ECU Silver Mining Inc.

ECU Silver Mining Inc.

May 19, 2006 12:41 ET

ECU Silver Mining Inc.-Financial Results For The Period Ending March 31st, 2006

TORREON, COAHUILA--(CCNMatthews - May 19, 2006) - ECU Silver Mining Inc. (TSX VENTURE:ECU) -

- Successful preliminary results from the pressure oxide leaching tests;

- Updated 43-101 report to be completed by mid-year 2006;

- Drilling program that commenced in December of 2005, still in the early stages.

ECU Silver Mining Inc. is pleased to provide the salient results for the first quarter ending March 31(st), 2006. First quarter revenues increased to $1,120,973 compared with revenues of $517,675 (117% increase) for the first quarter of 2005.This increase is mainly due to the increase of daily production. The net loss increased to $1,711,246, or $0.01 per share, compared with $916,548, or $ 0.01 per share, for the same period in 2005. This increase was mainly due of a one time charge of $1,788,850 related to the issuing of stock options to employees and directors. Without this one time charge, the company would have realized a net income of $77,604 for the first quarter. The Company generated an operating profit of $ 350,293 in the first quarter compared to a loss of $ 104,433 for the same period in 2005.

Production Update and future plans:

Full scale operations began at our milling facility in May of 2005 at 210 tonnes per day, and as of December 31(st), 2005, our average daily production was at 245 tonnes per day. Subsequent to year end, further modifications and upgrades were made at the mill. As of May 17(th), 2006, the Company has achieved consistent daily production of 295 tonnes per day. We anticipate on reaching our short term goal of 340 tonnes per day by the end of May 2006.

Given all the major discoveries that have been made since January of 2006, the Company is already in the process of assessing several economical models to evaluate what the optimum course of action might be going forward to significantly increase daily production. To that end, we anticipate to make a final decision well before the conclusion of fiscal yearend 2006. The discoveries of the two skarns already give us an excellent idea of the trend we should be following, however, the stockwork zone on level 17.5 that was just recently discovered is sufficiently accessible to justify a more progressive approach. Due in part to the existing infrastructure and the solid grades obtained in this zone, the Company now has the option to first significantly increase milling capacity by processing that zone alone while continuing the evaluation process for the rest of our findings.

Pyrite circuit testing update:

The Company has spent the better part of the past seven months conducting several testing methods that will enable us to produce a better gold pyrite concentrate. To that end, Doctor Javier Ramirez, was hired in September of 2005 as a consultant to aid management in developing processes to maximize recoveries. Doctor Ramirez has directed several phases of flotation tests carried out at the University of Morelia that led to an increase in gold and silver recoveries in the pyrite concentrates from 75% to 95%. As of March 31(st), 2006 the Company had approximately fifteen thousand ounces of gold waiting to be processed in our tailings pond. Furthermore, Dr. Ramirez has been searching for the best option to extract the precious metals from that pyrite concentrate and testing of numerous options has been done in various laboratories.

Although this process has taken a little more time then we originally anticipated, the

Company is pleased to report that we have just received the preliminary results from the pressure oxide leaching tests and they were successful. Further tests are being currently conducted for fine tuning the parameters and we expect a final report well before mid-year. This was a critical step and we must point out the importance of this accomplishment as once the circuit is in full operation, the Company will experience a significant impact on cash flows as this process would practically double the potential revenues from the pyrite concentrates.

National Instrument 43-101 update:

In July 2005, the Company published the NI 43-101 compliant technical report prepared by Roscoe, Postle and Associates. Subsequent to that initial report, there have been several new vein discoveries at our principal asset in Velardeiia and our major drilling program that commenced in December of 2005 has also found additional new veins. The upcoming report, which the Company aims to be prepared before mid-year 2006, will include all the data collected from these veins that have been integrated into our data base. Given that we are still in the very early stages of our current drilling program, we anticipate that updating of the 43-101 compliant technical report will become a continuing process over the next few years.

"The Company is pleased with the operational results from our first quarter of 2006. We have clearly demonstrated that we have a viable operation that justifies expansion. These results were obtained despite the following facts: Firstly, the mill was still going through modifications in the first quarter that affected over all production. Secondly, we have yet to reap the full rewards of the pyrite circuit that will improve our recoveries and in turn our revenue. Now that the mill is ready to begin operating at an average of 340tpd and with the implementation of the pyrite circuit, year-end operational results will easily be the Company's best on record. On the exploration side, the Company has achieved great success to date and while further work is still required in an effort to better define our discoveries, the Company is of the opinion that once all this data has been compiled and integrated into our data base, our mineral inventory will be positively impacted. Our updated NI 43-101 compliant technical report that is due out shortly will demonstrate that fact," noted Michel Roy, president and chief executive officer of ECU Silver Mining.

The Company anticipates that the next step-out hole to test the stockwork zone will start early next week. Assays will be released as they become available.

Mr. Michel Roy, P. Geo., a "qualified person" within the meaning of NI 43-101, prepared the technical information disclosed in this news release.

ECU Silver Mining Inc is a junior Gold, Silver, Zinc and Lead producer in the prolific mining district of Velardeiia, Mexico where historically over 500,000 ounces of Gold and 250,000,000 ounces of silver have been mined. Full scale production began in May 2005 at the Company's Santa Juana mine. To ensure the Company is positioned for continued growth and expansion, and to take full advantage of the current record setting metals prices, the Company has a fully operational infrastructure in place, several months of planned production available from the current stopes, and ongoing exploration programs.

Statements in the release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially. We undertake no duty to update any forward-looking statement to conform the statements to actual results or changes in our expectations.

Head Office
Rouyn Noranda
Quebec, Canada
J9X 7C8
Tel : (819) 797-1210
Fax : (819) 797-1214

Corporate Office
J. I. Jimenez 663
colonia Los Angeles
Torreon, Coahuila,
Mexico, 27000
Tel: (01152)-871-717-8633
Fax: (01152)-871-718-5025

Email Address


The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • ECU Silver Mining Inc.
    Michel Roy
    cell: 011-52-871-727-1061