×

Santa Fe Gold Reports 79% Increase in Revenues to $11.5 Million for 2012

ALBUQUERQUE, N.M.--(BUSINESS WIRE)-- Santa Fe Gold Corporation (OTCQB: SFEG) is pleased to announce financial results for its fiscal year ended June 30, 2012. Santa Fe Gold reported revenues of $11.5 million for the year ended June 30, 2012, which represents an increase of 79% over 2011. The Company's gross profit (or earnings from mining operations) increased by 34% to $4.2 million in 2012. The full version of the financial statements and management's discussion and analysis can be viewed on the Company's website at www.santafegoldcorp.com or at www.sec.gov.

“We are pleased with our growth in revenues and the increase in earnings from mining operations,” commented Pierce Carson, President and CEO. “We also are excited about our growth prospects for 2013. The recent developments at Summit are expected to contribute to higher grades and increased production in 2013.”

“Revenues have continued to increase since June 30, 2012, and for the September 2012 quarter just ended are estimated at $5.0 million,” Carson added.

2012 ANNUAL HIGHLIGHTS

  • 79% increase in revenues to a record $11.5 million.
  • 34% increase in gross profit (earnings from mining operations) to $4.2 million.
  • Cash and cash equivalents increased to $0.6 million as of June 30, 2012, from $0.2 million at June 30, 2011.
  • Current assets increased to $4.4 million as of June 30, 2012, from $3.0 million at June 30, 2011.

OUTLOOK

For 2013, the Company expects to experience continued growth, in part due to the following positive developments:

  • The Company re-evaluated its mine plan and ore schedule. As a result, the Company anticipates accessing richer parts of the ore body earlier and increasing production levels up to 12,000 tons per month.
  • The Company recently entered into an option agreement to acquire the Mogollon Project in Catron County, New Mexico. The acquisition of Mogollon represents a strategic opportunity to develop new ore sources to augment ore currently processed through the flotation mill at Lordsburg.
  • At the Ortiz Project, the Company is proceeding with a National Instrument 43-101 compliant technical report that is expected to elevate to current status the historical resources estimated at approximately 1.7 million ounces of gold.

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, 2012 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.

See Accompanying Tables

The following information summarizes the financial condition of Santa Fe Gold Corporation at June 30, 2012, including its balance sheets for the twelve months ended June 30, 2012 and 2011, respectively, and its results of operations and cash flows for the twelve months ended June 30, 2012, 2011 and 2010, respectively. The summary data are taken from our audited financial statements contained in our annual reports on Form 10-K for the financial years ended June 30, 2012, 2011 and 2010 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

June 30,

2012

2011

ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 614,385 $ 172,531
Accounts receivable 2,442,399 2,230,605
Inventory 951,458 175,578
Marketable securities 48,776 97,260
Prepaid expenses and other current assets 329,466 279,064
Total Current Assets 4,386,484 2,955,038
MINERAL PROPERTIES 579,000 579,000
PROPERTY, EQUIPMENT AND MINE DEVELOPMENT, net 24,139,166 13,104,215
OTHER ASSETS:
Construction in process - 8,427,113
Idle equipment, net 1,223,528 1,223,528
Note receivable - 203,422
Restricted cash 231,716 410,374
Deferred financing costs, net 1,102,070 314,700
Total Other Assets 2,557,314 10,579,137
Total Assets $ 31,661,964 $ 27,217,390
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 2,199,026 $ 1,090,907
Accrued liabilities 2,505,785 2,231,860
Derivative instrument liabilities 1,026,765 8,973,066
Current portion, notes payable 9,931,468 78,384

Current portion, senior subordinated convertible notes payable, net of discount of $5,564 and $-0-, respectively

444,436 -
Current portion, capital leases 41,487 83,856
Completion guarantee payable 3,359,873 -
Deferred revenue - 3,611,266
Total Current Liabilities 19,508,840 16,069,339
LONG TERM LIABILITIES:

Senior secured convertible notes payable, net of discount of $-0- and $2,498,065, respectively

- 11,001,935

Senior subordinated convertible notes payable, net of discount of $-0- and $19,684, respectively

- 430,316
Notes payable, net of current portion 936,996 58,957
Capital leases, net of current portion 3,545 45,057
Asset retirement obligation 159,048 149,236
Total Liabilities 20,608,429 27,754,840
STOCKHOLDERS' EQUITY (DEFICIT):

Common stock, $.002 par value, 300,000,000 shares authorized; 111,143,684 and 94,744,412 shares issued and outstanding, respectively; Includes non-vested shares of -0- and 237,500, respectively

222,287 188,341
Additional paid in capital 74,846,754 59,021,550
Accumulated (deficit) (63,966,224 ) (59,746,543 )
Accumulated other comprehensive (loss) (49,282 ) (798 )
Total Stockholders' Equity (Deficit) 11,053,535 (537,450 )
$ 31,661,964 $ 27,217,390

SANTA FE GOLD CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)

