Yesterday Silver Falcon Mining (OTC:SFMI) lost another 8% of its market value, as a part of its July rundown.

The beginning of this gloomy period is surprisingly marked by a positive press release about increased gold ore processing rates in the Diamond Creek mill.

But as we found out in our latest video report, press releases might not be sufficient any more to gain investors’ trust:[BANNER]

Even though the press release appears optimistic, there are still a lot of questions remaining. Are they actually producing any gold already? And if they are, can it cover their liabilities and rent for the mining properties? Those are the questions that should be addressed real quick, so that further price plunge could be avoided.

The rest is here:

Full map of the property is expected to be finished by the end of February 2010. It is needed to properly assess the risks associated with the exploration of the site and will potentially allow Force to establish optimal drilling locations.

The update was somewhat meaningful while the full map is not ready and gave the company some more positive share price action, but nothing special was announced. Basically they have just confirmed that everything is going according to plan.

The company currently holds 75% interest in the Diamond Spring prospect. The prospect is calculated to contain 4.3 million barrels of recoverable oil which under current prices would roughly translate into $320 million. Considering the company would have 75% net revenue interest by the time of recovery it would potentially generate $240 million for them.

The project is still in preparation phase and there are no guidelines on possible start of drilling operations. Further, as the company acquired $5 million private capital funding in exchange for their shares back in Nov 2009, they have also agreed not to pursue additional funds without the approval of capital provider Villa Atmu. Depending on the situation this sounds like a troublesome aspect.

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