Hi Bill
ECU came out with another stellar press release yesterday after the close to announce another material discovery. Since July 18th, the company has made 3 new discoveries at the Chicago, Terneras and Roca Negra mines.

What I am most impressed with, is not only with the significant grades and extensions of these new findings, but the fact they are completely new discoveries in addition to the companies "flag ship" mine, the Santa Juana. The reason I point that out is these new vein structures are at such a close proximity to the Santa Juana mine, thus, once the bigger mill is built, feeding the mill will not only be easier but also less expensive in terms of transportation.

By using the vein dimensions and grades given in the press releases for Chicago, Terneras and Roca Negra, I have calculated that the company has just added approximately another 4.26 million tonnes of rich ore (approx 60-65 million ounces of silver equivalent not including the base metals) in total to its inventory.

I have a model that contains about 14 other silver companies that are comparable to ECU to obtain a reasonable sense on how the mkt is valuing the company. Simply stated, given current mkt values, the average price for "in ground silver’ for these 14 companies is about $2.55 USD$/ounce (that price was closer $3.50 a few weeks back before silver was mauled). If one is to apply US$2.55/ounce for valuing in ground silver, ECU over the last 8 weeks has added anywhere between USD$153 million to USD$165 million (60 mill/ounces *$2.55/ounce or 65*2.55/) worth of value to its inventory. That is impressive!!!

But given the brutal carnage we witnessed in August across the markets, the company lost a significant chunk of its mkt cap despite these great results. Thankfully, we have had a nice rally over the last few days. But with the strong belief that Gold and Silver will eventually breakout from their long consolidations, ECU is poised to reap the benefits when this long awaited event finally happens as these discoveries are only the tip of the iceberg in terms of the potential targets ECU has still to explore at depth, such as the skarns and massive sulfides.
Cheers
Sami

Earlier in the week we were told of the discovery of a vein extension of the Teneras Vein. These are significant additions to the mine because all of the mines that ECU has established production at the present time were once in operation by historic producers, yet each of these new zones represent vein systems that are almost untouched from past mining activity. The mineralization has been encountered at the higher elevations with extremely high grade ore reported, and they represent large additions to the mineral inventory at Velardena.

Add in the discovery zone reported earlier in the summer from the Chicago Property, and the San Diego JV Project, and it is clear that ECU is adding silver ounces at an impressive rate.

Keep in mind that all of the discoveries at Velardena have similar traits in that they are narrow vein, high grade deposits near surface, and they all extend with remarkable continuity to depths of more than 600m. So these new veins which have been outlined from surface will amount to the addition of large resources. But what has me even more excited is that we know as exploration has continued to depth, the veins have tended to expand into wider intervals, and have converged into larger zones of mineralization. The mineralized corridor of stockwork ore, and the large intervals of skarn are just two examples of what has been outlined to depth.

As ECU continues to outline entirely new deposit areas at the mine, and definition work will follow that can be used to increase the compliant resources of the project, it is only a matter of time until the market acknowledges the magnitude of the discovery and bids in a higher market value for the company. As a long-suffering ECU shareholder, I can only say that once the stock runs past the $5 mark, it will not be that people will feel like they did not have the chance to load up cheaply during this extended consolidation period. The company has presented notice of one new discovery area after another throughout the last 15 months, and the stock is still cheaper now that it was when there was far less on the table in terms of asset value. The story for the company has never been better, and today we finally got some form of confirmation in a higher share price, but I do think we have a lot more to look forward to in the months ahead.
cheers!
Mexico Mike
www.smartinvestment.ca