Hello all,

Just got back from an all night drive from Idaho to Washington to home in California and may not be completely coherent. (Never am anyway.) I read all of the comments from others that attended the meetings and Spiny, AGBugg, and Bluesideup all did a great job in summarizing the meetings. There are so many things I heard and saw that it is impossible to write them all down, and I'm sure you don't want to hear all of my disjointed thoughts anyway. I will try to add different things than the others have already said.

First, at the GHDC meeting, I was surprised how few stockholders were there. Almost all of them (perhaps 12 total including spouses) were agoracom contributors. This meeting continues to provide a more open and easier access to the operation and the management staff. You already know that Allen Simon was not there at this meeting. Whether this was because he just didn't want to take additional time or if he is not a stockholder of GHDC, I have no clue. Didn't ask.

The attendance at the SFMI meeting was about the same as last year, perhaps a little bit less. Some new people and some from last year not there. I would guess about 80 people.

One thing that came out crystal clear in the GHDC meeting was that all mined material coming out of the Sinker tunnel is subject to a 15% royalty payment from SFMI to GHDC no matter which vein the silver or gold came from. There are no other royalties of any kind including Newvision. That question was asked and answered at least twice. This is different than my recollection and understanding, but in discussing this with Bluesideup, it is consistent with what he knew to be true. This to me adds great value to GHDC and detracts from SFMI. I'm about 50-50 with both so it doesn't affect me, but it may others.

Prior to the official meeting, there was a tour of the facilities and I was able to spend some time with CQ at the GHDC meeting. I have been impressed with him before, but now even more. I asked several questions of him and there was complete openness and complete answers. "Why did you continue to operate for two years at only 20% recovery?" Answer: The designers of the gravity mill operations told us there may be 20% to 80%+ recovery with this type of process. Start up takes time to smooth out operations, time to find the right employees and to train etc. It turned out to be 20% recovery. But this all takes time to determine, then there is tweeking that can be done to hopefully improve it, and that takes time to determine, then if that doesn't work tweek some more, etc. The employees are being utilized for operations and construction. During this whole two year process it was also determined that if the milling process was shut down, it may have been determined by the stockholders (market) that SFMI was dead or dying. They didn't want to take that risk so that was another motivation to continue operations. As I understand it, the process that the material went through with the gravity system is not wasted effort, as it would have gone through that anyway on the way to the next process of the now being constructed floatation system, which is a necessary process prior to the cyanide leaching process. (This last sentence is my conclusion not specifically what CQ said.) CQ also said that the employees are increasing in value as their experience broadens. It takes time to find and train new people and the people they now have are versatile and are worth keeping. If the operation was shut down, they would be gone and tough to get back. The material that has been brought down from the mountain that is left on sight to be run through the gravity system will take two to three months, by which time the floatation system will be up and ready to run the 30,000 tons of material waiting to be reprocessed which will then result in 3,000 tons of material that will be run through the cyanide leach system. This leach system will be ready to go in about 24 months (if all goes as planned) which is about how long it will take to run the 30,000 tons through the floatation system.

There are no plans to bring additional waste rock down from the mountain as the present timeline hope is by the time all of the present on site material is run through the new floatation and cyanide systems, there will be new mined material available. I hope I said this in an understandable way. Bottom line to me is that this whole operation was actually thought out and decisions were based on results as they occured and decisions were made that were the most logical based on the circumstances as they came about. Would all of this have been smoother from the beginning with an experienced mining mill operator other than CQ? Maybe, or perhaps probably, but in my opinion, I think we now have a very valuable and experienced operator in CQ that knows as much or more about the SFMI operation and our needs as compared to anyone that might be found elsewhere.

In addition to the above, CQ is also very knowledgeable about the construction process that is ongoing. Ask him a question about each or any phase on the new construction going on and coming (cyanide leach facility) and he answers quickly and completley about what is needed and how it will operate. He is also using in-house employees to build as much as possible rather than outside contractors. (Part of this is the result of the Bill Earl experience I believe.) From my own experience in farming operations, doing this, if you know what you are doing, can result in substantial savings, but also takes a lot more effort on the part of CQ. It is so much easier to hand off these kind of projects to someone else (contractor)rather than take responsibility yourself.

CQ is also responsible for the Sinker Tunnel project. He in my opinion is worth every dollar and every share he is receiving. Call me a cheerleader, but I have been able to recognize real leaders over the years and I beleive he is one. One further comment I heard him say to someone else is "I've given five years to this project, and I don't want it to fail."

