I think there is some kind of misconception for some people regarding the silver value of ounces in the ground, and the share price. Analysts will often quote an arbitrary value for a resource of $2 or $3 per ounce of silver in the ground. This is a metric of comparison, that allows the most important consideration of a silver stock to be compared with other silver stocks. It is a tool to help boil down some of the variables, and not necessarily a precise quantitative consideration.

Now I know some people take that number and somehow assume it relates to future cash flows, or profits, or treat it the same as a price sticker on the value of a company. ECU trading is dictated by the short term behaviour of the market participants. Most people who execute trades are ignorant of the fundamentals of a company, and I suspect many could not tell you how many ounces of silver ECU has proven up, or even the difference between M&I to Infered resources. They buy or sell on emotion, or all kinds of reasons that have nothing to do with the facts of a company. So there is not a great relevance to most data comparison to the trading of a stock.

Overall, I think ECU will find a value that is in line with what the company has to offer, and in line with the trading multiple of the entire peer group. But that is a balance that takes months to achieve, and even more in a volatile market.

I have no sympathy for those who sell based on flawed analysis. I have seen posts recently that appear rational and filled with in depth commentary, yet they make no sense whatsoever. Just consider the 'ounces in the ground' concept as relating to asset value. Now a chunk of real estate in a big city also has asset value. One could buy that land and pay more or less than the true value of the land. IF the owner of the property is distressed, you may get to buy it very cheaply. That is not an indication that the asset value itself is low, it is just a reflection on the circumstances of the sale at that particular time.

To take it to the next level in the analogy, I could buy the land and just leave it as a parking lot, thereby generating a very low cash flow for my investment. Or I could develop it into a shopping mall and see a much greater return on my investment. The same land, but the end value in my investment can generate much different values in cash flow depending on how I put that asset to work.

There are people who seem to think that ECU can only earn $2 or $3 per ounce of silver in profits because that is the multiple that TD used for their report. I read at least one long post somewhere else that implied that. And its pure nonsense, an indication that some people just dont get it.

I believe an asset value of $2 per ounce of silver resource in the ground is conservative for a large deposit, for which there is ample evidence that a profitable mining operation could be undertaken. Even so, that would still imply a higher trading range for ECU just to get to a 1:1 ratio for the resource asset, not including the value of the infrastructure, and not including any value at all for the real potential to add more ounces with future exploration success.

Again, the trading price today is just a reflection of market activity. There is no law that says a stock cannot trade well above asset value. And, the asset value should not be confused with cash flow multiples or long term discounted cash flow models.

There are buyers that are interested in purchasing large chunks of ECU stock. An old Chinese proverb states: never interupt an adversary when he is in the midst of making a mistake. If there are people that are foolish enough to dump their shares of ECU for peanuts, why would anyone expect that big buyers are going to rush up and pay more for the shares? Why wouldnt a patient buyer stand back and let all the bozos find reasons to sell their stock cheaply?

cheers!

mike