Silver Falcon Mining Inc. (fka SFMI)

[Imperial Whazoo]

I think you have it right.

I want everybody to think about the various paths "Frenchie", as he is disrespectfully referred to, could have taken in financing his company.

Go back to the base SEC filings, folks, and read them in order.

In way of preface, I held a small developing mining operation about two years ago. They gradually sold their assets to Standard Bank and to a branch of a big Japanese bank. The sellingtook about 6 years, and each time they did a deal to raise money, the banks took, as collateral, a little bit more of the company. Money flowed in to build out the mine and each year, the process repeated. Every time a deal was done, the company issued a PR praising the loyalty of the banking partnership members.

Finally, just about 8 years in, they finally got to the point where they were ready to open their mine.

Surprise! Surprise! Surprise! Their loyal banking partners foreclosed on them, even though the company was current and even though the years of hard work were on the brink of turning out favorably.

Standard Bank & the Japanese consortium forclosed & all the common shareholders lost everything.

Question: could it be that SFMI has done a good thing by not selling its soul to bankers and finaciers in order to do their 43-101, similar to the above mentioned real hisrorical example?

I mean... realize this fact: they borrowed, drilled a bit, proved something up, used the results to get more loans, and did it (that holy "43-101") over and over again. The calls for a 43-101 are made legitimatekly, to an extent..... but it must be inserted as a fact in the conversation that, to do a 43-101, you have to raise money. And since a 43-101 is never "DONE", it becomes a patterened thing and it alone can account for the very destruction of the company having to do the many stages of a 43-101 to make developmental progress.

See?? A 43-101 is not just a favorable thing. It can, and often does become, a lead anvil that drowns the company. Thats REAL WORLD, people.

Perhaps, the "NOVEL" approach "Frenchie" has charted is not all bad, after all.

Hmmmmm?!?!???

Fact is, SFMI, run by "Frenchie", could have done this kind of thing and in doing so, the yowls of outrage over the pace of progress and the lack of drilling and the failure to do a 43-101 would have been quieted.

And I bet my bottom dollar that, had "Frenchie" followed this "BETTER" (LOL LOL LOL!!) business plan, we would all eventually lose everything to the carnivores and vultures.

And so, lets look at what "Frenchie" did, instead.... and at what he also, did not do.... instead!!

It is a fact that the insiders granted themselves big salaries & perks. If anyone is of the mind to think it is wrong for them to have done this, then thats fine with me. People can feel that nepotism is a terrible crime, if they wish. I just happen to hold a slightly different view, LOL.

I'd really rather have "insiders" control SFMI than to have to have done the slow death sellout described above. I hate vultures and carnivores a million times more than nepotistic insiders.

Anyway, regardless of what is felt about the merits of insiders benefitting in the manner they have done at SFMI, it remains that the set of FACTS with which we all have to deal are that SFMI is a family owned company. Simple as that. Live with it & consider that there are worse things thatn having a family control a start-up company's fate. Think about that, or as my roommate used to say: "Put that in yer pipe and smoke it!!" LOL.

OK. So, insiders control things and they gave themselves fat pay packages.

What did the insiders do with the fat salaries they gave themselves?

Did they hire a batallion of pump 'n dump newsletter writers to trumpet the company?

Bear in mind that a lot of companies in stinky pinky-land hire armies of promoters and they give them vast amounts of half price shares to pump the stock.

Did "Frenchie" do this?

We all know he did not.

He could have. But he didn't.

Had he done so, I'd be right there with the people who despise him. I'd be first in line to say the "Frenchie" troupe was nothing more than a clitch of crooks who use SFMI to print money and dilute the value of honest shareholder's positions.

I'd be first in line to call him a fraud.... and worse!!

But FACT IS: "Frenchie" did not do this.

OK. So, did he hire Apple or Mirimar or any other such vulture firm to "lend" him funding in exchange for half price shares?

