I read that blog and I wonder what planet that guy lives on. For starters, I do not understand the need to attack Wistar Holt, who is one of the straight shooters of the professional asset management biz. And I guess if he wants to be critical of the resources outlined by ECU thats fine, but his comments are disingenuous to say the least.

For example, he is skeptical of the total resources because the data is mostly based on an infered degree of confidence and a lot of the total value is comprised of gold and base metals credits. Well, let me advise Captain Obvious that just about every silver mine in the world is poly-metallic. The one exception I can think of is the Shafter Mine in Texas, which in itself is an anomaly.

In the entire Sierra Madre mineral belt, the top producing silver district in world, there is not one pure silver mine. Not one. The vast majority of the silver deposits also derive a significant portion of the total metal value from lead and zinc, and for most of these deposits the expected recovery efficiency is less than 60% when the circuit is optimized to gain silver. So why would he indict ECU on that basis, if every other mine of consequence in the area is also polymetallic? I would assume he has a chip on his shoulder and wants to prove he is smart to the world. Little big man desease is common on the net.

As for his attack on Micon, again I would simply state that the methodology to arrive at a resource estimate according to NI43-101 standards is based on literaly thousands of assay samples and a block model was used. The consultant relied on direct sampling of exposed veins in the underground workings, and extensive drill data with multiple pierce-points along many kilometers of strike for the known resource zones. There are few large deposits in Mexico that have such an extensive data base of assay results to plug in to a model.

This blog writer also made a silly comment to emphasize some kind of play on words that there are no economic reserves at Velardena whatsoever. I guess that line came from the Department of Redundancy Deparment. See the definition of 'reserves' is that a study has been completed to establish that the rock can be extracted and processed under assumptions that would yield economic viability. So the fact that there are no reserves reported is a function of the fact that no studies have been filed yet, and NOT that the resource is uneconomic under current pricing.

There is a development curve that all mineral deposits advance through, from discovery to exploitation. You start with an infered resource, and then as more data is presented through increased drill density and sampling results you increase the confidence level of the deposit to reflect measured and indicated resources. Then, with the completion of a full study to demonstrate economic viability one can present a reserve, and even that is subject to degrees of confidence with proven and probable variance. This is true of each and every large deposit. You go from A to B to C in sequence.

What is special about the infered resources for ECU as a measure of confidence is the extensive testing that has been completed in the mill at Velardena to document the performance of the various types of mineralization under real world operating conditions. ECU was roundly attacked by many people when they halted commercial production in order to run test batches of sample material for several quarters. This was supervised by Kappes Cassidy and Assc., one of the most respected metallurgical consulting firms in the biz. Period. To write this work off, and the entire resource estimate, as some kind of creative fiction... draw your own conclusions as to the motives of that blog writer.

And one final point: the assumptions in terms of equivalence for silver with zinc and lead resources, are NOT an attempt to confuse or overstate the total resource. The numbers were originaly presented as conservative equivalence a couple of years ago when the metals prices were different and the first resource estimate was produced. Any investor will know that relative values of metals is always going to be variable from one year to the next. The objective is to establish what new resources have been presented from one report to the next, so you use the same comparitive parameters. Otherwise you end up with a sliding yardstick that is more a function of commodity volatility than a measure of exploration success.

A case in point is that while that sleazy weasel went out of his way to slam ECU and the estimate due to the variance in zinc and lead, he did not mention the same point with gold. The estimates use a 55:1 ratio for gold to silver. If we go by the current market prices, as he would want us to think is appropriate, then we should use about 70:1 as the ratio, and therefore the total silver equivalence would rise to 6.5 million ounces, instead of only slightly above 5 million. See, it works both ways. You just pick what you believe are realistic and conservative numbers and stick with them. Over time, the peaks and valleys of the metals prices tends to even out.

I hope most people can recognize a slam job when they see one, and not put too much respect to what these bozos have to say. The guy states he doesnt own the stock and does not trade it. So why go to all that work to attack it? He has an agenda, plain and simple.

cheers!

mike