Sterling Mining Company

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Newtechxl

Research von David Morgan:

http://www.sterlingmining.com/…bles/DaveMorganReport.pdf

weiterer Researchbericht:

http://www.sterlingmining.com/printables/eResearchSRLM.pdf

Das schreibt Hommel dazu:

SRLM.PK (STERLING MINING)
http://www.sterlingmining.com/
RDemotte@aol.com Ray DeMotte 208 666 4070
12.2 mil shares outstanding (May 31, 2004)
16.6 mil shares fully diluted (May 2004) --(To get the latest number, I have to call Ray DeMotte. Note the date.)
@ $6.35/share
$105 mil MC
~185 mil oz. reserves + resource, Sunshine alone
Quote from: http://www.sterlingmining.com/jun112003.html
"The prior operator last estimated the mine reserves at 26.75 million ounces of silver, 10.36 million pounds of copper and 7.05 million pounds of lead (or approximately 28.85 million ounces of silver-equivalent), as well as an additional resource of 159.66 million ounces of silver. "
Other properties:
Baroness 15 mil -- tailing project, no further exploration potential, (construction finished, testing beginning)
Tesorito 17 mil -- + exploration potential
San Acacio 14 mil -- + exploration potential
Total: 231 mil oz. silver
$105 mil MC / 231 mil oz. = $.46/oz.
$105 mil MC / 550 mil oz. = $.19/oz. (exploration potential)
You get "approx" 15.5 ounces in the ground for 1 oz. silver's worth of stock.
(Exploration potential is 37.)

Additional comments: Sterling Mining continues to acquire and lease good silver properties.
Timberline to Lease Montana Properties to Sterling Mining

I wrote an article on SRLM in late Dec. 2003. See: Sterling Mining (But I no longer own shares.)

Ray DeMotte really, really understands the silver story, and has been aggressively acquiring silver properties. Sterling continues to consolidate its land position around the Sunshine mine.

Sterling Mining acquired the Sunshine mine. Sunshine had "more than 360 million ounces of production over the past century" and was one of the big three: Hecla, Couer, & Sunshine. Sunshine went bankrupt. Sterling got the property a few months ago cheap, because they were quick & willing to pay cash. Other buyers wanted to do a full study before making an offer.
The best factors, I feel, are as follows:
1. The Sunshine mine is an existing mine that was mining at a profit. The company went bankrupt, not the mine. So there will be no great capital costs for start up, only minimal costs.
2. The Sunshine sits on 1/2 sq. mile, and was never fully explored. Sterling Mining owns 10 square miles of property surrounding the Sunshine, right in the heart of silver country, the location of CDE and HL, the other two big companies at the top of this list.
3. The management of Sunshine understands the silver story. They are on a mission to acquire distressed silver properties at today's cheap prices. See also: December 14, 2003: "In light of the continued low silver price, Sterling has this year begun holding back into inventory a portion of this year's silver coins minted."

For more detailed information on what's happening in the Silver Valley in Idaho, see the following link:
http://www.blanketpower.com/mining/titlepage.htm

Sterling Mining

By: Jason Hommel, GoldIsMoney.com

The stock of Sterling Mining (SRLM--pink sheets) has been a big winner
in 2003, moving up from a base of about 50 cents a share in the summer,
to hitting a high of $10 share by November. That's up by a factor of
20! A twenty-bagger! In about 6 months! Today, at $7.25/share, they
have just under 10 million shares, with a market cap of about $75 million.

So, why did the shares move up so much? Is it too late to buy? Is the
moved played out? Are the shares tired? Has a top come in? Is the
momentum lost? Will the shares now trade in a range? Those are the
questions that befuddle the technical investors. I don't concern myself
with such things, and this article will not address any of those
questions. I look only at value, the fundamentals. I ask, "What do you
get?" and "What are you paying?"

The fundamental story is that Sterling Mining acquired the rights to the
Sunshine mine, and continues to acquire more silver properties in the
Cour d'Alene silver valley, in Idaho, U.S.A.

