In late January, Sierra Madre Developments (SMG) sold its Penoles project to Morro Bay Resources (MRB) in return for 16 million shares and 8 million warrants of MRB. The management of SMG decided to dividend out all the shares an warrants to SMG shareholders on the basis of 0.2964 of one share of MRB and 0.1482 of one share purchase warrant of MRB. MRB is cashed up real nice with over $2.5 milion and no debt. For SMG shareholders, this dividend is a sweet bonus as MRB is currently trading at around 10 cents. MRB will be drilling the Penoles project this month and is already starting to promote the company on Stockhouse (https://www.stockhouse.com/opinion/interviews/2014/01/28/morro-bay-v-mrb-offers-mexico-silver-upside-ground-floor-stock-price) and probably will elsewhere. It can be realistic to predict that the stock will probably be trading around a quarter in the next few months. If that happens then the dividend is worth about 7.5 cents. SMG is trading at around 3 cents now. MRB will be motivated to increase that share price so the warrants will be exercised at either 15 cents before the end of June or 25 cents later. Just in case you were wondering, the Penoles project has already established a gold deposit and has two past producing silver mines. They are in the same general area as First Majestic (FR) which went from 25 cents to over $24. There are about a half a dozen other stocks in that area that enjoyed similar massive ten bagger plus gains. The good part for SMG shareholders is that after the dividend payout this month, the company can focus on the Harrison gold project which has about 200,000 ounces of gold delineated so far. In this environment of improved gold prices, I’m sure that they will have good success in promoting and financing further exploration. Pacific Comox used to own the Harrison gold project and I recall that they had good success in promoting and financing the project at a time when gold prices were much lower. Elmer Stewart of CUU fame is a director of MRB. For anybody watching CUU for a few years, you will note that he participated in private placements at substantially higher prices even though the odds were high that the price would decline, which it ultimately did. I’m sure he will be a substantial financial backer of MRB.