This table was taken from the actual Company Presentation, showing the potential cash flow from operations at various mill capacities and Gold grades.

Note, that Silver credits haven´t been included. And Gold prices minus costs of production have been set at $ 1000 per ounce (= cash flow per ounce).

Looking a bit into the future, if we can achieve commercial production in 2012 with average grades of 3 gpt, we should see a cash flow for 2013 (based on 250 tpd) of around $ 5M.

That would mean $ 2.5M for dividends, based on 75M shares issued (after exercise of all warrants in the money), which means a possible dividend of $ 0.03 per share.

And Tim Gallagher´s goal is, if production is showing favourable results, to expand the mill capacity pretty quickly to 750 tpd (preparation work for upgrade already done), with an estimated cost of around $ 1M. This could be paid out of the other half of 2013 cash flow ($ 2.5M), which is not used for dividends.

Looking at historical grades in Pinos with over 50gpt Gold and 260 gpt Silver (pure vein mining), one could assume, that an average of 3 gpt might be quite low, actually.

And Silver credits could pay for all mining costs, increasing the cash flow even further.

There seems to be some risk here (nobody knows the "real" grades), but quite a lot of potential for a big reward as well.

Just for the fun of it, if I assume, an average of 9 gpt can be achieved with a 750 tpd operation (probably 2-3 years down the road), we would be looking at nearly $ 40M XBR cash flow, meaning $ 20M for dividends = $ 0.26 per share (based on 75M shares outstanding then). And I´m pretty sure, the share price would be well over $ 1 by then.

And we would have $ 20M/year for our other two very prospective properties and for further aquisitions.

Plus this doesn´t even show the potential if we see Gold prices well above $ 2000 and Silver prices over $ 50, which is my expectation over the next 3-5 years.

As I said: high risk - high reward here !

FANTOMAS