I talked with Dwight of ECU's corporate office yeterday about the new mill we are attempting to buy from Hecla. Specifically I wanted to know how much gold ECU had stockpiled in the tailings and material from the pyrite circuit. Dwight said that the amount had previoulsy been computed as $6 million worth of gold using $700/ounce gold and a 50% recovery. This means that there is approximately 17,140 ounces of gold in these materials that can be run thru the new cynide mill. Since gold is now $900/ounce and the gold recovery rate from the mill is 79%, the profit from this material will be substantial. The total weight of tailings and pyrite material is approximately 30,000 tonnes. This means the tailings and pyrite have an average gold content of 0.571 oz/tonne.

Dwight also said that ECU plans to initially run 100 tpd of these tailings and pyrite combined with 300 tpd of newly mined oxides. This means that the mill operating rate will be approximately 400 tpd. Since the amount of tailings and pyrite is approximately 30,000 tonnes, it will take 300 days to process it at the proposed 100 tpd. The projected net smelter return from the new mill is 78% for the gold and 55% for the silver. ECU's recent NI43-101 gives the measured, indicated, and infered oxides as 1,454,000 tonnes with an average gold content of 2.62 g/tonne and an average silver content of 168 g/tonne. This tonnage is adequate to feed the new mill at capacity of 500 tpd for 8 years. I also suspect there are additional oxides currently in the potential category which will be moved to MI&I in the future.

Following are profit calculations for the new mill:

Oxides:

Au value = 2.62 g/tonne x $900/ounce x 78% NSR = $59.14/tonne

Ag value = 168 g/tonne x $12.42/ounce x 55% NSR = $36.90/tonne

Total Precious Metal Value = $96.04/tonne

Mine + Mill Operating Expense = $40/tonne

Profit = $56.04/tonne

Tailings & Pyrite:

Au value = 0.571 oz/tonne x $900/ounce x 78% NSR = $401.07/tonne

Mill Operating Expense = $15/tonne

Profit = $386.07/tonne

Using the initial feed composition of 300 tpd of oxides plus 100 tpd of tailings/pyrite, the estimated profit is $55,419/day or $16,625,700 over the 300 day stockpile of tailings and pyrite. This is roughly twice the cost of the mill which is about $8,450,000 in cash plus stock. Needless to say, anytime you can double your money in less than a year you have a winner.

After the tailings and pyrite are processed, if ECU runs the oxides thru the new mill at 400 tpd, it will generate a profit of $22,416/day or $8,181,840/year. Of course higher gold and silver prices will only help our profit.

I also asked about the status of drilling the massive sulphides and was told that they are on hold now mainly because the market is not currently rewarding explorers for resource improvement. ECU is therefore making the move to buy the mill inorder to move to greater production which is being better rewarded by the market. Once ECU gets cash flow from the new mill, they will reconsider the drilling.

Some of this information was obtained from a phone call with Dwight, some from the NI43-101 and some is my best assumption. If I have misunderstood Dwight I apologize and needless to say investors should validate the information. Regards.