ECU Silver Mining Inc.
TSX VENTURE : ECU

ECU Silver Mining Inc.

July 25, 2005 14:53 ET

ECU Silver Mining Inc.: Technical Report On The Velardena Property

TORREON, COAHUILA--(CCNMatthews - July 25, 2005) - ECU Silver Mining Inc. (TSX VENTURE:ECU) -

ECU Silver Mining Inc. (the "Company") is pleased to announce the completion of the technical report on its Velardena property prepared by Roscoe, Postle and Associates ("RPA"). The report dated July 10, 2005, contains a wealth of information including the history and geology of the property. Taken from the report, the table below represents an estimate of the resources compliant to National Instrument 43-101:



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TABLE 1 - ECU RESOURCE ESTIMATES
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ECU Silver Mining Inc. Velardena Project
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Au g/t Ag g/t Tonnes Oz Au Oz Ag Ore Type
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Santa Juana
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Measured (M) 3.76 169 60,900 7,300 330,600
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Indicated
(IND) 5.17 211 483,500 80,400 3,277,800
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Inferred 6.37 264 378,300 77,400 3,214,700
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San Diego
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Measured 0
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Indicated 0.74 242 143,200 3,400 1,112,900
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Inferred 0.50 272 129,600 2,100 1,131,000
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San Mateo
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Measured 1.83 400 2,800 200 35,700
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Indicated 1.58 280 23,700 1,200 213,000
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Inferred 1.60 285 140,600 7,200 1,288,800
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San Juanes
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Measured 2.39 2.41 15,400 1,200 118,900
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Indicated 2.74 221 166,200 14,600 1,180,300
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Inferred 2.75 207 90,400 8,000 602,100
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TOTALS
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M+IND 2.50 199 342,400 27,500 2,194,900 Oxide
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M+IND 4.50 229 553,300 80,900 4,073,900 Sulphide
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TOTAL M+IND 3.74 218 895,700 108,400 6,268,800 All
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Inferred 3.99 263 738,900 94,700 6,236,600 All
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Included in the sulphide resources (Table 1 above), the majority of
which are contained in the CC and Santa Juana veins, is the
following:

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TABLE 2 - ECU RESOURCE ESTIMATES
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ECU Silver Mining Inc. Velardena Project
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Au g/t Ag g/t Pb% Zn% Tonnes
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Santa Juana
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M+I 9.95 336 4.75 6.06 117,200
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Inferred 8.58 340 4.72 5.4 169,500
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San Mateo
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M+I 1.61 292 0.97 1.32 26,500
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Inferred 1.76 403 1.84 1.5 54,700
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TOTAL
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M+I 8.42 328 4.05 5.19 143,700
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Inferred 6.92 355 4.02 4.45 224,200
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Resources were estimated using the following parameters:

- A tonnage factor of 2.5 for all oxide mineralization;

- The tonnage factor for sulphide mineralization is generally 3.8 for the veins and combined with a tonnage factor of 2.7 to account for waste material. Dilution is at a grade of zero;

- The minimum mining width is 0.8 or 1.2 m depending on ground conditions.

- Veins greater than 80 cm are diluted with an additional 40 cm;

- High assays are capped. In general, Au assays are capped at 26 g/t and Ag assays to 1,300 g/t, which correspond to the 95th percentile of the frequency distribution for all of the data from Santa Juana. Some individual veins have individual cutting factors;

- A cutoff grade of 150 g/t Ag equivalent for sulphide mineralization and 235 g/t Ag equivalent for oxide mineralization;

- Equivalent silver values were calculated using a gold price of US$400, a silver price of US$6.00 and appropriate recoveries for both oxide and sulphide mineralization established by metallurgical testwork and mill recoveries.

Measured Resources are those blocks no more than 15 m distance from drill holes or underground samples with sampling in three dimensions, including raises and crosscuts unless continuity has been established between developed levels.

Indicated Resources are those blocks no more than 30 m from drill holes or underground samples with at least two drill holes in a block in addition to sampling above or below.

Inferred Resources includes those blocks between 30 and 50 m distance from known drill holes or underground samples. There are minor local variations and exceptions are made if there is evidence that the veins have been mined laterally to the resources in which case the veins are extended as far as 80 m down dip and 100 m up dip.

RPA audited the database used in estimating the resources and during the site visit carried out independent sampling of a number of drill holes.

The Company is not aware of any legal, title, permitting, marketing or environmental issues that would materially affect the Statement of Resources.

Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability pending the completion of a preliminary feasibility study.

To issue a Mineral Reserves inventory, a preliminary feasibility study must be prepared, including cash flow projections based on a life of reserves mine plan, estimated operating costs and estimated metallurgical recoveries. Although the original mandate given by the Company to RPA was to calculate reserves, it was decided in early 2005 to calculate only resources because the metallurgical information required was incomplete since at that point in time the Company was still in the process of fine tuning the Mill and it was a priority of both parties to finalize the report as soon as possible.

Since then, the Company has finalized the metallurgical information and test mined the resources to provide additional information on mining methods and costs to be used in an ongoing evaluation of the economical viability of production from the Velardena property. As a result, the Company now has an excellent base to prepare its preliminary feasibility study since determining the resources was an initial requirement before the life of reserves mining plan could be finalized. The preliminary feasibility study will be utilized in the next phase where the company will endeavor to re-classify the measured and indicated resources to reserves status. The uniqueness of this situation is attributed to the exceptional fact that the Company was a mining producer prior to preparing a mineral resource estimate that complied with the requirements on NI 43-101.

