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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: Proud Deplorable who wrote (31414)	7/25/2005 9:47:55 PM
From: zoo york	Read Replies (1) \| Respond to of 313771

Hi Ralph! I have an opinion on the ECU report issued today... The report was completed under the most conservative assumptions, and only considered a narrow band of rock immediately adjacent to each drill core intercept. Even so, the report identified a 10-year ore supply for the mine operating at 300 tpd. The company has been aggressively increasing their processing capacity at the mill and expect to reach a level more than double that within a year, so lets just say 5 years of ore supply at full capacity. That is exceptional, and few companies in Mexico have proven up that much resource ahead of production. However, that is still only the tip of the iceberg. The report did not consider the resources present at the deeper levels of the two operating mines, or the untapped potential of the other 5 mines that are not in operation at this time. Given that production has been ongoing at the mines for over 100 years, and the continuity demonstrated in the vein systems, one could make a case that more than double the M&I and inferred resources exist in zones that can be easily put into production. The report basicaly admitted that the potential for additional reserves to be added is very high, once the company decides to do more drilling. I was able to visit the property and tour the underground workings of the mine last spring, and I came away very impressed with what I saw. The workings are very narrow, and I would not want to work a regular shift there, but they are very efficient at extracting the ore from the narrow width veins with minimal dilution. There are something like 20 veins that have been identified that are not even targets for exploration yet, as they are already able to extract more ore than they can process. The upside for this company is huge, yet they are already profitable on the basis of the current production levels. The share structure is bloated more than I would like, and the cash reserves are very thin at this point. They are servicing a debt obligation that carries a very high interest rate. These are hurdles that must be navigated successfully but given the monthly cash flow they are generating, and the canny management that was able to surmount those challenges on a shoestring budget last year, I am very confident for the prospects. cheers! COACH247 PS: For personal disclosure I have a small position of 17,000 shares and the same number of warrants from the last placement.