Santa Fe Gold Reports 130% Increase in Revenues to $5.9 Million for September Quarter
Santa Fe Gold Corporation (OTCQB: SFEG) is pleased to announce
financial results for the quarter ended September 30, 2012. Santa Fe
Gold reported record revenues of $5.9 million for the three months ended
September 30, 2012, representing a 130% increase over the same three
month period of the prior year. The Company also increased earnings from
mining operations to $1.4 million for the three month period, a 55%
increase over the same period of the prior year. The full version of the
financial statements and management's discussion and analysis can be
viewed on Santa Fe's website at www.santafegoldcorp.com
or on EDGAR at www.sec.gov.
'We are extremely pleased with the continued growth in revenue in the
first fiscal quarter of 2013,' commented Pierce Carson, President and
CEO. 'We expect revenues to continue to increase as we reach higher
grade portions of the Summit ore body. As an established and growing
producer of gold and silver, we are well on our way to another record
breaking year.?
Carson added, 'We are equally optimistic about the Mogollon acquisition
and the planned business combination with International Goldfields
Limited, both of which are strategic growth drivers for the Company.'
2013 FIRST QUARTER HIGHLIGHTS
130% increase in revenue to a record $5.9 million for the three months
ended September 30, 2012.
55% increase in earnings from mining operations to $1.4 million for
the three months ended September 30, 2012.
OUTLOOK
On October 22, 2012, Santa Feannounced it had closed an option
agreement with Columbus Silver Corporation to acquire the Mogollon
Project, Catron County, New Mexico, in exchange for payments
aggregating $4,500,000 scheduled to be paid through the end of 2014.
On October 11, 2012, the Company announced the signing of a Binding
Heads of Agreement to pursue a merger with International Goldfields
Limited (ASX: IGS). Upon completion of the proposed merger and a $5.0
million placement into IGS, existing SFEG and IGS shareholders are
expected to own 61.57% and 27.11%, respectively, of the outstanding
shares of the combined company′s common stock. The transaction is
expected to close in the first quarter of calendar 2013.
On November 7, 2012, Santa Fe announced it had received $4.0 million
in loan advances from IGS in fulfillment of a condition of the Binding
Heads of Agreement.
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 commercial production in 2012; (ii)
a substantial land position near the Lordsburg mill, comprising the core
of the Lordsburg Mining District; (iii) the Mogollon project in
southwestern New Mexico; (iv) the Ortiz gold property in north-central
New Mexico; (v) the Black Canyon mica deposit near Phoenix, Arizona; and
(vi) 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.
Forward-Looking And Cautionary Statements ? Safe Harbor
This press release contains forward-looking statements, including with
respect to the negotiation, implementation and effects of a proposed
business combination between Santa Fe Gold Corporation ('Santa Fe?) and
International Goldfields Limited ('IGS?). Those statements and
statements made in this release that are not historical in nature,
including those related to future benefits, increases in shareholder
value, synergies, improved liquidity and profitability, constitute
forward-looking statements within the meaning of the Safe Harbor
Provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by the use of words such as
'expects,? 'projects,? 'plans,? 'will,? 'may,? 'anticipates,? believes,?
'should,? 'intends,? 'estimates,? and other words of similar meaning.
These statements are based on current plans, estimates and projections,
and, therefore, you should not place undue reliance on them. These
statements are subject to risks and uncertainties that cannot be
predicted or quantified, and our actual results may differ materially
from those expressed or implied by such forward-looking statements. For
Santa Fe, these statements are subject to the following risks and
uncertainties: difficulties, delays, unexpected costs or the inability
to reach definitive documents with respect to, or consummate, the
proposed business combination with IGS and other transactions referred
to in this press release and those described in the documents we file
with the U.S. Securities and Exchange Commission, and risks associated
with the inherent uncertainty of future financial results, and
additional capital financing requirements. All forward-looking
statements included in this release are made as of the date of this
press release, and Santa Fe assumes no obligation to update any such
forward-looking statements.
Statement Regarding Additional Information That May Become Available
If a transaction is to be proposed to the stockholders of Santa Fe and
IGS, Santa Fe and IGS would file with the Securities and Exchange
Commission and distribute a Registration Statement on Form F-4 covering
securities to be issued in the transaction. Santa Fe shareholders would
receive a prospectus and proxy/consent solicitation statement in
connection with such transaction. The final terms of the prospective
merger of Santa Fe and IGS remain subject to change and would only be
reflected in a binding definitive agreement that remains to be
negotiated between the companies. A copy of the definitive merger
agreement would be filed along with the prospectus. Santa Fe
stockholders would be urged to read these and any other related
documents the corporation may issue. If and when these documents are
filed, they can be obtained for free at the SEC′s website, www.sec.gov.
