Standard Mining, ( Formerly Quest International ) Message Board

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Gold/Mining/Energy : Standard Mining, ( Formerly Quest International )

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To: ThomasJ.Menning who wrote (410)	5/30/2000 12:53:00 PM
From: ThomasJ.Menning	Read Replies (3) of 462

Let me begin by saying that I am still one of the largest shareholders in this company; so it is not in my best interest to trash the management. That being said, let me critique the proposed acquisition of El Chanate. Current Facts: 1. Gold is fluctuating between $270 and $280 per ounce! 2. There is no appetite on behalf of lending institutions to provide financing for the production of gold! 3. Equity financing appears to be the only way to raise capital! Acquisition Facts: 1. That SDM has enough cash in the treasury to make the US $200,000 dollar payment required at the completion of their due diligence. 2. That SDM will need to raise US 1,800,000 (CDN $2,700,00)by January 1, 2001. With the current share price and current market conditions the company will need to issue approximately 10,000,000 shares and 10,000,000 purchase warrant shares. With those kinds of numbers the company will once again have over 40,000,000 shares outstanding and will still not be in production! 3. To my knowledge SDM has not published any estimates regarding the capital requirements for production. Where will these dollars come from? 4. The royalty structure appears to be very rich in favor of the seller! This is Anglo Americans means of hedging! 5. If the property is that good, why is Anglo American willing to part with it? Answer because it is too small! Conclusion: El Chanate is to big a gamble and will cause to much dilution. SDM should keep its powder dry and concentrate on Zopilote. Zopilote will eventually be a low cost producer and a company maker. It has the potential to provide all shareholders with a tremendous return! Sorry that I did not post this sooner!

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