Featured Company

December 24, 2007 - By: Lee Anderson, J.D., M.L.S., Staff Analyst

Generally speaking for gold as with oil, most of the world's easy, high-grade mineral deposits have been tapped, leaving resources that are lower-grade, harder to reach or in politically challenging locations.

However, the management at SFMI knew a good deal when they saw it. High on War Eagle Mountain in southern Oregon sit some of the most productive gold mining properties in the world.

One of them was owned by Gold Corp, Inc. (NYSE: GG) which is the definitive Gold Mining Company in the world and arguably the best run with extensive international reserves.

Fortunately, for SFMI -- to giant Gold Corp. Inc. theses mines were just too small for the big guys!

Enter SFMI

First, SFMI obtained the rights to mine property owned by Gold Corp, Inc. (NYSE: GG).

Second, SFMI owns two mines in a prime location and both within driving distance to the mill that they also own!

Third, SFMI is in the United States. There is no political intrigue and no currency fluctuation.

Fourth, SFMI understands in mineral deposits location, location, location is the driving force. Their mines are located adjacent to the open-pit mines of Kinross Gold Co., ( NYSE : KGC ), which have produced approximately $ 1.8 Billion in gold and silver.

Fifth, SFMI has 14 deep-shaft mines covering the War Eagle Mountain's primary epithermal Gold and Silver-producing veins.

Sixth, SFMI annual yield, at full capacity, is estimated to be $ 215 Million at $650 gold, and that is clearly a very conservative price.

Seventh, SFMI sampling results indicated where initial mining efforts should be focused, and which mines are more valuable. They have a game plan and they are working it.

SFMI announced the War Eagle Mountain vein structures clearly extend to depth, and without any evidence of diminishing ore values. The deepest veins discovered, so far, extend to the 610 meters (2,000 foot) level and show values of 64 g/t Gold (2.5 oz Gold/ton) over 2.7 meter (9-foot) widths.

Eighth, SFMI’s mill has the ability to process all the ore from BOTH the Benton Mine and the Gold Bug mine. It can process both gold sulfides and free gold and it is within driving distance from both mines.


Slow and Steady Wins the Race

SFMI has shown a steady increase upward in price. While no day has been momentous what SFMI has demonstrated is a peak price when measured against the initiation of Stock Guru coverage more than a 144% increase steadily rising from $0.045 to $0.11

How long can gold's winning streak continue?

Is gold’s rise solely attributable to the weak dollar and low interest rates?

Price of gold per troy ounce (daily closes):

  • 12/4/06 $646

  • 11/8/07 $834

  • 12/3/07 $794

Gold has experienced seven straight years of strong gains. Gold futures leaped by 26% in 2007 and reached a 27-year high of $845.84 before slipping just below $800.

The weak dollar is attributable to the U.S. budget and trade deficits.

The Federal Reserve’s direction of low interest rates low is expected to continue makes gold attractive.

Inflation which has been edging higher may mean the Fed will stop lowering rates but gold will continue as an excellent hedge. There is little indication the Fed will raise rates.

Gold appears as though it will close out 2008 at the $800 USD mark.

Investors continue appear as gold dips below this mark to purchase a safe haven.

Gold has traded in tandem with oil prices for the last five years and oil continues to trade at $90 USD.

Emerging nations continue to be troubled in their gold production. South African production was battered this year by strike action and industrial accidents, while fears abound that Russian output may be hit by delays to the issuing of export licenses.

The National Union of Miners in South Africa organized the country's first national strike on Dec 3, resulting in total production losses estimated by analysts to be just under 19,000 ounces.

There is no indication China’s economy will slow and the Chinese demand supports the price of gold as well.

Gold appears to continue to be more than a safe haven. It appears to be a very good investment strategy.


 

Disclosure: Pentony Enterprises LLC has been compensated $14100 cash from stockpromoters.com for profile coverage. Pentony Enterprises is not a registered investment adviser or a broker/dealer. Pentony Enterprises LLC makes no recommendation that the purchase of securities of companies profiled in this web site is suitable or advisable for any person, or that an investment in such securities will be profitable. In general, given the nature of the companies profiled and the lack of an active trading market for their securities, investing in such securities is highly speculative and carries a high degree of risk.