The Sunshine Mining company went bankrupt due to their debt burden, and
perpetually low silver prices. This is what creates the opportunity for
silver investors today. Sterling Mining bought the property because
they were willing to offer cash, while other major mining companies
wanted to spend too much time doing their due diligence.

In the real world of real and limited assets, it's "first come, first
served". That's the rule whether applied to buying silver bullion, or
buying land rights, or participation in private placement
opportunities. Whoever shows up with the cash first gets to buy it.

Now, when Sterling Mining leased the Sunshine property, I didn't know
the Sunshine mine from a hole in the ground. I was fortunate enough to
own a little stock of Sterling back at 61 cents/share. My initial
decision to buy Sterling Mining stock was based on seeing a banner ad at
David Morgan's web site, silver-investor.com, and by reading about
management's philosophy of acquiring silver properties at low prices
while silver is still cheap. I, myself, due to my ignorance, wondered
whether it was too late to buy more after the stock had moved to 83
cents after they announcement of the acquisition of the Sunshine mine.
And, I kicked myself for not buying any at 50 cents/share. In the end,
I had to force myself to ignore my jealousy of other people's good
fortune (those who bought before me), and I had to buy the stock on the
merits of the situation at the time. And so, I bought more at 90 cents,
and more at $1.10. Again, I bought at $2.40, and again I bought at
$3.60. The more I learn about the Sunshine Mine, the more I keep
buying. It was difficult to buy into a rapidly rising market, and each
decision was a new decision. But obviously, those were the right
decisions. I bought, knowing little more than the "silver resource"
totals listed for the Sunshine, which are 185 million oz. of silver. I
divided the current market cap by those silver ounces, to get a "cost
per oz. in the ground." I could hardly believe the math and good
opportunity, but I realized it was a good value. But the more I learn,
the more I realize the great value of Sterling Mining.

The Sunshine Mine produced 360 million ounces of silver over 100 years
of fairly continuous production.

In 1993, the Sunshine Mining Company, with 200 million shares, and $100
million in debt, and with the price of silver ranging between $3.70 and
$5.30/oz., had a market cap of $500 million dollars!

In contrast, Sterling Mining now owns a 15-year operating lease on the
Sunshine mine with option to buy it outright by paying $5 million more,
which they can choose to exercise at any time, no rush. And Sterling
Mining has no debt. At $6.55/share, with just under 10 million shares
fully diluted as of December, 2003, Sterling Mining has a market cap of
about $75 million. I believe they will have no trouble raising the $5
million (with little dilution) to exercise the option to buy the mine.

So, does significant upside potential remain? Is $75 million less than
$500 million? You bet!

But look at the other advantages of Sterling Mining: Very low
overhead. Better land position. Sterling continues to acquire property
in the silver valley.

And the silver bullion market is in a much better position, with a
higher price, with 13 years of deficits, a smaller silver supply, and
investors are waking up to the silver story now with the availability of
information on the internet. Investors are also waking up to the
monetary fraud of the overvalued paper dollar, as gold continues its
third year of a bull market.

Sterling Mining also owns ten square miles of land around the Sunshine
mine. Of those 10 sq. miles, only 1/4 mile was ever properly explored
by Sunshine. Sterling mining has begun a surface exploration program
around the mine using modern exploration techniques to rectify the
situation.

This brings me to the Cour d'Alene Silver Valley. This valley produced
1.1 Billion ounces of silver historically. There were basically three
big mines, Hecla, Cour d'Alene, and the Sunshine. In December, 2003,
Hecla has a market cap of about $850 million and Cour d'Alene has a
market cap in excess of one Billion dollars! The Sunshine mine is a lot
like the other two mines, in that it has been in continuous operation
for about 100 years, and they never really needed to do any significant
exploring, they just followed the silver into the earth. Therefore, all
three of these mines have traded at a significant premium to the stated
"resources and reserves," because they all have a strong history of
proving up and adding to their reserves as they mine.

