I think its worth a note to underline the importance of the base metals credits in the ore at Velardena. I know that most people own ECU because they are bullish on silver and want that leverage. And I know that many investors in the mining sector are bearish on base metals and not interested in considering the value they represent.

Most mines in Mexico are polymetallic. The same rock minerals in which the richest silver and gold are emplaced will often contain copper, zinc, lead, cobalt, etc. Its a bonus. Once you have taken the time and expense to build a mine, extract the rock, crush it, and subject it to processing and recovery, in most cases its just a matter of a relatively inexpensive additional processing circuit to extract some or all of the base metals values.

Now I know people have been convinced that in a US recession base metals will drop in value. I do not think that will happen this time around, and neither do the big producers that know the market, because there is a continual process of consolidation and mergers ongoing, which would be unlikely if base metals prices were going to be headed lower. Either way, we can be sure that the base metals will not go to zero. Even if they dip from the current levels, the recovery of these bonus metals from the PM ore will still generate additional revenues.

Now here is why it matters for ECU. We will not be producing silver. We will be producing a concentrate that is rich in silver. That concentrate will be sold to a smelter based on a percentage of the contained metals value. In a flotation cell recovery circuit, ECU will produce a zinc-silver concentrate, and a lead-silver concentrate. So you better believe that the base metals credits are important, and will factor directly into the financial performance of the company.

Those who try to convince you that only the silver resources matter are either outright liars, or they are sounding off about things they know nothing about (which is common on the BBs unfortunatley). And it is also worth pointing out that no recovery circuit is going to get 100% efficiency and extract every gram of metal from the host rock. But ECU has the benefit of extensive testing and real commercial mining in its history, so we can get a pretty good idea that the recovery efficiency will be very good:

75% for the silver, 70% for the zinc, and 65% for the lead would be my estimates going forward for a large operation, based on the historical numbers, which often exceded 80% efficiency.

And one final point to consider: those resource numbers are based on silver equivalence that is calculated using much lower prices for the base metals than the current market prices. So even if the base metals do fall in value, then the net silver equivalence in terms of revenues will still be pretty much in line.

cheers!

mike