Santa Fe Gold Reports Increasing Sales of Silver and Gold in March Quarter
11.05.2011 | Business Wire
Santa Fe Gold Corporation (OTCBB: SFEG) reported silver and gold About Santa Fe Gold: Cautionary Note Regarding Forward-Looking Statements: See Accompanying Tables The following information summarizes the financial condition of
revenues of $2,894,007 for the March 2011 quarter, as compared to
$261,532 for the corresponding quarter in 2010. Revenues for the nine
months ended March 31, 2011 were $4,144,269, as compared to $274,978 for
the nine months ended March 31, 2010. The increases in revenues reflect
the start up of the Summit silver-gold mine located in southwestern New
Mexico. The mine is expected to achieve commercial production in 2011.
QUARTER MARCH 2011 HIGHLIGHTS
Record revenue of $2.9 million
Net income of $0.04 per share
Revenue streams from smelter contracts
Production ramping up during 2011
Strong earnings projected in 2012
Processing mill with extra capacity
Proposed acquisition of additional silver assets
Santa Fe′s President and Chief Executive Officer, Dr. Pierce Carson,
stated, 'The record revenues of $2.9 million and net income per share of
$0.04 for the quarter mark another milestone in Santa Fe′s progress
towards becoming a significant precious metals producer. Further
substantial increases in sales volumes are expected as production from
our Summit silver-gold mine ramps up from the current rate of 100-150
tons per day to full production of 400 tons per day.?
Dr. Carson continued, 'To date the underground ore processed has come
from mine development work, which has resulted in diluted grades.
Currently we are carrying out the development necessary to begin
mechanized mining of the vein deposit, which is scheduled for Q3 - Q4 of
2011.?
'Our flotation mill has extra capacity, and we plan to acquire
additional precious metal assets for processing through the mill. This
will further increase production levels to take advantage of the current
price environment,? Dr. Carson added.
Santa Fe reported that during the March 2011 quarter it delivered its
products to two smelters under previously announced sales contracts. It
delivered regular monthly shipments of high-value silver-gold
concentrates to Aurubis AG in Germany, and shipments of siliceous flux
material for precious metals recovery to Asarco LLC in Arizona.
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.
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 its Canadian public disclosure filings may be accessed via www.sedar.com,
and readers are urged to review these materials.
Santa Fe Gold Corporation at March 31, 2011 and June 30, 2010, its
results of operations for the three months and nine months ended March
31, 2011 and 2010, respectively, and its cash flows for the nine months
ended March 31, 2011 and 2010. The summary data for the three and nine
months ended March 31, 2011 and 2010, respectively, are unaudited; the
summary data for the financial year ended June 30, 2010 are taken from
our audited financial statements contained in our annual report on Form
10-K for the financial year ended June 30, 2010, but do not include the
footnotes and other information that is included in the complete
financial statements. Readers are urged to review the Company′s Form
10-K in its entirety, which can be found on the SEC′s website at www.sec.gov.SANTA FE GOLD CORPORATION CONSOLIDATED BALANCE SHEETS
March 31,
June 30, 2011 2010 ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents
$
473,631
$
5,540,130
Accounts receivable
2,783,632
-
Inventory
78,851
-
Marketable securities
164,898
-
Prepaid expenses and other current assets
298,308
267,208
Total Current Assets
3,799,320
5,807,338
MINERAL PROPERTIES
579,000
579,000
PROPERTY, PLANT AND EQUIPMENT, net
13,342,360
3,790,215
OTHER ASSETS:
Construction in process
7,499,226
15,177,362
Idle equipment, net
1,223,528
1,223,528
Note receivable and accrued interest
201,400
-
Restricted cash
410,374
410,374
Deferred financing costs
339,279
413,017
Total Other Assets
9,673,807
17,224,281
Total Assets
$ 27,394,487
$ 27,400,834
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable
$
845,405
$
458,098
Accrued liabilities
1,582,444
320,566
Derivative instrument liabilities
11,524,959
9,894,041
Notes payable, current portion
108,124
138,821
Capital leases, current portion
109,100
138,117
Deferred revenue, current portion
3,804,674
243,107
Accrued interest payable
229,629
20,525
Total Current Liabilities
18,204,335
11,213,275
LONG TERM LIABILITIES:
Senior secured convertible notes payable, net of discount of
$2,861,621 and $3,793,560, respectively
11,088,379
10,156,440
Notes payable, net of current portion
60,518
122,915
Capital leases, net of current portion
