Silver Falcon Mining Inc. (fka SFMI)

[oryx]

The 10Q contains nothing new or unexpected.

First, the money quote (literally):

We expect to begin recording regular revenues from the shipment of bullion dore bars in the fourth quarter.

The burn rate for 2011 is under $1M/month. Pretty good for everything they are doing, including the mill expansion and smelter/lab/storage facility construction.

Mill operating expenses of $1.4M for nine months, or ~$155k/month. About the same, maybe a bit higher- but then they are increasing capacity.

The number of shares at the end of last year was 286M. As of June 30, it was 321M. As of September 30, 342M. So an average of ~ 20M shares per quarter, which has been pretty consistent. Again, not bad for all that they are accomplishing. That rate should be reduced as revenue reduces the need to issue shares, and the share buyback will also offset the share increases. For the nine months of this year, the 55M shares breaks down as follows:

5,898,483 shares of Class A Common Stock upon conversion of promissory notes with a principal balance of $492,600.

27,593,829 shares of Class A Common Stock were issued to various vendors for consulting services valued at $3,809,000.

7,357,148 shares of Class A Common Stock valued at $992,608 were issued in payment of accrued compensation.

245,045 shares of Class A Common Stock were issued to a vendor for the purchase of equipment valued at $24,825.

14,000,000 shares of Class A Common Stock valued at $1,553,300 were issued to a vendor for various exploration and construction projects at our mill site and mine sites.

144,000 shares of Class A Common Stock were issued to note holders for interest of $13,824.

Note that promissory notes of $492k were redeemed for 5.898M shares. That's about .083/share. Also, the new notes issued this year have conversion prices averaging over .10/share. Also note that those numbers are much higher than the .015 that is constantly being harped on here. That's because the outstanding notes have "conversion prices ranging from $0.015 to $0.276 per share". Wonder why the notes due at .276 are never mentioned, just the lower value ones?

One further note about the conversion debt. Any debt redeemable above the present share price will probably be held at least until the share price gets above the conversion price- otherwise it's better to collect the debt in cash. So any debt that has been converted is likely the debt priced at a lower share price. Much of the remaining debt is likely debt in the higher end of the .015-.276 range, meaning fewer shares to settle the debt.