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

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 atwww.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

)