Post by Bahama Pete on Mar 26, 2010 11:45:23 GMT -5
I just took a position in Silver Falcon Mining Inc,.
My last pick was Nova Gold (NG) when it was .35 last year. I procrastinated too long, and missed out on some pretty hefty gains. I'm on this train....God Bless.....
ECONOMIC GEOLOGY 101 AND SFMI
IVE BEEN ASKED TO REWRITE POST BECAUSE I WROTE IT HASTILY yesterday
Let's examine first the mining industry
There are 3 types of Mining stocks
Juniors which strictly explore in order locate and quantify reserves for future mining
Junior Producers which are outfits that explore and currently produce metals
Last Producers that strictly produce in mining operations
Producers typically do not explore due to large costs and the long term requirements to develop a junior location to bring it to production
Juniors require a great deal of investment money..generally 10s of millions over long term periods
An example MINCO a canadian Co. based in China stared up in 1998 and still not in production
Look at KGC kinross the neighbour of War eagle SFMI who by the way lost War Eaagle in default foreclosure in 2000 when Gold unexpectedly fell to $240.00 per ounce KGC currently $18.00 per share and that is with production sites and exploration sites also
Then look at ABX barrick Gold at $40.00 plus per share
In examining Barrick Gold Mine strike you will see that there is 12 million ounces of Gold in reserve having ineed 1.7 million ounces last year. Also note that the SFMI Mill mangaer is a former Barrick gold mill employee
I conclude that he was hired for two reasons. First the mine reserves are extremely comparable
Second it is my opinion SFMI being more of a financial company lacking any track record or experience in mining operations has developed the site with an operating mill in order to be targeted for a high priced takeover
Now examine some basic formulas
take a mine with known reserves of 10 million in gold at current price with 1 million shares of stock outstanding
To simplify the stock value would be approx $10.00 per shareSimply dividing te reserves by the number of shares
SFMI is currently a junior
Typically a junior once it has developed completely in preparation to become a producer they will either find private placement money a joint venture with another mining operation or be bought out in takeover by a producer
Why? simply because of Economics. Take ABX They have a very large amount of share holders they have a major invesment of equipment and employees and company infrastructure.Therefore they need to continually be on the look out for juniors that are in the final stages to joint venture or direct takeover.
Now youmay be understanding my reasons for speculating the possibility of an ABX takeover of SFMI
SFMI has risen like a shooting star from junior to the verge of being a producer in unprecedented short time
Why? First they had negotiated a mining lease with GoldCorpHoldings
War eagle Mountain is a historic mining site that was worked for 1863-1903
I will not chronicle its history because you can go to the SFMI site and read the historical synopsis.
However the intersting part is that there are 500,000 tons of high grade gold and silver tailspin
Acording to SFMI thet expect to produce 285 million from the tailspin in the Diamond Creel Mill
The planning of SFMI has been brilliant
First the negotiation of the mining rights lease
Next the purchase of teh Mill site
Then the development of all the infrastructure and ppermits not only for the mill site but for mining opermits
Keep in mind some thing else SFMI is the only totally USA mining co. in the world
Why this is importnat is because of politically stability
For instance MINCO is in Communist China
many mining ops are in Mexico and or South America.This is a big long term adventadge of SFMI
Also typically tailspin yields are low
however the reason for high grade tailspin at War eagle all goes back to economic Geology
From 1863-1903 the ore was being transported by mule
being that the ore was of such high grade any ore with less than 2 oz per ton was discarded on site. therefore think of SFMI as mie already that is about to mill nearly 300 million in revenues
If you take the 160 million shares outstanding divided into the nearly 300 mill you might say SFMI is already worth approx $1.50 per share
WWhy is it still 6 cents.Likely it is lost in an ocean of other juniors.Keeep in mind that most juniors never produce and will ultimately be very poor investments.They likelyhood of any junior becoming a producer is very very small
TRANSLATION WE ARE FLYING UNDER THE RADAR SCREEN WITH NO PUBLICITY NO REVENUES ONLY SMALL QUARTELY LOSSES
IN OTHER WORDS NO REASN FOR THE WALL STREET ANALYSTS TO NOTICE SFMI
WE ARE JUST ANOTHER JUNIOR WITH A PIPE DREAM
Now according to SFMI planning they are going to quantify the reserves in the mountain from tailspin earnings at roughly a cost of 6.5 million
Why is ist so costly?
