Good Afternoon LongSFMI and others. Well, I thought the update was very informative and have cobbled together a few thoughts.

Investing in a junior explorer/developer is something like reading a mystery adventure. You progress through a series of facts and clues wondering what the next chapter will bring. The updated history helps to flesh out the roadmap and mental image of what we are dealing with. The previous information on the website was somewhat disjointed, so this update is most helpful. The history and development of the War Eagle mining project is a contrast to what was then, to what is now possible with modern day technology and geological expertise. The historical geological data and mapping is a goldmine unto itself. We know that historic mining efforts were much costlier and most inefficient. Only the richest ore with the minimum of effort was mined and very valuable ore was left behind. It would appear that the prospects are exciting not only because of the easy access to valuable resource left behind but also to the rich veins present as well as the promising clues of future discovery. So the exploratory door is wide open. The cherry on top is the grub stake gift of all the tailings.

So, as usual, we have many positive indicators blended with unknowns. Imagine what it would cost today to develop the infrastructure in place for the War Eagle project, from scratch, if you had just discovered it today; hundreds of millions I would guess for over three miles of tunneling through granite. Throw in all the years of geological reports and wasted tunneling/adit effort, prospecting, surveying, filing claims, permitting, hiring and managing labour, equipment purchase and maintenance, road/rail construction, supplies and so on. The SFMI report gives us an excellent understanding about all of it. As an aside, I can tell you from my brief management experience with a junior explorer (Timmins, Ontario) called International Falcon Resources, believe it or not, that I never really understood how long everything took until then. We were greenhorns and the learning curve was brutal. Just acquiring old claims and dealing with government was enough to test the mettle of the most patient. Investment capital needs grew with the project. Hiring the right geologist was crucial. Meeting the demands and expectations of impatient shareholders, filing quarterlies and the annual report, holding an annual meeting, dealing with regulators and the securities commission, being most careful in the wording of every news release, working with partners, drilling and waiting for assays…on and on it went…never fast enough. Paying lawyers, accountants and voting a BOD etc. It took years to get to square one before there was even a hint of the possibility of mining. Joint venture partners were needed. The impatience of many shareholders was brutal. Claims of incompetence, fraud, malfeasance and so on went with the territory. We always had to be more than careful about what we said and ready to back up everything. The personal price was significant, as well as to the pocket book. To top it all off, the timing for the mining sector couldn’t have been worse post Bre-X.

Now compare all that to how quickly SFMI has moved along. It is quite remarkable.

Getting back to SFMI, the report gives us much to consider. The sinker Tunnel access allows for very healthy profit and especially so if a mill were constructed in it or proximal to it. If the cost of mining is about $170/ton, that gives us net profit of $830/ton per gold equivalent ounce with gold at $1,000. The upside is phenomenal considering, as I do, that gold will head for over $5,000/oz. in the next few years. The potential is scary. Having the historic gold/silver ratio benchmark to work with is another perk. I am curious as to how the grades will change with depth knowing that historic surface grades were extremely high and diminished to depth. But, alternately it was reported that the ore did increase in value in several areas, including one area from the eighth level to the ninth and in the Golden Chariot it increased from the seventh to the eighth. New geological techniques that allow for reading the “pitch” of the veins, the understanding of the cross fracturing, intersecting, and fissuring elements of the ore deposits will help reveal their extension laterally and at depth. The Piper and Laney report indicated that the veins were continuous for long distances. The Sinker Tunnel vein access indicated that the gold/silver weight ratio of one to sixteen was as strong in all levels of the Oro Fino/Golden Chariot vein. It is suspected that the better understanding of the complex, often intersecting system of veins where large deposits are found, could allow for the discovery of much more high grade ore. The theory that primary ore developed in the lower regions of the mine can be determined by access from the Sinker Tunnel via raise to the vein above, intersected by the Golden Chariot shaft, and then following the vein to further depths.

The upcoming computer generated, two dimensional map will be most interesting and reveal yet another grasp on the mapping of War Eagle with ongoing updates. I am looking forward to future, progressive survey and exploration reports with the understanding that we have two respected geologists on site. I noted that SFMI plans on raising additional capital to complete the latter and wonder how much further dilution may be needed, or if the company will have sufficient capital from the expected near term production cash flow. I wonder if the bulk sampling from accessible veins will be high grade and will enhance the grade/ton put through at the mill, which will increase the profitability. It will be most exciting to receive the survey estimates for proven, probable and possible. I’m not sure how long this will take but whatever the time schedule, it will be light years ahead of many promising exploration plays out there.

We all know that it takes anywhere from 5 to 10 years for an explorer to become a mine and that only about one in a thousand have any hope at all. So, SFMI is in very rare company with production starting soon. The near term pro forma production estimates are tantalizing and might surprise to the upside. The potential for high grade ounces-in-the-ground, perhaps up to four or five million is not out of the question in my mind….given the historic production values. If progress is positive, I suspect that SFMI will be a take out target sooner than we might guess due to the incredible bull market we will see in the PMs and the diminishing production globally…coupled with soaring investment demand.

I think the tailings production estimate may be most conservative since some astute longs who have been to the site support the assumption that the initial tailing sample grades of 5.1 gm/ton gold and 72.7 gm/to silver are in the low range from the Belle Peck tailings and that grades will be higher from the other 15 tailings dumps, shaft material and possible near term vein material.

I have a few concerns which nag at me to be totally honest. One is the “off-shore” connection, which I realize can be totally innocent and legal. However, it raises a perceptional red flag with shareholders/potential shareholders due to the recent negative visibility such business ventures have raised because of large hedge fund and corporate, illegal tax activity which is now under scrutiny. The other somewhat confusing area has to do with the Chinese corporation, Laoshan, if they are still a large shareholder/investor in Goldcorp or in SFMI, which I believe they are, and what their impact may be with respect to shareholder interests. Also, I am hoping that management will proceed, once the OTC listing is completed, as quickly as is possible to list on the TSX venture exchange. Now I sound like just another impatient shareholder, but I believe that it is crucial.

Well, pardon me for babbling on. I am sure other shareholders have much more to offer but at least, those are some of my thoughts. I welcome any and all opinions on those above expressed.

For newcomers the grades can be confusing. 1 PPM = 1 gm/tonne; 1 oz. = 31.1 gms.;

1 ton = .893 tonne;

Cheers all!