Santa Fe Gold Files New Technical Report for Summit and Ortiz Properties and Clarifies Technical and Public Disclosure
27.09.2014 | Marketwire
VANCOUVER, BRITISH COLUMBIA -- (Marketwired - Sept. 26, 2014) - Santa Fe Gold Corporation ("Santa Fe", "Company") (OTCBB:SFEG) announces that, as a result of a review by the British Columbia Securities Commission (the "BCSC"), it is issuing the following news release to clarify, retract and amend certain technical and public disclosure statements, made by previous management, which were not in compliance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101").Santa Fe has interest in three gold properties in the State of New Mexico, USA. The Summit Gold-Silver Property that operated until November 2014 and is currently on care and maintenance is the most advanced property. The Ortiz and Mogollon properties are exploration stage properties.
(1) The Summit Gold-Silver Mine
A Technical Report, titled, "Preliminary Economic Assessment, Summit Gold-Silver Project" dated September 17, 2014, based on NI 43-101 standards, has been completed for the Summit Mine by an independent mining consulting firm, Chapman, Wood and Griswold Inc, Albuquerque, New Mexico, USA with the resource estimate and other contributions by Moose Mountain Technical Services, Cranbrook, BC, Canada.
The new report has been filed on SEDAR on September 24, 2014. A summary of the new mineral resource estimate is tabulated below:
Table 1.1 Indicated Resource by Au Equivalent Grade
(Diluted Tons Adjusted for Pillar Loss)
In Situ Diluted
AuEq Tons Tons
Cutoff Above AuEq Au Ag Above Au Ag Ounces
(OPT) Cutoff OPT OPT OPT Cutoff OPT OPT Au Ag
0.140 212,800 0.251 0.132 7.157 220,239 0.117 6.373 25,702 1,403,583
Table 1.2 Inferred Resource by Au Equivalent Grade
(Diluted Tons Adjusted for Pillar Loss)
In Situ Diluted
AuEq Tons Tons
Cutoff Above AuEq* Au Ag Above Au Ag Ounces
(OPT) Cutoff OPT OPT OPT Cutoff OPT OPT Au Ag
0.140 627,209 0.277 0.128 8.935 649,136 0.114 7.884 73,742 5,117,787
* The Resource estimate has an effective date of August 27, 2014 and uses a cut-off Grade of 0.14 opt (Ounce Per Ton) AuEq
* Gold Equivalent (AuEq) calculated at 60:1 Silver to Gold Ratio - Using $1200 / Oz Au and $20 / Oz Ag
* Resources were estimated using 3D block modelling, using the percent block method in Minesight© software with a minimum mining width of 6 feet
* We are not aware of any legal, political, environmental, permitting, taxation, socio-economic or other risks that could materially affect the potential development of the mineral resources.
* Mineral resources that are not mineral reserves do not have demonstrated economic viability.
* Dilution is applied to all blocks at 15% dilution, with Au and Ag grades of 0.031 opt and 1.93 opt
The base case mine model for the Summit property is summarized below:
Scheduled Resources 220,239 tons of indicated resources containing 25,702 Ozs Au
and 1,403,583 Ozs Ag and 649,136 tons of inferred resources
containing 73,742 Ozs Au and 5,117,787 Ozs
Production Rate Tons per day 400
Grade - Ounces per Ton 0.115 Au, 7.50 Ag
Average Annual output Gold Ounces 14,400
Average Annual output Silver Ounces 943,000
Average Annual Gold Equivalent Ozs/Yr 30,000 (at 60:1 Ag:Au conversion)
Mine life 6 years
The preliminary economic parameters are as follows: $US
Gold Price per ounce $ 1200
Silver Price per ounce $ 20
Capital Cost $4,200,000
Cash Cost per Ounce AuEq $ 578
After Tax Cash Flow (LoM) $36.6 million
This preliminary economic assessment is preliminary in nature and is based on resources, not reserves, and a portion of the modeled resources in the mine plan are in the inferred resource category and are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Given the inherent uncertainties of resources, especially inferred resources compared to reserves, the Summit mine project cannot yet be considered to have proven economic viability and there is no certainty that the preliminary economic assessment will be realized.
The company's website and corporate presentation material have been updated to reflect the conclusions of the technical report.
(2) The Ortiz Gold Property
A Technical Report titled, " Ortiz Gold Exploration Project" dated September 16, 2014, based on NI 43-101 standards has been completed for the Ortiz property by an independent consulting firm, Independent Mining Consultants (IMC), Tucson Arizona, USA.
During the preparation of the report the Company has reviewed the historic technical information on the project. Due to the historical nature and the age of the data available for calculating the resource and economics, the Company was unable to confirm that adequate Quality Assurance and Quality Control systems, and procedures, as required by CIM standards, were in place at the time the data was being collected. It is therefore not possible to validate the quality of the data to meet today's Canadian CIM reporting standard requirements.
As a result, the Ortiz property has no qualifying data on which to complete a CIM compliant resource estimates and therefore no defined resources.
The Company is therefore retracting all earlier disclosures relating to resources and economics for this property.
The Company's website and corporate presentation material have been updated to reflect the conclusions of the technical report.
The new report was filed on SEDAR on September 24, 2014.
