Good post Moose. I was meaning to talk a little about the tailings issue that arose but you beat me to it as I was having lunch with a friend today and just got back to my desk.

Everyone will remember that ECU had about 135,000 tonnes of tailings that was produced before the gold/pyrite flotation circuit was added to the sulphide mill in 2006 and contained good gold grades and some silver. When the sulphide mill re-started last spring the company was processing these tail in the sulphide mill to float the gold and silver that remained through the gold/pyrite circuit to produce gold pyrite concentrate that contains aprroximately 22 gms gold and 150 gms silver. The plan was to process this concentrate through the roaster and then add to the new oxide mill to get a final recovery of about 95% of the gold and silver. The company has presently about 15,000 tonnes of this gold/pyrite con in storage and is adding monthly since the sulphide mill is once again processing sulphides about 15-16 days per month, not yet a full schedule.

The company ran numerous tests last September and October which demonstrated that the tailings could be fed directly into the oxide mill as a supplement to the run of mine ore and get about 65% recovery without processing in the sulphide mill or roaster thus removing 2 steps. This was an excellent solution and everyone was very happy since now the sulphide mill could get back to ramping up towards full production of sulphide ores once again and producing lead/silver con, zinc/silver con, and gold/pyrite con. Plus the oxide mill processing oxide ores and supplementing this with the roasted material from inventory and new gold/pyrite con from the sulphide mill operation and producing high quality saleable dore bars.

What happened at the oxide mill is the oxide transition zones in the Santa Juana mine contained a little higher sulphide than expected plus more copper than desired so a small copper problem surfaced which was effecting recoveries in December even though ample high grade feed should have produced better results. This problem was of course discovered and some temporary actions were taken to control the copper level in the solutions in January and a couple of consultants were called in to help advise and more solutions were implemented so that the copper issue is now resolved.

In the meantime the question of the tailings effects on recovery were again reviewed and tested. The outcome of the tests suggested that the tails were more sulphide than oxide now and were upsetting the cyanide levels and thus effecting recoveries. It became clear that the deeper in the tailings pile the company got the more the tails were now sulphide based and not oxidized as the top layers were ergo the decision to stop processing the tailings directly in the oxide mill as a supplement on March 4 as per the press release. The company now has about 80-85,000 tonnes of tailings to be processed having run over 50,000 tonnes through the various processes in the last 8-10 months. This remaining tailings material will now have to processed once again in the sulphide mill which means part of the month the mill will process sulphide ores and part of the month tailings until the remaining tailings are processed. So I guess the 15-16 days of present sulphide ore processing will remian at this level until the tails are done.

The bottom line is this means that the oxide mill can start once again processing out best grade material since the small copper issue and tailings question seem to be resolved as indicated by the noted immediate recovery improvements mentioned in today's press release so reveune will increase from the oxide mill. Plus the sulphide mill is processing saleable lead/silver and zinc/silver cons 15-16 days per month and adding more gold/pyrite con to inventory with 22 gms gold and 150 gms silver and also spend the balance of the time or some ratio between the two processing tha tailings which also adds to gold/pyrite con inventory.

Now the process of increasing production,and throughput plus enhancing recoveries can start once again. This is pretty normal course stuff in mill start-ups and quite often mills take 12-18 months to really hit their stride, it seems that ECU is close.