Santa Fe Gold Reports 130% Increase in Revenues to $5.9 Million for September Quarter

Santa Fe Gold Reports 130% Increase in Revenues to $5.9 Million for September Quarter

ALBUQUERQUE, N.M.--(BUSINESS WIRE)-- 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

Total Assets

$ 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

Current portion, senior subordinated convertible notes payable, net of discount of $1,703 and $5,564, respectively

448,297 444,436

Current portion, capital leases

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

STOCKHOLDERS' EQUITY:

Common stock, $.002 par value, 300,000,000 shares authorized; 117,537,970 and 111,143,684 shares issued and outstanding, respectively

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

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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
TWX +0.66 65.15

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