I will dig into your recommendations and see where it goes. I do have the fever to hit the 10X numbers a few times and really like the idea of loading up millions of share in the 000's lottery.

The financial analysis of the companies I already own I believe have that potential or more, otherwise I wouldn't be there. However each of them have missing pieces of the puzzle that need to be filled in. How could it really be much different from a risk reward perspective.

Again, thanks for your input and encouragement.

Thanks for the perspective. I wish I knew how to find the 10 to 20% runs. If I did I would work them.

I think these guys have a ton of foreign investors as they are listed on the German exchange.

I don't know if this can account for the thin market and volume and tight fisted hold on the price but I do think you are right about it not being used for someones personal sandbox to play in.

Good Luck with this one. I will let you know when and if I find another one that has some potential and hope you will do the same.

With all due respect I think you will miss this one if you wait for $.15. It seems to me that you are playing the market instead of the company.

We did a study a few months ago and found that gold mining companies that go into production and prove up the cash flow sell at an average of 23 time earnings during the early years of development. We also did a production cost study to determine the average cost per ton and oz of production for gold in both the placer and underground mine settings.

The Strand Mine has material stockpiled and ready to haul to the mill that is only 15 miles away and therefor the production cost will at the very low end of the spectrum.

The silver mining gurus hanging out around here can fill in the blanks but my guess is earnings can reach $.15 per share next year. If this is true we should go to $3.00 pps and this is only one of many properties these guys will put into production because they know we are headed for a bubble that will ultimately burst a few years down the road.

I am always open for anyone to argue against may case and offer alternatives. We just need some serious dialog and exposure to get this thing moving.

It has already been demonstrated that even with "great news" from miners, it isn't moving the needle very much, anywhere right now.

This will change in the spring and throughout the year as more companies move into actual production. There is little or no value added reaching pre production stages this winter.

Today, if you don't have absolutely and proven and defined resources, raising money is an uphill battle.

The body of knowledge has grown exponentially the last couple of years and part of that knowledge is recognition of the risks associated with exploration and production.

My watch list has many start ups who hung out the shingle "open for business" who show absolutely no trading activity whatsoever. Two years ago that would not be the case.

I am following the idea that gold is not yet in a bubble and that is yet to come. As the bubble builds so will the value of all miners to one degree or the other. The popular notion is that the bubble will burst in 4 to 5 years but watch the curve closely and get out in time.

Housing cannot recover during this period of time and unemployment will persist because construction will not recover in housing or commercial.

It appears that DGRI has a reasonable chance to build a sustainable cash flow and build value for it's shareholders. This goal is inextricably tied to obtaining the financing to explore and produce. Therefor the only news that has any value is associated with conveying positive results. It would be a pleasant surprise if some production could occur this quarter at the MMM but it is not reasonable to expect that to happen.

I can't remember when our management team ever hit the target dead center. If they didn't own all the voting rights where do you thing they would be?

I, of course wish them well and will hold my position, for now.

$2000 gold can bring many marginal deals into production. I am looking for an efficient way to shake the rotten fruit out of the tree and find and focus on the 5% that have a fighting chance of making it.

I wouldn't be surprised to learn of a gold and mining data base due diligence program that weighs the 400 variable in real time but haven't found it yet. I think there must be 5000 to 10,000 exploration and juniors world wide. Getting them in a real time program could be very profitable.

In the meantime, if you know of any system that can separate out the good prospects please let me know.

Greetings. SFMI, PCFG and NBRI are all on my "Near Production" watch list. I should have bought all of them long ago when they were really cheap. Now I need to wait for the best entry level I can get because of the current price levels. That may be coming soon. OOPS, I thought SFMI was the Australian company I am watching. SFMI is on my watch list but not my potential buy list. Maybe it should be with the price level drop. Need to look into it.

I am heavy into DGRI at sub penny prices. Very messy company and legacy with a scammy management style but they end up with the BG resource in Montana that just may prove up some day. This is an example of where the fraud squad has very worked hard to expose the scammy stuff, this company has responded by cleaning up it's act and makes every effort to operate legitimately with transparency. Management continues to over promises and under gives but the price is right and commensurate with the risk.

I am accumulating SHSH to about 30,000 shares. I think it is too expensive but there are no longer any clouds hovering over the companies future and they have a clear path to dollar land and relatively fast. This is clearly now a pre production company and should be valued accordingly. My guts tell me that this management team will have production going all over the place by the end of next year and projected income will soar. Maybe a $10.00 stock by 2013?

I have long been an investor in SRCH. The company is in the last stages of proving up the slag reclamation process and completing a 2 week pilot production run and feasibility analysis should begin soon. In my opinion, I think the company should and will sell to a major for around $15.00 per share. Chain of custody assay has the Au content of the slag pile at .50 Au per ton. for 20,000,000 tones of slag. There is a hedge fund and big private money behind the deal.

My investment strategy is to find undervalued, messy, struggling, even scammy looking companies very early in their development. I prefer exploration and pre production stage before the first big run if I can get it in on it. There are so many of them that the DD is horrendous. One out of every two I study goes in the junk pile after a few days. Only 5000 more to go.

Looking forward to learning more from you and chasing down some good pics with you.

The website profiles the new guys.

It is rumored that Crosby is Bings nephew.