(3) The Mogollon Gold-Silver Property
To comply with the disclosure requirements of sections 2.3 and 2.4 of the NI 43-101 standards, the Company is modifying the disclosure to meet NI 43-101 standards or retracting disclosures that cannot be modified to meet NI 43-101 standards. The Company website and corporate presentation material are being updated to reflect these changes.
The Mogollon property has an historical resource estimate completed by previous owners from diamond drilling in the 1980's. The historical resource estimate was 845,000 tons at 9.35 OPT silver and 0.15 OPT gold grades. The resource has previously been disclosed on the company website and in corporate presentations. Santa Fe cautions that this historical estimate was prepared by a previous owner and Santa Fe has not completed the necessary exploration drilling to verify the estimate. No qualified person has done sufficient work to classify the historical estimate as a current mineral resource and Santa Fe is not treating the historical estimate as a current mineral resource or mineral reserve.
Santa Fe has not yet done sufficient work at the Mogollon site to confirm the historical resource area as the priority exploration target. There is currently no exploration-drilling program planned for this property.
The Company is retracting all prior disclosures which have appeared on the company's website and in corporate presentations and news releases related to the Mogollon Property resource size potential, primary drilling targets and future development and mining plans.
The Company is currently evaluating its options on how best to advance the Mogollon property to maximize the value of this project for its shareholders. A decision and an action plan are expected to be made in the fourth quarter of 2014.
To comply with the requirements of NI 43-101, section 3.1 requirements the company has added Mr. Garry Biles, Chief Operating Officer of Santa Fe Gold, as the Qualified Person who reviews and approves all of the scientific and technical information included on the Company's website and contained in news releases.
Susan Bird, P.Eng is the Qualified Person who reviewed and approved the resource estimate for the Summit Gold - Silver Property.
Mr. Garry Biles, Chief Operating Officer of Santa Fe, is the Qualified Person pursuant to NI 43-101 who reviewed and approved the scientific and technical information included in this news release.
Cautionary Note to U.S. Investors - To comply with its Canadian Securities law obligations, Santa Fe has filed an updated Resource estimate for its Summit Mine in Compliance with NI-43-101. Standards which differs significantly from the mineral reserve disclosure requirements of the U.S. Securities and Exchange ( "SEC") set out in Industry Guide 7. The disclosure in this press release regarding mineral properties was prepared in accordance with NI-43-101 standards which differs significantly from the mineral reserve disclosure requirements of the SEC set out in Industry Guide 7. Under NI 43-101, companies are permitted and required to disclose " mineral resources", which are not "reserves". U.S. companies subject to the disclosure requirements of the SEC are not normally permitted to disclose mineralization unless they constitute "reserves" by U.S. standards in documents filed with the SEC. Investors are specifically cautioned not to assume that any part or all of " measured mineral resources", "indicated mineral resources", or "inferred mineral resources" will ever be converted into SEC defined mineral reserves.. "Inferred mineral resources" have a greater amount of uncertainty as to their existance, and great uncertainty to their economic or legal feasibility. It cannot be assumed that all or any part of an "inferred mineral resource" exists or will ever be upgraded to a higher category. Under Canadian rules, estimates of "inferred mineral resources" may not form the basis of a feasibility or prefeasibility studies, except in rare cases. In addition, the definition of "reserves" and related terms under NI 43-101 and the Industry Guide 7 differ significantly. Accordingly, any "reserves" disclosed in this press release may not constitute "reserves" under SEC standards. Under SEC standards, mineralization may not be calssified as a "reserve" unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Among other things, all necessary permits would be required to be in hand or issuance imminenet in order to classify mineralized material as reserves under the SEC standards. The United States Securities Exchange commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. U.S. Investors are urged to consider closely the disclosure in our Form 10-K which may be secured from us, or from our website at http://us.sec.gov/edgar.shtml
Catalin Chiloflischi, President & CEO
SANTA FE GOLD CORPORATION
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; (ii) a substantial land position near the Lordsburg mill, comprising the core of the Lordsburg Mining District; (iii) the Mogollon gold-silver project, within trucking distance of the Lordsburg mill; (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. Those statements constitute forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 and forward-looking information under Canadian securities law. Forward-looking statements can be identified by the use of words such as "expects," "projects," "plans," "will," "may," "anticipates," believes," "should," "intend," "estimates," and other words of similar meaning. 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, including the following risks and uncertainties: financing risks, exploration and development risks, gold-silver commodity price risks, risks related to obtaining consents, permits and licenses, regulatory and governmental risks, currency fluctuation risks, uncertainty of the outcomes of litigation and risks associated with the inherent uncertainty of future litigation results, adverse outcomes in litigation may result in significant monetary damages or injunctive relief that could adversely affect our ability to conduct our business. All forward-looking statements included in this release are made as of the date of this press release, and the parties assume no obligation to update any such forward-looking statements.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the gold bonds, and shall not constitute an offer, solicitation or sale of any gold bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful. This press release is being issued pursuant to and in accordance with Rule 135c under the Act.
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Contact
Santa Fe Gold Corp.
Catalin Chiloflischi, President and Chief Executive Officer
Toll Free: 1-877-684-9700 or (604) 685-9700