ECU Silver loses $8.4-million in 2009

2010-03-31 17:36 ET - News Release

Mr. Michel Roy reports

ECU SILVER RELEASES YEAR END RESULTS FOR 2009

ECU Silver Mining Inc. has released its audited consolidated financial statements for the year ended Dec. 31, 2009, and the related management's discussion and analysis of financial position and results of operations.

ECU reported a net loss of $8.4 million, or 3 cents per share in 2009, compared with a net loss of $18.0 million, or 7 cents per share in 2008. Revenues from metal sales used to offset mining property costs were $6.6 million in 2009, compared with $0.7 million in 2008.

Michel Roy, CEO and Chairman stated, "In the first 10 months of operation, to February 2010, with the oxide mill, we were able to generate gold and silver sales of approximately 750,000 ounces in silver equivalent terms. We feel this is quite the accomplishment given new mining operations typically take several months to get to commercial production. Now, entering into our 11th month, we feel we have learned a great deal from our operations and have identified several opportunities to increase our recoveries. As a result, our gold and silver sales for 2010 will be significantly greater than 2009, on an annualized basis."

ECU treated 126,572 tonnes of material from the oxide mill (plus another 12,651 from the sulphide mill) in eight months of milling and mining operations in 2009. This is the first year of operations for the oxide mill and ECU treated an average of over 500 tonnes per day (tpd), which is the target capacity of the oxide mill. The costs associated with our operations in 2009 were $10.3 million, with a significant part of these costs allocated to mine development, mill preparation and mill maintenance, particularly in the four months prior to the oxide mill being in operation.

Since our last report to shareholders, ECU has focused its efforts on operations to generate gold and silver dore bars for sale. In March, 2009, we purchased the oxide mill, a 500 tonne per day gold and silver recovery plant located adjacent to ECU's properties near the town of Velardena, in Durango, Mexico.

Within six weeks of acquiring the oxide mill, we had our first gold/silver dore pour. Since then, we have now reported on operations for 10 months (May 2009 to February 2010) and have averaged approximately 17,000 ounces of silver per month plus another 580 ounces of gold per month, all from the oxide mill. At a silver/gold ratio of 65 to one, this translates to 55,000 ounces of silver equivalence per month. In addition to this, we have also restarted operations at our sulphide mill and have averaged approximately 10,000 ounces of silver per month plus 180 ounces of gold per month. Consequently, in the first 10 months of operations, we have generated around 76,000 ounces of silver equivalence per month. This does not include value received for any base metals that we generated. Most recently, we have been experiencing much better recoveries in our oxide mill from improvements we completed during 2009. As such, we expect these higher recoveries to translate into higher amounts of gold and silver for 2010.

Our objective for 2010 will be to continue minimizing our financial risk through the operation of our oxide and sulphide mills. We also are evaluating a new exploration program with the objective of drilling into our massive sulphide discovery at depth. However, the first priority will be to complete our scoping study, which should be released shortly. The scoping study will outline the preliminary economics of a 1,500 tonne per day sulphide operation capable of producing 4,000,000 to 5,000,000 ounces of silver equivalent per year.

Copies of the audited financial statements and related MD&A can be found on SEDAR at www.SEDAR.com.