Silver stocks...

Bill,
Pan American Silver just published their latest precious metal reserve and resource data http://www.panamericansilver.com/documents/2010-NR-006-02-10_RR_Update_V6FINAL.pdf. Since Pan American is the world’s no. 2 primary silver producer and the most profitable North American silver company, I thought it would be interesting to compare the metal grades of ECU Silver’s project to those of Pan American. Since ECU’s mine is being mined as veins, I have compared to company to only the vein projects of Pan American. Up until last year, 70% of Pan American’s reserves and resources were comprised of their vein type deposit mines. This drastically changed in the 4th quarter of last year when Pan American bought Aquiline and their huge Navidad mine which is an open pit type mine. The vein type mines now only comprise about 25% of Pan American’s silver holdings. Pan American stole Aquiline for about 83 cents per ounce silver in the ground most of which was in the measured and indicated category, plus got a couple of other properties included for nothing. This shows how beat up the silver miners have recently been and helps explain why the stock price of ECU has suffered since if Aquiline was not worth big bucks then no junior is in this environment. Anyhow, the comparison table is below:

Surprisingly the tables show that the precious metal values of ECU’s ore is greater than that of Pan American in any category including their reserves. This is due to the fact that more than half of the value of ECU’s ore is the gold at current prices, and ECU could very well be called ECU gold. The dollar value of the metals was computed for both companies for a silver recovery rate of 60% and for a gold recovery rate of 72%. These are basically the recovery rates for ECU and the actual recoveries for Pan American may very well be better. I am in no way saying that ECU is a better company than Pan American, they are apples and oranges at this point. This is just a fundamental analysis showing that the grades of ECU’s vein type deposit are better than the average grades for Pan American’s vein type deposits which include their Huaron, La Colorada, Quiruvilia, Manantial Espejo, San Vicente, and Calcatreu mines. Pan American has made a profit mining these vein type mines the last several years, so in theory, ECU should be able to profitably mine their veins.

Regards,
Bryant