Golden Minerals Company

Below is a cut and paste of ECU's 2008 financial statement from Sedar. Sorry it did not come out in table form. The statement shows that for the year, ECU lost just over 18 million. Also, ECU had a bad year last year in several areas that will hopefully improve this year. Namely, they had a 2.67 million dollar unrealized loss in foreign exchange. This year the canadian dollar had advanced against the US, so hopefully this category will yield a gain this year. They also spent $3.92 million on stock based compensation which was high compared to 2007, and included a provision for a loan loss of $1.24 million. This loan loss provision appears to cover loans to employees which were backed by stock options when made which now have no value due to the share price drop. At year end, ECU also had accounts payable deficit of $3.35 million which was included in the annual loss.

I have not listed these costs to point out negatives, but to show that there is significant room for improvement which is likely to be made. Hopefully the employee loans will be paid back with the required interest. Also the Canadian dollar has improved. And also the recent financings and new mill cash flow should allow ECU to pay the old accounts receivable. Another possible cost reduction is the reduced and currently on hold drilling program. This reduced drilling should partially offset increased costs of feeding and operating the new mill. Yet another possible reduction in costs is interest expense since the latest finacing converted several million in debt into shares. Based on my Mill Optimization post last night, ECU may start generating dore sales of $19 million per year. This combined with savings and income described above should greatly reduce ECU's loss this year and result in a small profit over the next few quarters and years. I calculated the total company cost per equivalent silver ounce produced for Pan American, Hecla, Couer D Alene, and Endeavour Silver last year and it ranged from $14 per ounce for Pan American, to $18 per ounce for Hecla and Couer, to $22 an ounce for Endeavour which is a mid cap like ECU. In other words, almost all silver producers are operating at a loss at the current silver price of $13 an ounce, so for the share prices of this sector to really increase, we need higher silver prices. Regards.

ECU SILVER MINING INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF LOSS, COMPREHENSIVE LOSS AND DEFICIT

for the years ended December 31, 2008 and 2007

2008 2007

(in Canadian dollars) $ $

(restated)

EXPENSES

General and administration — Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,721,022

3,375,225

General and administration — Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,583,294

1,742,211

Stock based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,922,655

1,267,112

Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

148,054

123,225

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(103,623)

(390,383)

Interest and bank charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246,075

813,192

Interest on long term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,627,347

1,582,150

Financing fees for convertible debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

302,982

—

Foreign exchange (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,525,156

(688,302)

Provision for loan loss

(Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,242,934

—

Write-down of inventory

(Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 827,384

879,137

Write-down of mining property interests

(Note 6 (vii)) . . . . . . . . . . . . . . . . . . . . —

288,102

18,043,280

8,991,669

Loss and Comprehensive Loss for the year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,043,280)

(8,991,669)

Deficit, beginning of year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (75,775,084)

(66,783,415)

Deficit, end of year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (93,818,364)

(75,775,084)

Loss per share

(Note 16)

Basic and diluted loss per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(0.07)

(0.04)

Weighted average number of shares outstanding

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

242,609,557

228,045,838

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

243,790,807

230,748,016

The accompanying notes are an integral part of the consolidated financial statements

3

ECU SILVER MINING INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

for the years ended December 31, 2008 and 2007

2008 2007

(in Canadian dollars) $ $

(restated)

OPERATING ACTIVITIES

Loss for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(18,043,280)

(8,991,669)

Items not affecting cash

Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

148,054

123,225

Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,922,655

1,267,112

Write-down of inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

827,384

879,137

Unrealized foreign exchange loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,675,183

(879,705)

Accretion interest — convertible debentures . . . . . . . . . . . . . . . . . . . . . . . . . .

52,875

—

Loss on disposal of capital asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,688

—

Provision for loan loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,242,934

—

Write-down of mining property interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

288,102

Bank charges funded through warrant issue . . . . . . . . . . . . . . . . . . . . . . . . . .

—

146,619

Changes in non cash working capital items

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

479,492

(220,838)

Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(827,384)

(879,137)

Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(82,842)

264,963

Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,351,433

(559,145)

Cash used in operating activities

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,236,808)

(8,561,336)

INVESTMENT ACTIVITIES

Mining property costs & supplies — net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10,488,013)

(14,515,070)

Purchase of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,533,804)

(2,995,944)

Cash used in investing activities

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,021,817)

(17,511,014)

FINANCING ACTIVITIES

Shares and warrants issued for cash, net of cash costs . . . . . . . . . . . . . . . . . . . .

(4,869)

31,402,237

Proceeds from convertible debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,000,000

—

Financing costs related to the equity component of convertible debentures . . . . .

(55,153)

—

Increase in long term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,139,649

1,554,209

Increase in prommisory notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,534,033

—

Decrease in credit facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

(290,970)

Cash generated by financing activities

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,613,660

32,665,476

Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . .

(27,597)

(30,650)

Increase in restricted Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(435,150)

—

Increase (Decrease) in cash and cash equivalents during the year

. . . . . . . . . . . (8,107,712)

6,562,476

Cash and cash equivalents, beginning of year

. . . . . . . . . . . . . . . . . . . . . . . . . . 8,645,927

2,083,451

Cash and cash equivalents, end of year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 538,215

8,645,927

The accompanying notes are an integral part of the consolidated financial statements