So, I was wrong to buy Sterling Mining only for the "reserves and
resources" of the Sunshine, because like Hecla and Cour d'Alene Mining,
there is likely to exist much more silver in the Sunshine mine than the
published resource figures show. The Silver Valley is unique in that
the silver is not all close to the surface, but goes deep.

The Sunshine mine was producing silver at a profit as recently as 2000,
with cash costs around $4-$4.50/oz. So, unlike a lot of silver
explorers, Sterling Mining has an existing mine, with existing
infrastructure. Other companies often have capital costs in excess of
$100 million dollars to get a mine going.

Right now, Sterling Mining is listed on the pink sheets. (SRLM) They
don't have a listing on the major exchanges, and they don't have a
bulletin board listing either. Why not? Those cost money. Right now,
management is still focused on spending their money on land acquisitions
and consolidating their position within the silver valley. There is a
silver rush going on! And I think management is pursuing the right
strategy. I see no reason to rush for an Amex listing and become a
fully reporting company at this time. The assets of this company are
not in the financial balance sheet, but rather, in the ounces of silver
in the ground that they are rapidly buying. They are in the process of
acquiring land all around the Sunshine, and making their property
contiguous, buying properties that are adjacent, or next door. I think
it matters very little whether they had $1 million or $1.1 million cash
in the till in the last quarter. (Ray Demotte, president, says they
have about $1.1 million cash now, in December, 2003.)

Nevertheless, Sterling Mining is committed to moving up to another
exchange by next year, and also they will be slowly increasing their
marketing efforts. However, their priority will continue to be to
acquire cheap silver prospects, resources and reserves.

The company has not even yet spent money on booths at the gold shows.
Personally, I think spending money on marketing is well worth it. The
better they tell investors their story, the more money they will receive
when they issue shares, and the better deal they will get for existing
shareholders. As a shareholder, this is my motivation for writing about
the company.

Sterling Mining has other good silver properties in addition to the
Sunshine Mine. All total, they have perhaps up to 500 million oz. of
silver "exploration potential" that they might have within all their
various properties in the silver valley.

So, how cheap is the "silver in the ground" that you are buying when you
buy Sterling Mining stock? At just under 10 million shares, at
$7.25/share, with a market cap of $75 million divided by up to 500
million, that's 15 cents/oz. of silver in the ground. I like to
calculate things in terms of silver to silver, so I divide the market
cap by the silver price, and I get a market cap denominated in silver,
which is $75 million / $5.76/oz. = 13 mil oz. of silver market cap.
Then, I divide the oz. in the ground, or 185 million or 500 million
(exploration potential) oz., by the 13 million oz. market cap. This
gives a range of 14.2 to 38 oz. of silver in the ground that you get
when you spend the equivalent of one oz. of silver (or each $5.76 that
you spend) on Sterling Mining stock at $7.25/share.

Ray Demotte, president of Sterling Mining, looks at it in a similar
way. He says that with the 185 million oz. of silver in the Sunshine,
and with just under 10 million shares, that's 19 oz. of silver per
share. So, to keep that figure constant or rising, he figures that with
every share he issues to raise capital for expenses, he'd better buy up
to (or explore and find) 19 more oz. of silver in the ground, or more,
to keep growing the silver resources for his shareholders. That's the
kind of management perspective I love. He is keeping dilution to a
minimum, while growing the company by acquiring silver assets.

Ray Demotte says that a lot of his existing shareholders are continuing
to buy stock. They tell him that they are "tired of holding paper
money." I believe we are witnessing the beginning of monetary demand
for silver, as investors pour money into silver stocks first.

Monetary demand for gold and silver will cause silver prices to explode
beyond belief.

Just look at the amount of dollars out there that could buy gold. $20
trillion in bonds plus $9 trillion in M3 = $29 Trillion. A mere 1% of
that is $290 Billion, which, at $400/oz., is a massive demand of 22,549
tonnes of gold. Yet annual gold demand is a mere 4000 tonnes, which
exceeds the 2600 tonne mine supply. Do you understand what those
figures mean? That means that far, far less than 1% of dollars, in
either bonds or M3 can buy gold, because there simply is not nearly that
much gold available. And how much silver is available for monetary
demand? Nothing, because we have deficits. But there is 62 million oz.
of silver registered for delivery at the COMEX, which, at $6/oz, is
worth $372 million dollars. So, if about 1/10th of 1% of 1% of paper
money tries to buy that silver, it will be gone.

