It is always a good thing to challenge the status of any JPM and their management. The “resident detractor” you refer to brings up some excellent questions…that really should be addressed.

Since I am on a tight time schedule today, I will only bring up a few observations and trust that another investor is able to address the concerns in a more detailed manner.

There is an opportunity/risk cost to all JPM projects. There is also ALWAYS a trust factor which can always be easily questioned, deservedly or not. This aspect is almost always open to conjecture and assumption. This is part of the risk and requires a leap of faith, if you will, by most JPM investors. Detractors of any JPM can always make nervous shareholders even more nervous by working this angle. I wonder how many investors (taxpayers) in the US Gov Admin. really trust them as managers? How will we ever know whether we can trust Pierre, Rich and management? only by results…and results never come fast enough for most shareholders, and especially detractors. If one doesn’t like this huge risk factor, one should not be invested. Quite simple. It is most common to find that the principles involved demand a high return in return for putting up their financial stake and their time investment. High risk = high reward. What was the cost for the leases in stock and royalties? A 15% net smelter royalty to the management of Goldcorp is considered high…but what will be the return to the shareholders based on an 85% return on ? ozs/year gold/silver converted to gold equivalent?

Seems to me that $1.2 million is not a bad debt load…considering the high grade resource value in the tailings, the high grade, historical resource values in the mine and the high grade resource value in the promising proximal exploratory areas. ..with the infrastructure in place (which would cost millions and millions for most JPMs in an exploratory phase, for which they would have to massively dilute their stock and take years to develop). Many small JPMs with promise have already been delisted or sold.

As for the old bugaboo of salaries/compensation, check out other JPMs and come to your own conclusions. Again, this can be considered miniscule if the project is substantial with increasing resource base and ongoing production in an era of higher trending gold/silver prices, increasing demand and diminished production. Seems to me that the management has foregone much of their compensation in the short term in order to get the project off the ground and into production which should be within a few months. (all this quite pales in comparison to the ongoing rape of the US taxpayer with respect to the billions of bonuses and salaries and increased hiring at the likes of Government Sachs and the rest of the Wall St. thieves).

As for the smelter contract, I believe it is with a B.C, smelter nearby in Canada. I may be corrected on that. Having shareholders fund JPM projects is a natural course of events for all JPMs…so, what is the problem here? This is a public company. Shareholders will be handsomely compensated for their risk if the rewards are there…and many think they are. Many shares are restricted from trading as well, so this should enhance share value potential. There is also the possibility that management will buy back some of the stock.

Shareholders do take the risks while management gets big pay, , just like they do in US banks (Lehman, Bear Sterns, etc.), GM, Fanny Mae etc…except that these institutions are not only bankrupt and have lost billons in shareholder value, they are also being bailed out by the taxpayers…sort of a reverse double dipping deal gone bad.

With respect to the “transfer of value from the tailings into the pockets of management” point, our detractor assumes that the tailings do not amount to much and that there is no upside to the forthcoming additional tailings assays, no value in the infrastructure and upgrades, no value in the capital equipment and structures, no future in the high grade, in-ground resource, and nothing to be discovered by further exploration and no potential for an interested party to buy out the project. So, this assumes that once management has taken all the goodies from the surface material, they will hit the road and retire leaving all the shareholders in their dust and broke. It also assumes that management thinks there is no speculative upside to SFMI shares given that it is at 2 cents and that they have dismissed the possibility of a future share value of anywhere from 50 cents to $1…which would be incredibly rewarding for them, to say nothing of the shareholders.

So, it all boils down in my mind to whether or not I trust the management. I do not know Pierre. I do not know what motivates the man, how inherently honest he is or what hidden agendas, if any, he may have. I can only make an educated guess based on what has transpired so far and what happens going forward. I have doubts like all other investors. (I also have doubts about all investments.) Whatever his character and principles as a man, I can’t imagine him not taking advantage of what appears to be a once-in-a-lifetime bonanza opportunity with respect to the incredible resource value it appears SFMI is sitting on. I also trust a few of the major investors in SFMI who I have communicated with… who in turn, have trust in Pierre. That is good enough for me.

I am more optimistic in the PM sector going forward from here than I have ever been for over ten years now. I believe we are on the doorstep of some incredible gains in many of the woefully undervalued JPMs, gains that will be stimulated and driven far greater than we can imagine, not only because of the fundamental reasons and technical charts, but because the powerful entities that have made fortunes shorting the PM markets are already positioning or positioned to make even bigger fortunes by speculating on the long side of the PM and JPM markets. Any JPM with even a sniff of promise will be a high reward beneficiary. Any management that does not realize this must be inert. I don’t believe Pierre is inert…in fact I hear he is very savvy. Any JPM management that is savvy will have an agenda that will make them very wealthy and their investors will be taken along for the ride, either by design or by serendipitous good fortune.

Hang on to your hats folks, whatever PM stocks you hold. We are in for the ride of sa lifetime over the next few years starting any week now…probably next.