Southridge Enterprises Inc (SRGE)

[stervc]

I-Glow & ALL, important confirmation to understand...

Respectfully, there was not a failure to recognize that it was Tumi Resources that hired Behre Dolbear to do an analysis of Cinco Minas. It is stated and indicated here within the same SRGE 3rd Qtr filing at the top of page 21 within the link below:

http://www.otcmarkets.com/financialReportViewer?symbol=SRGE&id=93307


The filing above also stated that John Nebocat, P.Geo (Professional Geoscientist/Geologist), produced three detailed technical briefs as the qualified person for Tumi Resources. This adds further credibility for the Cinco Minas property owned by SRGE. Here’s one of those technical briefs (a NI 43-101) below of which the company is referring:
http://www.southridgeminerals.com/SouthridgePDF/Cinco-Minas-43-101.pdf

It is also known that this is the same Behre Dolbear Report that confirmed the same valuation that led Tumi Resources to abandon the Cinco Minas project. However, the true reasons for Tumi abandoning the Cinco Minas project is a little complicated. I’ll explain it for investors to know the importance of this which led to SRGE becoming the owners of this huge opportunity.

Tumi Resources and their team reviewed an underground high-grade mining option that gave resource numbers too low to be of interest to Tumi Resources because of how low the price of gold was back then. This was derived from knowing that mining for gold during the years of 2003, 2004, & 2005 was not economically feasible because of the price of gold per ounce. This made the Cinco Minas property unattractive as Tumi indicated this in their Tumi filings and PRs. The average price of gold per year per ounce back in 2003, 2004, and 2005 was as indicated below:
http://www.nma.org/pdf/gold/his_gold_prices.pdf

For 2003 = $363.38 per ounce
For 2004 = $409.72 per ounce
For 2005 = $444.74 per ounce

I think it’s safe to say that if Tumi would have waited it out a few more years, they would have been sitting on a gold mine; and I mean that literally. Compare and contrast the valuation back then in 2003, 2004, and 2005 to the valuation now in 2012 along with comparing the disparity in the price of gold back then to now given that the same Behre Dolbear Report which identified 89,100 ounces of proven (measured) and probable (indicated) gold listed within the SRGE 3rd Qtr filing:

For 2003 = $363.38 per ounce x 89,100 ounces = $32,377,158
For 2004 = $409.72 per ounce x 89,100 ounces = $36,506,052
For 2005 = $444.74 per ounce x 89,100 ounces = $39,626,334

From the SEC filing by Tumi Resources on page 3, Tumi had written-off the Cinco Minas in 2005 as indicated below:

http://www.sec.gov/Archives/edgar/data/1191832/000114066105000212/tm0527.txt

…The increase in loss in 2005 is attributed to the $2,903,371 write-off of the Cinco Minas Project. …

Even more important of an explanation, which actually further confirms significant value of the Cinco Minas, read what Tumi also released in 2005 below…

http://www.prnewswire.com/news-releases/tumi-resources-limited---tumi-abandons-the-cinco-minas-project-jalisco-mexico-54443987.html

…Although a resource was established for Cinco Minas, the results of a scoping study previously undertaken by Behre Dolbear (see press release dated June 4, 2004) indicated a very high strip ratio for an open pit mining operation, such indication having been confirmed by in-house studies performed by the Company's technical consultants. Additionally, a review of an
underground high-grade mining option gave resource numbers too low to be of interest to the Company… …In summary, a combination of a very high strip ratio for an open pit, underground open stopes, and an option to earn only a 60% interest with high underlying holdings costs, make the Cinco Minas property unattractive to the Company from an economic prospective. …

This means that with the price of gold per ounce for 2005 being on average to be $444.74 per ounce, it’s safe to presume that the Revenues from the indicated 89,100 ounces would have only brought only a 60% interest of the $39,626,334 as derived above which equates to $23,775,800 that would have been brought to Tumi. Further examine why below.

This means that back in 2005 with the price of gold being $444.74 per ounce, Tumi was 100% sure that they would have not benefit from moving forward with the Cinco Minas project. This is the amount of $23,775,800 truly was not economically feasible considering the price of gold back then as indicated. Now compare the $23,775,800, which is what Tumi would have made because of the price of gold at such time, to the 2012 amount for the 89,100 ounces of gold given today’s price of gold at $1,700 per ounce below:

For 2012 = $1,700 per ounce x 89,100 ounces = $151,470,000 Gold Revenues

It appears as if Tumi should have exercised a little more patience considering the price of gold right now. It has cost them dearly considering the now value of $151,470,000 in Gold Revenues for 2012 versus the $23,775,800 that was the value of the same amount of gold back in 2005. Still, 60% would have brought Tumi Resources $90,882,000 in Revenues. Still, keep in mind, this is only from 20% of the known value from the Cinco Minas.

There were a few owners of the Cinco Minas and Gran Cabrera since 2003, but due to gross negligence, lack of funding, lack of interest, and/or a host of other reasons by prior owners of the Cinco Minas and Gran Cabrera, SRGE was able to buy the Cinco Minas and Gran Cabrera in 2010 for $7.5 Million as indicated within the PR below:
http://ih.advfn.com/p.php?pid=nmona&article=45610151

There were key entities and individuals from the Minera San Jorge S.A. de C.V. (MSJ) that allowed the purchase to take place. The most important of those individuals was Alfonso Sanchez Navarro of which whom is now a Board of Director for Southridge (SRGE) right now as indicated below:
https://nvsos.gov/SOSEntitySearch/CorpDetails.aspx?lx8nvq=aAcyYO1iIpfDt%252bkO7ehU8Q%253d%253d&nt7=0

So now that SRGE has the Cinco Minas and the Gran Cabrera, the company has position itself to be in line for experiencing some huge growth for itself and its investors.

v/r
Sterling