For the Years Ended June 30,

2012

2011

2010

SALES, Net $ 11,531,869 $ 6,440,897 $ 320,145
OPERATING COSTS AND EXPENSES:
Costs applicable to sales 7,347,158 3,317,914 -
Exploration 2,680,856 2,147,511 1,004,256
General and administrative 3,303,763 2,823,548 2,119,270
Depreciation and amortization 4,039,875 2,322,736 477,760
Accretion of asset retirement obligation 9,812 - -
17,381,464 10,611,709 3,601,286
LOSS FROM OPERATIONS (5,849,595 ) (4,170,812 ) (3,281,141 )
OTHER INCOME (EXPENSE):
Interest income 9,108 11,645 16,410
Miscellaneous income 5,328 - 4,278
Other expense (1,749,742 ) - -
Gain on derivative instrument liabilities 6,568,533 1,652,961 3,295,947
Accretion of discounts on notes payable (1,066,843 ) (1,275,811 ) (1,052,160 )
Interest expense (2,136,470 ) (835,076 ) (192,688 )
1,629,914 (446,281 ) 2,071,787
LOSS BEFORE PROVISION FOR INCOME TAXES (4,219,681 ) (4,617,093 ) (1,209,354 )
PROVISION FOR INCOME TAXES - - -
NET LOSS (4,219,681 ) (4,617,093 ) (1,209,354 )
OTHER COMPREHENSIVE LOSS
Unrealized loss on marketable securities (48,484 ) (798 ) -
NET COMPREHENSIVE LOSS $ (4,268,165 ) $ (4,617,891 ) $ (1,209,354 )
Basic and Diluted Per Share data
Net Loss - basic and diluted $ (0.04 ) $ (0.05 ) $ (0.01 )
Weighted Average Common Shares Outstanding:
Basic and diluted 101,959,367 93,249,081 87,639,127

SANTA FE GOLD CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended June 30,

2012

2011

2010

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,219,681 ) $ (4,617,093 ) $ (1,209,354 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 4,039,875 2,322,736 477,760
Stock-based compensation 926,727 1,010,081 717,547
Accretion of discount on notes payable 1,066,843 1,275,811 1,052,160
Accretion of asset retirement obligation 9,812 - -
Write-off of note receivable 210,889 - -
(Gain) on derivative instrument liabilities (6,568,533 ) (1,652,961 ) (3,295,947 )
Loss on disposal of assets 152,587 - 3,572
Amortization of deferred financing costs 882,629 98,317 89,026
Net change in operating assets and liabilities:
Accounts receivable (211,794 ) (2,230,605 ) -
Inventory (775,880 ) (175,578 ) -
Prepaid expenses and other current assets 54,719 (11,856 ) (116,957 )
Accounts payable and accrued liabilities 1,382,044 2,523,580 (654,285 )
Deferred revenue (755,442 ) (388,734 ) -
Completion guarantee payable 504,049 - -
Net Cash Used in Operating Activities (3,301,156 ) (1,846,302 ) (2,936,478 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease to restricted cash 178,658 - -
Proceeds from disposal of assets 25,000 - 31,400
Purchase of marketable securities - (98,058 ) -
Note receivable (7,467 ) (203,422 ) -
Additions of property, equipment and mine development (1,826,306 ) (1,156,276 ) (402,858 )
Construction in progress (4,208,960 ) (3,665,034 ) (4,893,365 )
Net Cash Used in Investing Activities (5,839,075 ) (5,122,790 ) (5,264,823 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock 1,200,000 2,000,001 10,301,003
Proceeds from notes payable 15,000,000 77,306 212,762
Proceeds from deferred revenue - - 4,000,000
Payment of private placement fees - (136,000 ) (625,000 )
Payments on notes payable (5,164,034 ) (201,701 ) (238,369 )
Payments on capital leases (83,881 ) (138,113 ) (130,811 )
Payment of financing costs (1,370,000 ) - (288,000 )
Net Cash Provided by Financing Activities 9,582,085 1,601,493 13,231,585
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 441,854 (5,367,599 ) 5,030,284
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 172,531 5,540,130 509,846
CASH AND CASH EQUIVALENTS, END OF YEAR $ 614,385 $ 172,531 $ 5,540,130

SANTA FE GOLD CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Continued)

For the Years Ended June 30,

2012

2011

2010

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 1,482,441 $ 799,354 $ 521,642
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for services $ 300,000 $ - $ -
Stock issued for conversion of convertible notes payable $ 13,432,424 $ - $ -
Stock issued for conversion of accrued interest $ - $ - $ 483,000
Stock issued for conversion of accrued liability $ - $ - $ 200,000
Stock issued for conversion of note payable $ - $ - $ 18,219
Insurance premiums financed with note payable $ 105,121 $ - $ -
Equipment purchased with note payable $ 790,035 $ - $ 16,825

Santa Fe Gold Corp
Pierce Carson, President and Chief Executive Officer
505-255-4852
or
Investor Relations
Torrey Hills Capital
Clay Chase, 858-456-7300
cc@sdthc.com

Source: Santa Fe Gold Corporation