ALBUQUERQUE, New Mexico--(BUSINESS WIRE)--Santa Fe Gold Corporation (OTCBB: SFEG) is pleased to announce it has entered into an option agreement with Columbus Silver Corporation (CSC: TSX-V), whereby Santa Fe may acquire the Mogollon Project, Catron County, New Mexico, for payments aggregating $4,500,000 scheduled to be paid through the end of 2014. The Mogollon Project encompasses most of the Mogollon district in southwest New Mexico, which has substantial recorded historical production of silver and gold.
“This acquisition fits our strategic objective of developing new ore sources to augment ore currently processed through our flotation mill at Lordsburg,” stated Pierce Carson, CEO. “The Mogollon district contains partially drilled silver and gold deposits that hold promise for new mines, and those deposits will be our initial focus. The district also offers a number of excellent exploration targets with potential for discovery of multi-million ounce silver-gold deposits.”
On signing the agreement, Santa Fe paid Columbus Silver $100,000. The payment schedule calls for Santa Fe to pay a further $150,000 within 3 business days of approval of the agreement by the TSX Venture Exchange, US$500,000 on or before December 31, 2012, and four payments of $937,500 each on June 30, 2013, December 31, 2013, June 30, 2014, and December 31, 2014. Additionally, Santa Fe must maintain the property in good standing by paying underlying claim and lease payments.
During the option earn-in period, Santa Fe will have full access to the property, and among other things will have the right to conduct surface and underground exploration, development and mining activities in preparation for commercial mining.
The agreement is subject to TSX Venture Exchange approval. If such approval is not obtained, the agreement will terminate and any payments made by Santa Fe to Columbus Silver must be refunded with 5% simple interest thereon.
Upon TSX Venture Exchange approval, Santa Fe and Columbus Silver will enter into a mutual release regarding the previous plan of arrangement between the parties, which expired by its terms on May 31, 2012. Approximately $1,060,000 was advanced by Santa Fe to Columbus Silver in connection with the foregoing, and the parties will acknowledge that the funds are non-refundable.
Additional Information:
The option agreement contains other
terms and conditions, and a full copy is included as an Exhibit to Santa
Fe’s Current Report on Form 8-K, which it will file promptly with the
SEC and will be available at www.sec.gov
and also may be accessed via www.sedar.com.
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 Ortiz gold property in north-central New Mexico;
(iv) the Black Canyon mica deposit near Phoenix, Arizona; and (v) 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.
Cautionary Note Regarding Forward-Looking Statements:
This
press release contains forward-looking statements and forward-looking
information (collectively, “forward-looking statements”) within the
meaning of applicable US and Canadian securities legislation. All
statements, other than statements of historical fact, included herein
are forward-looking statements. Although the Company believes that such
statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Forward-looking statements are
typically identified by words such as: believe, expect, anticipate,
intend, estimate, postulate and similar expressions, or are those,
which, by their nature, refer to future events. The Company cautions
investors that any forward-looking statements by the Company are not
guarantees of future results or performance, and that actual results may
differ materially from those in forward looking statements as a result
of various factors, including, but not limited to, variations in the
nature, quality and quantity of any mineral deposits that may be
located, variations in the market price of any mineral products the
Company may produce or plan to produce, the Company's inability to
obtain any necessary permits, consents or authorizations required for
its activities, the Company's inability to produce minerals from its
properties successfully or profitably, to continue its projected growth,
to raise the necessary capital or to be fully able to implement its
business strategies, and other risks and uncertainties disclosed in the
Company’s Annual Report on Form 10-K for the year ended June 30, 2011
and its most recent quarterly reports filed with the United States
Securities and Exchange Commission (the “SEC”), and other information
released by the Company and filed with the appropriate regulatory
agencies. All of the Company's US public disclosure filings may be
accessed via www.sec.gov
and its Canadian public disclosure filings may be accessed via www.sedar.com,
and readers are urged to review these materials.