Next subject, Allen Simon. What a chirismatic individual he seems to be. I only saw his address during the SFMI meeting that everyone can see on the youtube video, along with a short personal conversation after the meeting. He had no plans to address the meeting and only did so as a result of AGBugg asking to hear from him during the meeting. You have all probably heard about his "big score" comment which is great to hear. It seems that he has great confidence in the Quilliams, as he said publicly, and that he will do whatever possible to help him (PQ). He seems to really like and respect him. In my personal conversation (brief) with him, I asked "Do you have help with you on your advisory committee?" trying to find out who might be on his committee. His answer was "Help? I have all kinds of help as I know 30 or more moneyed people that I talk with all the time. We will do whatever it takes to keep this project going." That was not the answer I expected and perhaps I didn't word my question very clearly, but I have the impression there is no formal committee and the last thing he wants to do is sit down in a committe meeting to discuss SFMI. He seems to be more of a person of action that is interested in SFMI and will spend as much or as little time as necessary to see that it succeeds and go on to the next business project. He doesn't seem to be one that wastes time and it says a lot to me that he is involved with us, especially sinse he has no background in mining. He sure must see something worth his time. He also said he never puts money into a project without meeting management and knows the operation personally. He has invested in this project but only after he did all of his "due diligence" which apparently is much more extensive than I ever did. He seems to be very careful.

I met and spoke with Bobby Joe (neat guy). This past year I, along with many others, was concered with what is actually going on at the mill. He was telling me of his picture taking experiences at the mill, and that more recently as he was walking around the back to take pictures of the vault area and that the security guards would approach him and tell him he was tresspassing and why was he there. He needed to get close to the property to take his pictures. Of course he wasn't tresspassing and he knows exactly where the property lines are, but the great thing to me is the guards are alert and doing their job. This was not a predetermined stunt to gain stockholder interest, but demonstrates to me there is something of value here and when we as stockholders are told there is increased security at the mill site because of what we are doing here, there is indeed increased security. Good job Bobby Joe and thanks again. You are providing information to us in many ways.

Compensation numbers. Spiny and Bluesideup respectfully asked very pointed questions to PQ about the compensation packages. First of all, there was no shuting off of the meeting when these questions were posed, they simply came later in the question and answer period. I think PQ believes he answered the questions clearly. I personally didn't understand the reasons he put forth, but I do understand that he is the man, and we sink or swim based on what he and CQ do. Floating shares vs restricted shares seems to be a huge distinction to him, but not so much with me. From what I have seen, PQ will not knowingly cheat anybody, but he also will not back down from what he perceives to be right for him and other board members (his family included) even if other's perceptions are different. But the bottom line for me is I'm willing to live with this situation even though in the end it will cost me. I'm of the belief that the payoff will be substantial enough that I won't complain.

There was a change in the goal of the N43-101. Originally it was to be historical in nature and be added to as new information would become available. Now they are saying the N43-101 will not be released until they have some drill results to provide. That of course will delay that until the middle or end of 2013.

Funds were discussed. In speaking with CQ, funds have been an issue. That is why (my opinion) things were not done in a timely manner that were projected last year. The funds seem to be arriving now for whatever needs they have, but are not there until needed. I suppose they have to continue to perform in order to receive additional money when needed. This seems to be true whether milling or drilling. So I don't think one has to be given up for the other. To me this is really good, because as you may recall, I have been an advocate of doing the mill operation so that income will come so that when purchase offers come, we don't have to sell. Much stronger bargaining position. PQ said funds needed are promised, but no guarantee.

I spoke with Lewis Georges, board member. He was really outspoken and enthusiastic about how much has been accomplished and how much we have to look forward too. I had never seen him like that before, as he always seemed subdued to me. He was also very enthusiastic about CQ and what he has done for the company.

There is some current delay with their current construction because the Owyhee County building inspector has been terminated. SFMI now has to wait for the building inspector from an adjacent county to come to give approval of the next step in their building. Time lost.

Other things were observed, but I can't think of them now. If significant, I'll add later. My overall impression is that this is a really big project. Bigger than I first understood. The amount that has been accomplished is huge. The amount left to do is huge. The people their to do the work are capable and I believe they can get it done. There is still considerable risk, funding being the biggest risk, but this is a project I would invest in (and already have). I just wish I had more money available to invest.

Hope I have added something worth reading.

Calfarmer