ECU Silver Reports on Gold and Silver Operations for December and November 2009
Thursday January 28, 2010, 11:01 am
TORONTO, ONTARIO--(Marketwire - Jan. 28, 2010) - ECU Silver Mining Inc. (TSX:ECU - OTC:ECUXF)
ECU Silver Mining Inc. is pleased to report on its silver and gold fabrication for the months ending December 2009 and November 2009.
Highlights include:
-To-date in January, silver ounces precipitated, are close to the ounces
generated in November and December of 2009, combined.
- December yielded a silver equivalent of 52,752 ounces from the oxide
mill and 15,162 ounces from the sulphide mill.
- November yielded a silver equivalent of 52,533 ounces from the oxide
mill and 22,233 ounces from the sulphide mill.
- Average daily throughput at the oxide mill has increased to 650 tonnes
per day ("tpd"), exceeding the 500 tpd target by 30%.
The ramp up of the oxide gold and silver plant at Velardena, which was acquired in March of 2009, has been successful, despite the typical start-up challenges that are normal for new operations. The Company believes these challenges are behind it and expects the operations to perform more optimally in 2010. Evidence of these improvements has already taken hold as expected silver ounces precipitated in January of this year, should be close to the ounces generated in November and December of 2009, combined. The Company will also continue to ramp up its 320 tpd sulphide plant, also located in Velardena, which will generate additional gold and silver metals contained in concentrates, for 2010.
In December, the Company generated (see Table 1), a total of 592 ounces of gold and 14,272 ounces of silver from its oxide mill and also generated 124 ounces of gold and 7,102 ounces of silver contained in concentrates from the sulphide mill, which has been ramping up since September 2009. Using the current silver-to-gold ratio of 65 to one (base metals not included as equivalents), ECU generated 52,752 ounces of silver equivalents from its oxide mill and 15,162 ounces of silver equivalents from its sulphide mill.
Table 1: December
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(ounces) Oxide Mill Sulphide Mill Total
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Gold 592 14 606
Silver 14,272 6,189 20,461
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Silver Equivalent 52,752 7,099 59,851
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In Pyrite Concentrate (sent to inventory)
Gold - 110 110
Silver - 913 913
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Silver Equivalent - 8,063 8,063
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In November, the Company generated (see Table 2), a total of 584 ounces of gold and 14,573 ounces of silver from its oxide mill and also generated 180 ounces of gold and 10,533 ounces of silver contained in concentrates from the sulphide mill. On a silver equivalent basis, ECU generated 52,533 ounces of silver equivalents from its oxide mill and 22,233 ounces of silver equivalents from its sulphide mill.
Table 2: November
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(ounces) Oxide Mill Sulphide Mill Total
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Gold 584 11 595
Silver 14,573 9,021 23,594
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Silver Equivalent 52,533 9,736 62,269
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In Pyrite Concentrate (sent to inventory)
Gold - 169 169
Silver - 1,512 913
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Silver Equivalent - 12,497 12,497
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During November and December, the dissolution of precious metals in the oxide milling operations was impacted by high concentrations of copper in the solutions. The higher concentrations of copper occurred mainly because of the higher mill throughput levels during these two months, when slightly over 600 tonnes of material were processed per day, much higher than historical maximum levels of 500 tpd. Steps have been taken to bring gold and silver recoveries back to their normal levels by reducing the copper in the solution circulating through the mill.
To date in January, average daily mill throughput has increased significantly to 650 tpd and the copper levels in the solutions have been maintained at acceptable levels. The precious metals that were not dissolved due to the previously high copper will be recovered over time through leaching of the tailings.
Readers should note that ECU cannot provide production or cash flow forecasts. ECU is considered and recognized as an exploration and development company by the security regulators in Canada, and as such, is restricted by the regulators from providing specific forecasts. The Company holds a NI 43-101 compliant silver equivalent mineral resource of 40 million ounces in the measured and indicated category and 391 million ounces in the inferred category. Consequently, ECU's current milling operations represent only a minor part of ECU's mineral resources and this defines the basis for the classification of the Company as an exploration and development company. This classification will continue until production represents a material portion of the business, or until a pre-feasibility is completed.
A preliminary economic assessment ("Scoping Study") is underway, which will highlight, on a preliminary basis, the economics of larger milling operations at the Velardena operations. This is the first major step to completing a pre-feasibility study.