It appears that Lex and Shirly are off the board and out of the picture.

With the Strand Mine acquisition planned for production in the spring, it looks like that is the fuse that puts Rescue and Kimberly in to production soon thereafter.

If the phantom NI 43-101 defines the high grade gold this could be magical.

I have been watching this for about a year. Six months ago, they brought on a seasoned director with good contacts. Peeked my interest to watch closer and begin to accumulate. Lots of potentially good properties but all unproven. They claimed a NI 43-101 with high grade gold but no one can find it. Never filed with SEDAR apparently.

Suddenly a few months ago they filed exemption for $2,000,000 private offering and a few weeks later announce new management.

The following link is to the announcement today about the acquisition of the Strand Mine in Idaho.

http://ih.advfn.com/p.php?pid=nmona&article=50063494

New experienced management with what is becoming a clear strategy to quickly reach production adds up to what I think is now a grossly undervalued stock. BUT, the needle hasn't moved much, YET.

Who knows what value the legacy properties will add but if the gold resources are real maybe there is grand slam home run by 2013 or sooner.

With $12,000,000 in gross production and $8,000,000 net with 51,000,000 shares outstanding applying a 20 times earnings multiplier against per share earnings, the stock should be valued at about $3.00 per share based on the Strand Mine production alone. In my humble opinion.

The new management of this company did a very smart strategic play by acquiring Strand and bypassing legacy properties for current production. Why? Because it is most likely none of them have resources proven and defined to the point they are ready for production.

Getting them there is very expensive in terms of exploration costs, time and the effective allocation of resources. The drilling and assay programs to property define a resource can be very extensive and expensive and should only be taken on with the mitigation of as much risk as possible.

Finding and exploiting the low hanging fruit before spending the extra bucks to to hit the mother load is simply a smart play. The major lenders and investors know this too and it won't be long before they start banging on the door to get a piece of this sure winner.

The gold mining sector we are operating in is not moving well at this time. Great breaking news is not moving the needle very much if at all so it is better to not expect much regardless of the news we may receive in the short run from DGRI.

I have been accumulating a stock that just broke news of an acquisition that will definitely go into production in the spring with scientifically proven resources. Should be a 5 beggar from here. The news barely moved it.

There are 100's of gold miners on my watch lists and 98% are red or neutral right now.

The end of year tax loss sell off rally will pick things up a little but the motivation is not sustainable.

A new gold and silver rally will again focus attention on the junior miners and exploration companies as we thaw out from the winter freeze.

At today's prices the value of the silver and gold noted is about $12,000,000 gross contained in 17,500 tons of material most of which is ready to haul and process.

SHSH finally breaks with news of a new acquisition that will go into production in the spring of 2012. This is a $.20 stock that is now per-production and should reflect that status and pricing but is way behind that curve.

This is the result of work done the last few months by a new Chairman, CEO and CFO with impressive resume's.

The company has been in business since 1969, owns a Silver mill and Gold mill and a bunch of silver and gold properties throughout Idaho and the northwest. The acquisition is 15 miles from the silver mill and apparently has a stockpile of low hanging fruit to start production.

I am sure that the pros who DD this are going to see the true value and act accordingly.

Good Luck!

SHSH finally breaks with news of a new acquisition that will go into production in the spring of 2012. This is a $.20 stock that is now per-production and should reflect that status and pricing but is way behind that curve.

This is the result of work done the last few months by a new Chairman, CEO and CFO with impressive resume's.

The company has been in business since 1969, owns a Silver mill and Gold mill and a bunch of silver and gold properties throughout Idaho and the northwest. The acquisition is 15 miles from the silver mill and apparently has a stockpile of low hanging fruit to start production.

I am sure that the pros who DD this are going to see the true value and act accordingly.

Good Luck!

Shoshone Silver/Gold Announces Letter of Intent for Silver Strand Mine

http://ih.advfn.com/p.php?pid=nmona&article=50063494

Chinese Mining company offer to buy Jaguar Mining for nearly $800 Million.

Link to Bloomberg article:

http://www.bloomberg.com/news/2011-11-16/shandong-gold-said-to-make-785-million-offer-to-buy-jaguar.html

There is a tremendous amount of upside in gold mining and DGRI has as good a chance as anyone to realize that potential with the Basin Gulch property.

The next article about reducing risk in the following post could have been written by Perttu himself who has probably experienced most if not all of the high risk conditions and unexpected results exploring BG that were mentioned in the article.

I think what it really means to us is that management has been looking for clear signs that spending money will have a good chance to produce a return. Money is scarce and those signs have yet to live up to expectations. Deferring work at BG displays some rational thinking and can go far to sustain a pathway to a producing company.

To say that the DGRI management team has been flooded with a tsunami of reality is an understatement. How they continue to navigate these waters will be interesting to watch.

Reducing risk in junior gold stock investment - Cook

Excellent sane approach to assessing risk and finding the 5% that will make it.

Link to article published at MineWeb.com

http://www.mineweb.com/mineweb/view/mineweb/en/page66?oid=139862&sn=Detail&pid=66

When will the 10Q be filed?

I can think of a lot of things I would do if I ran the company and I am sure the new guys are thinking hard.

First, I would do a forward split to 200,000,000 shares and sell the treasury when the pps get over $.10 +.

