Santa Fe Gold Corporation (OTCBB: SFEG) is pleased to announce it has entered into contracts with three smelters to sell a majority of its anticipated 2012 production of high-value precious metals concentrate and siliceous flux material. The three smelters include Aurubis AG in Germany, and Freeport - McMoRan Miami Inc. and ASARCO LLC in Arizona. The 2012 contracts are valued in the aggregate up to $30 million at current gold and silver prices. Santa Fe's Lordsburg flotation mill produces gold and silver concentrate from its Summit mine located in southwest New Mexico. The company also produces silica flux material, the sale of which involves direct shipment of ore with only minimal processing required.
We are pleased to have reached agreements for sales of a majority of our 2012 concentrates and silica flux, said Pierce Carson, President and Chief Executive Officer. The contract with Aurubis provides for deliveries of up to 360 tons of concentrate, and the contracts with FMI Miami and Asarco provide for a total of up to 48,000 tons of silica flux. These contracts reflect a realization of our marketing strategy of developing multiple customer outlets and multiple revenue streams.
Dr. Carson continued, Sales of flux to FMI Miami and Asarco are significant to Santa Fe and could account for a substantial portion of ore mined at Summit. Smelter flux sales also add another dimension to our strategy of expanding Santa Fe's production profile by processing other ores from the Lordsburg area, utilizing our excess milling capacity. Among other potential advantages, material sold as smelter flux does not have to be milled and therefore frees even more capacity at our Lordsburg mill.
The Summit mine is expected to reach full, steady production during the first quarter of calendar 2012. Revenues are expected to increase significantly over the course of 2012 reflecting increases in both tonnage and grades. Annual life of mine revenue at full production is estimated to be approximately $40 million at recent gold and silver prices. Ore reserves are estimated to average 0.143 ounces per ton gold and 10.78 ounces per ton silver (0.35 ounces per ton gold equivalent). Direct operating costs are projected to be $364 per ounce of gold equivalent produced over the life of the mine.
About Santa Fe Gold:
Santa Fe Gold is a U.S.-based mining and exploration enterprise focused on acquiring and developing gold, silver, copper and industrial mineral properties. Santa Fe controls: (i) the Summit mine and Lordsburg mill in southwestern New Mexico, which began processing operations in 2010; (ii) a substantial land position near the Lordsburg mill, comprising the core of the Lordsburg Mining District; (iii) the Ortiz gold property in north-central New Mexico; (iv) the Black Canyon mica deposit and processing equipment near Phoenix, Arizona; and (v) a deposit of micaceous iron oxide (MIO) in western Arizona. Santa Fe Gold intends to build a portfolio of high-quality, diversified mineral assets with an emphasis on precious metals.
To learn more about Santa Fe Gold, visit www.santafegoldcorp.com.
Cautionary Note Regarding Forward-Looking Statements:
This press release contains forward-looking statements and forward-looking information (collectively, forward-looking statements) within the meaning of applicable US and Canadian securities legislation. All statements, other than statements of historical fact, included herein are forward-looking statements. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking statements as a result of various factors, including, but not limited to, variations in the nature, quality and quantity of any mineral deposits that may be located, variations in the market price of any mineral products the Company may produce or plan to produce, the Company's inability to obtain any necessary permits, consents or authorizations required for its activities, the Company's inability to produce minerals from its properties successfully or profitably, to continue its projected growth, to raise the necessary capital or to be fully able to implement its business strategies, and other risks and uncertainties disclosed in the Company's Annual Report on Form 10-K for the year ended June 30, 2010 and its most recent quarterly reports filed with the United States Securities and Exchange Commission (the SEC), and other information released by the Company and filed with the appropriate regulatory agencies. All of the Company's US public disclosure filings may be accessed via www.sec.gov and readers are urged to review these materials.
Santa Fe Gold Corp
W. Pierce Carson, President and Chief Executive Officer
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