The following post was deleted from another board:

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The 10K really brought out the FUD.

Lots of statements taking standard disclaimers and making it sound like the end of the world- “We may have trouble as a going concern if a huge asteroid hits the earth”. LOL

And lots of twisting and outright falsehoods:

[quote]How can they be processing when the 10K states that they need AN ADDITIONAL 6 million to process ore? It's in the 10K, dude. They don't have the funds to process or are you saying the 10K is a lie? [/quote]

No, the 10K is correct. If you read it, it is clear that they are talking about needing $6M to start extracting (mining) and processing new ore, not the ore that is lying around. They have been processing ore since early last year, as noted in multiple PRs and filings, including the present one- “We closed on the purchase of our mill site in early December 2009, and have begun processing tailings in May of 2010.” “The development phase involves transitioning the mine from processing tailings leftover from prior mining activities to extracting and processing raw ore from the mountain.” And BTW, even though the report refers to all the above ground ore as “tailings”, the stuff at all the mine sites is ore, not “tailings”, since it has never been milled- and they certainly didn’t transport mill tailings back to the mine sites. And that’s according to the report from the Idaho Geological Survey, p. 19: “The only millsite in the study area with a significant amount of tailings is at the Dewey Mine.” And anybody who has been to the site and collected samples (including many of the posters here) knows that the piles there are chunks of unprocessed, uncrushed ore- not milled and pulverized “tailings”. And “don’t have the funds to process”? A lie, according to the same 10K. Something about a $7.2M line of credit. And they will be smelting and receiving revenue from a huge backlog of concentrate soon. And, BTW, that $6M will be spent over a period of 14 to 18 months- it’s not a payment due immediately- and they will soon be generating more than sufficient revenue to cover all their proposed expenses, so that much of that $7M LOC will not be needed.

[quote]nobody said that.. what has been stated is that they weren't processing ore, contrary to what has been stated here as fact many times. but the facts, in actuality, is that this company is not processing ore. [/quote]

Simply a lie, as noted above. It’s ore that’s been piled at the mine sites for over 100 years since the financial crash shut down mining operations in the area, but it’s still ore.

[quote]No processing of ore (Since SFMI doesn't have the 6 million needed as stated in the 10K) [/quote]

[quote]That's impossible. The 10K states that they need an additional 6 million to even start processing. [/quote]

Repeating over and over a lie about SFMI not processing doesn’t make it true. The 10K as quoted above states explicitly that SFMI had “begun processing tailings in May of 2010.” And BTW, the 10K also states that they have a $7M+ line of credit. Which makes the parenthetical a lie too.

[quote]The so called fact that there is material being stored instead of be smelted and sold to initiate a reasonable amount of return for the cost of milling is unconscionable on the part of corporate. [/quote]

They are storing the concentrate because smelters are so busy nowadays that they can charge UNreasonable rates for smelting. That’s why SFMI is building their own smelter, which is great long term thinking that will return the cost of the smelter many times over.

[quote]To date there is not an accurate accounting of a total number of shares. [/quote]

What the…???? Every 10K and 10Q has had an accurate accounting of the total number of shares. In fact, the present 10K gives a share count as of March 9, 2011. And if you want an update more than once a quarter, call IR.

[quote]They have no collateral. [/quote]

Another lie. The concentrate has been used as collateral for a while, as noted by PQ at the shareholder meeting. And obviously the line of credit comes from someone who would like to acquire $7M of stock at current prices without driving the price through the moon- and who also thinks that SFMI has something worth that much.

Let’s look at some of the positive statements in the 10K that seem to have been ignored to concentrate on anything that can be twisted negative. I've added some bolding:

[quote]Historical records indicate that the [b]Oro Fino Vein system extends at least some 12,000 feet in a north-south direction and has been observed to vary greatly in thickness (from 0.5 ft to 25 ft) and mill grades of 0.5 to 1.25 Troy ounces of gold per ton.[/b] Our owned and leased land encompasses only about 600 feet of the Oro Fino Vein system, but all of the major mine shafts that exist on the system. Several large pockets of very rich ore concentration have been found scattered throughout the ore shoots. [b]Mill grades at these ore shoots containing up to 25 Troy ounces per ton have been encountered, with some areas showing grades as high as 90 to 300 oz gold/ton.[/b] [/quote]

[quote]We began actual operations in May 2010. Initially, our operations will consist of processing tailings left on the mine site from prior mining operations, which estimate are about 500,000 tons. Later, after we complete a confirmation program to prove up and locate reserves on our property, and make further capital improvements to the mine site, we plan to begin mining and processing raw ore. [/quote]

Those “tailings” are actually ore left at the mine sites. Assays of those ore piles have shown values from 6g/t up to and well over 2 and 3 oz/t.

