Interesting that on SH they post the bearish comments, but they did not bother to repost my rebuttle. Here is my response to that opinion, and it is just that: an opinion, as are my comments. We all put our pants on one leg at a time, and people should learn to trust their own instincts instead of over-reacting to every commentary that someone posts on a forum...

cheers!

mike

http://www.mexicomike.ca/php/phpBB2/...

I have met Tom Szabo and he made the effort to travel to Reno for the Smartinvestment.ca Conference in November. He is a gentleman and very knowledgeable about mining stocks and trading of futures. I wish him well. However I also have profound disagreement to express with his opinion, and please feel free to share my rebuttle to his comments...

Tom only quotes the M&I oxide resources in his numbers. Part of the strategy for ECU production is to run the a blended mix of the oxides and the pyrite concentrate produced from the floatation recovery circuit. This has the effect to enrich the throughput. They also plan to process the stockpile of tailings left over from many years of past production, that is rich in gold. I have raised the issue of metallurgy challenges in this mix, but with Dan Kappes on the BOD and is contributing his expertise in improving the recovery efficiency, I have been told that the new mill will be able to process the material and yield positive recoveries. When we start seeing reports of the efficiency they are generating it will be possible to comment further. But for sure the total production numbers cited by Tom are woefully underestimating the reality.

Keep in mind that inferred resources amount to more than three-quarters of the total mineral inventory. As ECU has developed underground workings to access the drill-indicated vein resources, they have discovered that the overall grade of the deposit has increased. Because the veins tend to be narrow and irregular, the drill core often misses the higher grade or wider vein intervals. When they actually develop the stopes all of the ore grade material is extracted and this has been well-documented that the overall grade and tonnage is higher than estimated by resource numbers. So including the inferred resources to the total makes the whole issue less of a concern.

Next keep in mind that part of the reason the oxide resources were not expanded is because the oxides did not behave well in the floatation cell process. The company focused their efforts on exploring the deeper sulphide resource zones on the property. Now that they have a means to run that material with high recovery efficiency the company will probably dedicate more time to exploration to expand the oxide resources.

The comment expressed by Tom about the narrow veins is inaccurate. It is not the dilution that has generated lower resource numbers, but the fact that NI43-101 reporting standards require a tight drill density and multiple pierce-points for each vein in order to count them in the inferred inventory. Since most of these zones do not have the requisite drill density, for the purposes of a resource estimate, they do not exist. However as the company develops these shallow mineral zones, they can go ahead and mine it whether it is reported as a resource or not.

The fact is that NI43-101 reports are overly conservative for accounting of the resources in narrow veins. This does not mean narrow veins are not profitable to mine. It does mean that a company must operate at high levels of efficiency, and the ore grade must be higher because dilution is a factor.

I am not the spokesman for ECU. I own the stock, and I have been undergound to visit the project twice, and I have witnessed the mine development, ore extraction, and the operation of the floatation circuit. From what I have seen, the company has a very good chance of generating a profit and of funding the ongoing exploration work. ECU has faced many severe challenges and managed to deal with them along the way. But it is not a stock for everyone. If you do not think it is worth the risk to own this stock, do not buy it. Its that simple. For me, I expect big things from this company.

cheers!

mike
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