Invest the proceeds in exploration and production of legacy properties and acquire a few more with real proven resources.

Utilizing the major miner model, financed each new project separately with convertible debt and keep a steady stream of deals flowing through exploration and into production.

Drive production to where the company is worth $5.00 per share minimum and keep on going through the gold bubble that tops out in 4 or 5 years to a $20.00 per share company.

Just a few thoughts in my spare time.

I don't know the back story, but the money must have been good enough for Lex to turn loose of the company.

The new guys can make something happen.

Complete 10Q filed on EDGAR

http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8239180-1180-246508&type=sect&dcn=0001144204-11-063671

Good research. Keep up the good work. This is where the rubber meets the road in the mining industry. Veteran players know how to put deals together that work. Lot's of sellers merely test the market with their excess properties to see if they can find a bigger fool so to speak.

They try and get a lot of cash up front and major commitments from buyers to dump lots of cash into exploration and resource definition in a big hurry. Real miners tend to want to defer up front cash requirements to reaching thresholds.

Realistically, it is very expensive to perform even the minimal due diligence on any one project, leaving many potential spec buyers on the sidelines until they can raise the money (millions) to move a project forward.

When a property shows up on the industries radar that exceeds expectations, very few get a shot at it. These properties go under contract almost immediately only to show up on a major's property list down the road.

It is apparent that you are one of us who are looking for ways to identify potential winners in the gold mining arena. Keep up the grind and share your thoughts as many of us and those gems will turn up.

The problem as I see it, is that the NI 43-101 doesn't seem to be available to the shareholders from any source.

The illegality issue is one that is being played out worldwide by U.S based companies who have consistently used these documents to promote their stock without the legal right to do so in the U.S.

The SEC has forced many of these companies to comply with the laws by removing any reference to the reports in any filed documents or in promotional media, including websites.

Until recently, companies quite often got away with it. However the the fraud squads have taken hold of the issue and when they find a company that is non compliant and meets other criterion they can make life pretty miserable on these boards and elsewhere.

As difficult as it has been to buy stock in this company, I am now a shareholder and definitely want to hear managements side of the story going forward.

It is good that some discussion begins on this issue.

Other than the change in management and raising $2 million, the resource that peeked my interest is gold indicated in the Kimberly Mine and Rescue Mine as well a the gold processing mill nearby.

However, the NI 43-101 mentioned for either or both of these resources in the website, doesn't seem to exist. Attempts to find it on SADER have failed and there is no link to it on the website.

Having been around this for awhile, we have learned that if SHSH is not a Canadian listed company that the use of and promotion of an NI 43-101 report is, in fact, illegal in the U.S. and in fact, illegal in Canada if it is not registered in Canada.

Additionally, without any clear definition of the metallurgical resources available with the companies numerous mini9ng properties, it has been impossible to evaluate the value of the resources and the company adequately.

All of this is why this company is so intriguing and may have lots of hidden value. It also may have lots of hidden pot holes depending on implementation of operating plans for the future.

Hopefully the 10Q will shed some light on where this is going and what we can expect in the future.

The 250 ton production goal was established for operation of a fully operating pilot plant way back when. I would think a pilot plant would be part of the feasibility analysis but I am not sure if it survived after inclusion of the 7 to 10 day run utilizing the autoclave system.

The fully operational plant has always been considered a 2000 ton per day plant and may or may not be the optimal plant after reevaluation and application of the autoclave process. The important issue is that the process is scalable to a commercial level of production.

It looks like the market reacted so far to the 10Q in neutral. We do need to remember that there are only 141 reported shareholders. I think there are more because I think the brokers are looked upon as one shareholder even thought a lot of people buy through a brokerage company they don't list the clients separately.

My reaction, is that there are no negatives in the Clarkdale update and things are moving along as planned.

The annual meeting is in December in Nevada and my guess is that management would love to reveal the results of the entire testing process at the meeting. I can't think of any reason why testing and evaluation wouldn't be finished by December.

In any event the 7 to 10 day continuous production run is the king maker that will change a lot of lives forever. Hopefully this process begins in December and ends with the closing of a strong buy out offer from a major producer sometime in mid 2012.

Clarkdale Slag Project update per 10Q for September 30, 2011.

The short version is that testing continues on the gold extraction process from solution to assure that Iron and Silica are not suspended along with the gold. This is the part of the process that the application of heat and pressure from the autoclave changed the previously failed results so the suspended metals don't turn to mush when extracted.

This says to me that gold is being produced from solution and now it is a matter of determining the "best" method of extraction to be used commercially. It looks like we are almost home.

Clarkdale Slag Project . Since the second half of 2010, we have pursued autoclaving in an effort to prove our ability to commercially extract and recover precious and base metals from the slag material at our Clarkdale Slag Project. Autoclaving, a proven technology that is widely used within the mining industry, is a chemical leach process that utilizes elevated temperature and pressure in a closed autoclave system to extract precious and base metals from our slag material.

During the third quarter of 2011, we received the results of a progress report from independent engineering firm SGS Lakefield Research Chile, S.A. (“SGS”).