Additional information on how to obtain these documents from Santa Fe
would be made available to stockholders if and when a transaction is to
occur. IGS would provide disclosure and arrange for solicitation of the
votes of its shareholders in accordance with Australian regulations
following execution of a binding agreement. Such documents are not
currently available.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act of 1933, as amended. Santa Fe, its
directors and executive officers, may be deemed to be participants in
the solicitation of proxies or consents from Santa Fe′s stockholders in
connection with any transaction that might be proposed to such
stockholders. Information about the directors and executive officers of
Santa Fe and their ownership of IGS and Santa Fe stock will be included
in the prospectuses and proxy/consent solicitation statements if and
when they become available.
See Accompanying Tables
The following information summarizes the financial condition of
Santa Fe Gold Corporation at September 30, 2012, including its balance
sheets for the three months ended September 30, 2012 and twelve months
ended June 30, 2012, respectively, its results of operations for the
three months ended September 30, 2012 and 2011, respectively, and its
cash flows for the three months ended September 30, 2012 and 2011. The
summary data for the three months ended September 30, 2012 and 2011,
respectively, are unaudited; the summary data for the financial year
ended June 30, 2012 are taken from our audited financial statements
contained in our annual report on Form 10-K for the financial year ended
June 30, 2012, 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 | ||||||||||
? | ||||||||||
| September 30, | June 30, | |||||||||
2012 | 2012 | |||||||||
| (Unaudited) | ||||||||||
| ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 261,566 | $ | 614,385 | ||||||
Accounts receivable | 5,300,378 | 2,442,399 | ||||||||
Inventory | 851,976 | 951,458 | ||||||||
Marketable securities | 50,821 | 48,776 | ||||||||
Prepaid expenses and other current assets | ? | 380,768 | ? | 329,466 | ||||||
Total Current Assets | ? | 6,845,509 | ? | 4,386,484 | ||||||
MINERAL PROPERTIES | ? | 579,000 | ? | 579,000 | ||||||
? | ||||||||||
PROPERTY, EQUIPMENT, AND MINE DEVELOPMENT, net | ? | 23,310,054 | ? | 24,139,166 | ||||||
? | ||||||||||
OTHER ASSETS: | ||||||||||
Idle equipment, net | 1,223,528 | 1,223,528 | ||||||||
Restricted cash | 231,716 | 231,716 | ||||||||
Deferred financing costs, net | ? | 1,064,489 | ? | 1,102,070 | ||||||
Total Other Assets | ? | 2,519,733 | ? | 2,557,314 | ||||||
| $ | 33,254,296 | $ | 31,661,964 | ||||||
? | ||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Accounts payable | $ | 2,248,170 | $ | 2,199,026 | ||||||
Accrued liabilities | 4,218,850 | 2,505,785 | ||||||||
Derivative instrument liabilities | 2,922,997 | 1,026,765 | ||||||||
Current portion, notes payable | 9,686,747 | 9,931,468 | ||||||||
| 448,297 | 444,436 | ||||||||
| 34,877 | 41,487 | ||||||||
Completion guarantee payable | ? | 3,359,873 | ? | 3,359,873 | ||||||
Total Current Liabilities | 22,919,811 | 19,508,840 | ||||||||
LONG TERM LIABILITIES: | ||||||||||
Notes payable, net of current portion | 450,566 | 936,996 | ||||||||
Capital leases, net of current portion | - | 3,545 | ||||||||
Asset retirement obligation | ? | 161,779 | ? | 159,048 | ||||||
Total Liabilities | ? | 23,532,156 | ? | 20,608,429 | ||||||
| ||||||||||
| 235,076 | 222,287 | ||||||||
Additional paid in capital | 75,923,010 | 74,846,754 | ||||||||
Accumulated (deficit) | (66,388,709 | ) | (63,966,224 | ) | ||||||
Accumulated other comprehensive (loss) | ? | (47,237 | ) | ? | (49,282 | ) | ||||
Total Stockholders' Equity | ? | 9,722,140 | ? | 11,053,535 | ||||||
Total Liabilities and Stockholders' Equity | $ | 33,254,296 | $ | 31,661,964 | ||||||
? | ? | |||||||||
| SANTA FE GOLD CORPORATION | ||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
| AND COMPREHENSIVE (LOSS) INCOME | ||||||||||
| (Unaudited) | ||||||||||
? | ||||||||||
| Three Months Ended | ||||||||||
? | September 30, | |||||||||
2012 | ? | ? | 2011 | |||||||
SALES, net | $ | 5,880,297 | $ | 2,550,724 | ||||||
? | ||||||||||
OPERATING COSTS AND EXPENSES: | ||||||||||
Costs applicable to sales | 4,435,856 | 1,620,490 | ||||||||
Exploration | 595,817 | 528,954 | ||||||||
