Hi Chop!

I was at the Cambridge Show in Vancouver and got back home late last night. I have been to every one of these shows since 2003 and this one was interesting. Last year it was a bigger show but the TSX dropped 700 points during the day and the mood was extremely bearish. This year the show was suprisingly busy on both days, and the mood was cautiously bullish.

Much of the discussion at the booth was questioning why the stock was so cheap even after the good news that has come out lately. We believe that an iceberg order at 7 cents was holding up the stock late last week and early this week, and it looks like it was finally taken out yesterday. Today the stock behaved very well. It is also worth noting that even on higher volume of 150,000 shares traded, that still only amounts to a few thousand dollars worth of stock changing hands. So the resistance holding SMH down at these relatively low levels is not much at all.

There is a fine line between doing deals to raise the money the company needs in order to continue with the exploration objectives, and the risk of diluting the float. David Bending understands this and that is why he has worked to find investors willing to put money into the company at above market prices. I think it is also worth noting that no warrants were issued in the last financing, so it is less dilutive overall. No one wants to see the company share structure balloon out to several hundred million shares and yet the money has to come from somewhere if people expect the drills to begin turning again. The solution is to do small equity offerings and keep things moving forward while we wait for meaningfull revenues to come from the JV at Marudi.

cheers!

Mike Kachanovsky

IR Consultant