Hi Guys!

I was away on a property tour all last week so I am a bit behind the curve on the latest news, but it was excellent and will matter in the long run. Believe me, the market may have sputtered, but I would bet a few senior mining companies in Mexico literally crapped their drawers when those grades came out. There is absolutely no question in my mind that Velardena is going to host a huge mining operation sometime in the future. We can await some further evidence from step out drilling but this new zone is it, no analyst will be able to deny the company has reported a significant zone here, regardless of whether anyone is impressed by all the other data so far.

That is why we have waited around for a couple of years of bad market performance for this company. All of the bozos on SH can pound sand. As ECU goes on to demonstrate that a large tonnage of this high grade (kilo silver EQ) ore is on hand, the stock is going to start discounting in an inevitable takeover or JV deal.

Does anyone remember Michel Roy at the AGM last year mentioning that he is permitting a new tailings pond to handle millions of tonnes? I think this latest NR shows exactly why he is on the right track.

I sent the following to Bill Murphy today:

As for the most recent news, there are a couple of points that are
intriguing to me. First off is that both of those new zones were
encountered in the same drill hole, and there is the potential that
others may exist below that. Hitting high grade multiple horizons
across wide intervals is about as good as it gets in an underground
mining environment. It was pointed out right in the NR that the new
zones represent high grade high tonnage potential. The market still
thinks ECU is a low tonnage story, even after the MC was defined, and
even with so many new wider vein intervals that have also been
reported lately.

One other thing that I believe a few people may have overlooked is
that the company has used the recovery efficiency from real operations
to calculate the silver equivalence of these zones. Most juniors just
look for high numbers to crank out, so they assume 100% recovery of
all metals to come up with a grade. ECU went with very conservative
metals price assumptions: $640 gold, 65 cent lead, and $1.20 per pound
of zinc. And they STILL came up with 1,100 g/t silverEQ and an
astonishing 2180 g/t silverEQ for the lower intercept. Not bad for
the very first hole that ever tested that depth. Anyone want to
speculate what will happen as they step out and drill further to
depth, where even higher grade zones may be awaiting discovery?

I guess now we must wait for a few more step out holes to confirm that
we are in fact into significant tonnage. One need only ask, what are
the odds that the very first hole to test this depth would have hit
two closely spaced mantos and that that will be all there is? I think
more likely the dimensions of these zones are going to represent
similar to the MC stockwork zones. That intrusive which created these
deposits is also the source of the Santa Maria Mine across the valley
from Velardena which was formerly operated by Grupo Mexico. I would
like to take a picture of the leach pad so people can see the mountain
of ore stacked there from that huge deposit, amounting to millions and
millions of tons. This is going to be a big story and we have waited
years to see it play out. Soon even the bananaheads that cover these
stocks will have to take notice.

cheers!

mike