ECU Silver Mining Inc.
TSX VENTURE : ECU

ECU Silver Mining Inc.

October 10, 2006 16:37 ET

ECU Silver Mining Inc.: Technical Report on the Velardena Property

TORREON, COAHUILA--(CCNMatthews - Oct. 10, 2006) - ECU Silver Mining Inc. (TSX VENTURE:ECU) -

The Company is pleased to announce that its June 30, 2006 National Instrument 43-101 Technical Report will be filed on Sedar today.

Moreover, at the request of the "Autorite des Marches Financiers" of Quebec, the Company's press release of June 30, 2006 is being re-issued in order to reflect certain final modifications made to the Company's 43-101 Report which impact upon the disclosure originally contained in such press release. A summary of the amendments made to such original press release, together with the full text of the restated press release, follow below.

Change #1:

Per press release June 30th:

"Broad Oak audited the database used in estimating the reserves and resources and during site visits carried out independent sampling of a number of drill holes and working places."

The Company was asked to remove the word "reserves" as this report does not include reserves.

Change #2:

Per press release June 30th:

"The Company now has a sufficient base to justify a major production expansion"

The Company was asked to remove this statement until a pre-feasibility study on the project has been filed.

Change #3

Per press release June 30th:

The "ADDITIONAL POTENTIAL" figures given were a range of "35 million to 47 million" ounces of silver equivalent.

That range has now been broadened to "33 million to 55 million" ounces of silver equivalent.

The Company would also like to clarify one further point. The resource figures appearing in the tables included in the press release did not include any base metals content in them. These figures were strictly based on silver and gold data only. Although a material addition to overall resources may develop once a pre-feasibility study on the project has been filed to take into account the base metals, there is no guarantee that it will, and thus for the time being, only gold and silver data was used in calculating the Company's resources.

Restated Version of June 30, 2006 Press Release:

- Indicated Resources reaches 1.4M tonnes or 17.4 Million ounces of silver equivalent a 42% increase from last NI 43-101 compliant technical report;

- Inferred Resources reaches 6.3M tonnes or 81 Million ounces of silver equivalent a 608% increase from last NI 43-101 compliant technical report;

- Additional potential for 2.8 to 4.0M tonnes or 33 to 55 Million ounces of silver equivalent with further testing;

- Current drilling program less than 30% completed;

- Numerous veins and recent discoveries, such as skarns (#1, #2) and stockwork zones are NOT included in this report despite the 42% increase in Indicated Resources and 608% in the Inferred Resources.

ECU Silver Mining Inc. (the "Company") is pleased to announce the completion of the updated technical report on its Velardena property prepared by Broad Oak Associates (BOA). The report updates the Resources Inventory of the Velardena Project taking into account new information obtained in 2005 and early 2006.

2006 Drilling Summary to date and areas NOT included in this Technical Report

The Company has experienced a significant amount of drilling success thus far in 2006 with the commencement of our planned 15,000 metres, 50 holes exploration program. Given the great deal of information that is contained in this new National Instrument 43-101 (NI 43-101) compliant technical report, we would like to highlight the following points before proceeding with discussing the findings of this report in greater detail:

1) Despite the large increase in our Resources Inventory from last year, our current drilling program is less than thirty percent completed;

2) Most of the significant 2006 discoveries that will have a positive material impact on our next NI 43-101 compliant technical report were NOT included in this update. The specific veins and zones not included in this report are:

A) The Stockwork zone encountered first in a crosscut on level 17.5 with a true width of 28.0 metres grading 2.19 grams per tonne (g/t) gold (Au) and 55 g/t silver (Ag) and then proven to be continuous over significant height and widths by drilling (see Stockwatch press releases dated May 8 and May 18, 2006);

B) The mineralized green skarn (Skarn #1): The first intercept averaged 1.08 g/t Au and 1.01% Zn over 68.6 metres, including a 14.4 metres section grading 4.02 g/t Au and 1.73% Zn. Since then, the zone has been shown to continue at depth and laterally for at least 100 metres (see Stockwatch press releases dated April 3, May 1 and June 21, 2006);

C) Skarn #2 graded 1.68 g/t Au over 37.1 metres in hole TA 17.5-05A, again confirming a very significant increase in grades as the Company goes deeper (see Stockwatch press release dated May 1, 2006);

D) A large number of known veins that will become a part of future Resources Inventory reports with minimal further work were not included in this report for different reasons. The Terneras, Hiletas and Roca Negra veins were excluded because of insufficient recent information confirming historical data. The C0, C1 and Veta Oriente veins in the Santa Juana mine were not included because the information needed was obtained after our cut-off date. The Pajaro Pinto, Pajaro Azul, Buenaventura 1, 2 and 3, Ordenanza 1 and 2, Viboras, Chicago and several unnamed veins, which are known veins identified on surface and/or by underground workings on the properties of the Company, were excluded since they have not been sampled or explored recently.

