PERSPECTIVES

While the market for the junior mining industry continues to be challenging during the global economic crisis, the management team at ECU Silver have completed necessary steps to ensure that we protect shareholder value. The Company was one of very few mining companies able to raise funds in one of the most difficult financing periods in recent history, through a “bought deal” financing. This financing was necessary to secure the purchase of a gold and silver recovery oxide plant so as to give us the ability to generate revenues for support or our ongoing funding and exploration needs.

The acquisition of this 500 tonne per day (“tpd”) oxide mill is somewhat unique as the mill is located immediately adjacent to our property in Durango State, Mexico, at only a short distance from our mine site. We originally owned this mill and essentially bought it back from Hecla Mining who had been maintaining the mill on care and maintenance. Consequently, our previous experience with the mill together with our advanced state of underground development, enabled us to start operating the mill and subsequently pouring silver/gold doré bars in record time. Within three weeks of closing the mill acquisition, our team in Mexico had the mill running and then another three weeks later, the mill was generating silver/gold doré bars for sale to refineries.

Although the Company is generating saleable doré bars, according to Canadian accounting guidelines we are considered a development stage company and as such we cannot deem our operations to be in production, nor can we forecast production. A development stage mining company must complete an economic study that allows it to convert certain mineral resources into proven and probable reserves before it can consider itself to be in production.

Over the next quarter, we anticipate that our gold and silver recovery oxide plant will operate at a constant rate of 500 tpd. Most recently we have been treating low grade and development material. This was done in order to ensure there were no operational problems with the mill. During the course of the next quarter,
we will be treating higher grade mineralized material as well as evaluating the opportunity to increase the tonnage rate through the mill.

Cheers.