Over the last two weeks there have been 3 ECU news releases documenting intersections of 8 veins or zones of mineralization. These veins and zones are as follows:

Terneras East Vein

New Chicago Vein

Cantarranas Zone

Ag Vein Zone

Contact Zone

La Cruz Vein

Redox Zone

A4 Vein

Since these veins and zones vary greatly in width and metal grades, I have summed up these 8 intersections to get a total width and average data which is as follows:

Summed Width = 42.28 meters (138.7 feet)

Average Width = 5.285 meters (17.34 feet)

Average Grade Ag Equiv = 11.47 oz/tonne

Average Grade Metal Value = $200.49 /tonne

Average Grade Metal Value at 70% Recovery = $140.34 /tonne

This shows that the Stockhouse bashers arguments that ECU is only narrow veins is complete BS.

The only of these veins or zones that ECU has stated the strike and depth for are the Terneras East Vein (200m x 600m) and the New Chicago Vein (400m x 600m). I also think that both of these veins are still open, either in both strike and depth, or most defanitely in depth. Based on this information, I don't think it would be unreasonable to assume that each of these recent vein and zone intersections will turn out to be 400m x 600m like the New Chicago. If this turns out to be the case, we are talking about 30,441,600 tonnes of ore and 349,279,200 oz Ag Equiv for these 8 veins and zones. Per GRW's recent post, ECU is looking to increse the mill, first to 1,500 tpd, then to 5,000 tpd. For the 5,000 tpd mill, it would take 16.68 years to process this much ore. Please be aware that this does not include many previous discoveries including the Santa Juana Vein, the San Mateo Vein, the Roca Negra Vein, or the Minerialized Corredor. According the the 2008 ECU Annual Report, a total of 32 veins had already been discovered. The 5,000 tpd operation using the average metal grade of Ag = 11.47 oz/tonne would produce 14.65 million ounces of Ag equiv per year using a 70% recovery rate.

ECU's January 2008 NI43-101 report used cutoff values of $45/tonne for narrow veins and $25/tonne for bulk mining. It then should be conservative to say that ECU's mine costs will run $50/tonne for extraction, processing, and capital costs. If this is accurate, the processing of these discoveries would produce an average profit of $90.34/tonne or $164,870,500 per year. There is only one problem I see with the proposed 5,000 tpd mill - It will be too small.

Pan American Silver Corp currently has a P.E. of 28.21. Lets assume ECU ends up with a share count of 400 million shares. Lets assume that coprorate and exploration costs in the future reduce ECU's profit to $130 million per year. Using the P.E. of 28.21 that would put ECU's share price at $9.17 per share. A bigger mill would generate a higher share price. Higher metal prices would generate a higher share price. A better market for mining companies would generate a higher share price. Even better discoveries would generate a higher share price. I beleive all 4 of the above will eventually happen, and thus $9.17 per share will prove to be a low share price prediction. Regards.