SGS performed a number of autoclave tests, under various metallurgical conditions, using both pressure oxidation (“POX”) and pressure oxidative leach (“POL”) testing methodologies . Results from the optimized POX and POL tests both resulted in approximately 0.5 opt (ounces per ton) of gold extracted into solution. The optimized POX tests produced slightly less than or equal to 0.5 opt gold and the optimized POL tests produced 0.5 opt gold or slightly greater. These results confirm the previous autoclave test results performed by our technical consultants, which yielded up to 0.5 opt of gold into solution using both of these methods. These results are consistent with other tests and analyses conducted by other independent consultants as well as our pilot test conducted last year at the Clarkdale Facility using a similar leach in an ambient temperature and pressure environment, rather than under autoclave conditions. Moreover, the SGS test results reaffirm that autoclaving does not dissolve the levels of iron and silica into solution as did the ambient leach, thereby improving the ability to recover gold from solution and thus improving process technical feasibility.

We are currently performing additional autoclave tests through our consultants and SGS to confirm and prove the repeatability of the optimized metallurgical protocols that yielded the highest gold extraction into solution at SGS. We are also performing gold recovery and extraction tests to determine the best method of recovering gold from the pregnant leach solution. This important step will also provide the data necessary to determine the recovered gold grade from solution and is expected to result in the production of gold dore, providing determination of recoverable gold grades.

SGS has advised us that the results of this test work is largely based on the analysis carried out on gold solutions emanating from the tests, by atomic absorption spectrophotometry. These analyses of gold in solution are not in agreement with fire assays analyses, which are both prone to analytical difficulties due to the refractory nature of the slag. Both SGS and Arrakis, Inc. (“Arrakis”) have recommended proceeding directly to the recovery of gold from solution using carbon or ion exchange resin technologies or other commonly used methods of extracting gold from solution. The recovery of gold will not only define the most cost-effective method of such recovery, but should also provide a tighter definition to the total process system mass balance.

Concurrent with these tests, we have commenced planning for limited continuous pilot tests in a larger multi-compartment autoclave (30-50 liters) as we move towards the completion of a bankable feasibility study. These limited continuous pilot tests will replicate a commercial autoclave system and should provide sufficient operating data to design and conduct the larger 7-10 day continuous pilot test required to obtain a bankable feasibility study and to design a commercial-scale production facility.

Clarkdale Slag Project – SGS Tests and Analysis

We engaged SGS to conduct bench-scale autoclave testing on material from our Clarkdale Slag Project, which contains approximately 20 million tons of copper smelter slag. SGS, with offices and laboratory facilities in Australia, Canada, Chile, Europe, Mexico, South Africa and Russia, has been providing metallurgical testing for the mining industry for over 60 years and is recognized as a world leader in the development and demonstration of bankable flowsheets and pilot plant programs. We retained SGS because SGS has the necessary qualifications, credentials and equipment to independently evaluate the processing methodology and autoclaving results previously achieved by our technical consultants.

Previous bench-and pilot-scale tests conducted during 2010 at the Clarkdale, Arizona pilot facility (the “Plant”) demonstrated that gold, copper and zinc could be extracted into an acid solution using chlorine compounds coupled with sulfuric acid at ambient temperature and pressure. However, due to the large quantity of iron and silica also dissolved during the process, the gold was extremely difficult to remove from solution.

We therefore sought alternate autoclaving methods for extracting metals from the slag. The methods that were examined included POX and POL. The POX method is a two-step process that uses sulfuric acid under elevated temperature and pressure to pre-treat (oxidize) an ore and dissolve base metals into solution prior to dissolving gold into solution in a subsequent ambient temperature and pressure leach. The POL method represents a variation of the Pressure Acid Leach (“PAL”) method, which operates at low pH with selective chemistry to dissolve the metal or metals of interest directly in the autoclave, resulting in a one-step process that places gold into solution. Test data confirms that if conducted correctly, only the metal of interest is placed into solution, with very minimal amounts of other elements being dissolved.

During the second half of 2010 and first half of 2011, Arrakis,, an independent metallurgical testing and analytical company, as well as our other independent consultants conducted over 100 bench-scale autoclave tests. The majority were comprised of two-part POX tests in which the Clarkdale slag was pre-oxidized in an 8-liter Parr Autoclave using sulfuric acid, and then the residue was subjected to the same chlorine chemistry leach originally used at the Plant to extract gold into solution. The POX tests indicated that a gold grade of 0.5 opt could be consistently placed into solution with reduced iron and silica, thereby improving the ability to recover gold from solution and thus improving process technical feasibility. A qualified and internationally recognized independent third party laboratory was therefore sought to confirm these results as a precursor to performing a continuous autoclave pilot test. SGS was retained to perform these tests. Our technical team subsequently traveled to Santiago, Chile with chain-of-custody Clarkdale slag samples and testing was commenced.

James Murray, President, Arrakis, managed and coordinated the test work; Richard Kunter, Richard S. Kunter and Associates, provided technical direction to the SGS testing program assisted by Roger Kelley, R.J. Kelley, Consulting Metallurgist, all of whom also provided independent expert reports to us with regard to the results at SGS. The conclusions drawn by the three independent consultants, in reviewing the SGS test work, confirm the results and conclusions of SGS.