The existing mine shafts go down to approx 1200 foot level which at teh time was current technology
Reports appear that gold and silver areas raech down to much greater depths
Now the good news is the nature of the Geology
It is hypogene granite which is highly dense strong rock.It can be mined by blaating without honeycomb engineering develope for the famous Comstock lode in nevada.Honey comb is much more costly
Reports are saying that SFMI can produce 1 oz of gold which also includes 7 to 14 oz of silver at $12-approx $350.00 per oz
Compare thet to the Barrick Gold Mine which reports prodeuction cost at $452 per ounce
If you are understanding so far you may be drawing the same conclusions
Now there is speculated reserves over decades of geology reports that there may be 10 million ounces of gold witgh 100 + million ounces of silver
If this is the case the reserve could be 12-15 billion dollars
once again if SFMI had the equipment in place and were mining with 160 million shares what would the potential sghare value be?
i conclude that SFMI has dweveloped the project to ultimately be taken over by the highest bidder for future mining operation.i specauklate that it will be ABX who is one of teh few companies in the world with infrastrucure and finances to make such a seemingly large aquisition
In one side note as a former commercial real estae broker in Manhattan i noticed something very intersting in the SEC filing in august 2009
The offices of SFMI at 1385 Broadway was laesed at 42000 per year for three years for a total of 126000. now according to the SEC filing the lease was executed by a payment of approx 1.5 million shares of stock in place of the 126K
Now this begs the question why would a major landlord of A Class a building in the heart of Midtown Manhattan rent a $42 a square foot annual space in exchange for a pile of paper worth 25-30K
It would seem to me the CPAS and financial people that looked over the deal must have been enticed by something potentially very big
In final conclusion
look at KGC 418.00+
look at ABX $40.00+
If the historical geological claims And there are volumes of them what will SFMI be offered in a takeover
Will it be joint venture?
Takeover?
Private placement?
What might the price of SFMI be or paid for in a takeover?
Being that there are ties between GoldCorp and SFMI i would guess taht it will be the takeover
It would be the one that is least risky
Sell it out to a major mining entity float away on a giant parachute
Hopefully if it all happens we will all have a golden kite to fly and God Bless PQ RK and all the other shrewd business men at SFMi
My last pick was Nova Gold (NG) when it was .35 last year. I procrastinated too long, and missed out on some pretty hefty gains. I'm on this train....God Bless.....
ECONOMIC GEOLOGY 101 AND SFMI
IVE BEEN ASKED TO REWRITE POST BECAUSE I WROTE IT HASTILY yesterday
Let's examine first the mining industry
There are 3 types of Mining stocks
Juniors which strictly explore in order locate and quantify reserves for future mining
Junior Producers which are outfits that explore and currently produce metals
Last Producers that strictly produce in mining operations
Producers typically do not explore due to large costs and the long term requirements to develop a junior location to bring it to production
Juniors require a great deal of investment money..generally 10s of millions over long term periods
An example MINCO a canadian Co. based in China stared up in 1998 and still not in production
Look at KGC kinross the neighbour of War eagle SFMI who by the way lost War Eaagle in default foreclosure in 2000 when Gold unexpectedly fell to $240.00 per ounce KGC currently $18.00 per share and that is with production sites and exploration sites also
Then look at ABX barrick Gold at $40.00 plus per share
In examining Barrick Gold Mine strike you will see that there is 12 million ounces of Gold in reserve having ineed 1.7 million ounces last year. Also note that the SFMI Mill mangaer is a former Barrick gold mill employee
I conclude that he was hired for two reasons. First the mine reserves are extremely comparable
Second it is my opinion SFMI being more of a financial company lacking any track record or experience in mining operations has developed the site with an operating mill in order to be targeted for a high priced takeover
Now examine some basic formulas
take a mine with known reserves of 10 million in gold at current price with 1 million shares of stock outstanding
To simplify the stock value would be approx $10.00 per shareSimply dividing te reserves by the number of shares
SFMI is currently a junior
Typically a junior once it has developed completely in preparation to become a producer they will either find private placement money a joint venture with another mining operation or be bought out in takeover by a producer
Why? simply because of Economics. Take ABX They have a very large amount of share holders they have a major invesment of equipment and employees and company infrastructure.Therefore they need to continually be on the look out for juniors that are in the final stages to joint venture or direct takeover.
