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Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
Santa fe gold management presentation
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Santa fe gold management presentation

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  • 1. Management Presentation July 2012
  • 2.  This presentation includes forward-looking statements that are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. While these statements are made to convey to the public the companys progress, business opportunities and growth prospects, readers and listeners are cautioned that such forward-looking statements represent managements opinion. Whereas management believes such representations to be true and accurate based on information and data available to the company at this time, actual results may differ materially from those described. The companys operations and business prospects are always subject to risks and uncertainties. Important factors that may cause actual results to differ are set forth in the companys periodic filings with the US Securities and Exchange Commission. Cautionary Note to U.S. Investors: The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can legally extract or produce. We use certain terms in this presentation, such as “resources”, “geologic resources”, ”measured”, ”indicated” and “inferred”, that the SEC guidelines strictly prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosure in our latest Form 10-K and other reports filed with the SEC. You can review and obtain copies of these filings from the SEC’s website at http://www.sec.gov/edgar.shtml. 2
  • 3. Table of ContentsI. Corporate OverviewII. Asset PortfolioIII. Summit Gold-Silver MineIV. Strategic Acquisition: Mogollon Gold-SilverV. Ortiz Gold ProjectVI. Investment Summary 3
  • 4. Investment Highlights Santa Fe is a U.S. mining and exploration company that develops primarily silver and gold properties:  Summit Gold-Silver Mine, New Mexico ▪ Revenue of $6.4 million generated in FYE June 30, 2011 ▪ Revenue of $8.1 million generated in nine months ended March 31, 2012 ▪ Revenue of $3.7 million generated in three months ended March 31, 2012  Potential acquisition of Mogollon Gold-Silver project, New Mexico ▪ Strategic acquisition that would potentially double silver and gold resources for processing at the Company’s mill near Lordsburg, NM  Ortiz Gold Project, New Mexico ▪ Measured & Indicated historical gold resource of 1.1mm oz ▪ Inferred resource of 0.66mm oz Experienced management team with acquisitive focus and successful record in exploration and development. 5
  • 5. Ticker OTCBB: SFEG (As of July 2012)Shares Outstanding 112 millionWarrants & Options 22 millionFully Diluted 134` millionManagement ownership 12%Market Cap $40 millionVolume (90 day average) 150,00052-week Range $0.28 - $1.23Employees 70Working Capital at March 31, 2012 $0.6mm 6
  • 6.  Financing with Waterton Global Value, LP  $10mm drawn down: $5mm used to repay short term debt, remainder for working capital  Terms: Repayment over30 months, 6 month grace period, 9% interest  $5mm revolving credit facility to bring forward accounts receivable  Gold and silver sales agreement Conversion of $13.5 million of convertible debt  Sulane Holdings Inc. converted $13.5 million of convertible debt in December 2011  Conversion price was $1.00 per share, a premium over December trading prices Net effect of the financings  Eliminated short term debt, provided working capital, strengthened balance sheet 7
  • 7.  $5 million Offering of Units  The Units are priced at $0.40. Each Unit consists of one share of Santa Fe common stock and one three-year warrant having an exercise price of $0.60 per share.  The stock to be issued will be registered under Santa Fe’s S- 3 shelf registration statement. The stock will be free- trading immediately.  The offer is currently scheduled to remain open until July 25, 2012; however Santa Fe in its discretion can close it sooner or can extend it.  Further details are available in Santa Fe’s SEC filings.  See links on the home page of Santa Fe’s website. 8
  • 8. Rationale behind the Spin Outs – Creating Value Santa Fe Gold Corporation Santa Fe Owned (OTCBB:SFEG) Potential Acquisition 100% 100% 100% Lordsburg Mining Ortiz Other Non-Core Mogollon Gold Silver Company Gold Project Mineral Properties Project 100% 100% Summit Lordsburg Mill Drilled resourceGold-Silver Mine 9
  • 9. Santa Fe has an experienced management team to lead the company’s growth. W. Pierce Carson, PhD. President and CEO: Joined Santa Fe in 2003  40 years worldwide mining and public company experience with Exxon Minerals, Kennecott Copper, and Nord Pacific  Past president of companies listed on NYSE, NASDAQ, TSE and ASX  MS and PhD in Economic Geology, Stanford; AB in Geology, Princeton John L. White. VP & General Manager LMC: Joined Santa Fe in 2012  32 years experience in development & operation of underground, open pit mines and in construction.  Senior management experience as VP with St. Cloud Mining and Salls Brothers Construction. Erland A. Anderson. Technical Manager Mining: Joined Santa Fe in 2010  40 years experience mine management & technical services, N. & S. America  Senior management positions with St. Joe Resource Co. and Nord Resources Corp; Manager of US Operations for A.C.A. Howe International 10
