Santa Fe Gold’s Summit silver-gold mine in southwestern New Mexico is expected to achieve commercial production soon. Mechanized long-hole mining of the ore body began in December 2011 and has proved to be very successful. At the targeted production rate of 400 tons per day, output during 2012 is anticipated to increase by 400% from 2011 levels.

Annual revenues over the life of mine are projected to approximate $40 million at recent gold and silver prices. Operating costs are estimated to be $364/oz of gold equivalent produced. Ore reserve grades over the life of mine are estimated to average 10.78 oz/ton silver and 0.143 oz/ton gold.

“The production ramp up has been aided significantly by the $25 million debt financing completed in December,” said Dr. Pierce Carson, president and CEO. “In particular, we have been able to acquire additional underground equipment, which will help in the mining and removal of ore from the mine. Currently awaiting removal there are about 10,000 tons of drilled and blasted broken ore underground.

“We are continuing to operate the Lordsburg mill two 8-hour shifts per day, five days a week, and the Summit underground mine two 10-hour shifts a day, seven days a week. We have added to our operating staff and instituted an aggressive training program with a strong emphasis on safety. Currently our work force totals 56, the majority employed at the mine and the mill,” said Dr. Carson.

“With the present environment of attractive silver and gold prices, we expect 2012 to be a good year for Santa Fe,” Dr. Carson said. “Looking to the future, our flotation mill has significant extra capacity and an important priority will be to step up both our exploration and acquisition programs for additional mill feed.”