Some of you may have wondered, as did I, why ECU did not postpone the merger announcement before reporting the massive sulfide drill results. Here is the answer, as best as I understand it.

First of all, ECU expected the results as far back as a couple of weeks ago. However, a second mechanical problem occurred and caused another delay.

Also occurring over the past couple of weeks, were the separate, independent due diligence studies conducted by/on each company. A "fair valuation" agreement was reached whereby it was determined that the two companies were essentially equal in value (approx. $310 MM market cap).

So, a conversion rate of 20 shares of ECU for 1 share of Golden Mineral was agreed by both parties as being "fair."

Had ECU hypothetically rallied to $1.40 upon some stellar MSZ drill results, I don't believe Golden Mineral would have accepted a 20 for 1 conversion rate. As a result, Golden Mineral may have insisted on a conversion rate of 28 to 1, and ECU shareholders would not have been any better off than they are now.

Ironically, ECU shareholders stand to benefit more by this sequence of events, should the MSZ results turn out to be stellar when they are reported, hopefully in the next week or two. My expectation would be for both stocks to rally simultaneously after the drilling is reported.

Separately, there will be alot of cross currents in the trading of the two stocks. Aside from any rise or fall based on metal price action, I expect to see many shorts begin to cover ECU before the deal is consummated in late Aug--early Sept. In addition, the "Arbs" will certainly hang around and seek out any discrepancies in the "parity" values of the two stocks. Should be interesting to watch.