Following is my assessment of SFMI in a number of areas. It’s pretty general, with no numbers. I have included both positive and negative comments. For the record, I am long SFMI.

SFMI has what I consider almost unlimited potential. SFMI has no debt, cash on hand, a great resource, a mill under construction and (presumably) near completion, and high grade tailings ready to be processed and produce revenue. When/if the mining, processing, refining, and revenue generation begin, by any calculation the present share price will be a gift.

I see several fronts where SFMI needs to be, and presumably is, making progress:

Administrative: SFMI needs to get the audit done so they can move off of the pinks. Presumably this would also result in better communication, which would then be required rather than optional. I have been less than happy with their transparency. For example, the recent PIPE financing has not been adequately explained. Not that I think it was necessarily bad, for instance I would be quite happy if the funds were used to purchase the Sinker tunnel (which evidently was at least partly paid for w/ stock), construct the mill or expand the milling capacity. However, not letting the stockholders know the details does not engender trust and leaves a huge opening for the bashers (e.g. see SH). I really would like to see the audit and some financials.

Bureaucratic: Permitting, corrections to meet code, etc., should be well underway, and according to some reports should be completed soon. Again, I would like it if SFMI would keep us better informed. I understand if contractors screw up, if local and state agents disagree on interpretations of codes, etc., but I would also like to be kept informed. Again, not keeping the stockholders up to date lets the bashers run wild with their own negative speculation about what is happening. OTOH, SFMI has made relatively fast progress in putting together a mill compared to some other operations I follow.

Construction: As stated above, the development of the mill has gone relatively quickly. If they can get the mill assembled and producing, the tailings alone should produce more than enough to justify the share price. Upgrading of the roads also seems to have been completed, and work on reopening the various mines and tunnels also seems to be progressing. This is another area where I’d like to see more updates and specific information.

Development: The acquisition of the Sinker tunnel may turn out to be a brilliant move. If they can manage to put a mill in the tunnel, and use it to access the other tunnels in the mountain, then processing ore at an area that is accessible year round may greatly increase production and reduce costs. Moving smaller amounts of processed concentrated ore will be much cheaper, and fewer trucks will be needed to move the same amount of ore if they can be used year round rather than just part of the year. Even without a mill on site, being able to access the mines year round would be a huge advantage.

I realize this is a bit rambling, just putting a few thoughts down. Feel free to add, expand, correct, or comment.

spiny