As a large shareholder of SFMI I'm growing more impatient as time passes on. I feel that previous PRs have been either greatly over stated in terms of progress or in some cases, intentionally misleading. In either case, I'm tired of seeing my account wither away while SFMI stockpiles concentrate with hardly even a nod to its shareholders. With the price of Gold & Silver soaring, I feel that as we are (as has been publicly reported) producing both of these, I cannot see a reason why we have no reports stating assays from any of the ore laying around the mill site. Until the markets can attach SFMI to Gold and Silver, it will continue to inversely track their climb up the charts. I think I speek for most when I say that we'd like to see hard numbers.

In the Feb. 3rd PR it was stated that, "On December 15, 2010, the Company started to process the OSO mill feed. Currently, the Diamond Creek Mill concentration tank contains only concentrate from the OSO. The Company will soon empty, dry, and assay this first run of the higher grade OSO material." Rich, are we ever going to follow through and report on this, or is this going to be a repeat scenario of the Nov. 30th PR? I know you have gotten an earful already about this but in case you have forgotten it was reported on November 30th that, "...This first shipment, net 498 lbs. of concentrate, when smelted, produced 283.3 lbs of Dore bars which are currently being assessed for their gold and silver contents. SFMI will sell these bars to the smelter for CASH REVENUE. Management believes that this transaction should consummate within the next ten-fifteen business days and will report on both the revenue and assayed values." To date, we have yet to receive reports of either revenue or assayed values. Call me impatient but it has been a bit past 15 days.

Can you give me a heads up on some possible timelines here? I know the 10k is due shortly, but I'd really love to see the assays from the first run of OSO material. Also, I read mention of the Lab being built, but I'd really like to know how the on site smelter is coming along too.

Thanks a lot.

RKs Response:

I’m sorry that your patience is running low, I feel that SFMI is one of the better situation for a junior on the market today.

First, the Belle Peck adit pile, 5200 tons, was used to tweak the mill circuit, train personnel and, hopefully, establish a smelting arrangement. The Belle Peck was a very low grade pile and the first 498lbs of concentrate was from the first 20-days of operations, whereas the mill was in its infancy of being calibrated. The smelter gave us time frames which we believes was accurate and reported as such to the shareholders. The confusion starts with the difference between dore and bullion dore and the confusion on how the smelting occurred based on a report from the smelting facility. In short, the Company eventually did receive it payment from the sale of this very low grade dore and, as the pr stated, it would be reported in the 10-K which will be due out before end of March. Because we had a number of industry experts look over the smelting report, we feel the smelter hasn’t been completely up front on what was done or not done during this first smelt. We have sent inquire letters to them asking for a more complete explanations on the process of the first low grade pour. Because of this lack of customer support from the smelter, the Company decided that it would be better served to handle its own dore production on site. A PR went out explaining the build-out of both a lab and pour facility. But to assume 100,000 dollars from this first pout would not be accurate.

The Company beginnings in Aug. 2010, brought down 13000 tons of 135,000 tons of ore from the OSO zone. On or around Dec 15, 2010, the Company started to process the mill feed for throughput into the mill which occurred once the last ton of the Belle Peck was processed, around Jan 02, 2011. Since the beginning of Jan, the Company has been processing a higher grade throughput from the OSO zone, and this concentrate is currently being inventory until the pour facility is ready to produce dore bars. This in-house production will reduce cost, and allow the company to control the flow of its dore to the refinery without an array of middleman.

We have internal assays on all values currently being produced and/or stored in inventory, the third-party lab report is pending, but like most lab services who specialize in the mining sector, they are overwhelmed with work, so we are waiting in –line along with others for our turn and our eventual report which we will publish.

Thank you for your shareholder support and as soon as the Company has validated results, they will be put in print

Rich