This may be why Goldcorp would pay what at first glance appears to be $765./oz. for 4.7 mil oz. Au equiv. at Cerro Negro, Argentina.

The veins at Cerro Negro "remain open at depth", and the company expects to find higher grade and higher margin deposit results at San Marcos and Mariana Deposits from the latest exploration drilling results.

Cerro Negro has 25,000 hectares in it, which is 96 sq. miles, with 10 currently identified prospect areas with gold showing.

"The property contains a large, very prospective land package, with a rich network of near-surface gold veins that are easily mineable at very low costs. The focus of current efforts is on growing gold reserves through exploration of these veins and testing new vein targets."

What Goldcorp implies is that it expects to find much larger reserves and resources than the newly increased 4.7 mil oz. Au equiv. at Cerro Negro. Their 96 sq. mile property with gold veins on 6 sites open at depth, and other prospects not yet explored or drilled, are what drove the company to pay $3.6 bil.

The tone of Goldcorp's site indicates they expect to find and mine much larger millions of oz's of Au equiv. at Cerro Negro. How much more? They don't say. But if they expect to find double the current approx. 5 mil oz. Au equiv. that they have "on the books", then their cost/oz. Au equiv. would be around $400./oz. Au equiv, not 765./oz. $400/ oz. for Au is top dollar paid in the last few yrs. for developed mines.

My questions to RS led to: We will continue to use the Belle Peck tailings this yr. and into next yr. We are making money milling the Belle Peck tailings, while we negotiate with BLM for road construction to access some other piles.

My questions to RS at the shm produced some answers that may be worth noting.

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This summer SFMI geologists surveyed and got ready for claims to BLM on 1,500 additional acres on WEM. Our geologists are trying to map and sample the veins where we find them both on and off land we now claim. The 1,500 acres of new claims will add 2.3 square miles to SFMI's present holdings of 2.2 square miles. I would expect many of the new claims to be north of the peak of WEM, where RS expects to find new cross veins. The new acreage will more than double the acreage SFMI now controls.

RS said that the Poorman and Oro Fino main fault vein systems probably extend 4 to 5 miles N-S along strike. The historical area mined along both the Poorman and Oro Fino was about 1.5 miles each. If RS is correct that the vein systems may reach 4-5 miles in length, then big discoveries of Au-Ag are in store.

RS also stated that there were bound to be more cross veins on the north side of WEM, and that there was a good chance that we would find veins that were "surface enriched" and had not been previously mined. The highest oz./t Au-Ag mined on WEM was mined within 300' of the surface. If any new vein enriched areas are found, SFMI may have bonanza grades like the miners in the 1860's-1870's. Bonanza grade is Au exceeding 1 oz./t.

RS thinks that the Cumberland vein structure is 4-5 miles long, most of which has not been mined.

Cape Horn Mine did not touch much of the Au in it's area, which is an extension of the Oro Fino vein system to the south. We own all of the Cape Horn claims and veins and are surveying them further.

I think SFMI has erred by dropping a decimal place in the value of silver in ounces/ton on their estimate of revenues in "SFMI revised 2011 Updated History of Mining On War Eagle Mt.", pg. 23, dated 8/16/2011. Instead of 4.7 0z. silver/ton, it should read .483 oz. silver/ton.

They also erred in the number of grams in one ounce of silver and gold used for calculations on the pg. 23 chart. They used 31.4 grams/oz. silver when the correct number is 31.1 grams/oz. silver

If corrected figures for silver are used, then silver revenue is only one tenth what pg. 23 shows, and should be $1,981./day, not $19,639./day silver.

This changes the yearly total of revenue to $ 3,469,440./yr.