ECU Silver Mining Inc.
TSX : ECU

ECU Silver Mining Inc.

March 09, 2009 08:00 ET

ECU Silver Announces Completion of Acquisition of Gold and Silver Recovery Plant

TORONTO, ONTARIO--(Marketwire - March 9, 2009) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

ECU Silver Mining Inc. ("ECU Silver" or the "Company") (TSX:ECU) is pleased to report that it has completed its previously announced acquisition of a carbon-in-leach (CIL) processing plant located in Velardena, Mexico (the "Plant") from a subsidiary of Hecla Mining Company ("Hecla").

Michel Roy, Chairman and CEO of ECU Silver, stated that "this is an excellent transaction for the Company. We are very familiar with this plant since we sold it to Hecla in 2001. Our re-acquisition of this plant will give us a second milling operation designed to make gold and silver dore bars. In these difficult times, this will permit us to re-emerge as a cash-flow positive mining company backstopped by a significant mineral resource".

Stephen Altmann, President of ECU Silver, added that "we are committed to providing our shareholders with a financially healthy company that will endure through these difficult times. The plant acquisition, along with our existing facilities, will provide us with an excellent platform for our future growth".

The Plant is a 500 tonne-per-day ("tpd") conventional leach, counter-current decantation and Merrill Crowe precipitation circuit which was operated by Hecla from 2001 to 2005, after which it was placed on care and maintenance.

Due to the good condition of the Plant, the Company believes that the costs associated with re-commissioning of the Plant should not exceed US$500,000. Any upgrades to improve the recovery of gold and silver and expand the capacity of the Plant will be evaluated and implemented after re-commissioning and start-up.

The Company intends to use the Plant to treat its existing oxide mineral resource containing 1,075,000 tonnes in the measured and indicated category and 379,000 tonnes in the inferred category. The Company expects to operate the Plant at an initial rate of 300 tpd and gradually ramp-up to 500 tpd.

As a result of the closing of the acquisition of the Plant, the 25,000,000 subscription receipts ("Subscription Receipts") issued by the Company on February 20, 2009 have been converted into common shares of the Company ("Common Shares") and Common Share purchase warrants ("Warrants") on the basis of one Common Share and one Warrant for each Subscription Receipt. Each Warrant entitles its holder to acquire one Common Share at a price of CDN$0.95 per share at any time until February 20, 2014.

As a consequence of the conversion of the Subscription Receipts into Common Shares and Warrants, the CDN$16,887,500 in proceeds raised from the public offering of the Subscription Receipts (the "Offering") and which had previously been placed into escrow have been released to the Company, net of an amount of CDN$789,619.38 which has been released to Blackmont Capital Inc. and TD Securities Inc. in payment of the balance of the commission owing to them in connection with the Offering as well as their expenses related thereto. From these net proceeds, the Company has paid US$8,000,000 to Hecla in payment of the cash portion of the purchase price for the Plant. The Company has also issued to Hecla an aggregate of 750,000 Common Shares in payment of the balance of the purchase price for the Plant.

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 Statements

The economic viability of the Plant is based on mineral resources identified on the Velardena District Properties and reported in the Company's National Instrument 43-101("NI 43-101") technical report dated January 20, 2009. Until the economic viability of the Velardena District Properties has been determined and mineral resources have been converted to mineral reserves by at least a preliminary feasibility study confirmed in a technical report as required by NI 43-101, there can be no assurances that the mineralized resources identified on the Velardena District Properties will be economically viable, nor can there be any assurance that the Plant will be economically viable.

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