I would not call it great news. The grades are very good but factor in dilution of waste rock across mining widths and the grades drop by 2/3 or so. It means the headgrade is back around that 100-200g/t silver average that is just enough to crank out a thin operating profit, but lets not forget the development of the access to this vein costs money too, so they are breaking even on this stuff I would imagine. It is a bonus to keep the mill running closer to optimum by pounding through extra tonnage but other than that this is just not good enough in my opinion.

When I speak with mining analysts they complain ECU is mining 'spider web' veins that are hard to make a profit on. This kind of news just reinforces that mininterpretation of the potential for this company.

We know that further to depth the spider webs converge into wider and more economic zones. Perhaps the same will be true of this new Terneras western expansion. The other veins that they have encountered also have potential.

Look, this is a very complicated situation the company is currently working through. They need to keep the operations running and strive for maximum efficiency at all levels in order to generate some cash to pay the bills. The potential to depth is where the greatest upside comes from but that has be paid out by mining lower margin veins near surface. They have invested millions into getting those mills running and must process as much rock as they can to keep the operation rightside up. That means even the thin veins get mined. Fair enough.

I have more than doubled my total ownership of ECU stock during the last 2 weeks. I may add more yet. I think we have a couple of difficult weeks ahead as the earnings come out and then Comex open season on manipulation with the op-ex on march 28th. Maybe things rebound after that, or maybe the goddam sell-in-may crowd will kill momo again shortly after. I am prepared to wait it out.

I do think gold and silver make higher highs before the summer. I do think the drilling will get specs interested again. And I do think the drilling will find some fat zones to get people thinking positively about the overall story for ECU again.

In short, there are some very strong magnets that could pull ECU lower, opposed by very strong magnets for the stock to plow higher. Lots of volatility coming in other words, but I am going to hang around and see what the drilling uncovers.

cheers!

mike

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