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Santa Fe Gold Is In A Period Of Transition
From The Exploration Phase To Development And Production With Two Gold And
Silver Projects In New Mexico
Mining
Precious Metals
(SFEG-OTC: BB)
Santa Fe Gold Corp.
1128 Pennsylvania NE, Suite 200
Albuquerque, NM 87110
Phone: 505-255-4852
Dr. W. Pierce Carson, Ph.D.
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published – March 21, 2008
BIO:
W. Pierce Carson, President & CEO, Director
W. Pierce
Carson, PhD joined Santa Fe Gold Corp as President and CEO in the fall of
2003 as part of the Company’s restructuring and reorganization initiative,
following a period of engagement as consultant. With Santa Fe Gold, Dr.
Carson continues an accomplished international mining career spanning 35
years with extensive experience in directing exploration, development and
mining of base metals, precious metals and industrial minerals and in
administering public companies. He served with distinction in a variety of
roles at Exxon Minerals, Kennecott Copper and Nord Pacific Ltd. Dr. Carson
holds a PhD in Economic and Structural Geology and an MS in Ore Deposits
from Stanford University, and a Bachelors Degree in Geology from Princeton
University.
Company Profile:
Santa Fe Gold Corp (OTCBB: SFEG) is
a U.S.-based mining and exploration enterprise focused on acquiring and
developing gold, silver, copper and industrial mineral properties. The
company owns the Summit silver-gold property and a mill site and processing
equipment in southwestern New Mexico; mineral lease rights to the Ortiz gold
property in north-central New Mexico, believed to contain two million ounces
of gold; the Black Canyon mica mine and processing facility near Phoenix,
Arizona; and a large resource 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.
CEOCFO: Dr. Carson, what is the vision for
Santa Fe Gold?
Dr. Carson: “Santa Fe Gold is a mining
exploration company focused on precious metals and is in a period of
transition from the exploration phase to the development and production
phase. We have two high quality precious metals projects here in New Mexico
and we are proceeding to take one of those into production. We plan to use
cash flow from operations to help develop our second, larger mine, and to
make additional acquisitions. Starting with these precious metals projects,
our vision is to build a much larger company, based on cash flow from
producing mines and with a portfolio of development and exploration
properties in the pipeline. The current investment climate in relation to
the precious metals markets provides a favorable setting in which to
accomplish our goals and to create value for our shareholders.”
CEOCFO:
Where are you in the development process?
Dr. Carson: “Late last year we completed
financing for our Summit Project, which will be a new silver/gold mine
located in southwestern New Mexico. In January of this year we hired a very
experienced project manager and began construction activities. We have
initiated ground clearing and preparation of the Summit mine and Lordsburg
mill sites, and we will be transporting the milling equipment to the mill
site for installation. We already have purchased a significant portion of
the equipment that we will need. We also are arranging for water and power
at the mill site. At the Summit mine, we are obtaining quotations from
mining contractors for mining the ore. Our preference is to employ a
contractor to mine the ore and employ our own people to process the ore. It
is still early in the construction phase and we have a lot of work to do
this year. Barring unexpected delays, we expect to achieve initial
production later in the year.”
CEOCFO:
Given all the activity in the mining industry, is it difficult to get the
personnel and the contractors and the equipment that you need?
Dr. Carson: “They are in short supply.
We have been fortunate in obtaining a first rate and very experienced
project manager who is familiar with operations in southwestern New Mexico.
So far, we have been able to obtain the people and contractors we need. But
generally what you are saying is correct. There is a shortage of people in
the mining business. It is boom times right now and whenever that happens
there always is a shortage of people. Our mine is a relatively small mine in
terms of the number of people and size of the operation, although it is
projected to have very good operating margins. We are not out looking for
hundreds of people, but rather will be hiring only two or three dozen so
don’t anticipate a big problem.”
CEOCFO: Is
New Mexico friendly towards the mining industry?
