I did some DD on Iliad Research and Trading & on guy who is the solo act running the thing. The fact is that back in 2009 & 2010, he pulled pretty much the same act involving another company. I don't know yet whether he is above board or not but I looked at some of the court filings & they look like templates for what is unraveling here. Thing is, he can not break the ownership canundrum with PQ unless he succeeds in getting it done another way, which would account for the tactics thusfar, I imagine.

Its like this, though: even if he succeeds in prying apart SFMI's ownership lockdown, he still has to figure out how to beat PQ et al at the mothership company, to whom SFMI owes the whole kit 'n caboodle, so kinda looks like the benefits of PQ setting up a second, controling entity that operates as a royalty company.... the overall genius of the thing kinda jumps out at ya.

PQ set it all up to protect himself from having his risk turn into a costly failure. It seems to be on plan, even with all the trouble that is afoot. And anyway, I trade it in and out, so its never been much of a problem for me to concern myself with.... I think everyone would have been better off trading this like I've done.

I never thought the thing was a slam dunk with all the cards known; and I'm also not a believer that he is just scamming everyone and playing out a complex fraud. The hand held by each player who is belly up at the table and sucking on a big ol' cigar... the mix of complexities is far too much of a complicated decision tree to decipher on a heads up basis, but that said, it is not like the setup is a prescription for inevitable failure, IMHO, either. Its a very complex game that some very smart people, including but not limited to PQ himself, have been slowly playing out.

My basic thought is, and always has been, that PQ is accutely aware that most risk-takers in his position in a start-up junior miner ventures... most in his position get robbed by the big-time pro's, and I think his basic thought was to avoid, if possible, selling off too much of the company to do the dance that he was expected to dance. Thats my guess about why he operated differently: he wanted to try to come up with an approach that was an escape route from being pinned down in a box canyon.

Now, it looks like one of the feared thievery pro's has stepped into the open. I figure the next move will involve a legal battle or two to prove whether the player who showed up is the short artist who appears to have been at play here this last year.

Your average joe proly is worn out, but I figure the real musicians are just now getting their instruments out and we are about to see quite a clever thing or two uncurl on us.

I chart for a guide, though, and I trade in and out. I never gave a tinker's %$#& about maunderings about his character or any such thing. He is as pure as the driven slush, LOL, but no mre so that most everybody involved at a high financial level, IMHI. So what. I like to study how these guys play their cards and doing so is a far different thing from liking or disliking the guy.

I just think making money on SFMI is a volume based deal. If there is more vol at the bid side, we come down. At the ask side, we go up.

I do think it is highly likely that there is a real short seller & I think PQ is doing the right thing by setting the stage for a legal battle. My bet is there will be counter-suits to balance the battlefield. And I bet he and DLNY, the MM he has to have to be correctly under the auspices of FINRA.... I bet they have tracked the trades for a long while & they have evidence.

They need to have a warchest to throw at the thing, and given that it was they who calculatingly made the move to refuse to issue the shares (as described in the 8K).... I figure they are not scrambling all that much to reply to the default fired off in their direction.

So, I never thought they would be destroyed, no matter how they get assaulted, because they have the second company, which can (ultimately) fall back on demanding that SFMI pay the waived rent due these last few years. So, even if SFMI gets pried open with deftly weilded legal pry bars, they could just roll over and sock it to whoever ends up "winning" the current wave of legal warcraft stuff.

Ultimately, the legal setup favors SFMI, even if they don't win the combat over the default of shares that are the subject of the lawsuit.

I want to see if there is a warchest in place to hit the ask & execute a short squeeze. Like I said earlier, if they force a short squeeze over all this, they obviously prove there is a short artist in the recent trading arena. Yhe very act of having to cover proves the obvious.

By forcing a short squeeze, they can force the guy out into the open and turn the tables on him.

We'll see.

I still think PQ has been far cleverer and far more competent about running this little company than he is said to have been. I think he always figured there were hiden enemies just behind the vegitation wall at the edge of the clearing.

I think he figured he was going to see people make attempts to eviscerate his high risk deal. I think his chief concern has always been to keep agents-unknown from pulling off the kind of company theft that happens all the time to little start-up mining ventures. Hence, he never played the game according to the expected guidelines. Effectively, he appears to me to have deliberately taken a non-standard approach, and my guess has always been that he did so out of cunning rather than out of inexperience or incompetent. All may think he was just robbing the shareholders, but I refuse to go along with that line of reasoning because of the way he set himself up (and the others in his family, too) to get paid in non-tradable shares.

I decided long ago that I was willing to let him try doing it a non-standard way because I firmly think that doing it the standard way would have doomed the company anyway. The dynamics of the 43-101 drilling approach, for example, are a formula for a one-way pronlem path. Its a wash-rinse-spindry cycle from which a player has almost no chance to escape, once he is forced onto that path. Do the filings, drill a bit, sell off as small a bit as possible to finance the next leg of needed forms.... and do it all the same way over & over again.

It seldom works so that the guy originally taking the risk ends up winning by holding the cards at the end, but I think what PQ has attempted was a clever way of trying to avoid the otherwise inevitable.

And I don't think that havong a threat actually emerge, who is trying to pull off this very thing, and who has done it in 2009/2010.... I don't think the coming out into the open is all that terrible. It looks to me like the threat has a face now and it looks exactly like the very thing it always looks like in little mining ventures like SFMI. PQ appears to have been spot-on in his fears that this is what he actually faces, behind the scenes.

I was willing to be onboard, from time to time, because I think War Eagle Mountain is uniquely valuable. And I kind of like a guy who will, at his age, try to pull off a hard deal to pull off.

And given the two-company structure that is in place, it also appears to me that the end is not yet predictable. He may actually pull it off.

And anyway, when I put myself in the shoes of a guy who wanted to use these kinds of techniques to steal a company from a guy like PQ, it always seemed kinda obvious to me that one of the things I have been blogging about would have been that PQ was not playing from the prepared sheet music. Thats really why I never took all the clamoring as very unusual. I'd have been clamoring too if I were counting on pulling off a theft of a company and the chief player sitting across from me refused to play the game the standard way, LOL.

So I watch for the next set of moves, and in my book, the volume fingerprint is going to be the tell-all.

So, now we come to find out that there are going to be legalities involving whether there has been a breech of contract by either SFMI or the guys who are accused of shorting (in breech themselves). And obviously, in that the evaporation of sell side support has resulted in a long set of green-bar days, I'd say there is at least circumstantial evidence supporting the accusations that there is fraud involving short selling.

We'll see.

Imperial Whazoo