November 30, 2009

Introduction

With a massive resource and two operating mills, ECU Silver Mining Inc. (TSX: ECU) is a junior mining company poised to exploit the current and future investor demand for gold and silver. The Company’s mission is to become a “Self-Funding Exploration Company” with the goal of growing its mineral resource to more than one billion silver equivalent ounces. ECU, which is focusing on the exploration and development of gold, silver, and base metals at its Velardeña District Properties in Durango, Mexico, has a recent NI 43-101 compliant technical report identifying (i) a measured and indicated resource of 40 million silver equivalent ounces and (ii) an inferred resource of 391 million silver equivalent ounces. In addition, the Company owns two mills with a combined capacity of 800 tonnes per day, with a plan to complete a scoping study for a 1,500 tonne per day operation that will ultimately increase to 5,000 tonnes per day, or larger. We had the opportunity to speak with ECU’s management team about its recent results and expectations going forward, an excerpt of which can be found below.

In March of this year, the Company acquired an oxide mill, can you bring us up to speed in terms of its production?

We are currently treating more than 500 tonnes per day (tpd) of oxide material grading between 3 and 4 grams per tonne (gpt) gold and between 90 and 150 gpt silver through our oxide mill. We treated 15,694 tonnes of mineralized material over 30 days during the month of October, which translates into approximately 523 tpd. We also have a second mill, a sulphide mill, which was restarted just last month with a capacity to treat 320 tpd. Our sulphide mill was operational for four days in October during which time it treated 1,220 tonnes of mineralized material.

Why doesn’t the Company report revenue?

Under Canadian Accounting rules we report as an exploration and development company and as such are prohibited from reporting mineral sales as revenue. Rather than booking revenue, mineral sales are recorded as an offset against mining properties and exploration costs.

What does the Company need to do in order to report mineral sales as revenue?

We would need to do one of two things. Either produce an economic study such as a prefeasibility or feasibility study which demonstrates the economics of mine production, or in the absence of a study, grow mineral sales to a level of significance, which we believe to be approximately $30 million.

Is the Company planning to develop an economic study, either a prefeasibility study or a scoping study?

The Company is working on a preliminary economic assessment, a scoping study, where we will define the parameters for a 1,500 tpd operation. We expect to complete the study in the first quarter of 2010. The scoping study differs from a pre-feasibility or feasibility study in that the scoping study incorporates certain inferred mineral resources into its analysis. It cannot be used to call ourselves a producer. The main benefit of our scoping study is that it will provide the first level of study on our mineral deposit to measure its economic viability.

What do “Deferred costs for the Velardeña property” refer to?

In much the same way and for the same reason we don’t book revenue on the income statement, we also don’t book exploration and development expenses on the income statement either. Our exploration and development costs are categorized as deferred costs and are therefore capitalized. We will continue to report this way until we are considered a “producer,” at which time exploration and development costs will be expensed.

What are your operating costs?

As an exploration/development company, we don’t report operating costs. In general, operating costs, including mining, milling, and site administration for our type of underground operations in Mexico, range between $20 per tonne and $70 per tonne. In our 43-101 technical report we used operating costs of $45/tonne for stoping and $25/tonne for bulk mining zones. These estimated costs were based on actual results from our past mining activities. When the oxide mill first started operating, more low-grade material from development stopes was sent to the mill. However, as a result of our advancing our underground development work, we now have enough mining stopes with higher grade material to feed the proper mixture to the mill, to generate more gold and silver.

Looking ahead to Q4 2009 and into 2010, what are your expectations?

In terms of our two operating mills, our plan for the new year is to have both mills running at a combined operating capacity of approximately 800 tonnes per day. We will also continue our exploration efforts, including the ongoing development of a new ramp on the Velardeña Property, which is intended to extend three levels below our current lowest developed level. We also expect to drill into the massive sulphides at depth.

Are your veins too narrow to mine economically?

