report, I went back to read the interview from last December where Pierre also comments on this report. But the values he states are different. Does anyone know how/why they are different and which the correct numbers are (see underlined section below)? If there truly was a report, I would think it would be public record. I posted the entire article below because I found some of his statements so incredible (in bold).

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TWST: Would you give us a short history of Silver Falcon Mining? Then, please bring us up to date as to what's gone on since we last spoke with you.

Mr. Quilliam: Briefly, we started in 2007, when we had the opportunity of acquiring a lease on gold properties on War Eagle Mountain in Murphy, Idaho, in the Owyhee Range. This property is part of the Three Sisters Mountains in the Owyhee Range in Idaho. The Florida and the DeLamar mountains were heavily mined by Kinross Gold in the past. We subsequently filed about 1,000 acres of claims with the Bureau of Land Management for mineral extraction.

Since then, we've acquired the services of numerous heads of geology, mining engineers and related disciplines. Mr. Roger Scammell, who is a well-renowned geologist, heads our program. We've contracted with Mr. Rick Walker, another geologist. We are also on the edge of hiring a permanent geology department head for the company. And we are also looking at establishing an overall plan on core drilling in the War Eagle area, so that we can develop a three-dimensional picture of the inside of this mountain to better understand where the gold and silver veins are exactly, and their composition and their value - subsequent to which the mining engineers that are on site will decide as to methods and ways of accessing those veins.

In the mean time, we have bought a 20-acre property at the foot of the mountain on which we have established a mill, which operates on a 24/7 basis. This mill presently is processing ore from the old dumps on the mountain. This mountain had been mined sporadically since the 1870s, and until about 1900s, early 1900s, when a succession of financial disasters in the world brought it to a standstill, and then was sort of forgotten about with the wars and so on and so forth. The old tunnels were all stripped of whatever metal they had for the war efforts.

Back in the 1980s, a consortium of Chinese bought the property from a delinquent bank loan and decided after a few years of ownership that mining was not for them. They were more in the investment field than in the mining field. So they turned around and sold it. We happened to be handy at that time. We purchased it recognizing the value of what there was on that mountain, and in that mountain.

And that brings us to today, where we have an operation which is producing revenue for the last two months based on bullion dore that we are smelting on site from our own concentrate derived from the dumps on the mountain - the old dumps on the mountain which contain quite a bit of gold and silver left over from the early days of mining. So that's where we are now and we are going on to greater and bigger things as we progress in the coming years.

TWST: In a recent press release, the company announced it is seeking bids for underground exploration at Sinker Tunnel. What depths are you talking about drilling and is any of this surface mining?

Mr. Quilliam: First of all, the mountain in the winter months is inaccessible due to the depth of the snowpack out there. But in the summer, of course, we will be doing surface drilling next year. But in the mean time, we own a tunnel which is directly under the mountain and crosses the main veins of gold and silver in the mountain, and this tunnel is at a 5,200-foot level, where winter is relatively mild and the maximum amount of snowpack a year is three feet. This tunnel is in pure granite, has been refected and inspected and so on. And our plan is that upon production of a drilling model by our geologists, we are going to put out for bid this coming month for the core-drilling companies to go in and start from the inside of the mountain drilling upward, downward and sideways to evaluate where the veins are exactly and their contents in gold and silver.

TWST: Would you comment briefly on the Silver Falcon's strategy in the silver market and pick out the trends that you believe are going to be important there?

Mr. Quilliam: Gold and silver appear to be on an upward climb that is going to be sustained for the next at least five years. The gold reserves of the various companies in the world have not increased to any amount in the past five years. As a matter of fact, they have decreased. And the gold usage and the silver usage in the world as a precious metal, not only for jewelry, but for commercial and industrial use, has been increasing year to year by a factor of 10% to 20%. As a result, an imbalance has been building between supply and demand. And of course, we being on the supply side, see nothing but increased revenues and increased profitability in our future.

When we first got into War Eagle Mountain in 2007, when we acquired the property, and leased that property, and subsequently ,when we filed the claims, gold was at $650, while everybody knows today it's at $1,700 and climbing. Silver at that time was $11, and today again $31 and climbing. So there is nothing ahead of us but an increase in value, according to analysts that predicts anything but growth in both value and demand on the gold and silver market, which is what we mine exclusively. To our knowledge, there is no other metal in the veins that we are planning on milling and mining. But should we encounter other metals, of course, we would look at it with interest and have our financial people extrapolate whatever profitability we can derive from it.

TWST: Realistically speaking, what do you expect out of Silver Falcon in terms of future prospects?

Mr. Quilliam: In terms of future prospects, let's take it one step at a time. First, the stock, which is grossly undervalued, presently is trading at close to $0.06. We expect that stock to go up by factors of hundreds of percent annually, simply due to the comparison between other gold producers and ourselves in the way of the share structure and the share value. Secondly, since gold is going up in value and our production is going up in size, of course, the profitability of the milling process will more than cover for its expenses, and also, we will more than cover for future expansion and to the company as a whole.

Now, recently there has been an institution that recognized the potential on site and offered us a line of credit of close to $10 million for development and core-drilling exploration, filing 43-101, trying to list our company on the Toronto Stock Exchange - where most of the world mining leaders are. And we've taken necessary legal steps to fulfill the wishes of both the line of credit people and ourselves and board of directors of our company, and have filed an S-1, and are on the way to further development of the company and to a full-fledged mining company, which is already a gold and silver producer.

