Capn -

I wanted to say, (and I doubt I speak only for myself), but your feedback & reporting from the SHM has been priceless.

Quote: It has enabled the establishment of a line in the sand as regards what has been firmly established as subjects about which there is no longer any doubt.

That said, I want to change subjects and talk about the speculation that was going on, according to conversations I had over the phone with folk at the meeting, regarding why there has always been so little info coming out of the company via PRs.

I learned in my phone conversations over the weekend that many times, this line of questioning came up. I don't recall if PQ spoke to the issue officially from the podium, but I do recall having been told that, in conversations separately, PQ emphasized that he disliked the stock price too, if for no other reason than that he is a huge shareholder and he wants to become richer out of the rising price.

I had it emphasized to me repeatedly that every one of the BOD members, and the employees themselves, oozed enthusasm for the work they are involved in, and that there is absolutely no truth to the allegations that this is a complacent group of nepotistic bottom feeders.

In fact, I was repeatedly told there is frustration, top to bottom, over the damage that gets done to stock prices every time news is released. I personally would have told these guys to write better PRs, LOL, and maybe folks did tell them this, but the fact remains that they all are fully in, and there is no complacency in what they showed about themselves. They, one and all, want this thing to succeed and they are all very vigorously about the business of doing their part to make this happen.

So, with this as a background, I thought I'd broach a subject via this post, so that folks can contribute via CIVIL conversation regarding it:

Question - What is behind the paucity of info? If the whole company, from top down, dislikes the way the chart behaves when they release the small amount of info they irregularly do, why are they deliberately continuing to release threadbare and confusing PRs?

My answer is that they are deliberately doing so because they comphend something that professional firms that buy other firms focus on, and that thing is called the

Quote: "Cost of Equity"

The reason I'm commenting about this at this time is that, as I type, I'm trading and I'm listening to Henry Kravis, president of KKR, in a lengthy interview on Bloomberg, and he is methodically explaining that "Cost of Equity" is the key variable in the formula they (and others) use when buying a company.

"Cost of Equity"

Now here's the basic idea, and in the case of SFMI, there are 3 elements.... a kind of three legged stool that is stronger than we had long been given to understand:

Here's the three legged stool, as I see it:
- the value proposition represented by the excellent assay levels in the above ground piles,
- the existence of a fully functional 24/7 year-round, low cost mill,
- an in-place buyer with favorable purchase terms is under contract.

Add to this the following:
- the uniformly fabulous news to have been reported by attendees of the SHM


As such, it follows that the SFMI value proposition outshines, with the buy-out industry's "Cost of Equity" in mind, makes SFMI a better buy-out candidate that most other JPM companies, by great measure.

Quote: SFMI has generated a deliberate paucity of information because they realized that they needed to be the party, in a buy-out situation , that controled the variable called "Cost of Equity". SFMI needed to get this variable defined FAVORABLY and they needed to be in control of it.

Stated plainly, by having done it in a way I personally despised, SFMI has gained control of the formula and it has created a value propostion that favors SFMI rather than the buyer.

Had the three legged stool not been established, then a buy-out may have come along, but the buyer would be in control.

So, rather than griping about management being incompetent and inexperienced, I think management needs to get applauded. Maybe not a standing ovation, LOL, but they at least need to get some kind of recognition for having generated this good outcome.

SFMI has always wanted to be bought out, and by providing a sturdy three legged stool of valuation, they lower the over-all "Cost of Equity" a potential buyer will be faced with in a buy-out.

The upcoming 43-101 will be a fourth leg and it should amp up the value proposition factorialy, not geometrically.

So, IMHO, SFMI has positioned itself methidically and the SHM is not even remorely negative in this regard.

And I further think that a guy like me, sitting in a cul-de-sac in a side street in "anywhere USA" is not the only one noticing that a potential buy-out company will face a much more attractive "Cost of Equity" if they buy SFMI than any of the other JPMs, who do not have as good assay info, do not have a functioning mill, do not have a contracted buyer, and do not have easy to access, already mined rock, ready to process.

As a value proposition, they way management has positioned SFMI very much favors a lucrative buyout at maximum prices.

And going forward, the 43-101 will even further favor SFMI.

I have no doubt that SFMI is attracting some covetious looks, LOL.

After all the fabulous info to have come from the SHM, there is no doubt in my mind that there are substantial interested parties out there, especially given the financial crisis in fiat currencies that is in the process of cratering economies world wide.

JMHO

Imperial Whazoo