ECU Silver Mining Inc.
TSX : ECU

ECU Silver Mining Inc.

February 20, 2009 09:34 ET

ECU Silver Announces Closing of Its $17,500,000 Bought Deal Financing

TORONTO, ONTARIO--(Marketwire - Feb. 20, 2009) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

ECU Silver Mining Inc. ("ECU Silver" or the "Company") (TSX:ECU) is pleased to announce the completion of its previously announced offering of an aggregate of 25,000,000 subscription receipts of the Company (the "Subscription Receipts") at a purchase price of $0.70 per Subscription Receipt (the "Issue Price"), for aggregate gross proceeds of $17,500,000 (the "Offering"). The Subscription Receipts were purchased and re-sold to the public by way of a short form prospectus filed in all provinces of Canada on a "bought deal" basis by a syndicate of underwriters led by Blackmont Capital Inc. and including TD Securities Inc. (collectively, the "Underwriters"). The Company has granted the Underwriters an option, exercisable within 30 days after the closing of the Offering, to purchase from the Company for resale up to an additional 3,750,000 Subscription Receipts at the Issue Price for additional gross proceeds of up to $2,625,000.

Each Subscription Receipt entitles its holder to receive one common share of the Company (a "Common Share") and one Common Share purchase warrant (a "Warrant"). Each Warrant entitles its holder to acquire one additional Common Share at a price of $0.95 per share at any time until February 20, 2014.

The gross proceeds of the Offering, less an amount of $612,500, representing 50% of the commission payable to the Underwriters which was paid to the Underwriters upon closing of the Offering (the "Escrowed Funds"), were deposited in escrow with Computershare Trust Company of Canada pending the closing of the previously announced acquisition (the "Acquisition") by the Company of the 500 tonne per day gold and silver recovery plant (the "Plant") located adjacent to ECU Silver's properties near the town of Velardena, in Durango, Mexico.

The terms of the Subscription Receipts provide that the Escrowed Funds, less the balance of the commission payable to the Underwriters, will be released to the Company upon the closing of the Acquisition. In such an event, U.S.$8,000,000 of the Escrowed Funds will be applied to the payment of the cash portion of the purchase price payable for the Plant. If the Company has not completed the Acquisition prior to 5:00 p.m. (Toronto time) on March 30, 2009, unless a holder has chosen to nonetheless convert its Subscription Receipts into Common Shares and Warrants, the holders of the Subscription Receipts will be refunded the full amount of the Issue Price of the Subscription Receipts held by them in exchange for such Subscriptions Receipts.

This press release shall not constitute an offer to sell or solicitation of an offer to buy the securities in any jurisdiction.

ABOUT ECU SILVER

ECU Silver is focused on the exploration, development and mining of precious and base metals at its Velardena District Properties in Durango, Mexico. The area is comprised of three properties, the Main Velardena Property, the Chicago Property and the San Diego Joint Venture Property. The properties contain a measured and indicated mineral resource of 40,000,000 silver equivalent ounces and an inferred mineral resource of 391,000,000 silver equivalent ounces. ECU Silver's mission is to become a pre-eminent silver and gold producer through the development of existing and additional potential resources in the Velardena district.

Cautionary statement regarding forward-looking information

Certain information contained in this press release may constitute "forward-looking information" with respect to the Company, which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects, exploration expenditures, costs and timing of future exploration, requirements for additional capital and regulatory matters. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; the future price of silver and other metals; possible variations of mineralization grades or recovery rates; failure of the plant, equipment or processes to operate as anticipated; accidents, equipment breakdowns, labour disputes and other risks which may arise in the mining industry; changes in planned work resulting from weather, logistical, technical or other factors; delays in obtaining governmental approvals or financing or in the completion of development or construction activities.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this press release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • ECU Silver Mining Inc.
    Stephen Altmann
    President
    (416) 366-2428
    (416) 366-8131 (FAX)
    Website: www.ecu.ca