Dr. Carson: “Yes, generally it is. The
southwestern part of the state where we are establishing our first mine, the
Summit Mine, is active mining country. Phelps Dodge, which is a large copper
producing company, operates several copper mines in southwestern New Mexico
and southeastern Arizona. There are a number of historic mining districts in
the region that have been significant base metals and precious metals
producers. Generally people in the Silver City and surrounding areas look
favorably upon mining. Mining provides jobs and is important to the local
economy, and also is part of the region’s heritage.”
CEOCFO:
Please tell us about the property and the potential?
Dr. Carson: “The Summit resource has
attractive grades in silver and gold. We plan to mine the ore by underground
methods and truck the ore to the Lordsburg mill for processing. Economics of
the project are sensitive to silver and gold prices, but at the current
prices, we expect the project to have excellent operating margins and
produce substantial cash flows. The resource is sufficient for an initial
seven to ten years of mining. So we have enough there to get established and
to operate for many years. We also are acquiring additional land and think
there is good upside exploration potential in the Summit area. Also, once we
establish the mill in Lordsburg, we expect to be able to bring in
additional ore from other districts that would be within trucking distance
of the mill. As far as we know, Santa Fe Gold will be the only company in
the area to have a milling operation of this type, which we believe will
generate a lot of opportunities.”
CEOCFO: Are
there new technologies that you are able to take advantage of in the mining
process?
Dr. Carson: “Yes, both the mining and
the processing will use modern, state of the art “best practice” techniques
to enhance safety and minimize environmental effects. Other than that, the
methods we will be using for both mining and processing are well know and
proven and do not involve significant technical risk. On the exploration
side, we will be using some sophisticated advanced techniques, both
geophysical and geochemical.”
CEOCFO:
Please tell us about the Ortiz gold project.
Dr. Carson: “The Ortiz project is in the
north central part of New Mexico about 30 miles northeast of Albuquerque. We
have a very large property position there, covering almost 90 square miles.
Historically the Ortiz property has had a lot of work done on it. Back in
the 1980’s and early 1990’s, there was about $40 million expended including
380,000 feet of drilling. That work identified very significant gold
resources totaling about two million ounces. We have carried out open pit
designs on a portion of those resources and concluded that mine development
would be economically attractive and that the mine would be capable of
producing gold at a relatively low operating cost per ounce. We intend to
develop the Ortiz mine following development of our Summit mine, the timing
partly dependent upon the permitting process. The Ortiz property is a very
significant asset for a company of our size. In addition to substantial cash
flows from mining, the large area under our control has the advantage of
promising exploration potential for additional significant discoveries.”
CEOCFO: You
have many years expertise in mining, why do you like the area you are in,
why have you chosen it to work in?
Dr. Carson: “There are a number of
answers to that question. First, we feel that New Mexico is under explored
compared to some of the other states such as Nevada which produces a lot of
gold. Projects in New Mexico also happen to be in our backyard, so we are
able more easily to handle the management and logistics as compared, for
example, to going down to South America. We may want to go further afield as
we grow as a company but at least to start with, focusing on projects close
to home is an expedient way for us to quickly achieve production, generate
cash flow and use that to build a base upon which to expand.”
CEOCFO:
There are many companies in the mining sector, why should investors look at
Santa Fe Gold, what sets you apart?Dr. Carson:
“Santa Fe Gold has several attributes to offer investors. First, the quality
of our management. We are a small group but very experienced and have “done
it before”, in fact many times, by successfully taking projects all the way
from exploration through development and operation. Secondly, the quality of
our projects. Both the Summit and Ortiz projects have significant
established resources and both are estimated to be in the lowest quartile of
operating costs worldwide for gold production. And thirdly, our business
model. We are on track to achieve production in the near term, which is
unusual for a junior exploration company. Of course, exploration and
additional acquisitions also are an important part of our future, but we
believe becoming a real operating company with cash flow will set us apart
and help lead to long term success. As we move closer to production and
continue to accomplish our goals, we believe the market will give us greater
recognition, to the benefit of our shareholders.”
CEOCFO:
Final thoughts, what should people remember about Santa Fe Gold?
Dr. Carson: “Santa Fe Gold has quality
management, quality precious metals projects and near-term production. These
are the ingredients for success and will drive appreciation in the company’s
market value.”
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