Therefore, long before 1% of U.S. paper dollars tries to buy gold, such
buying power will force the price of gold to head up well over
$1000/oz., and silver up over $50/oz. !!!

Some people think they can capitalize on that inevitable gain by buying
paper futures contracts. But I believe paper futures contracts will
default, since they promise to deliver more silver than I think exists
in deliverable form. Therefore, I believe the best ways to profit from
the inevitable trend is to buy physical silver bullion, and buy silver
stocks which have plenty of silver in the ground for what you are
paying, such as Sterling Mining.

I publish a free weekly silver stock report on 90 silver stocks. To
receive an email notice of when and where it is published, please sign
up at goldismoney.com

Disclaimer: I own shares of SRLM.PK. I have not been paid by the
company to write this article. GoldSeek.com does not own shares in SRLM.PK

- no payment received to publish this article.

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PUBLIC ACCESS ARTICLE -
Sterling Mining controversy...
02/07/05

Some subscribers may be aware that I came under attack at the weekend in an article by David Bond on a couple of websites for a remark I made about a possible reason for the acute weakness in the stock of Sterling Mining, in my recent article about Yamana Gold.
I won’t burden you with the entire article, but here are a some excerpts, just to give those of you who haven’t seen it the "flavour" of it, so to speak…

"Sterling Mining Co. got screwed this month and last by blowhard ignorance and reporting more shoddy than the Times v. Sullivan decision would allow, and I am here to tell you how it happened.
I’ve heard these bullshit analysts bellow from the pulpits in Toronto, Denver, New York, London, Moscow, Beijing and all the rotten little rues in between. And I even believed them, a time or two.
I would not accuse Clive Maund of being dishonest. Not my thing to impugn motive. But I can accuse him of being one sloppy sonofabitch, and probably flirting with Times v. Sullivan.
And you can thank Clive if you want to know why Sterling Mining Company went into the tank last month, from $7 to $3-something.
This sort of journalism is beneath contempt. I hired some crappy reporters in my time at newspapers whose newsrooms I have run on both coasts, but no zit-covered tyro ever tried to feed me a story a little bird told him.
You never called anybody at Sterling, Sunshine or Bunker Hill to “guarantee the veracity of this information,” did you? By every journalistic standard I hew to, by every principle I believe in, you flunk. Not just as a stock analyst. Not even as a tyro reporter.
You don’t spread lies you are too lazy to “guarantee the veracity” of. Not if you’re a man. Not when it’s as easy as a telephone call to check your facts, dude. You charge your readers several large a year to log on to your site. Insofar as you are not a responsible reporter, what are you? A huckster with a position? I cannot believe people pay for such treacle.
It’s time the market learned about you and the whole lot of you.“
And you can listen to my “little bird”: a big-assed green Amazon parrot named Buzzard, who sucks the marrow out of chicken bones and eschews liars. Until you do, Clive, leave my friends at the Sunshine alone or I will take this issue to print."

I think that‘s enough to give you an accurate idea of the tone of this article, and for subscribers to understand why I am not concerned by it. The reason I am bringing it up is to highlight an important point about the effectiveness of Technical Analysis at a time when the fundamentals may be impossible to ascertain accurately. You will have read the sentence above where I am held responsible for the price of Sterling Mining stock tanking, which I have highlighted in bold. Actually I find this accusation rather flattering, for it implies that, while the subscribers to my website may be modest in number, you have the financial clout to crater a stock on my say so.