A lot of folks on this board were holders of shares in a company that I, too, got deceived by, which did hire Apple and did dump vast shares at half price. The money did not flow to the company. It diluted the shares outstanding to where they were worthless and the money apparently went into the pockets of a guy from Chicago who has since disappeared.

Did "Frenchie" do this? Did he hire a vulture firm via a dilution scheme like the above?

We all know he could have, but he did not.

For all the accusations of dilution, it looks to me like none of the commonly used dilutive trickeries/schemes were ever employed by "Frenchie".

What "Frenchie" did was this.

He and his cadre of insiders took large deferred salaries. Check the facts. The SEC filings openly tell us this happened.

Then, last year, they paid themselves. Again, check the facts. The SEC filings openly tell us this happened.

But they did not take money. They took RESTRICTED SHARES.

Check the facts. The SEC filings openly tell us this happened.

They did not issue half-price shares, either. Again, check the facts. The SEC filings openly tell us this happened.

They paid themselves fat salaries with restricted shares.

From an accounting point of view, debts owed to them were removed from the books and they took onto the books shares that they voluntarily chose to get which they can not trade. In accounting terms, they made a maneuver that greatly improved the company balance sheet rather than simply enriching themselves via cash generated from discount share issuance schemes.

Was what they did.... was it dilutive in terms of total shares issued, for them to have done this?

Yes it was. But they are RESTRICTED. They could have taken cash for half price shares, but instead, they sanatized the balance sheet and deferred the day they get RICH until all of us benefit from the sale of the company.

Bear this in mind, too. All the half price schemes to issue shares for cash take money out of shareholder pockets. However, by taking deferred salaries as restricted shares, they set up a situation where their getting rich happens when cash flows from an outside party (NOT DILUION OF SHAREHOLDERS). Their getting rich happens at the sale of the company rather than at a present-time moment when they issue half-price shares to vultures.

"Frenchie" chose to take business steps that diluted the company the least possible amount and which, from an accounting point of view, resulted in a healthier balance sheet. And "Frenchie's" actions set a future date for getting rich AND SET UP A CASE WHERE HE GETS RICH FROM OUTSIDE MONEY AT THE TIME OF THE SALE OF THE COMPANY RATHER THAN FROM SHAREHOLDER DILUTION IN THE PRESENT.

I think these guys intend to sell the company.

When they sell the company, they make massive amounts, but the money that makes them rich comes from the deal & it does not come out of shareholder pockets.

The accuasations that they are lining their pockets via the dilution they have promulgated do not appear to be true at all.

So, far from robbing my pocket by diluting to high heaven, these guys.... these allegedly thuggish insiders and benefactors of "Frenchie".... these guys CHOSE DELIBERATELY TO DO AS LITTLE DAMAGE AS THEY POSSIBLY COULD TO THE ACTUAL SHARE PRICE POSITIONS OF COMMON SHAREHOLDERS.

They voluntarily structured a deal that defers the date when they get rich and that structures the event in such a way that they get rich from the sale of the company.

So I think the smart thing to do is to turn a deaf ear to the yowling about "dilution". Sure, there are a lot more shares now than in the past, but the facts do not tell a tale of "Frenchie" robbing my pocket to make the largest portion of what he hopes to obtain from devoting himself to this high-risk venture.

In America, we all hate nepotism, but given the choice of what happened when the "STANDARD" financing path was taken (via loans from banking sources) or via a pump 'n dump scheme, I much prefer nepotistic insiders who illustrate that they are not simply gutting the company.

Thats my take, unpopular though it is certainly going to be.

With that said, Happy New Year, people. I think we will see drills appear and we will see drilling on top of AND inside of the mountain in 2013.

And I think the reports of the drill cores will be FABULOUS!!

I have absolutely no doubt that 2013 will be great for SFMI. Also, I do not know if the sale of the company will happen in 2013, but I would not be the least bit surprised.

Hope that helps, people.

:o)

Imperial Whazoo