The Company strongly believes in the potential of the veins and zones outlined above, and firmly thinks that they will serve as the main catalyst for the expected future growth profile of our Resources Inventory. For example, the Company could already add the mineralized green skarn and the stockwork to the next Resources Inventory due to the latest intercepts but could not do so in time for this report as the latest data gathered was obtained after the cut-off date.

Thus, given the desire of the Company to issue data in a timely manner, a cut-off point had to be chosen that has precluded us from adding any of the above major findings in this updated Technical Report in any classification level or category. The Company is of the opinion that the data contained in this report are significant enough on their own merit to warrant their release at this point in time.

Specific 43-101 Technical Report Summary

The technical report defines a Resources Inventory including Indicated and Inferred Resources as shown in the table below. Furthermore, it mentions the potential described in the same table. Finally it compares the new numbers to those contained in the previous Technical Report published in July 2005 (see Stockwatch press release dated July 22, 2005).



------------------------------------------------------------------------
COMPARAISON WITH PREVIOUS TECHNICAL REPORT
------------------------------------------------------------------------
TONNES Ag Oz-eq(i).
------------------------------------------------------------------------
July 2005 June 2006 July 2005 June 2006
------------------------------------------------------------------------
Resources indicated 895,700 1,443,225 12,230,800 17,393,757
------------------------------------------------------------------------
Resources inferred 738,900 6,274,824 11,445,100 81,010,378
------------------------------------------------------------------------
Potential 0.4 to 0.7M 2.8 to 4M 4.5 to 10M 33 to 55M
------------------------------------------------------------------------
(i) The contained silver equivalent is the calculated contained precious
metals (gold and silver) in troy ounces. The gold values are
multiplied by 55 to obtain their silver equivalent based on the
ratio of the precious metal prices US$550 per ounce for gold and
US$10.00 per ounce of silver and the fact that expected recoveries
are similar for gold and silver.


Tables 2 and 3 below represent an estimate of the resources compliant
to NI 43-101:

------------------------------------------------------------------------
TABLE 2 - ECU INDICATED RESOURCES ESTIMATES
------------------------------------------------------------------------
ECU Silver Mining Inc. Velardena Project
------------------------------------------------------------------------
Mine Au Ag Tonnes Au Ag Ag Ore Type
g/t g/t Oz Oz Oz-eq(i)
------------------------------------------------------------------------
Santa Juana 4.95 208 390,377 62,150 2,610,988 6,029,235 Sulphide
------------------------------------------------------------------------
Santa Juana 2.90 132 335,986 31,326 1,425,890 3,148,842 Oxides
------------------------------------------------------------------------
TOTAL
------------------------------------------------------------------------
Santa Juana 4.00 173 726,363 93,476 4,036,878 9,178,077 Sulph/Oxid
------------------------------------------------------------------------

------------------------------------------------------------------------
San Juanes 2.70 215 246,935 21,436 1,706,916 2,885,879 Sulph/Oxid
------------------------------------------------------------------------

------------------------------------------------------------------------
San Mateo 2.36 231 57,434 4,358 426,552 666,234 Sulph/Oxid
------------------------------------------------------------------------

------------------------------------------------------------------------
San Diego 0.43 328 412,493 5,703 4,349,922 4,663,567 Sulph/Oxid
------------------------------------------------------------------------

------------------------------------------------------------------------
TOTAL 2.69 227 1,443,225 124,973 10,520,269 17,393,757 Sulph/Oxid
------------------------------------------------------------------------
(i) The contained silver equivalent is the calculated contained
precious metals (gold and silver) in troy ounces. The gold values
are multiplied by 55 to obtain their silver equivalent based on the
ratio of the precious metal prices US$550 per ounce for gold and
US$10.00 per ounce of silver and the fact that expected recoveries
are similar for gold and silver.


