ECU Silver Mining Inc.
TSX : ECU

ECU Silver Mining Inc.

March 31, 2009 20:59 ET

ECU Silver Files Fiscal 2008 Annual Financial Statements and Provides Outlook

TORONTO, ONTARIO--(Marketwire - March 31, 2009) - ECU Silver Mining Inc. (TSX:ECU) reports that it has released its audited consolidated financial statements for the year ended December 31, 2008 and the related management's discussion and analysis of financial position and results of operations ("MD&A"). The Company has also filed its annual information form in respect of the year ended December 31, 2008.

Since our last report to shareholders, ECU has achieved several significant milestones including:

- Discovery of Massive Sulphide Mineralization

- Significant increase in silver equivalent mineral resources to 40 million ounces of measured and indicated and 391 million ounces of inferred.

- Completion of a $17.5 million financing

- Purchasing a gold and silver recovery plant

Discovery of Massive Sulphide Mineralization

In July 2008 we were very excited to announce that we had confirmed grades from two massive sulphide veins intercepted at depth.

The first drill intercept yielded 3.66 g/t Au, 295 g/t Ag, 7.87% Pb and 12.07% Zn over a core length of 12.04 metres (40 feet) (17 g/t Au equivalent or 1,100 g/t Ag equivalent).

The second intercept yielded 7.90 g/t Au, 550 g/t Ag, 11.25% Pb and 27.68% Zn over a core length of 1.75 metre (6 feet) (33 g/t Au equivalent or 2,180 g/t Ag equivalent).

The key points regarding the two massive sulphide veins (the "M-S Veins") are;

i) The grades in the M-S Veins are substantially higher than the Santa Juana N.I. 43-101 Inferred Resource grades.

ii) Drilling has entered a zone where a multiple number of massive sulphide lenses may be found.

iii) The extent of the alteration zone is unknown as drilling has not yet reached the intrusive.

These drill results for the M-S Veins are considered to be extremely significant as they provide a high level of confidence to the geological model which suggests the potential for the discovery of additional deep seated massive sulphide replacement (Mantos-type) deposits. These Mantos-type sulphide deposits represent major sources of precious and base metals in a high-grade, high tonnage ratio.

Significant Increase in Silver Equivalent Mineral Resources

In December we announced the results of our fourth National Instrument 43-101 ("NI 43-101") compliant mineral resource estimate (the "Resource Estimate") on the Velardena District Properties in Durango State, Mexico ("Velardena"). The results confirmed a silver equivalent increase in Measured & Indicated resources of 6% to 40 million ounces ("oz") and an Inferred resource increase of 118% to 391 million oz of silver equivalent.

Our objective in our exploration campaign was to convert some of our Mineral Potential into the Inferred category. This was successfully done and we now have a mineral inventory that establishes Velardena among the larger silver and gold projects in Mexico. This increase in our mineral resources is the largest in the history of the Company. After only three and a half years, our exploration team has increased our mineral inventory by over 18 times.

The growth of our mineral resource has shown remarkable advance. Exploration efforts at Velardena have consistently yielded excellent results with several veins still open laterally and at depth and this has been quantified and reported by way of our Mineral Potential.

Completion of a $17.5 million financing

In February 2009, we completed an equity offering of 25,000,000 subscription receipts ("Subscription Receipts") at a price of $0.70 per Subscription Receipt for aggregate gross proceeds of $17,500,000. 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.

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.

Purchasing a Gold and Silver Recovery Plant

In March 2009, we completed the acquisition of a gold and silver recovery plant (the "Oxide Plant") in consideration of a cash payment of US$8,000,000 and the issuance of 750,000 common shares of ECU to Hecla.

The Oxide Plant is a conventional cyanide leach, Merrill Crowe precipitation circuit. It is ideally suited to treat ECU's oxide material and gold-pyrite concentrate inventory. The Company expects to generate a gold and silver precipitate or dore bars from the Mill, either of which can be sold to a third party refinery. The Oxide Plant has a capacity to process mineralized material at 500 tonnes per day.

The plant is located only two kilometres from the Company's Santa Juana mine site and immediately adjacent to its Chicago Property. The close proximity of the plant to ECU's mining operations will give the Company a significant advantage with respect to transportation.

The acquisition of this plant will provide ECU with an opportunity to generate a gold and silver dore bar and sell these to a refinery without the need to enter into smelter contracts.

Outlook

Our near-term objective for 2009 is to minimize our financial risk through the operation of our Oxide Plant. This will be achieved by treating our mineralized oxide material and sending the product to a refinery for payment. In addition, we look forward to further testing the massive sulphide showings at depth later on in the year. Thirdly, we plan on completing an economic study on our sulphide mineral resource.

Looking ahead, we believe the prospects for commodity prices will remain strong, and that we will see a recovery in base metal prices. We plan on ensuring that ECU is well positioned to capitalize on these trends by having an operation to treat our oxide resource as well as ensuring we are positioned to run our sulphide mill when lead and zinc prices recover.

Our primary focus this year will be on milling operations however the majority of the value of the Company remains on our significant current mineral resource and its ongoing exploration potential.

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

Cautionary Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 27E of the Exchange Act. Such statements include, without limitation, statements regarding the future results of operations, performance and achievements of the Company, including potential property acquisitions, the timing, content, cost and results of proposed work programs, the discovery and delineation of mineral deposits/resources/reserves, geological interpretations, proposed production rates, potential mineral recovery processes and rates, the proposed construction of a mill, business and financing plans, business trends and future operating revenues. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking statements as a result of various factors, including, but not limited to, variations in the nature, quality and quantity of any mineral deposits that may be located, significant downward variations in the market price of any minerals produced, the Company's inability to obtain any necessary permits, consents or authorizations required for their activities, to produce minerals from their properties successfully or profitably, to continue their projected growth, to raise the necessary capital or to be fully able to implement their business strategies. All of the Company's public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral properties.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this Press Release.

Contact Information

  • ECU Silver Mining Inc.
    Stephen Altmann
    President
    (416) 366-2428
    (416) 366-8131 (FAX)
    or
    ECU Silver Mining Inc.
    Dwight Walker
    Chief Financial Officer
    (416) 366-2428
    (416) 366-8131 (FAX)