Southridge Enterprises Inc (SRGE)

[stervc]

SRGE $550M Valuation in 3rd Qtr Filings…

All should view the significant valuation data of over $550,000,000+ derived from the work done by Behre Dolbear de Mexico of the Cinco Minas property owned by SRGE that’s located on page 21 of the recently released SRGE financials below:
https://www.otciq.com/otciq/ajax/showFinancialReportById.pdf?id=93307



Although the "Behre Dolbear Report" confirmed that the $550,000,000+ is in the ground, SRGE cannot log it as Revenues or as an Asset because within the US, such confirmed valuation in the ground cannot be logged as Revenues or as an Asset until it is captured out of the ground and sold. This is why you won’t see this within the SRGE Income Statement or its Balance Sheet. The "Behre Dolbear Report" is a huge piece of credibility that confirmed that the valuation is there in the ground at the Cinco Minas property. The mineral advisors known as "Behre Dolbear" has been around for over 100 years which is another huge piece of credibility. Here’s their website below:
http://www.dolbear.com


It was the "Behre Dolbear Report" that confirmed the over $550,000,000 to be in the ground of the Cinco Minas property owned by SRGE. Again, this is confirmed on page 21 from the recent 3rd Qtr SRGE filings in the link above. This value might be viewed as an ”Intrinsic Value” to some. The fundamental valuation will be a summation of proven (measured) and probable (indicated) ore reserves indicated within this recent 3rd Qtr filing which confirms that the valuation can be captured from the ground.

Based on this confirmation, I will derive a fundamental valuation that all should take into consideration to get an idea of where SRGE could be logically justified to trade. This also should help investors to understand why a major mining company would potentially consider buying out SRGE for pennies on the dollars. Observe…

Gold and Silver Amounts from Fiscal Year 3rd Qtr 2012 Financials:

Gold = 89,100 oz

Gold = $1,700.00+ per ounce as of 10/29/2012
http://www.kitco.com/charts/livegold.html
Gold Revenues from Proven & Probable Resources = $1,700.00 oz x 89,100 oz of gold
Gold Revenues from Proven & Probable Resources = $151,470,000

Net Profit Margin of 24% for Gold from Yahoo Finance as of 29 Oct 2012:
http://biz.yahoo.com/p/134conameu.html
(This means that the Net Expense Ratio for Gold is 76%.)

Net Profit for Gold = $151,470,000 x .24
Net Profit for Gold = $36,352,800

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Silver = 12,500,000 oz

Silver = $32.00+ per ounce as of 10/29/2012 close
http://www.kitco.com/charts/livesilver.html
Silver Revenues from Proven & Probable Resources = $32.00 oz x 12,500,000 oz of silver
Silver Revenues from Proven & Probable Resources = $400,000,000

Net Profit Margin of 41% for Silver from Yahoo Finance as of 29 Oct 2012:
http://biz.yahoo.com/p/135conameu.html
(This means that the Net Expense Ratio for Silver is 59%.)

Net Profit for Silver = $400,000,000 x .41
Net Profit for Silver = $164,000,000

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Total Net Profit for Gold and Silver from Proven & Probable Resources:

Net Profit for Gold = $36,352,800
Net Profit for Silver = $164,000,000

Total Net Profit for Gold & Silver Proven & Probable Resources = $200,352,800

The Total Net Profit for Gold & Silver Proven & Probable Resources of $200,352,800 was derived from the $551,470,000 amount for the total gold & silver Revenues from above.
($151,470,000 + $400,000,000 = $551,470,000)

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Consider the formulas below to derive the Earnings Per Share (EPS) to determine the Expected Price Per Share given the Outstanding Shares (OS) as of this 3rd Qtr Financials and the OS as of today:
(Know too that Net Profit and Net Income are synonymous.)

EPS = Net Income ÷ Outstanding Shares (OS)
Expected Price Per Share = EPS x Price to Earnings (P/E) Ratio

Key Variables for the Formulas above:
Net Income = $200,352,800
OS as of 3rd Qtr Financials = 799,900,868 shares
OS as of today = 545,874,868 shares
Price to Earnings (P/E) Ratio = 21.20 confirmed below:
http://biz.yahoo.com/p/134conameu.html

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The above amount of $200,352,800 for Net Income is derived from the "Behre Dolbear Report" data that was derived from a 2004 resource estimate that was prepared on the ”Cinco Minas” summation of proven (measured) and probable (indicated) ore reserves owned by SRGE. Again, Behre Dolbear is one of the most respected mining advisory firms in its industry. This estimate done by ”Behre Dolbear” de Mexico was based on the drilling, trenching and field exploration since 2003. Based on their examinations and calculations, they reported the numbers that I used above to derive a fundamental valuation of the Cinco Minas property.

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Below, I will derive a fundamental consideration for both OS’ indicated above to understand the magnitude of the share reduction that has transpired.

With the OS being 799,900,868 shares:

EPS = Net Income ÷ Outstanding Shares (OS)
EPS = $200,352,800 ÷ 799,900,868 shares
EPS = .2504 per share

Expected Price Per Share = EPS x Price to Earnings (P/E) Ratio
Expected Price Per Share = .2504 EPS x 21.20 P/E Ratio
Expected Price Per Share = $5.31 per share

This means that based on what has been confirmed from the "Behre Dolbear Report" for what’s confirmed to be in the ground of the Cinco Minas property, SRGE is worth $5.31 per share considering its OS of 799,900,868 shares.

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Now let’s take under consideration the new OS of 545,874,868 shares versus the above OS of 799,900,868 shares based on the OS being as announced from the previous OS PR-ed below:

With the OS being 545,874,868 shares:

EPS = Net Income ÷ Outstanding Shares (OS)
EPS = $200,352,800 ÷ 545,874,868 shares
EPS = .367 per share

Expected Price Per Share = EPS x Price to Earnings (P/E) Ratio
Expected Price Per Share = .367 EPS x 21.20 P/E Ratio
Expected Price Per Share = $7.78 per share

This means that based on what has been confirmed from the "Behre Dolbear Report" for what’s confirmed to be in the ground of the Cinco Minas property, SRGE is worth $7.78 per share considering its current OS of 545,874,868 shares.

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Whether or not SRGE trades in those share price areas will be based on investors learning and confirming what many of us already believe. This also does not taken into consideration the valuation from SRGE’s other properties that are owned. This is especially why I can see a major company being interested in some or all of SRGE for pennies on the dollar.

Below is the ”Attorney Letter” that was filed by the SRGE Attorney/Law Firm, CARRILLO HUETTEL, LLP, to further add credibility of the confirmed valuation indicated within this recently release of SRGE filings:

SRGE Attorney's Letter:
https://www.otciq.com/otciq/ajax/showFinancialReportById.pdf?id=93319

This is a very reputable Law Firm as indicated by just looking at its list of "some" of their current clients listed on their website below:

http://www.carrillohuettel.com/clients.php
http://www.carrillohuettel.com/


This Law Firm has verified the legitimacy of SRGE by signing off on the Attorney Letter for SRGE. They would not risk their firm getting into any kind of trouble because of a company not being legit. For this, I am very confident to trust the due diligence (DD) of this Law Firm that SRGE is very real or they would definitely not be here.

v/r
Sterling