, coming in from “management fees” Salazar is ready and able to take some risks.  My understanding is that they’ve outlined a $2.5 million internal exploration program for the next 18 months.

Everyone in Ecuador’s exploration ecosystem, from BHP to artisanal miners, wants to talk with Salazar.  Their corporate office is a destination place because few people, if anyone, has more connections in country than Fredy Salazar (and exploration manager Francisco Soria). When it comes to “hearsay” this group hears it, almost all of it.  Whenever the hearsay needs to be followed up on, Salazar sends one of their prospecting teams to give the property a look.

Expect to see more JVs announced during 2019, outside of the Adventus partnership.  And don’t forget the PEA for Curipamba should be published in April. I’m betting that’ll be a positive catalyst for SRL.  It’s highly unlikely that Altius would have paid $10 million for the 2% NSR unless they felt like they were buying a royalty with good upside at a good price.

They’re not in the charity business.

Point being, using Altius’ valuation for the royalty implies a $41 million valuation for Salazar’s 25% carried stake in Curipamba (ultimately it’ll probably prove to be worth more than that).

People can worry about “Ecuador” from a political perspective all they want, but sophisticated speculators are buying a stock like SRL with conviction.

Here’s why:  In addition to all the greatness happening within Salazar…Ecuador just passed a very mining-friendly tax code into law.  The country has $4 billion worth of debt denominated in U.S. Dollars, so they must attract foreign capital into their borders.  And here’s the kicker!  Lenin Moreno’s presidential term doesn’t end for another 2 years.  Therefore, any major political changes that could negatively effect Ecuador’s new mining-friendly laws are not likely (not for 2 years anyway).