I am a bit pissed off tonight, and I usually try not to get into these pissing contests anymore because they are such a waste of time and effort. ECU is one of those companies that seems to attract polar opposites in terms of discussion among investors. People either love it or hate it. Thats fine because I think we are all subject to a certain degree of bias in any stock that we consider. Where it goes off the rails is when people have to resort to personal attacks or unfounded criticism in order to justify their personal opinion.

I think the bottom line is that in the real world there are few absolutes in the mining biz. Lots of projects look great on paper but flop in the real world, and lots of projects look like they cannot work and then the right people or technology comes along and its a bigtime success. There are lots of moving parts and so much is based on unknown unkowns. My favourite example is the Carlin Trend in Nevada, one of the most productive gold mining districts in the world. Most of the 'ore' that is mined today was commonly refered to as 'waste rock' until heap leaching came into practice. You just never know.

There are some instances where overzealous promoters and scumbags have misrepresented the potential of a play, and in that case scandalous criticism is warranted. Most of the time, exploration is advanced by sincere, hard working people, and there are just many shades of grey. You present information according to the best practices of the industry and within guidelines for quality assurance and control, with secure custody of sample material, and acceptable modeling software to estimate deposit grade and geometry. Thats it. Every mining company will use that process to arrive at their resource definition. I think it is wrong to attack one company and management team on the basis of unknown unknowns that every similar company will have to deal with.

Lets look at the positives:

The geology of Velardena is intensely mineralized and there are several known deposit types that have been encountered, including epithermal sulphide and quartz veining, contact skarn/mantos/chimney/CRD, stockwork, and breccia. What is important to note is that ECU geos predicted they would encounter certain zones BEFORE they were discovered. The green skarn to depth and the lateral vein extension beyond the fault displacement zone are two examples of success that ECU accomplished that other companies could not. That should prove that the knowledge of the deposit is beyond the conceptual level. It should also provide credibility going forward for additional discovery potential.

Each year ECU has efficiently deployed exploration capital to yield significant increases in the total resource block.

ECU has secured ownership of the entire exploration property plus large chunks of surface land rights, and added to their holdings in the district. This was formerly a long term lease that was also encumbered by an outstanding lawsuit.

Infrastructure development has improved substantially in the last 2 years, with new levels opened to access resource zones of the mine, additonal processing infrastructure built up at the processing plant, and the new mill acquisition that was recently announced. This represents literally years of work and investment that is in hand and ready to generate revenues going forward. How many other great deposits are defined and halted because the operators cannot raise the cash they need to move forward to production? ECU has already made the investment to move ahead with a growth plan.

The company has gone from a retail penny stock to one that is covered by reputable mining analysts, with institutional investors participating, and is on the radar screen with some of the largest mining developers in Mexico.

People can bitch and complain about the market price all they want, but the above facts are indisputable.

Now one final comment on the real world. There is only a finite amount of capital that any junior has to work with. Decisions must be made in terms of what can be accomplished with that capital, and what results will yield the greatest long term value for shareholders. For example, ECU could have opted to halt all exploration work, and instead spend many millions of dollars on a full feasibility study last year to prove up reserves. Would that have moved the stock further ahead than to go full speed with exploration and prove up a huge additional resource block? I think not...

ECU could have just carried on with small scale mining and earned a small profit for decades. Instead they chose to halt small production, raise more cash, and move ahead to prove up a world class resource. Do investors gain more from having a diluted float but many multiples of a defined deposit under management? I think history shows us that they do. Otherwise the world would be mostly about small mines with limited resource development. It is the big mines that took years to prove up and devleop that are the most valuable in the world. Over the short term that is going to cause some wild swings in share value, but over the longer term it creates real capital appreciation. People need to focus and understand the big picture.

Management has the responsibility to understand the options that are available, and to make the best decisions for shareholders. Maybe in the short term that has hurt the stock and some people cant resist the urge to take cheapshots, but I think in the long term the strategy will build greater value. Thats why I remain invested. I live in the real world.

cheers!

mike