[quote]In 2010, the roads to the Sinker Tunnel Complex were upgraded to allow 25-ton trucks access to the site, and an area 300x400 feet was prepared to act as a staging area at the 5,200 foot level. The Sinker Tunnel was aerated in its entire length and the entrance to the Sinker Tunnel was permanently extended and secured to avoid land or snow slides to block access to the Sinker Tunnel. Permanent drainage pipes are being laid in the Sinker Tunnel as it was determined that the Sinker Tunnel is the main drain for the War Eagle complex. Mining and shoring or rock bolting of some weak points in the top wall is underway. Permitting for exploration of the Sinker Tunnel is underway with training for underground personnel and safety measures being installed per the latest mining rules and regulations. [/quote]

Much of this work is documented in Bobby Joe’s pictures. Great progress towards reopening and starting mining in a tunnel that connects directly to veins including the Oro Fino mentioned above with grades up to 300 oz/t, and that will also be connected up to the other mines, including those that according to Idaho were “in good ore” when the operations stopped due to the financial crisis. And these were mines averaging over 2.5 oz/t Au.

One note- It has been posted repeatedly that these mines have not produced anything in 100 years. That’s because once they were abandoned due to the financial crisis, they filled with water when not being actively worked, and technology at the time was not good enough to pump them out. SFMI will be able to do that with modern equipment, and the Sinker will provide drainage to keep them dry.

More from the 10K

[quote]The mines on War Eagle Mountain were very productive in the first few years because the surface deposits were of extraordinary richness. As the mines got deeper the veins had a smaller yet more consistent amount of ore in relation to the amount of rock that needed to be removed to expose it. [b]Generally, the value of ore per ton of rock removed remained consistent from a depth of 150 feet to as deep as any of the mines were worked. This would indicate that the extensions of the veins into the deeper levels, not yet reached by the mine shafts, would contain the same percentage of metal ore.[/b]

The mines became more expensive to develop and operate as they got deeper. This was not due to a decline in the yield per ton, but due to the increased cost of lifting the mineral ore and of removing water from deeper shafts. The removal of ground water in mines is a persistent expense that must be addressed on a daily basis. When a mine doesn't have a lower working level tunnel – like the Sinker Tunnel Complex – that intersects a vertical shaft, the water must be brought to the surface and disposed of no matter what the expense or technical inconvenience if the mine is to continue operating. This increased cost of mining at depth was one of the most significant problems for the mines on War Eagle Mountain. [/quote]

The problem of drainage is one that is easily addressed with modern equipment, and that will be a minor problem once drainage through the Sinker tunnel is provided.

[quote]The host rock on War Eagle Mountain is granite. [/quote]

Not limestone, as has been posted here more than once. LOL.

[quote]All representations of potential quantities of minerals are based on historical records which are believed to be accurate, but which may not have been performed pursuant to modern standards for evaluating mineral claims. [/quote]

Many of the surveys and assays, even contemporary ones, were conducted before the NI 43-101 was introduced only a dozen years ago. The numbers in the surveys and assays are still completely valid, even though they cannot be used to cite “proven” reserves.

[quote]In particular, historical records of mining on the site, and subsequent reports of the geology of the mountain, indicate that [b]veins containing gold and silver extend much further vertically than could be mined when the site was last mined in the 1880’s. In addition, historical records indicate that gold and silver exists in the veins in sufficient densities to warrant mining using modern extraction and milling techniques.[/b] [/quote]

Contemporary reports are in unanimous agreement that huge amounts of high grade gold and silver remain to be mined in War Eagle Mountian.

[quote]We believe that we have sufficient capital to finance this phase of development. [/quote]

What phase of development? Oh, the phase that results in smelting their own dore bars to be sold to a refinery and generate revenues to fund everything subsequent, as well as paying off debts. So they may not even need much, if any, of that $7.2M line of credit. Which means little if any more dilution. Which means the share buyback program begins in full force.

[quote]Another aspect of the confirmation phase will involve the development of a plan to use the Sinker Tunnel to mine the interior of the mountain on a year round basis. The plan will involve accessing and draining the mine shafts on the top of the mountain from the Sinker Tunnel, as well as relocating and collaring old shafts on the mountain. We estimate that the confirmation phase will take about 18 months, and will cost approximately $7,000,000. We began preliminary work on the confirmation phase in mid-2010. [/quote]

Let’s see, $7M over 18 months is less than $500k/month. If they are milling 100 tpd of 1 oz/t ore, that’s $144,000/day. So they should be able to pay that $7M with 3-4 days of revenue each month.

Oh, and one more thing. It has been repeatedly stated on this board that any information on gold and silver in WEM is over 100 years old. That is false. There are plenty of more recent and contemporary reports and assays, all readily available and easy to find (try reading the SFMI web site for starters):
[quote]An ore analysis was reported by D.A. Yeager, and C.K. Ikona, of Pamicon Developments, Ltd. "Investigations indicate at least one year's reserves in place at the bottom of the Illinois-Central; with ore indications of 11,205 tons @ 103 g/t Gold (3.6 oz Gold/ton)," wrote Mr. Yeager. [/quote]

[quote]The survey of the waste dumps was performed by D.A. Yeager, and C.K. Ikona, of Pamicon Developments, Ltd. "The dumps were created in the 1800s with ore that was considered low in value and was stockpiled for the day when metal prices were higher. Generally speaking, the cut-off value for ore to be further processed and transported to the refinery was 2 ounces of Gold per ton. The ore that did not meet this requirement was stockpiled. It seems apparent, both from a perusal of the history of the mines and from the results of the preliminary sampling, that the mineral reserves of War Eagle Mountain were by no means exhausted," wrote Mr. Yeager.

