Gold price slips as traders weigh outlook for Fed interest rate cuts
Bullion traded near $2,626 an ounce in thin trading after closing 1.1% higher on Friday.
Santa Fe Gold Corporation SFEG 0.00% today reported its Summit silver-gold mine in southwestern New Mexico is on track to ramp up production in Q4 2011. At the targeted production rate of 400 tons per day, output is expected to increase by 400% from current levels.
Once full production is reached, annual revenues are anticipated to approximate $40 million at recent gold and silver prices. Operating costs are projected to be $364 per ounce of gold equivalent produced.Ore reserve grades over the life of mine are estimated to average 10.78 ounces per ton silver and 0.143 ounces per ton gold.
“The recently completed $5 million debt financing provides needed working capital to achieve the ramp up,” said Dr Pierce Carson, President and Chief Executive Officer. One of the issues affecting working capital has been the significant lag time between shipment of product and payment from the smelter. We continue to keep costs to a minimum and compared to many mining start-ups have saved millions of dollars in capital and operating costs.
“We reached the southern extension of our main ore body some months ago and have been developing the ore body for mechanized mining. Currently we are working on completing the fourth of four sublevel drifts in the vein deposit as part of the pre-development required. This month we also expect to receive a permit that will allow us to generate additional necessary power. When we begin mechanized mining, which we plan for Q4 2011, we anticipate the production ramp up will occur rapidly.”
Dr. Carson continued, “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.”
Santa Fe is sending regular monthly shipments of concentrates to the Aurubis smelter in Germanyand silica flux to the Asarco smelter in Arizona. Payments from these smelters are received on a monthly basis. When production increases, the company plans to expand its customer base and also sell its products to other smelters. Both the concentrates and silica flux are premium quality products andSanta Feanticipates no problem in selling all it can produce.
“With the present environment of rising 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.”
AboutSanta FeGold:
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 processing operations in 2010; (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 and processing equipment 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.
Image by Santa Fe Gold Corporation