General and administrative | 774,042 | 963,124 | ||||||||
Depreciation and amortization | 1,085,344 | 658,407 | ||||||||
Accretion of asset retirement obligation | ? | 2,731 | ? | 2,127 | ||||||
Total Operating Costs and Expenses | ? | 6,893,790 | ? | 3,773,102 | ||||||
LOSS FROM OPERATIONS | ? | (1,013,493 | ) | ? | (1,222,378 | ) | ||||
? | ||||||||||
OTHER INCOME (EXPENSE): | ||||||||||
Interest income | - | 2,749 | ||||||||
(Loss) gain on derivative instrument liabilities | (852,132 | ) | 2,887,760 | |||||||
Accretion of discounts on notes payable | (3,861 | ) | (553,846 | ) | ||||||
Interest expense | ? | (552,999 | ) | ? | (411,423 | ) | ||||
Total Other (Expense) Income | ? | (1,408,992 | ) | ? | 1,925,240 | |||||
? | ||||||||||
(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES | (2,422,485 | ) | 702,862 | |||||||
PROVISION FOR INCOME TAXES | ? | - | ? | - | ||||||
? | ||||||||||
NET (LOSS) INCOME | (2,422,485 | ) | 702,862 | |||||||
OTHER COMPREHENSIVE INCOME | ||||||||||
Unrealized gain on marketable securities | ? | 2,045 | ? | 31,181 | ||||||
NET COMPREHENSIVE (LOSS) INCOME | $ | (2,420,440 | ) | $ | 734,043 | |||||
? | ||||||||||
Basic and Diluted Per Share data | ||||||||||
Net (Loss) Income - basic and diluted | $ | (0.02 | ) | $ | 0.01 | |||||
? | ||||||||||
Weighted Average Common Shares Outstanding: | ||||||||||
Basic and diluted | ? | 114,294,150 | ? | 94,556,912 | ||||||
? | ? | |||||||||
| SANTA FE GOLD CORPORATION | ||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (Unaudited) | ||||||||||
? | ||||||||||
| Three Months Ended | ||||||||||
? | September 30, | |||||||||
2012 | ? | ? | 2011 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||
Net (loss) income | $ | (2,422,485 | ) | $ | 702,862 | |||||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||||
Depreciation and amortization | 1,085,344 | 658,407 | ||||||||
Stock-based compensation | 259,884 | 312,791 | ||||||||
Accretion of discount on notes payable | 3,861 | 553,846 | ||||||||
Accretion of asset retirement obligation | 2,731 | 2,127 | ||||||||
Loss (gain) on derivative instrument liabilities | 852,132 | (2,887,760 | ) | |||||||
Loss on disposal of assets | - | 152,587 | ||||||||
Amortization of deferred financing costs | 37,581 | 99,579 | ||||||||
Net change in operating assets and liabilities: | ||||||||||
Accounts receivable | (2,857,979 | ) | 175,750 | |||||||
Inventory | 99,482 | (111,545 | ) | |||||||
Prepaid expenses and other current assets | (51,302 | ) | (154,789 | ) | ||||||
Accounts payable and accrued liabilities | 1,762,209 | (897,183 | ) | |||||||
Deferred revenue | ? | - | ? | (451,654 | ) | |||||
Net Cash Used in Operating Activities | ? | (1,228,542 | ) | ? | (1,844,982 | ) | ||||
? | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
Decrease to restricted cash | - | 128,658 | ||||||||
Proceeds from disposal of assets | - | 25,000 | ||||||||
Notes receivable and accrued interest | - | (2,045 | ) | |||||||
Additions of property, equipment, and mine development | (256,232 | ) | (158,185 | ) | ||||||
Construction in progress | ? | - | ? | (1,315,417 | ) | |||||
Net Cash Used in Investing Activities | ? | (256,232 | ) | ? | (1,321,989 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
| - | (213,716 | ) | |||||||
Proceeds from issuance of stock | 1,873,261 | - | ||||||||
Proceeds from notes payable | - | 5,105,121 | ||||||||
Payments on notes payable | (731,151 | ) | (73,804 | ) | ||||||
Payments on capital leases | (10,155 | ) | (35,722 | ) | ||||||
Payment of financing costs | ? | - | ? | (495,000 | ) | |||||
Net Cash Provided by Financing Activities | ? | 1,131,955 | ? | 4,286,879 | ||||||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (352,819 | ) | 1,119,908 | |||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | ? | 614,385 | ? | 172,531 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 261,566 | $ | 1,292,439 | ||||||
? | ||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||||
Cash paid for interest | $ | 247,599 | $ | 323,898 | ||||||
Cash paid for income taxes | $ | - | $ | - | ||||||
? | ||||||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||||
Stock issued for services | $ | 39,000 | $ | 48,000 | ||||||
Santa Fe Gold Corp
Pierce Carson, President and Chief Executive
Officer
505-255-4852
or
Investor Relations
Torrey
Hills Capital
Clay Chase
858-456-7300
cc@sdthc.com