I issued a clear warning to switch out of Sterling Mining stock on 27th October because it looked like it was about to fail at important support at the $6 level, an event which would be expected to lead to a steep drop - and such proved to be the case. This prognosis was based purely on Technical Analysis, I had no idea how much water was lurking at the bottom of the Sunshine Mine. This may be important to the folks in Wallace, Idaho, but frankly I don‘t care how much water is in the Sunshine Mine, or about the state of the joists holding the roof up. What I care about is the trend of the stock prices, and I make the reasonable assumption that that is the prime concern of my subscribers. This was an occasion where Technical Analysis won out, the interpretation was correct, we did not "have to know the reason why" Sterling was set to tumble, it was enough to know that it probably would. I do not advise my readers to sell a stock because I "hate the company" or "want to see it fail" or because someone has "paid me to do a hatchet job on it". I advise my readers to sell a stock either to take a profit or to avoid or stem a loss, based on a purely objective assessment of it. If there are people out there who cannot or will not grasp this reality, as that attack on me demonstrates is the case, that‘s not our problem.

Silver and Sterling Mining

Lou Passi and Jason Hommel

Here's a riddle that everyone will surely answer differently. What is it that you can't live without, yet is so scarce it may soon disappear altogether? The hopeless romantic might reply that it's "the love of a good woman". An environmentalist might complain that it's "fresh air in a smog-filled metropolis". And the political activist might simply shout "freedom". But, let's add another wrinkle to our riddle. What is it that is also sold short in amounts that far exceed its global supply? Impossible you say? Well, the correct answer to this riddle is SILVER.

Yes, silver is truly an indispensable commodity. It has a number of unique properties including strength, malleability and ductility, electrical and thermal conductivity, sensitivity to and high reflectance of light, and the ability to endure extreme temperatures. Because of silver's unique properties, it can't be substituted in most applications. A partial list of critical silver applications includes batteries, bearings, catalysts, electronics, electroplating, medical, photography, solar energy and water purification.

Due to silver's many invaluable uses, it has been consumed in industry in large amounts, about 7/10ths of an ounce of silver, per person, in the U.S., since 1945.

Thus, 60 years later, by today, silver is now also a scarce commodity. World demand for silver exceeds annual production and has every year since 1990 - a total of 15 straight years. Few primary silver mines are operating today due to current low silver prices, but prices are likely headed much higher and soon because above ground supplies are low, shrinking rapidly and approaching zero. The market has been living off silver inventories since 1990. Inventories are at historically low levels. From a peak of 2.2 billion ounces of silver in 1990, bullion inventories are now estimated at just 300 million ounces. Imagine how much lower supply might be in a year or two from now.

Most incredible of all is that due to excessive naked short selling and leasing, silver has the largest short position that's ever existed in anything! A naked short sale is the sale of something you don't own. Current naked short positions in silver (including over the counter, uncounted derivatives) total in the billions of ounces - that's with a "B" - and exceed real world supplies by billions of ounces too.

Regulations are supposed to preclude excessive short speculation, but regulators have apparently neglected to police the silver market. As a result, unbridled short selling has artificially depressed silver's price. Eventually, all short sellers will close their short positions by buying or delivering the physical silver they sold. And why? Because "He who sells what isn't his'n, buys it back, or goes to prison!" That means we're going to see a silver price explosion when short-covering buyers compete for too few ounces of available silver. And so, we might also see delivery defaults! In fact, the move towards defaults and rising prices has already begun, if you consider position limits as a breakdown on the freedom people should have to buy what they want. Today, silver is priced at about U.S. $7.50 an ounce, already up 70% in the past 24 months, but well below it's all-time high of near $50 in 1980.

If you want to capitalize on this silver price explosion, by all means start accumulating silver bullion bars and coins (if you can find them) at today's relatively low, low prices. More aggressive investors will desire to own shares in a variety of mining companies highly leveraged to the price of silver.

Sterling Mining (SRLM - Pink Sheets) is one such company. The share price March 31 was $3.60/share. With 15 million shares outstanding, the market cap is $54 million. With 15.8 million shares fully diluted, the market cap is $57 million.

Sterling now controls the legendary Sunshine Mine, the richest silver mine in American history with more than 360 million ounces of production over the past century. Mine reserves stand at 26 million ounces of silver, as well as an additional resource of 160 million ounces of silver, for a total of 186 million oz. of silver. The mine is leased for 15 years, and can be bought for an additional $5 million.

