The stock of ECU Silver Mining Inc. (TSE:ECU), (PINK:ECUXF) obviously needs something to boost its performance on the Toronto Stock Exchange (TSE). Having climbed to $1.10 in the beginning of the month, ECU seems presently unable to go back beyond the $1 level.

ECU_Silver_-_Chart_-_26_Apr_2011.jpgYesterday, the shares finished at $0.90, staying unchanged from the previous close. The trading volume was not impressive either and remained below the average. Still, there are positive factors that might aid the stock for an upward ride in the future.

The company continues to participate in different business forums, trying to present its achievements to investors. ECU Silver will be exhibiting at European Gold Forum Conference (12-15 April in Zurich, Switzerland). The company also took part in the PDAC 2011 International Mining Convention, held in early March in Toronto.

The financial and production reports reveal positive trends too:

  • During the last quarter of 2010, ECU Silver shipped more than 400,000 silver equivalent ounces (AgEq oz). Besides, in 2010 there was a 250% increase in gold sales and a 144% rise in silver sales, calculated on a year over year basis;
  • Revenues from metal sales reached $19.3M in 2010, a jump of 194% compared to 2009.

Now the negative part of the story. The financial condition of the company is actually not so bright as it may seem at a first glance:

  • Capital expenditures for 2010 exceeded $21M. During the past year, cash and equivalents decreased by $7.3M; not surprisingly, ECU Silver had only $345 thousand in cash at the end of 2010.
  • ECU Silver finished the year with a working capital deficiency of $11.75M. Moreover, the company had a long-term debt of over $13.2M.

ECU_Silver_-_Logo.jpgIn addition, the company is overvalued by traders. Its market value of $278M is well above the net worth of the business, which is about $60M. This probably raises some doubts whether a substantial rise in the share price may occur in the future.

It is up to the readers to draw up conclusions and make up their minds whether to take a short or a long position in regard to their trading with the company’s shares. Maybe, they could use further information from the latest ECU’s presentation and from a video interview with the president Mr. Altmann before taking the ultimate decision.

As a final note, it is worth mentioning that the price of silver has been booming lately, which is a favorable event.