Earlier in the session today I noticed a big block that appeared on the offer @ $1.13 representing more than 80,000 shares for sale. About 415,000 shares trading volume had changed hands on the day. Less than an hour later I checked the market depth again and another 50,000 shares or so had traded in total, but that entire block on the offer was gone. The market depth once again looks very positive for ECU today, with several large buy orders supporting the stock and very thin offers posted all the way up:

Not much resistance ahead. So what was that big order at $1.13 about earlier today? It appears to have been yet another phantom order. Anyone that wanted to sell the news would have had to go below it to get assurance of having the order filled. If you are short the stock and want to cover, you post a huge blocking sell order and then sit below that and buy anything that comes in below. Then pull the block and close the position. Mission accomplished...

I also noticed that the old pattern of 100 share sales every minute was back in effect, and CIBC was both the seller and buyer. Some people interpret that as bearish. I think if a program trader wants to dollar average a position over an entire trading day, then putting in a buy program will accomplish that to buy up to 50,000 shares in an entire day and never run the bid above spot. The fact that CIBC was both the buyer and seller on some of those program trades looks a bit fishy, but I only checked a few trades on the day. Someone else may want to post the entire action after the close.

I do not think the production news today was great news. I am discouraged that the mill grade continues to be well below the average resource numbers and the published sample data from the developed stopes. It appears we are mucking a hell of a lot of waste rock in our mining ops an that is depressing the overall grade. In effect it increases the cost on a per ounce of production basis. Offsetting this is the improving mill recovery efficiency, and higher gold and silver spot prices as Argoz reported. Also, the base metals market has firmed considerably in the last few quarters and I wonder if ECU is getting improved prices for the concentrates we are shipping.

Looking ahead, with the stockpile of gold-pyrite cons now shipped, we have booked the easy money. Obviously the arrangement was profitable for both parties, but the volume of gold cons we ship from here on will be dependant on maintaining strong mine production. ECU revenues will have been goosed with that extra stockpile shipping during the last few quarters and now it will be tougher for the company to continue posting growth. We will find out shortly if the company is ready for prime time as a legitimate producer, and able to fund the eventual debt repayment from operations.

I am happy as a shareholder that the company has addressed my personal concerns and appears to be on the right track. Some of the risk is gone from the story but ECU still has to prove they can maintain production, improve the grade control at the stopes, generate strong efficiency at the mill, and deploy a drill in the field successfully.

I opted to sell my traders today and book a small profit. I think the Cartel may pull a trick or two late in the week to try and trip up this market and I want dry powder on hand to buy any selloff that may come short term. I am back to holding my core position in my retirement account.

cheers!

mike

Voluntary disclosure: ECU is a paid advertiser on my website.