Silver Falcon Mining Inc. (fka SFMI)

[Imperial Whazoo]

I'll explain it to everyone, then.

Simply put,

under our new higher tax environment, if SFMI maintains safety staff or does work or buys equipment that is expensed in such a way as to leverage the tax advantages, then any evidence at all that SFMI has gold and/or silver in the tunnel and/or on the mountain and/or in the piles, will attract buyers who are faced with their own high tax bills for 2013. Any such entity, whether corporate or private, will substantially benefit from buying SFMI, and the financial attractiveness of SFMI is thus a counter-intuitive reality. In fact, the need to reduce taxes will drive up the value of a buyout in a manner proportionately inverse to all this worry and hand wringing about accumulated years of losses and unprofitable operations. This counter-intuitive reality is driven entirely by the beneficial effects on SFMI's that come from tax advantages.

Simple as that.

If some entity buys SFMI, and if SFMI has tax loss carry forward, tax credits, and so forth, then the value to the purchaser is amplified. I talked to the senior partner of a firm that is specifically experienced in this set of tax issues for small businesses like SFMI. I talked to him for an hour yesterday. He confirmed and added to my knowledge considerably.

What SFMI has here is a perfect storm that is due in large part to this counter-intuitve tax reality, so that is why i'm taking time to hammer out the facts about the value proposition that exists in 2013.

For a buyer, if there is even the slightest evidence that the tunnel and/or the mountain and/or the piles have value, then they can realistically be expected to pay more to buy SFMI than would ever be considered if SFMI were just a loss laden start-up.

This tax-driven counter-intuitive reality exists for SFMI because of the buildings that are about to be completed, the equipment that is about to be bought, the work in the tunnel that is about to be begun, and the drilling on the mountain that is likely this summer.

I'll revisit some specific examples:

- SFMI can take of 50% of safety related equipment costs.

- SFMI gets a tax credit for safety worker expenses.

- SFMI get to take advantage of 50% write-offs on appertenances. The senior partner of the tax firm told me that they can write off 50% of detachable appertenances to buildings built (such as the lab and the cyanidization circuit and the smelter and the mill extension).

I could detail a lot of advantages to SFMI, but lets look at one, as an example: accelerated depreciation on equipment.

If a piece of equipment is not able to be subject to the 50% write-off applicable to safety related equipment, SFMI can depreciate it at an accelerated rate, which means that every piece of equipment is afforded favorable tax treatment in 2013.

How great is that? LOL.

IMHO, its obvious that tax matters are extremely important for SFMI in 2013. Its a set of circumstances whose impact is simple to understand.

Its clear that, if even a hint of gold & silver shows up because of work done in 2013, there will be an enormous amount of value perceived as accruing therefrom.

IMHO, the most important issue for SFMI in 2013 is to do work that demonstrates that the perception that there is gold & silver in the tunnel and/or the mountain and/or the piles is a true perception.

And lastly, I think there is a high degree of probability that work in the tunnel and/or on the mountain and/or at the mill will come to fruition in 2013.

Hope this helps.

:o)

Imperial Whazoo