Six POX tests and 12 POL tests were conducted at SGS. The initial tests for both methods showed lower gold values being recovered into solution while later optimized tests for both methods showed significantly higher gold values. This increase was due in large part to the necessarily empirical method of the autoclave tests whereby problems involving autoclave mechanical issues and chemistry formulations were resolved as they were identified. As subsequently corrected autoclave tests were conducted, gold values in solution increased. Both POX and POL tests therefore resulted in negligible amounts of gold recovered into solution at the beginning of the testing when several problems existed and approximately 0.5-0.6 opt gold at the end of the test period, as test protocols were optimized.

We are currently performing additional autoclave tests to support gold recovery from solution and have commenced the gold recovery tests. Concurrent with these tests, we have commenced planning for limited continuous pilot tests in a larger multi-compartment autoclave (30-50 liters) as we move towards the completion of a bankable feasibility study.

Additionally, since the POL method involves fewer process steps resulting in lower operating costs, and appears to consistently place higher grades of gold into solution, this process is likely superior to the POX method in achieving desired results. We will make a decision in the near future regarding which process to utilize in further pilot testing.

We expect to develop a more thorough economic analysis of the full-scale production facility, including specific capital and operating costs, funding schedules and funding sources during the feasibility evaluation. The scope, size, timing and cost of a full-scale production facility will be addressed in the bankable feasibility study. If we determine that we should use autoclaving, the capital costs will likely be higher than those of other methods, including open-vessel leaching, and such costs will need to be considered when comparing the various extraction methods.

Clarkdale Slag Project – History

Prior to 2007, while conducting testing on the slag material and to assist in the process of designing a large scale production module, we initially conducted our testing in a smaller scale pilot plant. During this initial testing process, we determined that we could effectively liberate gold, silver, copper and zinc from smaller quantities of ground slag material by employing:

·

a mechanical process to break up the slag material using a small vibratory mill in our crushing and grinding circuit, and

·

a relatively benign (halide) chemical leaching process to liberate the precious and base metals from the crushed and ground slag.

Our primary goal consistently has been to demonstrate the economic viability of the Clarkdale Slag Project, including the generation of a bankable feasibility study. This work has required developing a technically viable flow sheet for extracting gold, silver, copper and zinc from the slag material at the Clarkdale Slag Project site. We began work on the Clarkdale Slag Project under a joint venture arrangement with Verde River Iron Company (“VRIC”), the then-existing owners of the Clarkdale Slag Project site. We engaged qualified independent engineers, and drilled and sampled the slag pile, under chain-of-custody standards, in order to understand potential grades and tonnages. After obtaining results from these efforts, we proceeded to work on the metallurgy capable of unlocking the value of the metals contained in the slag material. To achieve this objective, we operated a small pilot plant in Phoenix, Arizona, and completed an internal pre-feasibility study. The results of this work demonstrated that, with proper grinding, a simple halide leach could extract the precious and base metals in sufficient quantities which could potentially be economically viable. The next step involved the construction of a larger pilot plant (production module) at the Clarkdale Slag Project site, which was designed to test the commercial viability of the process and to complete a feasibility study. We proceeded to build one production module rather than complete a theoretical feasibility study. Concurrently, we completed the acquisition of the Clarkdale Slag Project site from the previous owners.


Thereafter, we designed and built a production module which was anticipated to process between 100 and 250 tons of slag material per day. The process of building and equipping the module was completed in late 2008. We ran into delays in construction and numerous technical difficulties in connection with the scaling up of the processes previously tested for the commercialization of the Clarkdale Slag Project. Although we were able to assay the milled slag product from the crushing and grinding circuit that demonstrated the presence of 0.4 ounces per ton of gold in the slag material, the benign leach chemistry used in the production module was unable to duplicate the results of the liberation of gold from the slag material achieved in the pilot plant.

Most of 2009 was devoted to attempts to commission and optimize the production module, during which time we encountered numerous challenges involving its crushing and grinding circuit. In early 2010, we brought in experienced outside engineering resources to better define and execute on a multi-pronged approach to achieve commercial feasibility of the Clarkdale Slag Project. This refocusing effort has resulted in significant progress, both operationally and from a research and development perspective.

The key to the potential success of the flow sheet involves the mechanical liberation of the metals by proper grinding. This process proved to be a significant challenge for the larger grinding equipment installed on site. After an entire year of innovative attempts and modifications, the grinding circuit did not liberate the precious metals sufficiently to allow the simple and benign halide leach circuit to operate effectively. We concluded that investigation of alternative grinding and leaching methods was necessary in order to solve the problem. We conducted preliminary studies of these alternative approaches to the process flow sheet, which have shown promising results and are the current focus of our efforts.

Initially during the start-up of the production module, emphasis was placed on the crushing and grinding circuit since it was believed, and shown in the pilot plant, that in order to leach the highest amount of gold from the slag material with our benign halide leach, mechanical liberation of gold particles was necessary via a very fine grind. As we began to crush and grind larger amounts of slag material through the production module, we encountered a number of equipment wear issues. Highly abrasive carbon-rich ferro-silicates (containing carbon, iron and silica) comprise about 90% of the slag material. The hardness of these materials caused significant wear and tear on the metal crushers and grinders. Further, as we increased the amount of slag material in the crushing and grinding circuit, we experienced difficulties in grinding the slag material into a fine enough material to be effectively leached by our benign halide leaching process. Our experience with the slag material in the larger scale production module required us to seek out more advanced hard facing technology and wear-resistant surfacing media for our crushing and grinding equipment. Initially, we believed that the wear issues relating to the throughput rate of the crushing and grinding circuit had been resolved. However, work during the first half of 2010 revealed that these issues were still present.