54,913
128,909
Deferred revenue, net of current portion
-
3,756,893
Asset retirement obligation
84,059
84,059
Total Liabilities
29,492,204
25,462,491
STOCKHOLDERS' (DEFICIT) EQUITY:
Common stock, $.002 par value, 200,000,000 shares authorized;
94,744,412 and 93,059,568 shares issued and outstanding,
respectively; Includes non-vested shares of 575,000 and 765,000,
respectively
188,341
184,590
Additional paid in capital
58,876,434
56,883,203
Accumulated (deficit)
(61,229,332
)
(55,129,450
)
Accumulated other comprehensive income
66,840
-
Total Stockholders' (Deficit) Equity
(2,097,717 )
1,938,343
$ 27,394,487
$ 27,400,834
SANTA FE GOLD CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
For the Three Months Ended
For the Nine Months Ended March 31, March 31, 2011
2010 2011
2010
SALES
$ 2,894,007
$ 261,532
$ 4,144,269
$ 274,978
OPERATING COSTS AND EXPENSES:
Costs applicable to sales
1,604,449
-
2,303,871
264
Exploration and mine and mill start up costs
597,266
275,425
1,669,663
449,259
General and administrative
679,757
655,407
2,171,297
1,726,510
Depreciation and amortization
577,857
127,641
1,725,858
342,121
3,459,329
1,058,473
7,870,689
2,518,154
LOSS FROM OPERATIONS
(565,322 )
(796,941 )
(3,726,420 )
(2,243,176 )
OTHER INCOME (EXPENSE):
(Loss) on disposal of assets
-
-
-
(3,572
)
Interest income
2,750
6,948
9,188
10,150
Miscellaneous income
2,485
1,000
14
4,278
Foreign currency translation loss
-
(726
)
-
(621
)
Gain (loss) on derivative instrument liabilities
4,425,628
3,634,854
(898,934
)
671,158
Accretion of discounts on notes payable
(322,782
)
(260,774
)
(931,939
)
(774,437
)
Interest expense
(180,457 )
(25,017 )
(551,791 )
(82,162 )
3,927,624
3,356,285
(2,373,462 )
(175,206 )
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES
3,362,302
2,559,344
(6,099,882
)
(2,418,382
)
PROVISION FOR INCOME TAXES
-
-
-
-
NET INCOME (LOSS)
3,362,302
2,559,344
(6,099,882
)
(2,418,382
)
OTHER COMPREHENSIVE INCOME
Unrealized (loss) gain on marketable securities
(25,102 )
-
66,840
-
NET COMPREHENSIVE INCOME (LOSS)
$ 3,337,200
$ 2,559,344
$ (6,033,042 ) $ (2,418,382 )
Basic and Diluted Per Share Data
Net Income (Loss) - basic and diluted
$ 0.04
$ 0.03
$ (0.07 ) $ (0.03 )
Weighted Average Common Shares Outstanding:
Basic and diluted
94,126,551
90,646,438
92,943,423
86,023,046
SANTA FE GOLD CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Nine Months Ended March 31, 2011
2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(6,099,882
)
$
(2,418,382
)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation
1,725,858
342,121
Stock based compensation
864,965
509,677
Accretion of discounts on notes payable
931,939
774,437
Foreign currency translation loss
-
621
Loss (gain) on derivative instrument liabilities
898,934
(671,158
)
Loss on disposal of assets
-
3,572
Amortization of deferred financing costs
73,738
64,448
Net change in operating assets and liabilities:
Accounts receivable
(2,783,632
)
(261,585
)
Prepaid expenses and other current assets
(109,951
)
(165,113
)
Accounts payable and accrued liabilities
1,649,185
(632,517
)
Deferred revenue
(195,326
)
-
Accrued interest payable
209,104
228,919
Net Cash (Used in) Operating Activities
(2,835,068 )
(2,224,960 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities
(98,058
)
-
Note receivable and accrued interest
(201,400
)
-
Proceeds from disposal of assets
-
31,400
Purchase of property, plant and equipment
(862,720
)
(277,257
)
Construction in progress
(2,737,147 )
(3,827,731 )
Net Cash (Used in) Investing Activities
(3,899,325 )
(4,073,588 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock and warrants
2,000,001
10,301,003
Proceeds from notes payable
77,306
212,762
Proceeds from deferred revenue
-
4,000,000
Payment of private placement fees
(136,000
)
(625,000
)
Payment of financing cost
-
(288,000
)
Payments on notes payable
(170,400
)
(170,606
)
Payments on capital leases
(103,013 )
(97,436 )
Net Cash Provided by Financing Activities
1,667,894
13,332,723
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(5,066,499
)
7,034,175
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
5,540,130
509,846
CASH AND CASH EQUIVALENTS, END OF PERIOD
$ 473,631
$ 7,544,021
For the Nine Months Ended March 31, 2011 2010
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest
$ 558,331
$ 78,711
Cash paid for income taxes
$ -
$ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Stock issued for conversion of accrued interest
$ -
$ 483,000
Equipment purchased with note payable
$ -
$ 16,825
Stock issued for conversion of accrued liability
$ -
$ 200,000
Stock issued for conversion of note payable
$ -
$ 18,219
Stock issued for services
$ 16,550
$ -
Santa Fe Gold Corp
W. Pierce Carson, President and Chief Executive
Officer
505-255-4852