"press release
Jan. 24, 2012, 8:30 a.m. EST
Santa Fe Gold Announces 2012 Smelter Contracts for Gold and Silver Sales Valued up to $30 Million
ALBUQUERQUE, N.M., Jan 24, 2012 (BUSINESS WIRE) -- Santa Fe Gold Corporation /quotes/zigman/480818 SFEG +7.14% 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 ."
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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 ..."