As a result of the challenges that arose with the equipment wear issues and our not being able to grind the slag material in the production module continuously, we adjusted the chemical characteristics of the leach to a more acidic leach in an effort to put less emphasis on the mechanical liberation and put more emphasis on the chemical liberation in an effort to maximize gold extraction from the slag material. Our goal was to achieve similar results in gold extraction from the slag material to those obtained in the smaller scale pilot plant, without significantly changing the grinding circuit or seeking alternatives to the design of the larger scale production module that might have a significantly greater capital cost than we had originally planned. In doing this testing, we encountered difficulties with the liberation of excess amounts of iron and silica in the leaching process, which resulted in difficulties with our filtration process and made the recovery of gold from the pregnant leach solution more difficult.


Because of these challenges, which have affected our ability to operate the production module on a continuous basis, the data from our operations reflects that our production module will not be able to process 100 to 250 tons per day, as originally planned. However, we anticipate the continued use of the facility for analytical purposes. The information received from the operation of the production module has been invaluable in providing information on how to process the slag and extract the base and precious metals on a commercial scale. In particular, we have a significant amount of data on various grinds and leach chemistries and their affect on leaching the desired (gold, silver, copper and zinc) and undesired (iron and silica) metals into solution. We also have a better understanding of the equipment wear issues that need to be considered when dealing with such hard and abrasive material. All of this data has provided us with a strong knowledge base that can be drawn upon as we continue to make adjustments to our process going forward.

During 2010, our technical team tested four potential flow sheets in an effort to identify new grinding, leaching extraction and equipment alternatives that would be suitable and commercially viable for the extraction of precious and base metals from the slag material. Based on this testing program, we believe that autoclaving shows the most promise, and have determined to pursue this method since the second half of 2010.

To test the commercial viability of the autoclave approach, we performed over 100 bench-scale (6-liter autoclave) tests which showed to be successful in leaching gold into solution from the slag material. In an effort to maximize gold extraction from the slag material, we tested several different leach protocols and grind sizes during our autoclave tests. Results of these bench tests by our consultants indicate that autoclaving can provide gold recoveries into solution of up to 0.5 ounces per ton (opt) from the samples which we have tested. Prior sampling tests on the slag pile have reflected that there may be variances in the amount of gold per ton within the composition of the slag in different parts of the slag pile.

Although the plant site in Clarkdale remains a valuable resource for the technical team, it no longer requires the previous levels of staffing during our autoclave testing and feasibility testing activities. Thus, as of early September 2010, we reduced the number of employees working at the Clarkdale Slag Project by approximately 50% to levels appropriate only for essential and necessary tasks, while assuring that important permits remain in good standing.

I have no idea what the ECPN process is and why it is mentioned in the same sentence with SRCH.

It would be naive to think that the major miners don't have intimate knowledge about what SRCH is doing. Especially Newmont Minting who has long been familiar with utilizing and employes Autoclaves in the sheltering process.

Do you think that the hired consulting scientist who introduced this process to SRCH dreamed it up out of the blue?

The use of the autoclave was introduced to attempt to solve a specific reoccurring problem in the old process. The details are discussed in the SEC filings. It turns out that it was the right solution to the problem that has allowed the project to move forward to the next step.

The opinion expressed by your friends is purely "contempt before investigation". In order to have any credibility, the contempt for the SRCH process must be dissected into it's operating parts and proven to be without merit and therefor the results of rigorous testing with positive results and validation by independent outside professionals determined to be a fraudulent representation.

Anything less and it is obvious that your opinion has no basis in fact and no value for current or prospective investors.

The SRCH process, that is in the final stages of independent verification and soon heading for a pilot production run has nothing to do with Delgratia or the promotion of a fly ash process.

I don't think Delgratia promoted a fly ash process but really don't know that much.

Carl S. Ager SR. has not been affiliated with SRCH in a management capacity for nearly two years. He remains a very largo shareholder and has a lot of skin in this game. His production theory failed to produce results and he was replaced by new management and a group of professional scientists to develop a new process that did produce positive results.

Additionally, and most significantly, the company has been able to raise large amounts of capital from institutional investors to continue and to refine development of the successful process.

The final stage will be about a two week continuous production run of the perfected process and it's success then becomes the foundation of a bankable feasibility analysis.

It is my opinion, if a major company steps up to buy out SRCH for $15.00 per share, management would recommend the sale to the shareholders.

I don't think DGRI is a dead issue by any stretch of imagination. Because of it's history and performance so far it's not for everyone.

As I have stated previously, I like to find troubled property and buy it cheap. DGRI has always measured up to that criterion.

My intent is not to dis the company but to try and find a way to encourage management to produce tangible bankable results and improve shareholder communication and therefor the value of the company.

I think it is now time to remove all subjectivity from the evaluation equation and base support of the company on objective results and behavior.

The company can expect even more widespread criticism if performance is not improved.

The fact remains that the company has not once proven a viable bankable mining resource at any of it's properties.

There may be reason to believe that this condition will change at some time in the future, but given the companies past there is no assurance this will happen or that the shareholders will be told about it one way or the other.