Two key points to highlight from Table 2 above are:

Firstly, the indicated resources in the various mines (1,443,225 tonnes) will only require a positive economical evaluation, by completing a pre-feasibility study already in progress, in order to be able to be moved to the probable reserves categories in the next update of the Resources Inventory.

Secondly, the total of 17,393,757 oz-eq(i) Ag represent a 42% increase from the last NI 43-101 compliant Technical report.



------------------------------------------------------------------------
TABLE 3 - ECU INFERRED RESOURCES ESTIMATES
------------------------------------------------------------------------
ECU Silver Mining Inc. Velardena Project
------------------------------------------------------------------------
Mine Au Ag Tonnes Au Ag Ag Ore Type
g/t g/t Oz Oz Oz-eq(i)
------------------------------------------------------------------------
Santa Juana 5.06 228 2,536,274 412,528 18,567,490 41,256,538 Sulphide
------------------------------------------------------------------------
Santa Juana 2.32 84 63,178 4,712 170,622 429,806 Oxides
------------------------------------------------------------------------
TOTAL
------------------------------------------------------------------------
Santa Juana 4.99 224 2,599,452 417,241 18,738,112 41,686,344 Sulph/Oxid
------------------------------------------------------------------------

------------------------------------------------------------------------
San Juanes 2.70 214 1,880,834 163,374 12,926,212 21,911,795 Sulph/Oxid
------------------------------------------------------------------------

------------------------------------------------------------------------
San Mateo 2.64 179 875,494 73,000 5,066,859 9,125,507 Sulph/Oxid
------------------------------------------------------------------------

------------------------------------------------------------------------
San Diego 0.39 259 919,045 11,524 7,652,928 8,286,732 Sulph/Oxid
------------------------------------------------------------------------

------------------------------------------------------------------------
TOTAL 3.30 220 6,274,824 666,449 44,355,703 81,010,378 Sulph/Oxid
------------------------------------------------------------------------
(i) The contained silver equivalent is the calculated contained precious
metals (gold and silver) in troy ounces. The gold values are
multiplied by 55 to obtain their silver equivalent based on the
ratio of the precious metal prices US$550 per ounce for gold and
US$10.00 per ounce of silver and the fact that expected recoveries
are similar for gold and silver.


There are several key numbers in table 3 above that must be discussed:

Firstly, the 608% increase in inferred resources from our last update is the direct result of the first phase of the Company's exploration program which confirmed the continuity, both vertically and laterally, of the most important veins in the main areas of interest. Although this continuity was strongly suggested by the geological models, it required confirmation in order to be included in the Resources Inventory and our drilling results have provided us with the necessary data to do so.

Secondly, one of the main objectives of our on-going drill program is to ensure that the data density in the areas corresponding to the inferred resources (6,274,824 tonnes) will be increased sufficiently to upgrade these to the measured and indicated categories in our next Resources Inventory reports. The Company fully anticipates this task to be accomplished before year-end as the work required is already being carried out.

A third point worthy of highlighting is that although the assays for lead and zinc have not been included in these calculations (because a portion of the samples in the database used does not include these assays), our actual production data since the beginning of 2005 have averaged an additional 1.7% Pb and 2.7% Zn which has had a significant impact on revenues, representing between 30% and 45% of the value of the actual sales in 2005. The Company expects future production to average similar or better base metals grades, since a smaller portion of the mill feed will consist of lower grade development ore. Furthermore, the Company intends to include the base metals assays for the sulphide resources in the next update of the Resources Inventory planned for the fourth quarter of 2006 by completing the assay database.

Additional Potential to Add to Total Resources Inventory

Using the known geological controls for the veins and considering the recent deep intercepts on the A4, CC and Santa Juana veins, it was possible to determine the "potential" at greater depth of the areas of the veins the current drilling campaign will probe. The results are mentioned in Table 4 below:



------------------------------------------------------------------------
TABLE 4 -ADDITIONNAL POTENTIAL
------------------------------------------------------------------------
Mine Au g/t Ag g/t Tonnes Ag Oz(i) Ore Type
------------------------------------------------------------------------

