Ecometals doubles in a day!!!

EC has forever been a dog since they announced disappointing results from their high priority target Rio Zarza earlier this year. So today was a great day for investors as the stock looks to have reversed its fortunes announcing the receipt of permits for its Brazil Manganese Operations and further updating Rio Zarza drilling. EC closed at .27 cents today up .13 from its low of .14 almost doubling its SP since announcing the news. EC has a long way to go from its high of $1.34 seen earlier this year but seeing its largest volume and biggest SP swing in a day since it gapped down on initial uneconomical results on Rio Zarza, it certainly looks like EC has made a bottom and turned the corner no matter what the outcome of drilling at Rio Zarza.

The stock is up on the Manganese news because they announced they received permits that will allow them to...

• Installation Permit (Licença de Instalação) that allows the installation of the beneficiation plant (crushing/screening);

• Operation Permit (Licença de Operação) that allows the excavation, beneficiation, loading, transport and commercialization of 600,000 tonnes of manganese mineralized material from stockpiles;

• Operation Permit issued to Ecometals Ferro do Amapa, that allows the Company to carry out advanced exploration covering the iron properties, including trenching and drilling.

In addition to this they will be shipping 270,000t of Manganese per year which will yield a gross revenue of $4.2M at the current rate, which they received the last shipment which was .32M for 20,600t of material. Ecometals has close to 3.3Mt of stockpiled manganese material which would yield potential gross revenue of $50M without the building of a benefication plant (which will enhance the potential grade of the stockpiled material to be shipped therefore bringing in more money).

So news that they have received permits for their Brazil operations is indeed good. They also provided an update on Rio Zarza for hole 7 and results for hole 6 that are further encouraging. They may or may not be on the track of FDN 2 but it seems like they are getting close. Results from hole 6 weren't going to be great because they missed the zone but hole 7 they announced they are within the hydrothermal alteration halo again and hit 100 meters of Mishuali rocks at the bottom of the hole.

Rio Zarza looks like it may yield up something yet as the facts remain that FDN IS FAULTED TO THE WEST and EC has hit rocks that are identical to FDN in every way but economical amounts of gold and in my opinion may be the edge of west side to northwest side of the alteration halo of the overall deposit. The fact does not change that FDN is faulted and completely cut off to the West so they know that it is out there and could be very close. The Aurelian geologist's thought that the potential for FDN2 was a bit further south than where EC is currently drilling and further east, but chances are significant that there is a further discovery related to Fruta del Norte with the potential of a further 6 -9M oz's associated with Kinross's FDN lying close by.

I am a believer in Rio Zarza and have never called it dead, although the SP has suffered after the initial disappointing results where the highly charged IP initially drilled turned out to be just magnetite. I reset EC in the portfolio at .15 for another run as I believe it has bottomed. The market gives absolutely no value to Rio Zarza at the moment so when they do hit, and I believe they will, EC will be off to the races and most certainly challenge 2010 highs.

Click here for Brazil manganese news

Click here for latest Rio Zarza results

Happy Trading