Under these circumstances what measure of valuation should I use to determine the value of the stock?

It is not my intent to dis the stock for any reason. I own 2,000,000 shares at a much higher pps than we see today.

It is my intent to try and put an end to the companies poor performance and horrible communication record. It is not uncommon for shareholders to take a stand against a management that repeats it's sins and delivers poor performance over and over again. Jim Cramer doe's it every day on national TV.

In this business, respect for management is earned one nugget at a time. It's nothing personal. Do something that will make me money and you have my respect. Until then, expect the harsh reality of facing extreme criticism.

There is no doubt that if an investor can handle the risk, that DGRI is a bottom play at this point in time. It may not be a buy and hold but we have seen the volatility making some money for a few astute smart investors.

Otherwise, it is difficult for me to recommend DGRI as a long term investment to my friends and family right now.

I fear the record of performance and poor communication will continue.

My premise is simple, if you make a promise and can't meet a deadline, tell me why and your next step to fulfill that promise. Updates are easy and are often communicated on a companies website.

For example: DGRI, Mini Moore Mine Update, "Due to circumstances beyond our control, the core sample testing and assay results have been delayed because of____________________. (bad weather, permits, a non-disclosure agreement with a prospective lender, whatever) We have established a new deadline to complete these tasks 60 days from the date of this announcement and will keep shareholders updated on our progress at this location on the website."

My question is why wouldn't you improve communication to this level if you knew that it would put your shareholders at ease and endear you to the thousands who believe in you? Do you think it might improve the pps?

This isn't open heart surgery. It's a simple band aid once in awhile when you scrape your knee. It takes a lot of band aids for a lot of scraped knees when you are growing up. I still scrape a knee once in awhile, don't you?

There is no doubt that you possess a legacy of negotiating experience. One of the benefits of a long career in the trenches is the ability to look at the circumstances from all sides and consider numerous reasons for certain behaviors and develop and present options that could lead to compromise or even complete adoption of a position.

In this regard, the postulate forwarded as possible justification for the companies communication posture sounds reasonable and easily acceptable. I would suggest however that if that were the case, the same tired old pattern of "set up and take away" would be replaced by something new, a fresh and refreshing way to not actually produce results and then withhold sharing results regardless of the outcome.

To make a long story short, I simply can no longer support a "team" that claims the gold and silver are there, just trust me.

If they want my vote, they need to earn it by actually doing something that will provide a return on my investment.

What they want to do or plan to do or even what we think they might be doing is worthless speculation in my mind.

After all if you and I invest our money so we can make money, is there any reason why we should put up with this companies shareholder communication protocol while anyone who is invested here has lost at least 50% of their money?

The ultimate outcome may be positive for us but we are betting on a track record that has been involved in at least 5 mining operations or sites in as many years and they are still "trying" to make something work. It is difficult to not be a little judgmental about the serious lack of performance and consequently the expenditure of vast sums of investor cash to support these results.

I have learned the hard way that investors really need to understand the technology supporting mining or any other endeavor.

An example is that a former Director for SRCH has started another company with a very weird technological process to extract gold from coal ash. It has quite a following but no scientific foundation for the efficacy of the process.

It shouldn't be a surprise that the operating plant that this company has employed is the very same plant that SRCH's predecessor, Verde River Iron Company built and used to do the first successful bench test that got SRCH rolling.

Now it is converted to the coal ash scheme.

Carl S. Ager SR. and the CEO of this new company were partners in starting up SRCH and acquiring Verde Rive.

I am speculating that when Carl failed to perfect the original process for SRCH, he ran for the hills. By then Luxor was deep in to this thing and helped him find the door, brought in their own Director and hired the new mgt. team to explore the options that now seem to be bearing fruit.

Too big to fail, No. Too embarrassing. Yes

The science behind SRCH's slag reclamation process represents a really big breakthrough and I am looking forward to retiring sometime next year when the sale closes.

To be honest about the filings, they do clear up previous misinformation, misrepresentations and withholds of information.

Certainly, one reason for all the forensics and restatements is because it is a requirement by regulatory authorities to possibly avoid sanctions and indictment.

Another good reason is once the threat of sanctions and indictment is removed, the future is no longer tainted and de-listing the stock is no longer a possibility and prospective lenders, acquisition or JV partner's can successfully join hands and move the company forward with no systemic risk.

Strategically, to the extent that only the sale of treasury stock is available to support the ongoing financial operation of the company, we know that DGRI has internally run out of ammunition to incite new money into the game in any significant amount to support it's appetite for operating capital. We haven't seen a consistent battering of the pps to think the company is dumping shares yet.

So, if I need to move the share price so I can dump shares to cover nearly $100,000 pr month in operating and debt service or attract a partner or a lender what should I do?

Lease a speculative silver mine in Idaho? Sure, why not. But like the erstwhile Jungo lease, will that really put a dent in the overhead in the long run, who knows. Neither of these initiatives seem to be viable solutions to a pressing short term finance problem.

But while I am playing this game, what I am really looking for is a way to leverage the potential at Basin Gulch. I'm talking to real miners and real potential finance partners who will put up some real money to do the necessary exploration and get what there is to get.