TWST: Is the balance sheet in place to follow-through on any other opportunities that may arise down the road?

Mr. Quilliam: Absolutely, our CFO - who, by the way, has been brought up to the level of director in the last month - has developed various models and various controls to enable us to jump at any opportunity that presents themselves. The Orofino vein, which is crossed, by the way, underground by our tunnel, shows potential of a 2,000-foot in height with an extent of 12,000 feet in length. This is so far as we've been able to ascertain, therefore the value in that ore body alone, and there are three of them crossing the mountain, the value in that single ore body alone should make up for not only profitability and rentability on the mining of it, but should also provide for possibility of acquisition either in the area or elsewhere in North America. The board of directors has decided that North America is where they wish to establish mining operations for the time being. We have not looked at outside venues, places like Africa or Europe, Asia or anywhere else. We have decided to limit ourselves to North America. There are plenty of opportunities. As a matter of fact, we are considering at present other opportunities in the surrounding areas.

TWST: Within the financials, if you were an investor in this company, what do you believe are the most important metrics today for understanding your business model?

Mr. Quilliam: Basically, you've got to be in the gold and silver market. From an investor's point of view, this is not a short-term jump-in, jump-out, sort of casino-type investment. This is an investment, which is going to be long term; this is an investment which is going to bring back large amounts of profit, derived from early joining of the participants in the company, participants meaning shareholding. And anybody who has a substantial, controlled portfolio, should at this time, in our opinion, be in the market to acquire shares of companies like ours, who are poised for sharp upswings in value.

TWST: For the investor who follows your company, what would be the next milestone that they should be on the look out for?

Mr. Quilliam: Completion, as there are a number of them. The next one that we're looking at is completion of our milling operation. We have a mill, which we've expanded since opening a year and a half ago. We are completing a smelter, which is going to be in full operations early in the year - in the new year. We are going to establish a close circuit, a flotation circuit to recuperate 100% or close to it of the precious metals that flow through our circuits, that's the first milestone.

The second milestone will be the development of a 43-101, complete with recommendations by the combination of mining engineers and geologists as to the direction to be taken by the corporation in its physical development of the underground mine.

And the third milestone will be our representation on the Toronto Stock Exchange in Canada, which is the most senior and the most experienced representative of mining companies and their trades anywhere in the world that we have investigated.

TWST: Please tell us about Silver Falcon's management team and give us some insight into their backgrounds.

Mr. Quilliam: Starting with myself, if you wish, I'm a financier that's done well in the last 40 years. I have done a number of industrial and commercial ventures, some of which have been highly profitable, others have been less, but on the overall, came out ahead. As a COO, I have appointed a university graduate, who holds a master's degree. We have gone out to search the market for the best and the brightest - namely Mr. Roger Scammell, whom people will know, no doubt, remember from his days at Scorpio Mining. He found some large deposits of gold and silver in Central America. He is also a mature and well-rounded out geologist in the world, and various disciplines and various conferences in the world. Under his leadership, we have approached a number of mining engineers and geologists to build for the company a steady and knowledgeable geology department.
For our financial, we have gone outside and recruited Mr. Thomas Ridenour, who was an independent CPA after having served in the commercial and industrial fields in a number of public companies. We have brought him on board as a director and CFO. And Mr. Ridenour has complemented the side of a regulative financials if you want in our corporate side. From the point of view of public relations, we've retained the well-known public relations firm Yes International, and that has been going on since 2007. From the point of view of legal, we are represented by a knowledgeable group of lawyers in Investment Law Group in Atlanta, Ga., and we have one of their best as our SEC lawyer. We are fully compliant in all our filings, all the requirements of the public world. And basically, we have in Idaho a team of experienced local managers for the mill, the mine and so on and so forth, that have done nothing but good for the public appearance of the company toward the local population and the resultant smooth operation.

TWST: In summary, what will be the key message you wish to convey? What compels an investor to include SMFI, not only as a part of their current portfolio, but also as a part of their long-term investment strategy?

Mr. Quilliam: What would compel an investor is the combination of factors. Number one, there was, according to the USGS, which published in 1926 a report that the mountain held at those days' prices approximate $10 billion. And gold at that time was $25 an ounce, and silver was $1 or $2 - basically, silver was considered as a nuisance. So if there was $10 billion in 1926, God knows today what the numbers will be, but that's number one.

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The 8K from last week stated "In a 1926 USGS report, it was believed that the mountain contained $2 Billion dollars of Gold and Silver" -- why the difference??

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Number two is the price of the stock, although not reflective of the position of the company, for the future it is certainly very attractive to anybody who wants to get in on the bottom step and be carried right to the top of the escalator. And those two factors together should make anybody that understands the potential of gold and silver, let alone the company, but simply the potential of gold and silver as metals and as revenue-producing metals, should be eager to jump into a situation such as this.

TWST: Is there anything that we've overlooked?

Mr. Quilliam: No. Frankly, I think we've covered it all. We're very busy going onward and upward, if I may say. And with the completion of various stages, which have been very successful in the past, with completion of these stages in the coming months, I think we shall have a great year ahead of us.

TWST: Thank you. (KL)