  • 10.  W. Pierce Carson, PhD. Chairman, President and CEO  40 years worldwide mining and public company experience with Exxon Minerals, Kennecott Copper, and Nord Pacific  Successful track record in exploration, development and operations  Past president of companies listed on NYSE, NASDAQ, TSE and ASX  MS and PhD in Economic Geology, Stanford; AB in Geology, Princeton John Frost Director  50 years international mining experience  Credited with the discovery of 40 commercial mineral deposits  Past President of Exxon Minerals International; established Exxon Minerals’ domestic and international exploration programs  MS and PhD in Geology, Stanford; BS in Mining Engineering, Stanford 11
  • 11. Summit Mine, New Mexico Ortiz Gold Project, New Mexico Processing commenced in Q2 2010  Historical resource of 1.7mm oz gold Commercial production in Q2 2012  NI 43-101 report to be completed Production ramp-up underway  Permitting estimated 2 years Substantial exploration potential  Production as early as 3 yearsLordsburg Mill, New Mexico Proposed Strategic Acquisition Significant excess capacity  Potential acquisition of Mogollon Increase in throughput expected: gold-silver mining district  Ramp-up of ore production from Summit  Increase supply of ore to Lordsburg Mine Mill from Mogollon property  Proposed acquisition of Columbus Silver  Highly prospective exploration assets  Historic Lordsburg Mining District  Other ore sources within trucking distance 13
  • 12. Santa Fe’s attention to low costs and US mine locations position it for long-term strength. Summit Gold-Silver Probable Reserve Tons (000s) 618 Silver Grade (opt) 10.780 Ag Oz (000s) 6,663 Gold Grade (opt) 0.143 Au Oz (000s) 88 Gold Equiv Grade (opt) 0.349 Au Equiv Oz (000s) 200 Production Ramp-up  Processing commenced in April 2010  Commercial production commenced April 2012  Lordsburg Mill is producing a marketable, high value Au-Ag concentrate  Sales contract with European Smelter: Aurubis AG, Germany  Sales contracts with Arizona Smelters: Freeport McMoRan; Asarco  Initial production of approximately 1,000 gold equivalent ounces per month building to 2,400 gold equivalent ounces per month 15
  • 13. Production Parameters Underground mining using rubber tired equipment and decline access 80% metallurgical recovery 5-10 year life of mine 57 miles to Lordsburg MillExploration Potential Excellent potential to expand reserves/resource through further drilling Further targets to be identified through mining Further targets in the northwest of license area identified through preliminary drilling 16
  • 14. In May 2011 Santa Fe completed a Technical Report on the Summit Mine,yielding the following conclusions1: Capital Cost: $18.5 million (now completed) Average Cash Cost: $364/oz Au Equiv Average Operating Cost: $84.50/ton Revenue: $28.5 million/yr EBITDA: $18.0 million/yr Payback: 4th Qtr 2012 IRR: 66%21 Pricing Assumptions:  Gold: $1,000/oz  Silver: $16.67/oz2 $60 million of tax loss carry-forwards to be applied to Summit 17
  • 15. Mine Life 5 Yr 10 Yr$1000 Gold; $16.67 Silver (in millions)Revenues $144 $288EBITDA $91 $186$1400 Gold, $23.33 SilverRevenues $201 $402EBITDA $149 $302* Economics based on Technical Report by Chapman Wood and Griswold, Inc., May 2011 18
  • 16.  Santa Fe is negotiating to purchase Mogollon Gold-Silver Project Synergies of the acquisition include:  Mogollon project is within trucking distance (approx 100 miles) from Santa Fe’s Lordsburg Mill, which has spare capacity  The Mogollon acquisition would potentially more than double the supply of ore to the mill  Production could begin as early as 2014 Primary Asset: Mogollon Gold-Silver District, New Mexico:  Past Production: 15.7 million ounces of silver; 327,000 ounces of gold  45 miles of vein length available – only 3 miles developed so far  Drilling program planned for 2012  Initial target 60 million ounces silver (1 million ounces gold equiv) 20
  • 17.  Initial Target: Consolidated Mine (Mogollon District)  1980’s drilled resource: 845,000 tons grading 9.35 oz/t Ag and 0.15 oz/t Au; open along strike and at depth  Drilling program planned for 2012  Underground exploration/development program planned for 2013  Initial production possible in 2014 21
  • 18. 23
  • 19.  Resource Estimate  1.7m “non-compliant” historical ounces  $40mm spent on exploration in the 1980’s – 1990’s Measured & Indicated* Inferred* (0.01 opt Tons Grade Au Oz Tons Grade Au Oz cut-off) 000s opt 000s 000s opt 000s Carache 10,985 0.058 637 13,041 0.067 483 Lucas 12,683 0.033 419 6,397 0.028 179 Total 23,668 1,056 19,438 662 Production Potential  Historical production in excess of 350,000 ounces of gold  Future production anticipated as early as 3 years  Open pit mining at 3mm tons/yr to be processed through crushing, milling and gravity recovery Litigation settled  Settlement with Ortiz Mining Inc. confirmed Santa Fe’s exclusive mineral lease rights. Next Steps  NI 43-101 Technical Report: Resource statement and preliminary economic assessment.  Permitting: Complete technical work and environmental studies* Non-NI 43-101 compliant and should not be relied upon; Santa Fe does not treat it as current. 24
  • 20.  Santa Fe is successfully making the transition from an exploration to a producing company Profile of increasing cash flow beginning with Summit (2012), followed by Mogollon (2014) and then Ortiz (2016) Low estimated cost of production from all mines Lordsburg Mill is a strategic asset for new ore sources Mogollon acquisition would build gold & silver asset base Ortiz Gold Project potentially a “company maker” Pursuing strategic acquisitions and/or mergers Listing on AMEX or other senior exchange a priority 26
  • 21. Thank You!

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