This solution will require the restructuring of the existing debt with Deinhart and others and relinquishment of some control of the company. Happens all the time and everyone can be better off in both the short and long run. Basin Gulch is the only asset that has any real potential sustainable value and is attractive enough to pull in some money one way or the other.

As shareholders we have been distracted into thinking there is some other solution to the companies financial problems somewhere else. I hope the distraction is temporary and the new pristine DGRI prevails in once again showcasing it's potential crown jewel at Basin Gulch.

There is always a logical reason why things happen and don't happen. The unreasonable part of the equation as far as maintaining good communication with the shareholders is concerned by fulfilling promises is the demonstrated streak of disloyalty to shareholders for whatever reason by not fulfilling those promises.

Everyone is forgiving when changes occur or plans must change but to be told that an event will occur within a week and the results reported and production started soon thereafter and then nothing for a month is just unacceptable.

If the company had a proven resource somewhere that didn't cost millions in exploratory work to prove up or something solid going on somewhere and they were so busy getting ready to produce something, well ok, there can be some forbearance for bad behavior.

My point is that DGRI has no track record of producing results based upon it's stated plans after acquiring and supposedly exploring a property.

This dismal record of achievement must change and the management of the company must begin to express it's loyalty to the existing shareholders or we will experience more of the same from the disenchanted.

Sixteen trades so far today. Not exactly a run one way or the other. If a few trades can move the stock 10% or more there is something wrong with the base and the stock is being used as someones sandbox. You can see this in the 800,000 share sell the other day above $.006 and the buy today for the same share count at $.0033. Survey 100's of similar companies and even the major gold miners and you will find very low volumes and very little stock price movement one way or the other right now. Certainly there are exceptions but generally it is very slow out there.

I can show you other gold companies where the shareholder base is so tight no one hardly ever sells below the ask and when they do, it is for very small amounts of stock.

Of course, the companies behavior plays a significant role in establishing the value of the stock but so does the loyalty of the shareholder base.

The way I see it is that the company continues to demonstrate it's disloyalty to the shareholders and many savvy shareholders return the favor by playing if not creating the price movements.

However, this game is played with many, probably most, up and coming exploration, pre-production stage gold mining companies.

Many of the same complaints expressed here are almost verbatim those expressed on other gold mining boards.

I believe the disloyalty disease is caused by over promising and under giving. After all the management of these companies have been able to make a fairly good living with promises that do, for the most part, become delayed or fall apart during the early development stages.

Understanding this phenomenon, it becomes necessary for astute investors to sift through and dig deeper into these companies to find those nuggets of truth that can and should ultimately build wealth for the shareholders.

Those nuggets are either there or they are not, you be the judge.

Regarding the 8K, looks like McDougal intends to sell shares at a price greater than his option price of $.61 per share in order to exercise his option.

I think it is always good news when an insider exercises options regardless of what it takes to do so.

I think the buyout value is around $15.00 per share, so the 200,000 shares will be worth $3,000,000.

Frankly, I'm surprised there hasn't been a run on this stock by now. There may have been a quiet run for quite a long time now considering the relatively high average volumes lately.

Management probably noticed this when they now have proposed authorization of 40,000,000 of preferred stock that could easily counter a hostile takeover attempt.

All of this maneuvering is only meaningful when they get the process working in a continuous two week production run producing gold. When this is validated by outside sources we are off to the races and the buyout guys will show up. Actually, I'm sure they already have and are just waiting for confirmation to make their offer. After all they will be buying $20,000,000,000. worth of gold for $2 billion if that is the ultimate deal.. The sweetener is that gold keeps going up and when it doubles in 5 years, they get all their money back, on paper.

What do you think the conditions would be for the company to enter the "mainia" phase other than the breakout of gold and silver prices?

The conservative prognosticators are telling us $1900 gold by the end of the year and $2000 plus by the end of 2012. Not exactly a breakout.

I am quite familiar with the format and necessary content of an NI 43-101 but do appreciate your interest in education.

The report for the Kimberly or possibly the Rescue Mine is mentioned on the Shoshone website. It makes specific reference to resource content.

My concern is that shareholders have based their investment decisions on the content of the report and that is the reason the value of the pps is being supported whereas there is no other reason for the support historically.

Again, I cannot find any scientific proof for the companies assertions about the size and scope of resources mentioned on the website.

I have no doubt that the new guys will move this company to new and great heights with or without the present resources.

The company published the existence of the NI 43-101 on their website and i want them to prove it exists and cough it up.

Thanks for the response. I think this is one of those deals that you need to look to the back story for clues.

Given what we know there is no way to validate any resource on any property. Troubling but not lethal.

The takeover by 3 new guys with background has substance and value.

It looks like they arranged for the $2 million in the private offering. This certainly adds value.

The tight fisted stockholders are keeping the pps up and there just isn't any support for it . Nevertheless, I am accumulating when I can.

The new guys are pros and know this business. I think they must be thinking about a forward stock split. If they release anything positive in the 10Q it will drive the pps up to a level that the stock may become unmarketable in the spec market. If they start producing right away that may make a big difference.

I don't like the price and the volume but it has never been a volume player. That is going to change and it may be as soon as the filing of the 8K.

So the NI 43-101 was never filed in Canada. They have flown under the radar on this one so lets wait untie the 8K and take that on later. After we get a copy somewhere.