Santa Juana 4.8/5.2 190/230 1 to 0.15 to 6 to
1.5M 0.25M 11M 15 to 25M All
------------------------------------------------------------------------
San Juanes 2.7/3.0 190/230 0.75 to 0.07 to 5 to
1M 0.1M 7M 8 to 13M All
------------------------------------------------------------------------
San Mateo 2.6/3.0 160/200 1 to 0.08 to 5 to
1.5M 0.12M 10 10 to 18M All
------------------------------------------------------------------------

------------------------------------------------------------------------
TOTALS 3.4/3.8 180/220 2.8 to 0.30 to 16 to
4M 0.45M 28M 33 to 55M
------------------------------------------------------------------------
(i) The contained silver equivalent is the calculated contained precious
metals (gold and silver) in troy ounces. The gold values are
multiplied by 55 to obtain their silver equivalent based on the
ratio of the precious metal prices US$550 per ounce for gold and
US$10.00 per ounce of silver and the fact that expected recoveries
are similar for gold and silver.


The data in Table 4 above represent the portions of the veins at our mines which the Company expects will be upgraded to the inferred resources class in our next NI 43-101 compliant technical report after the completion of the actual drilling program, should the samples collected continue to demonstrate expected results.

Although no assurances can be given that such an upgrade will occur in the future, the Company is of the opinion that since the data collected from all such targets drilled in 2006 confirmed the continuity of the veins in the areas where they were expected, there is every reason to be optimistic about the inclusion of these portions in future Resources Inventory reports.

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 1.0 metre;

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

- 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$550.00, a silver price of US$10.00 and appropriate recoveries for both oxide and sulphide mineralization established by metallurgical testwork and mill recoveries;

- Indicated Resources are those blocks defined by one or 2 sides, more exactly by one or two levels, with systematic sampling each 3 metres. The vertical influence is determined by the distance between two levels, actual or projected, and laterally by geological limits (fault, geology or grade) or 30 metres from the last development;

- Inferred Resources include those blocks representing a reasonable continuity at depth from blocks of indicated resources or intercepts by more than one drill hole, with the limits determined by experience and historical data available. Resources stopped at elevation 1000m, the level reached by current drilling and historical data from the Terneras and other mines in the immediate area.

Broad Oak audited the database used in estimating the resources and during site visits carried out independent sampling of a number of drill holes and working places.

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.

Further Discussions and Outlook

According to BOA's report: "Assuming normal geological controls at this mine and the grades known there is a potential in this area for an additional 2.8M to 4.0M tonnes at a grade of 3.4/3.8 g/t Au and 180/220 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 veins extensions as suggested by the geological environment.

Broad Oak's work pinpointed areas requiring minimal further exploration and sampling which would enable the Company to include other veins in the resources database. Given that the Company is still in the very early stages of its current drilling program, it anticipates that updating the NI 43-101 compliant technical report will become a continuing process over the next few years.

The Company's view is that its development strategy should be concentrated on continuing the evaluation of the known veins and zones to increase its total Resources Inventory to a level which will permit it to further properly evaluate the size of the next production increase. In order to do so, the Company intends to accelerate its exploration program in the very near future by adding more drills.

"The Company is extremely pleased with the findings of the NI 43-101 report, and proud in approaching the 100 Million ounces of silver equivalent milestone. The results are consistent with expectations given the areas considered in the report. Furthermore, the latest intercepts of the exploration program clearly demonstrated that there is a real potential for a very large mining operation from the green mineralized skarn and/or the stockwork zones. We are confident that the Company will continue to yield excellent growth to our total Resources Inventory numbers with each successive NI 43-101 compliant technical report update. This opinion is based on the fact that assay results obtained after our cut-off date for both the green skarn and the stockwork zone provided solid evidence for their inclusion as part of our next update," noted Michel Roy, President and Chief Executive Officer of ECU Silver Mining.

The Company would like to thank the personnel of Broad Oak Associates, Mr. Geoffrey Carter and Mrs. Kristine Dunstan, for their tireless efforts over the past six month and looks forward to continue working with them in the future.

The technical report was carried out under the supervision of Mr. Geoffrey Carter, P. Eng., a "qualified person" within the meaning of NI 43-101. The report will be filed on Sedar within 45 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.

ECU Silver Mining Inc. is a junior Gold, Silver, Zinc and Lead producer in the prolific mining district of Velardena, 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



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

Contact Information

  • ECU Silver Mining Inc.
    Michel Roy
    President and CEO
    Cell: 011-52-871-727-1061
    Email: ecu@ecu.ca
    Website: www.ecu.ca