Michel Roy, chairman and chief executive officer, commented: "Several new initiatives and upgrades have, and will be implemented into both milling operations which will provide for enhanced recoveries as well as increased annual capacity. These new initiatives have already started to show their benefits as seen in our daily throughput of mineralized material at the oxide mill where we have consistently achieved well above our 500 tpd target, at times reaching almost 700 tpd."
Stephen Altmann, president added that "Our goal in 2010 will be to focus on three priorities. First and foremost is to ensure profitable operations in order to maintain a strong balance sheet; second, complete our Scoping Study; and third, resume exploration activities, with internally generated cash, to further enhance our mineral resource and delineate the rich massive sulphide discovery."
The Company plans, after the first quarter 2010, to report results of its milling operations on a quarterly basis, as is standard in the industry, rather than monthly.
About ECU Silver
ECU Silver Mining Inc. is focused on the exploration, development and mining of gold, silver and base metals at its Velardena District Properties in Durango, Mexico. The Company holds a NI 43-101 compliant mineral resource of 40 million silver equivalent ounces in the measured and indicated category and 391 million silver equivalent ounces in the inferred category. The Company also owns two mills with a combined capacity of 820 tonnes per day. ECU's mission is to become a pre-eminent silver and gold producer through the development of its existing and potential mineral resources at Velardena.
http://www.ecu.ca/s/Home.asp
http://finance.yahoo.com/news/ECU-Silver-Reports-on-Gold-ccn-214010785.html?x=0&.v=1
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Additionally, 'argoz' @ SH posted the following analysis last night which, as constructed, bodes well for ECU Silver going forward:
ECU Profitability
posted by argoz on Jan 28, 10 10:19PM
Today's news release broke production for the months of November and December into oxide mill, sulphide mill, and pyrite concentrate (from sulphide mill). The production of dore bars from the oxide mill and the production of lead and zinc concentrates from the sulphide mill are sellable at this time and generate monthly revenue. The pyrite concentrate is not being sold at this time but can be processed in the roaster and added to the oxide mill in the future to increase production from the oxide mill. In other words the pyrite concentrate will generate revenue in the future but not yet. If we do not include the precious metals in the pyrite concentrate then for the two months combined, gold production was 1201 ounces and silver production was 44,055 ounces.
Using the average gold and silver prices for November and December, and assuming a 3% refining fee for the dore and a 10% refining fee for the concentrates, revenue from gold and silver for the 2 months should have been around $2,054,664. If we add in revenue from lead and zinc of $61,612, we have total revenues of $2,116,276. So we have now exceeded $1 million per month in sales. Being as the oxide mill cost $8 million, I think we made a good buy.
The news release also said that both gold and silver recoveries were low because of the high copper content and that the recoveries for both metals have been restored to normal in January as a result of process improvements. The release also said that production at the oxide mill for November and December were slightly above 600 tpd and that in January production has been increased to 650 tpd. As a result of these two improvements, silver production from the oxide mill in January will be about the total of November plus December. This would put January silver production from the oxide mill at 28,845 ounces. If we add the average monthly silver production from the sulphide concentrates of 7,605 ounces, we should get silver production of 36,450 ounces in January. As noted above the gold production should improve also and for the purpose of this estimate I will predict 800 ounces of gold in January. Using current prices and above fees, revenues from the precious metals in January should be around $1,428,167. If we add in the average monthly revenue from the lead and zinc of $30,810 we get total revenue of $1,458,977 for January.
There are still several improvements going on which will build on the revenue number estimated for January. First, I do not think much of the gold pyrite concentrate is being processed in the roaster and fed in the oxide mill yet. This concentrate has a very high gold content and once flowing will improve revenues greatly. Also the sulphide mill feed rate is being increased from around 100 tpd in November and December, to 320 tpd eventually. Lastly, ECU will be processing gold tailings in new tanks as described in a news release several months ago.
In the MD&A on Sedar for the 3rd quarter of 2009, ECU said that cash development costs for the quarter were $2,659,698 and that revenues were $2,223,241. Based on the above production rates for November and December, ECU was producing revenue over that period at the rate of $3,174,414 per quarter. Based on the above estimate for January, ECU will be generating revenues of around $4,376,931 per quarter. Assuming costs have increased due to increasing tonnage and processes, ECU should have been slightly profitable in Q4 2009 and will be quite profitable in Q1 2010.
http://agoracom.com/ir/ECU/forums/discussion/topics/399007-ecu-profitability/messages/1320914#message
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