October 16, 2010

After speaking with Michel over lunch, it is my take that ECU will resolve the issues bothering analysts in the months ahead and the stock will do what it did in 2006 and then some. Once the analysts appreciate ECU really does have 420 million equivalent silver ounces and is VERY likely to firm up 1 billion ounces in the years down the road, they are likely to pour into this very undervalued stock. There is no reason not to think ECU will eventually have one of the largest silver mines in Mexico, which will certainly grab the attention of the majors over the next year.

Once the psychology changes, the share price is very likely to make a pretty fast run to $5, digest those gains, and then move on up from there. If silver does what I think it is going to do in the months ahead, the price of ECU should soar. With that in mind, I am standing pat and waiting for ECU to perform as I thought it would years ago.

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On November 4th I ended the MIDAS commentary with:

Just about everything the GATA ARMY/CAMP has brought to your attention over the last decade is coming to pass. And guess what, we are just warming up. For some time I have done a Rant Man that gold/silver and the shares will become THE GO TO investments around the world. We are not there yet. It is still to come. When it does, you will not believe the upside action in all of the quality gold/silver junior/exploration stocks … especially the silver stocks, as there are so few of them. Even my biggest holding. ECU Silver (82 cents up, 9 cents Cdn), which has been the dog of dogs, will go berserk to the upside. Not that it has deserved that description, it is just terribly misunderstood … AND, has been HEAVILY shorted. When the perception changes and the shorts are forced to cover, lookout … not just for ECU but for many others in the junior/exploration sector.

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Well, guess what? An ECU press release yesterday announced fabulous results which confirmed what Michel told me at lunch and was conveyed to Café members…

Another angle is that a very large portion of ECU’s resources is in the category called inferred. Most players consider the inferred resources as having a low probability of becoming real. However, in ECU’s case as demonstrated a number of times, they normally get more in reality than expected by the resources numbers. To be more specific, ECU is generally only being credited for between 5% and 20% of their inferred number when the number is more likely to be 100%.

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Analysts are coming to grips that Michel was right all along AND the those who were heavily short ECU have been buried. Before the criminals made their move, ECU rose 20 $1.44 Cdn before ending the day at $1.16, up 3 cents.