April post: cobbling together the historical drilling results from the last two news releases, plus factoring in all the previous historical data (Kinross geological high value analysis and Idaho Bureau of Mines) additional to mining production information and high grade sampling surprises and recent geological observations, highlights the tremendous discovery potential that now exists for SFMI’s War Eagle properties. So, depending on one’s estimates, mineralization could be anywhere from 5 million to 8 million ozs. gold equivalent exclusive of tailings, and maybe even much more. The high grade to bonanza grade potential is truly exceptional. I’m sure you agree.

I my estimation, the value of any offers made for SFMI will be directly related to when they are made, the later the better going into next year. By then they will have to be extremely high to entice shareholders to sell. I’d hate to even guess right now.

I am expecting the price of gold to hit $1500 to 2,000 by/before year end.

I have only heard rumors to the effect that there is outside interest. Surely those close to Kinross know the potential value of this property as do others close to the scene and going forward I’m sure the news is spreading. Deposits like this are rare, as you know. Given the above factors, I don’t think an intense, closely spaced drilling program will be pre-requisite for resource-starved shoppers.

April post: 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.