Sterling acquired the Sunshine Mine after the Sunshine mining company went bankrupt. In 1993, the famous Sunshine mining company had a market cap of $500 million, while they were $100 million in debt. The debt caught up with them as silver prices dropped in 1999-2002.

Today, lean Sterling Mining has a market cap of about $70 million, and is debt free. Thus, Sterling Mining may have an upside potential to increase their market cap by about 7 times to return to the former valuation.

Oddly, the Sunshine Mine was profitable when it closed in 2001. It was producing at a rate of over three million ounces of silver per year at an average grade of approximately 20 ounces per ton and a cash cost of just $4.49/ounce. The property includes offices, a 1,100-ton-per-day mill, more than 100 miles of underground workings, and 2,300 acres of mineral rights.

In 2003-04 Sterling completed a surface geophysical program on the property to explore for the potential upward continuation of silver-bearing structures. The program identified five target areas, and in September 2004 an initial surface drill program was conducted. Sterling is following a methodical approach preparing the mine for a return to long-term sustainable production.

Sterling Mining's share price has suffered recently, down to just below $4/share from a high of about $14/share, perhaps partly due to rumors on the internet about mine flooding. Olav Svela, Vice President, has firmly stated:

"There is no water problem at the Sunshine mine. We are currently finishing up our Phase II development plan for the mine and hope to be in production within a couple of years, if not sooner."

Many silver stocks, in general, have also been hit by two problems in the last year. First, silver prices stalled in April 2004, when silver hit a high price of $8.40, and then crashed back to $5.50, thus discouraging many silver stock investors. Second, many private placement shares have come free trading, and that puts downward pressure on share prices as initial investors with large blocks of shares cash out to lock in gains. Sterling Mining gained from a low of about $.25/share in early 2003 prior to the acquisition of the Sunshine mine.

Sterling is now the 7th largest primary silver company in the world with 231 million ounces of silver resources or 19 ounces of silver per share. Silver accounts for 91 percent of the company's total resources, making it a high-leveraged silver stock.

Other Company Projects: (many leased, not all 100% owned)

Coeur D'Alene Mining District - In addition to the Sunshine Mine, Sterling controls more than 15,000 acres of mineral rights in the Silver Valley. This is one of the richest silver districts on earth, yet there's been relatively little surface exploration conducted by modern techniques. Recent discoveries indicate that significant silver mineralization is just waiting to be found.

Mexico Projects. In 2003 and 2004 Sterling acquired a number of properties in Zacatecas State, Mexico, with rapid production and exploration potential for 100+ million ounces of near-surface silver resources.

Baroness Tailing Project - an advanced stage project located in the Zacatecas Mining District, Mexico. Production is expected to begin in 2005. It is estimated that the project contains 5 million metric tons of finely ground tailings that average 3.0 ounces per ton silver and 0.02 ounces per ton gold, which is a resource of 15 million ounces of silver and 100,000 ounces of gold. Processing costs are expected to be $3.50 per ton or less.

Milagros Property - Sterling Mining holds an option on the Tesorito and Tabasquena claims near the prolific Milagros property in Zacatecas State, Mexico. The claims comprise two shallow shafts (about 65 feet and 280 feet deep, respectively) approximately half a mile apart, sunk onto a major silver-bearing epithermal vein structure. The reported thickness of the vein averages about 10 feet, widening to nearly 20 feet. The structure is believed to be open along strike on both ends, as well as at depth. Earlier reports have estimated that between the two shafts lies an estimated one million tons of mineralization, which, based on past smelter returns, has historically produced ore at 17 ounces per ton silver, implying a 17 million oz. silver resource.

San Acacio - The San Acacio Silver Project, located four miles from the City of Zacatecas, Mexico, comprises the old San Acacio Mine within the famous Veta Grande Mining District that has produced 180 million ounces of silver. The San Acacio claims cover roughly four miles of the Veta Grande quartz-carbonate vein system. Historical reports indicate a drill-inferred resource of 14.4 million ounces of silver. Previous operators have used this drill data to estimate an additional 3.1 million tons at a grade of 5 ounces per ton silver, yielding another 15.5 million ounces. Sterling management anticipates that surface drilling will be conducted on the property in early 2005.

