Every once in a while I go back to the basics .Why I invest in junior gold stocks is one question. The other is, what do I look for in a junior gold/silver stock? How does SFMI meet some of those criteria? Of course, I have yet to find one that meets all criteria, but who has?

So, keeping SFMI in mind, what is so alluring about it? I was informed about SFMI by another long investor and advised to do my own DD, whereupon I became a holder, even though the risk was great (as iwith all juniors) and patience would be required. Being absolutely convinced that the PMs would be one of the best investment sectors, with the biggest upside potential/leverage over the next 3 years, is the “why”.

What to look for, again keeping in mind that very few juniors ever become miners…about one in a thousand…can vary, but there are still many promising plays out there. SFMI is one.

First of all it’s odd to find an unknown “upstart” on the pink sheets with so much legitimate and promising historical data from many reliable sources such as Kinross geologists, Idaho Bureau of Mines, The Idaho Geological Survey data and former miners on site. Rich, anecdotal mining and prospecting information along with historical publication reference publication lends further support to the intriguing story of SFMI. All the research leaves one to the conclusion that there is much high grade resource left in place and that there are most promising exploration discoveries to be made.

SFMI is a rare junior explorer (soon-to-be producer) in North America with a former high grade producing property in a historically prolific mining region with a supportive local government and local people friendly to mining, with a readily available skilled labour force. Environmental issues are not a problem which is most budget friendly. Look around the globe to see the tremendous, almost prohibitively expensive environmental obstacles that many juniors are plagued with. It could be years before they can put a shovel in the ground. SFMI can be a good neighbour and a good employer. A myriad of expensive and time consuming obstacles that so many juniors must contend with are not an impediment for SFMI. Geopolitics is another daunting, frustrating barrier for some excellent juniors. So, right off the start there are significant advantages for SFMI.

What stage are we at?

Most junior “miners” do not mine at all and they have many different “agendas”. Many need to raise/dilute and spend millions and just to explore and prove up enough reserves to be attractive to a potential producer (a producer hungry to replace depleting resources/reserves). This can take several years and credit is tough to get. SFMI is already on the doorstep of production…close to cash flow with high grade material on site beside its almost functioning mill. Try to find those ingredients in a junior anywhere in the world. There are next to none. Then think about immediately accessible, minable gold/silver reserves existent in and proximal to the mines, adits and shafts of SFMI’s War Eagle Mountain properties…all within the reach of the Sinker mine tunnel. Veins are known to run to depth and length. SFMI can expediently drill and reach rich ore. It’s not just a grassroots plot of land that needs 5.000 holes drilled over 5 years to define a resource with economically mineable reserves. Cost of recovery and quick access and sale to market are huge factors in mining profitability. All of the above data and NRs to date suggest SFMI has that real potential. It owns valuable assets and SFMI is soon to be a viable business, which makes it a buy. When I look at that chart of the life cycle for a mine, SFMI has already leapfrogged the discovery and development stages taking from 3 to 5 years. It is at the start-up, low risk production stage where the share price rises steeply.

What about the need for ongoing capital?

SFMI already has historical resource estimates and drill results that are promising. Future resource estimates are and can be gathered quickly by on-site geologists and engineers allowing them to draw swift opinions based on results. All indications are positive and near-term assay results should be most attractive. But the familiar elephant-in-the-room financing question must be answered. SFMI will not fail for need of financing like so many juniors. It is not a “pretender” with a flashy website looking for “dot com” dough. SFMI will soon be cash flowing which will make it profitable, but there will be need for greater financing to increase and expedite ore recovery and much greater production….which vastly increases the share value. In essence, capital availability will only determine the speed at which SFMI grows…not its success. Don’t forget, SFMI will be highly profitable off the mark with low cost production and easy access to high grade tailings; shaft muck and wall face ore. Exploration, development and construction costs will be minimal in comparison to others. Will all these factors make SFMI very attractive to acquisition or a big bucks, reserve-starved partner? How about an XYZ offering $100 million for 50% of the action and taking on the entire project? Well then, how about an outright offer? The longer it takes the more it will cost…all to the shareholder’s benefit. It could be that Pierre Quilliams will decide to develop the mine, raise capital via share dilution, hire more management and grow SFMI. I wonder if he will because of the time involved. How much does he want and when? Does he have the staying power and expertise?

There is always a need for more information. It never ends until the project is shut down. SFMI then, has much to do. It needs better information which requires more expertise. The web site will need tables, location maps, map sections with drill intercepts and ample documentation. There are always questions about the abilities, experience and capabilities of management and directors. What are the controlling shareholder’s track records? Do the skills fit the job? SFMI needs mine operators, not mine finders so much. This is a grey area for SFMI at this time. To be fair it can be said that success and cash flow is what any business is about and to that extent, the jury is ou

How will SFMI make money for the shareholders and when?

Well, to repeat, production is at hand. Conservative estimates on 400t/day mill production, approximate 340 oz/day gold equiv. yields about 125,000 oz/yr. At $900/oz that is $112,500,000. That brings the share value to about $1.25/share. Accounting for higher grades, costs, higher gold/silver prices, other factors and P/E of 10 to1…there is a wide range of possibilities of share value anywhere from $3 to $10 going forward one year. Let’s not forget that the rich reserves as per the Idaho Bureau reports and Kinross geologist’s estimations could be anywhere from 2 million to 5 million ounces gold equivalent…plus tailings….plus new discoveries. Consider gold at $2,000/oz and silver at $30/oz. Come to your own conclusions.

What attributes does SFMI have that I like?

Cash flow/near cash flow…yes.

Near production…yes.

Exceptional management (school is out).

Resource estimates…yes

Prospect generators…yes.

Existing assets…yes.

Higher grade resources versus lower grade…yes.

Existing mining camp…partial with mill.

Existing infrastructure…yes.

Low development costs…yes.

In good jurisdiction…yes.

Short permitting times…yes.

Long lifespan potential…yes

Stage of project…good

Demand for product going forward…in spades.

Profitability…excellent.

Profitability time frame…excellent.

Stock dilution…minimal, tightly held.