A simple comparison....About 80% of the world’s biggest gold mines are open pit and average grades range from .5gm/t to 4 gm/t.
If we use a stock I have held that I have been following for years, DGC.TSX, Detour Gold as an example, it has an average grade of 1.15 gm/t. Proven and probable to total 236 million tons containing 8.8 million ounces gold. Almost a Billion tons of mine waste will be produced. Cyanide is used in the recovery process. Imagine SFMI trying to do that re environmental concerns.
A pre-feasibility study is being done. Pre production capital expenditures are forecast at $844 million which include a 135 km power transmission line, processing plant, infrastructure costs, and others. Ongoing costs (sustaining) are forecast at $417 million.
So, over $1 billion has to be spent before the first year of mining is done. Production is not expected to commence until mid 2112.
DGC is still exploring and drilling to prove up more reserves which will continue to add to overhead costs. It has to continue to raise capital and has 73 million shares trading. It is trading at $20/share with no production and more financing needed over the next three years minimum.
Now, compare the above to SFMI with 173 million shares out and a plan for share buyback. Historical geological reports indicate anywhere from 4 million ounces to 8 million ounces (and possibly much more) of high grade (av. 2.5 oz/t or 77 gm/t) gold equivalent. Infrastructure is in place. Mine infrastructure is in place with miles of tunnels, shafts and adits. If, like DGC above, SFMI had to raise financing to build these it would be in the millions and millions…and take years.
The parallel, major, high grade veins of War Eagle are 100 ft. apart with a major east west transverse vein. These are easily accessible from within the mine and Sinker tunnel. It is of unique importance to point out the fact that SFMI has a gold to silver ratio of 14 oz silver to 1 oz gold. Silver traditionally trades in a ratio of $16 to $1 silver. Today it is at 64…so silver is going to have to explode to the upside to $ 68/oz just to reach its average ratio. Imagine if you will, the value of SFMI’s historical resources when gold is $2000 and silver is $125.
There are 33,000 tons of at least 1 oz/t loose ore in the bottom of one shaft alone…estim. $33 million at a cost of $100/t.
SFMI is already in production with its own new mill being managed by a former Barrick Gold mine manager. For the average explorer, 1 in 1000 makes it to production and it takes an average of 5 to 7 years to achieve that…plus hundreds of millions of $.
SFMI is already there and starting to mill its 300 thousand to 500 thousand tons of tailings/ore mix estimated to be about 1 oz/t gold equivalent…$300 million to $500 million…at a cost of about $125/t. That will be contested until the assays come out and the doubters are silenced.
So ladies and gentlemen, those are the simple basics. SFMI is unique in North America and the world. I can find nothing quite like it with everything in place and into production, cash flow and huge speculative value. Drilling will commence soon into the rich veins in War Eagle. The gold and silver are there and will be revealed quickly. The attraction of the riches in war Eagle for many of the world’s largest PM miners must be most alluring to say the least. They need gold now, not in three to 7 years. Which one will jump first before the other gets it?
And to think so many are quibbling about where the price of this stock should be (50 cents to $1 maybe! Is nuts IMO) and where it is at 22 cents …is mind boggling to say the least. In 1995 this stock would have been the equivalent of at least $30 today…and bought out here and now….all or nothing. But then again, who would remember those days or the heady days of 1980? They are upon us my fellow gold bugs….just so many don’t know it.
And let me tell you, the need to acquire that gold and silver is much, much more desperate than back then just from a global supply/demand factor alone. How much longer will they be able to fool us all it isn’t? I’ll tell you when…the day you wake up to a stunning announcement from a major offer for SFMI. Laugh all you want…I’ve seen it and I’ve been there. It will happen and my guess is before Halloween.
The days of demanding a bankable feasibility study for a no brainer like War Eagle with all it’s credible historical data are almost over. Savvy, successful, experienced geologists with any knowledge whatsoever know that and will advise their employers accordingly.
Can you take the action believers!?