Our mineral resource contains veins that range from 30 centimetres (1 foot) to 6 metres (20 feet). However, all grades in our mineral resource are based on a minimum mining width of 1 metre. There are several other mines in Mexico which have similarly narrow veins and which are economically mining narrow veins. A portion of our mineral resources also contains large corridors of mineralization that range from 10 metres (33 feet) to 90 metres (300 feet) that have the potential for bulk mining applications. In addition, our drilling into the deep seated massive sulphide has indications for some very wide veins.

Can you elaborate on the Company’s growth plan and provide us some guidance in terms of timing going forward?

Our goal is to reach one billion silver equivalent ounces. Our growth plan will focus on what we do best, exploration. Our track record of increasing mineral resources has been extraordinary. In three years we have increased our resources from 2 million tonnes to 30 million tonnes and now have a measured and indicated resource of 40 million silver equivalent ounces and an inferred resource of 391 million silver equivalent ounces. We plan to start our exploration activities again, early in the new year. Our scoping study will outline the economics of a 1,500 tpd operation with plans to eventually grow the operations to 5,000 tpd. However, our future production facilities will be highly dependent on the ultimate size of our mineral resource.

How will you fund the Company’s exploration initiatives?

We plan to primarily fund our exploration activities from the sales of our doré bars and concentrate. We will evaluate our various options at the time to determine whether, after the scoping study, it makes sense to proceed with financing the construction of a 1,500 tpd plant or to focus exclusively on continued exploration. The decision will depend on the market conditions at the time and whether we think we can add more shareholder value.

Will the Company need to raise money in order to repay certain of its debt obligations?

In Q3 2009, we restructured our debt to extend the maturity date of the loan by one year from November 2009 to November 2010. Principal repayments are scheduled to begin in November 2010, will be payable in 12 equal monthly payments, and should be manageable through funds generated from operations. We believe that our lender’s decision to extend the maturity date is a testament to the quality and potential growth of our assets.

Is ECU content with the current share structure of the Company?

While ECU has approximately 290 million shares outstanding, a significant number of these shares are held by a small group of loyal shareholders, whom have held these shares for several years.

What percentage of the Company is owned by management and board members?

Management and board members own approximately 5.1 million shares in the Company plus 15.7 million options with an average strike price of C$1.83. We believe it is important to align and re-align the interests of our skilled leadership team with those of the Company. In order to do so, we may from time to time issue options to management and board members.

Why would management and/or board members be exercising options and/or selling stock?

In some cases, certain options were set to expire and thus were exercised, adding cash to the Company’s balance sheet. To fund the exercise of options, management and/or board members may have sold some of their holdings in the Company. Significantly, and despite a small amount of shares being sold, the share ownership of management and the board has increased by 17% since the last proxy circular. Also, the Company doesn’t pay its directors any fees or salaries, they are compensated entirely by the issuance of options.

What is happening with Golden Tag?

ECU and Golden Tag are involved in potential arbitration and as such we cannot discuss the situation in any detail. We are working hard to resolve the matter with Golden Tag and we hope and expect to resolve it in a timely fashion and then continue to work together in a productive manner. It is important to note that the ownership of the property is not being disputed.

At CDN$0.70, is ECU fairly valued?

Absolutely not. Our operations are just now hitting their stride. How many other exploration companies can claim a mineral resource the size of ours, a measured and indicated resource of 40 million and an inferred resource of 391 million silver equivalent ounces, all the while having milling operations that will fund exploration growth. On the basis of our resource alone, we are trading around $0.40 per ounce of in-ground silver equivalents. Now, compare that to our “peer” group, which are trading on average at around $1.30 per ounce of in-ground silver equivalents. The math is fairly simple, we are being valued at about a third of our peer group. And that valuation is based strictly on our resource estimate. Let’s not forget that we have two operating mills with a current capacity of 800 tpd, which we expect will allow us to be self funding in 2010. We think there is tremendous upside to our story.