JE Project - 700 acres of property located in the 'Persian Gulf of Silver', a NW Montana region of several low-grade 100+ million ounce deposits. Stratabound silver/copper mineralization was defined in this area by eight diamond drill holes adjacent to the NNW-trending Snake Creek Fault. Sterling aims to conduct an initial exploration program in 2005 to test the zone of mineralization between the discovery hole and the Snake Creek Fault, where grades are expected to increase. Management believes this property has the potential for 50+ million ounces of silver resources.

Montana Silver-Copper Sulfide Belt - covers a 1,600 square mile area in Sanders County, northwest Montana. In this area three world-class silver/copper deposits have recently been identified: The Troy, Rock Creek and Montanore deposits. These three deposits contain roughly 350 million tons averaging 0.75 copper and 1.75 ounces per ton silver. In 2003-04, Sterling Mining acquired a number of properties in this area.

Other silver companies in Montana are Mines Management (MGN - Amex) and O.T. Mining (OTMN - pink sheets). Montana's Governor has recently stated his strong support of mining interests in the state.

Company Objectives

Begin producing silver in Mexico in 2005
Grow annual production in Mexico to 2+ million ounces within 24 months
Restart production at the Sunshine Mine within 36 months
Increase silver resources to 400+ million ounces within 3 years
Hold outstanding shares under 25 million to maximize shareholder value
Seek listing on AMEX within 12 months
Sterling is as close to a pure leveraged play on silver as you will find among mid-tier mining companies. The company's share price should also benefit from a solid "producer bonus" as production begins in Mexico this year and from additional silver discoveries. Furthermore, the company's silver ounces in the ground are also among the cheapest you can buy, if you buy stock at current prices, which is priced at about $.29/oz. in the ground.

March 31, 2005

Die lage von Sterling ist schwer einzuschätzen. Morgan schreibt folgendes:

terling Mining is a company that we have followed for quite some time. The company became very interesting to us when it was announced that this little micro cap company had tied up the assets of the famous Sunshine Mine in Kellogg, Idaho. When we first recommended the stock, we set a buy limit of less than $3 per share and yet the price of the shares quickly went over our buy level. Eventually, the stock actually traded as high as $14 per share. This was well above our expectations based upon silver assets alone, but probably a low valuation if/when the mine was put back into production.

An extensive report was written about the company at the end of August 2004. At that time the stock had good support at the $6 level and was trading at the $7.25 level and rising. It seemed prudent to raise the buy level then to the level of $8 or so.

Like all mining companies, the management is one very key ingredient and one we do our best to examine carefully. However, in some cases it is basically an unknown. We liked the aggressive nature of management and the open attitude toward input from shareholders and industry people as a whole. In fact, management asked the Silver Investor what Sterling Mining needed to accomplish in order to make this company better and stronger. The answer was simply to become a reporting company as quickly as possible, making certain however that the filings were in perfect order and to hire the best auditors and legal advice possible.

This input was given by the Silver Investor quite some time ago, and we have kept asking the company for updates ever since. It was explained that the company had to go back 100 years to do a full audit and this required a great deal of time. This sounded logical and we accepted this explanation. Executive management informed us that a few months ago the audit was complete and that the top priority was to focus totally on filing the Form 10 to list the company on the Bulletin Board as a fully reporting company.

As of March 22, 2005, we have discovered facts that have caused us great concern. Others in the company reported to us today that the audit would not be complete until July 2005 at the very earliest. This obviously is in contradiction to earlier statements by other executives of the company. Unfortunately, we have recently had a similar experience with a company—Scorpio, which was punished badly because of poor management, and we do not wish to see this happen again! Therefore, each reader must determine whether the likelihood is that this company share value will be going higher or lower.

