Santa Fe Gold Corporation (SFEG) declared today the beginning of commercial production at its Summit silver-gold mine in southwest New Mexico. Initial development of the mine has been successfully completed, mechanized mining of the ore body has begun and production levels are steadily increasing.
Ramp up to full production levels is continuing and revenues are expected to increase over the course of 2012 reflecting increases in both tonnage and grades. At full production, annual life of mine revenue is estimated to be approximately $40 million at recent gold and silver prices. Ore reserves are estimated to average 10.78 ounces per ton silver and 0.143 ounces per ton gold (0.35 ounces per ton gold equivalent). At full production levels, direct operating costs are projected to average $364 per ounce of gold equivalent produced over the life of the mine.
Pierce Carson, Santa Fe Gold Corp.’s President and CEO, said:
We are very pleased to be able to declare commercial production at Summit, which is a significant milestone. However, it is important to recognize we are still at an early stage in mine development. We have not yet reached the richer parts of the ore body that constitute the majority of the reserves. Daily production rates are variable and we are continuing to make improvements in operating efficiencies. On the positive side, mechanized long-hole mining has proved to be very successful and we are confident of attaining our target mining rate of 10,000 tons per month, or 400 tons per day. However, due to limited mechanical availability of underground mining equipment, we have not yet reached our target.
Santa Fe Gold Corporation
1128 Pennsylvania NE, Suite 200
Albuquerque, New Mexico 87110
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:
- the Summit mine and Lordsburg mill in southwestern New Mexico, which began processing operations in 2010;
- a substantial land position near the Lordsburg mill, comprising the core of the Lordsburg Mining District;
- the Ortiz gold property in north-central New Mexico;
- the Black Canyon mica deposit and processing equipment near Phoenix, Arizona;
- a deposit of micaceous iron oxide (MIO) in western Arizona.