Now youmay be understanding my reasons for speculating the possibility of an ABX takeover of SFMI
SFMI has risen like a shooting star from junior to the verge of being a producer in unprecedented short time
Why? First they had negotiated a mining lease with GoldCorpHoldings
War eagle Mountain is a historic mining site that was worked for 1863-1903
I will not chronicle its history because you can go to the SFMI site and read the historical synopsis.
However the intersting part is that there are 500,000 tons of high grade gold and silver tailspin
Acording to SFMI thet expect to produce 285 million from the tailspin in the Diamond Creel Mill
The planning of SFMI has been brilliant
First the negotiation of the mining rights lease
Next the purchase of teh Mill site
Then the development of all the infrastructure and ppermits not only for the mill site but for mining opermits
Keep in mind some thing else SFMI is the only totally USA mining co. in the world
Why this is importnat is because of politically stability
For instance MINCO is in Communist China
many mining ops are in Mexico and or South America.This is a big long term adventadge of SFMI
Also typically tailspin yields are low
however the reason for high grade tailspin at War eagle all goes back to economic Geology
From 1863-1903 the ore was being transported by mule
being that the ore was of such high grade any ore with less than 2 oz per ton was discarded on site. therefore think of SFMI as mie already that is about to mill nearly 300 million in revenues
If you take the 160 million shares outstanding divided into the nearly 300 mill you might say SFMI is already worth approx $1.50 per share
WWhy is it still 6 cents.Likely it is lost in an ocean of other juniors.Keeep in mind that most juniors never produce and will ultimately be very poor investments.They likelyhood of any junior becoming a producer is very very small
TRANSLATION WE ARE FLYING UNDER THE RADAR SCREEN WITH NO PUBLICITY NO REVENUES ONLY SMALL QUARTELY LOSSES
IN OTHER WORDS NO REASN FOR THE WALL STREET ANALYSTS TO NOTICE SFMI
WE ARE JUST ANOTHER JUNIOR WITH A PIPE DREAM
Now according to SFMI planning they are going to quantify the reserves in the mountain from tailspin earnings at roughly a cost of 6.5 million
Why is ist so costly?
The existing mine shafts go down to approx 1200 foot level which at teh time was current technology
Reports appear that gold and silver areas raech down to much greater depths
Now the good news is the nature of the Geology
It is hypogene granite which is highly dense strong rock.It can be mined by blaating without honeycomb engineering develope for the famous Comstock lode in nevada.Honey comb is much more costly
Reports are saying that SFMI can produce 1 oz of gold which also includes 7 to 14 oz of silver at $12-approx $350.00 per oz
Compare thet to the Barrick Gold Mine which reports prodeuction cost at $452 per ounce
If you are understanding so far you may be drawing the same conclusions
Now there is speculated reserves over decades of geology reports that there may be 10 million ounces of gold witgh 100 + million ounces of silver
If this is the case the reserve could be 12-15 billion dollars
once again if SFMI had the equipment in place and were mining with 160 million shares what would the potential sghare value be?
i conclude that SFMI has dweveloped the project to ultimately be taken over by the highest bidder for future mining operation.i specauklate that it will be ABX who is one of teh few companies in the world with infrastrucure and finances to make such a seemingly large aquisition
In one side note as a former commercial real estae broker in Manhattan i noticed something very intersting in the SEC filing in august 2009
The offices of SFMI at 1385 Broadway was laesed at 42000 per year for three years for a total of 126000. now according to the SEC filing the lease was executed by a payment of approx 1.5 million shares of stock in place of the 126K
Now this begs the question why would a major landlord of A Class a building in the heart of Midtown Manhattan rent a $42 a square foot annual space in exchange for a pile of paper worth 25-30K
It would seem to me the CPAS and financial people that looked over the deal must have been enticed by something potentially very big
In final conclusion
look at KGC 418.00+
look at ABX $40.00+
If the historical geological claims And there are volumes of them what will SFMI be offered in a takeover
Will it be joint venture?
Takeover?
Private placement?
What might the price of SFMI be or paid for in a takeover?
Being that there are ties between GoldCorp and SFMI i would guess taht it will be the takeover
It would be the one that is least risky
Sell it out to a major mining entity float away on a giant parachute
Hopefully if it all happens we will all have a golden kite to fly and God Bless PQ RK and all the other shrewd business men at SFMi