It is our considered opinion that all that was written in the main Sterling Mining Company report available to all Web based subscribers is accurate and based upon the best information available; however, management has had ample opportunity, in our view, to focus and build shareholder value by prioritizing objectives that would help the company to raise capital and build for the future. This simply has not been accomplished. We know it is easy to criticize but upon a through investigation we must report the facts.

The company’s Mexico projects may be worth $1 to $2 per share when fully producing, and the Sunshine should be worth more than $10 per share when back in production. However, with the knowledge that the audit is not and will not be complete for several more months, when we have been told differently several times, we cannot in good faith recommend the stock as a buy any longer. Therefore we have removed it from our Model Portfolio

Sterling Mining Begins Second-Stage Underground Rehabilitation at Sunshine Silver Mine
Wednesday April 27, 1:01 pm ET

WALLACE, Idaho--(BUSINESS WIRE)--April 27, 2005--Sterling Mining Company (OTC:SRLM - News) announced today that it is commencing the second stage of underground mine rehabilitation at its Sunshine Mine in Idaho. The first stage initiated in December and completed in February this year, focused on the Silver Summit Tunnel, that provides primary access to the eastern part of the Sunshine. New work will be directed at the Silver Dollar Tunnel and connecting raise to the Silver Summit Tunnel level. This work, to be performed by Atlas Fausett Contracting of Osburn, Idaho, will complete the eastern portion of the mine's primary and secondary escapeway system and allow new underground exploration activities and renovation of the Silver Summit hoist as part of the work plan designed to return the Sunshine Mine to sustained production.

Sterling's Sunshine Mine Manager Mike McLean stated: "Our renovation plan and timetable are right on track. In addition to the rehabilitation work we are in the process of re-establishing 13,000 volt power to the Silver Summit in preparation for hoist renovation and access to the 3,000 level of the mine. An internationally recognized expert on hoists, Mr. Peter Tiley, will be on site in the first week of May to review our progress. At the same time we have completed Phase II of our Mine Plan, and commencing Phase III."

On-going maintenance essential to keep the mine plan moving on schedule continues uninterrupted. Recently, site personnel completed a variety of tasks including electrical grounding checks and equipment repairs. The mine's compressed air receiver tanks have been inspected and certified. Federally required annual training of personnel was completed as was a successful mine inspection of all active work areas by the Mine Safety and Health Administration (MSHA).

Sterling President Ray De Motte said: "Completion of the Mine Plan Phase II and the beginning of the second stage of mine rehabilitation is a significant milestone in our progress at the Sunshine Mine and as a company. As we move towards our Phase III goals, we will continue to develop and, in fact, accelerate our strategic and organizational infrastructure necessary to build upon the progress to date."

Sterling initiated a three-phase mine planning process with Phase 1 completed in spring, 2004. Phase 2, completed in late March this year, projected that the Sunshine Mine would be profitable with silver prices above $5.75 per ounce. Phase 3 of the study including ongoing maintenance, development and exploration plans have already begun.

The primary goal of the Silver Dollar rehabilitation work is to re-establish Sunshine Mine's secondary ventilation and escapeway route in order to prepare for mining utilizing the Jewell shaft. Concurrently, Sterling is finalizing plans for the 2005 exploration program which will expand its geophysical database and double the diamond drilling footage of 2004 with the goal of increasing mineable silver-bearing zones while keeping projected cash costs at or under $4.50 per ounce. The mine plan projects full annualized production capability building towards the 5 to 6 million ounce range. The 2005 exploration program will include underground drilling, the first underground drilling since 2001.

Sterling Mining Company controls the legendary Sunshine Mine, the richest silver mine in American history with more than 360 million ounces of production over the past century. Sterling offers investors superior leverage to silver price increases through its extensive portfolio of "Silver Valley" landholdings in Idaho and through strategic alliances and equity stakes in neighboring companies. The Company also holds several advanced properties in Mexico, including the Baroness Tailings Project in the Zacatecas silver district, which is currently processing silver-bearing tailings material. Sterling stock trades on the OTC Market Exchange under the symbol "SRLM". Please visit the Sterling website at http://www.sterlingmining.com for more information.