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Message: Re: SFMI today...Spiny
1
Sep 07, 2010 11:01AM

I hope I'm right too! :)

Seriously, the market still has yet to realize what has happened here. SFMI will go from a startup to a producer without any of the usual intermediate steps. No exploration, no aerial surveys, no trenching or drilling to speak of, no major share issuances (other than to pay bills directly), no 43-101 or feasibility studies, no big deals about permits or environmental impact statements, no construction other than the mill, no major financings, etc. While I'm sure SFMI has done some sampling and assaying, maybe some drilling, etc., really the thing of primary importance is that they built the mill. Nothing else was required in terms of getting to production. And because SFMI skipped all the intermediate steps between startup and producer, they may skip all of those intermediate price levels, too. Once information comes out that (IMO) they are netting $70M per year, soon to be $200M, it will be hard for the market to price SFMI at anything less than 3X income (producing gold miners are typically priced at 10-20X income). And 3X means $1 per share ($3 at 500tpd). Even priced at 1X means .33 - $1. I think we will see a gap that will never even come close to being filled. SFMI is one in a thousand, so I don't see any problem with it being in that 10-20% that end up with unfilled gaps.

1
Sep 07, 2010 03:09PM
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Sep 07, 2010 03:22PM
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