Most of the resources included in Table 2 were discovered as a result of a follow-up to a small drilling program using one drill for exploration purposes performed between January and May of 2004. The same program also extended the resources below the main mining area of the Santa Juana mine, opened a new area of the San Juanes mine, and confirmed the potential of the skarn model. With this program, which required only a small investment over a few months, the Company demonstrated the continuity of all veins, the potential of the skarn model and even discovered new veins of economic interest. These results showed the high probability that the geological model will continue at depth, which would have a major positive influence on the Company's future financial results.

The existence of these high grade resources (Table 2) is integral to the Company's core short-term development strategy because; in addition to increased revenues from higher grades, access to these resources is readily available through existing and presently utilized underground infrastructure. As well, the Company has proven its ability to successfully achieve good recoveries of gold/silver/lead/zinc at the mill using a simple flotation technology.

The Company is focused on production and maintaining a sufficient level of resources to insure continuity of operations. Its goals are to maintain a resources inventory allowing for at least 12 months of production in active stopes (currently it has 18 months) and an additional 24 months of production in areas it can reach rapidly with minimal capital investment (currently it has more than 3 years).

RPA's report includes the following: "RPA is of the opinion that there is excellent potential to expand the resource base and upgrade the classification of the existing resources by carrying out additional drilling and underground exploration."

This opinion is based, at least partly, on the fact that many veins included in past resource estimates were not included in the current estimate because of insufficient density of information. For example, at the Terneras mine (also part of the Velardena Project), where more than 2,000,000 tonnes were mined, the veins continue laterally and at depth according to available plans, records, and a few samples. As well, on the San Diego property, only two out of a possible five veins were included because the sampling was not sufficient. In both cases, the Company believes that only a small exploration program would be required for the inclusion of this mineralization in the data-base.

The veins at the Velardena Project contain quantities of base metals: zinc, lead and/or copper. However, most of the samples from the mines and exploration programs were not assayed for base metals because, historically, the past producers were extracting only gold and silver and were not interested in other metals; therefore, these quantities could not be included in the report, except for what was included in Table 2. Recent metallurgical tests and samples were both assayed for base metals, confirming the presence of zinc, lead and copper. However, these assays are not in sufficient quantities to extrapolate to the large database used to calculate the resources. The Company believes that a simple systematic sampling program would allow the base metals assays to be included in the resources estimates.

According to RPA's report: "Based on the drilling to date and the historical development in the district, RPA is of the opinion that there is the potential to develop at depth an additional 400,000 to 700,000 tonnes at a grade of 2.5 g/t to 3.5 g/t Au and 210 g/t to 260 g/t Ag. There has been insufficient exploration to date to define these potential resources and there is no assurance that they will be defined." This potential quantity and grade is conceptual in nature and is based on an extra 50 meters extension of the veins included in the resources, at depth.

Considering the history of the mining camp, Terneras was mined over a vertical height of 550 meters, Santa Juana over 550 meters, San Mateo for 300 meters, etc, with all the main regional veins still opened at depth, the Company is of the opinion that the veins will continue at depth for more than 100 meters below the current known levels.

The Company would like to thank the personnel of Roscoe, Postle and Associates; especially Messrs. Stewart Wallis, Jim Pearson and Al Hayden. Their efforts required them to sort through an enormous geological and historical database that was continually being updated to reflect the latest information from the developments at the Santa Juana mine and the metallurgical results of the production stemming from the Company's ongoing mining activities.

RPA's work pinpointed areas requiring minimal further exploration and sampling which would enable the Company to include other veins in the resources database. These areas will be one of the main targets of the Company's next exploration campaign planned for this fall.

The Company's view is that its short term development strategy should be concentrated on the resources listed in Table 2 since the assays indicate exceptional high grade resources which will translate directly to increased revenues.

The Company is pleased with the results of the 43-101 report as they are consistent with expectations given the limited exploration performed in the past. The Company specifically limited its exploration for two reasons. First, in order to be fiscally prudent by conserving cash in the first stage of the project's life. Second, because the Company was confident that it had sufficient resources on hand and ready to be mined at present capacities to operate the mill profitably.

It is the Company's view that the demonstrated achievements in recent months, viably transform the Company to a full fledged producer. In May and June, the Company reported estimated sales of US$657,200, with corresponding operation and administrative costs of US$560,000.

The Company is currently planning an expansion to its mill in Velardena which will include the requirements needed to increase daily production and produce a pyrite concentrate to improve gold recoveries and increase monthly revenues. With this expansion, the Company expects monthly sales to initially reach US$540,000 for lead and zinc concentrates and an additional US$220,000 for pyrite concentrates. Corresponding costs would increase to US$400,000 per month.

The resources indicated in Table 1 are sufficient to provide the Company with positive net cash-flows and at least a ten year life(i), even without any additional drilling program, and considering only the Measured and Indicated resources. Despite all its achievements to date, the Company is not content to rest on its successes and is currently active on all fronts in efforts to improve mill capacity and recoveries. The Company also remains committed to increasing its resource base through strategic acquisitions and drilling in an effort to improve shareholder value.

The technical report, dated July, 10 2005, was carried out under the supervision of Mr. Stewart Wallis, P. Geo. and coauthored by James L. Pearson, P. Eng. and Alfred S. Hayden, P. Eng, all being a "qualified person" within the meaning of NI 43-101. The report will be filed on Sedar within 30 days.

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

(i)Based on estimated production of 300 tonnes per day and 25 working days per month and Measured and Indicated resources of 895,700 tonnes.

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


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