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Monday, 04/14/2008 12:14:59 PM

Monday, April 14, 2008 12:14:59 PM

Post# of 165854
The movement of the stock is no surprise as the market is finally starting to take SRSR, the estimated 188,000,000 lbs. plus Nemegosenda resource, and the imminent Hawk confirmation/recommendation Report seriously. The big question on my mind is what we can expect in the way of PPS once we get a resource or strong confirmation of same.

Since SRSR is an exploration company with no income, the market values the company in 3 ways:

1) Management

2) NI43-101 reserves

3) Anticipated future reserves, i.e. blue sky

The first major move in the stock to an interim high of .015 from .0003 was done largely on the basis of the new President/CEO Scott Keevil coming aboard. The company had no known reserves, only had a broker agreement for the Nemegosenda property, and no other work done on the other 4 properties. Due to real good DD on the part of some on this board, we started DDing Nemegosenda before the Company purchased the property. The stock still didn't react very much until this past week and I believe it to be in anticipation of a positive verification of the Niobium in Zone D.

The best way to predict a stock price is to find a stock in the same status as a comparison. We are fortunate to have a Niobium/Tantalum exploartion company that already has NI43-101 reserves. It is very easy to compare.

We simply take the market capitalization of the company (Commerce Resources) and divide it by the total market value of the reserves and come up with a % of reserve value. This percentage of reserve value can then be applied to SRSR as a fairly good guesstimate of what we may be selling for when we announce reserves. I am going to make 2 price estimates - one on the spike when reserves are announced and the other being a retrace/consolidation level.

Commerce Resources spiked to $1.75 with 140,000,000 shares fully diluted on reserves of 59,844,200 lbs. Niobium and 10,800,800 lbs. Tantalum. Market price of Niobium $26/lb. ; Tantalum - $70/lb.

Price spike of Commerce Resources after NI43-101 reserves established:

1)(MKT CAP) - $1.75 X 140,000,000 shares = $245,000,000.

2) MKT VALUE of RESOURCE: 59,844,200 lbs. X $26 = $1,555,949,200
10,800,800 lbs. X $70 = $756,056,000
$1,555,949,200 + $756,056,000 = $2,312,005,200

3) (MKT CAP) Divided by (Total market resource value) = % market value of resource.
$245,000,000 Divided by $2,312,005,200 = 10.6%

10.6% is the percentage of the resource that makes up the value of the company(market capitalization).

Applying this to SRSR, we make the assumption that the reserves will be 188,000,000 lb. of Niobium. I believe that this number will prove to be very low, but for the purpose of this guesstimate, I'll use the old estimate from the 1987 Sage Report.

Market resource value: 188,000,000 X $26/lb. = $4,888,000,000

(MKT VALUE) $4,888,000,000 X 10.6% = (MKT CAP) $518,128,000

PPS = (MKT CAP) $518,128,000 Div By (Shares Out) 725,688,058 = 71 cents

Commerce Resources has since settled down in a trading range and is today at $1.04. We do the same calculations:

$1.04 X 140,000,000 = $145,600,000 MKT CAP Div By $2,312,005,200 = 6.3%

SRSR projected PPS after initial price spike:

$4,888,000,000 X .063 = $307,944,000 (MKT CAP) divided by 725,688,058 shares = 42 cents

If SRSR should be valued the same as Commerce Resources had been and is valued in the market, then when reserves are fully recognized by the market, the preceding calculations could give us an initial idea of what to expect. I only used the old estimate of 188,000,000 million lbs. of Niobium and every indication is that this figure is very low. We also need to consider that the price of niobium is on the rise. I also didn't take into account the 5 other targets on Nemegosenda and also the 4 other very promising properties in SRSR's portfolio.

Long term this stock is in the dollars. First things first!.....Cheers...Jim