Initial findings estimate that probable recoverable gold and silver metals from the tailings stockpiles could exceed 19,200 Gold oz, and 221,440 Silver oz, or approximately $19 Million gross ore value. [/quote]

In the quote above, note that the dollar values quoted correspond to gold at maybe $700- because the assays were conducted relatively recently (as in after 1980), not in the 1800s.

More assays from the same survey:
[quote]Keystone Adit: 63 g/t Gold (2.2 oz Gold/ton) 1,109 g/t Silver (39.1 oz Silver/ton)
Illinois Central Adit: 477 g/t Gold (16.9 oz Gold/ton) 3,180 g/t Silver(112.2 oz Silver/ton) [/quote]

And recent results from another company:
[quote]A total of 49 holes were drilled by NERCO, Inc. The holes ranged from 70-feet in depth, to 700-feet in depth, with samples taken at 5-foot intervals, and were intended to test near-surface average mineralization. The drilling used reverse circulation methods and was not designed to provide results similar to blocked-out or core drilling methods, which yield a detailed analysis covering the entire length of the core.

"We are definitely pleased with the exploration and drilling results that have been obtained thus far in the area. Hole 'W14' indicated nearly 445 vertical-feet of mineable-grade ore at .18 to .85 oz Gold/ton; while, hole 'W40' returned nearly 380 vertical-feet of .11 to ..45 oz Gold/ton. The remaining holes indicated yields from .24 to .88 oz Gold/ton over scattered intervals. [/quote]

And more:
[quote]The independent drilling program was conducted by Donald Tully, P. engineer. “Five angle holes, totaling 684 meters (2,245 feet) were drilled In the Oro Fino area. Two angle holes, totaling 312 meters (1,025 feet) were drilled in the Keystone & Illinois Central area. Three vertical holes, totaling 209 meters (685 feet) were drilled in the Cow Cornice Basin area,” wrote Mr. Tully.

Mr. Tully added, “The two holes that were drilled in the Keystone & Illinois Central and North Empire zones of the Central Vein system on the Mountain, approximately midway between the North and South shafts of the Poorman mine, struck extremely strong new veins. These structures showed mineable width indications of mineralization, with results of 1,000 ppm of Gold, or 660 g/t Gold (23.27 oz Gold/ton). It is concluded that the War Eagle Mountain property is an excellent exploration bet in a favorable geological environment for discovering additional and new deposits of precious metals, in addition to mining of the existing deposits.” [/quote]

And more:
[quote]The preliminary surface sampling and assayed results of the mineralized ore bearing quartz veins found within the Illinois-Central zone revealed the following (reported-ounces per ton (OPT)):
Location Vein width (ft) Au (OPT) Ag (OPT)
Illinois Central .42 16.846 111.20 [/quote]

More:
[quote]Preliminary recovers during the testing mill phase has shown 0.75 oz per ton [/quote]

And (ho-hum) more:
[quote]According to Met-Solve Labs, the samples from the Poorman’s tailings contain 3.3 g/ton Gold and 94.5 g/ton Silver. [/quote]

And more (this is getting boring...):
[quote]An independent drilling program was also conducted by Nerco, Inc., and a “Hot-Zone” was discovered as a result of a structural study based on color air photos. This report states, “A prominent east-west lineament was observed. A total of 49 holes were drilled in the areas between the Poorman Vein, the Afterthought Vein, and the Cornice Basin (Cornice Zone), with samples taken at 5-foot intervals. A majority of the drill-holes intersected mineralized zones, ranging from 5– 45 feet in width. Gold and Silver content ranged up to .62 opt Gold and 8.48 opt Silver per ton. Considering the random pattern in which the holes were drilled, and the intervals of samples, exploration has succeeded in demonstrating the potential for medium-to-high grade underground deposits to be excellent.” [/quote]

Yet more:
[quote]according to Met-Solve Labs, these latest samples from the tailings contain 6.9 g/ton Gold and 50.9 g/ton Silver. [/quote]

And one more for good measure:
[quote]Donald W. Tully, P. Engineer on April 14, 1998 recapped the drilling report as follows:

“The Drilling Program was done with a large rotary down-hole-hammer drilling machine which was capable of drilling both vertical and angle holes. Samples were taken at five foot intervals. Five angle holes, totaling 2,245 feet, were drilled in the Oro Fino area. Two angle holes, totaling 1,025 feet were drilled in the Keystone/Illinois Central area. Three vertical holes, totaling 685 feet were drilled in the Cow Cornice Basin area. This was a limited exploratory program. The two holes that were drilled in the Keystone/Illinois Central and North Empire zones of the Central Vein System on the Mountain, approximately midway between the North and South shafts of the Poorman Mine, struck extremely strong new vein structures. These structures showed 1,000 ppm in Gold (23.86 oz Gold / Ton). [/quote]

There are plenty of results for assays conducted within the last few decades, as well as a number of contemporary assays completed for SFMI. Any statements or implications to the contrary are false.