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To get a better handle on the grades Santa Fe Gold may be encountering at its Jim Crow Mine, it is currently bringing into production, it may be advantageous to connect the dots by extrapolating data from publicly available sources on nearby mines and deposits, to try determine the real value and future potential of the highly coveted and renowned Steeple Rock Mining District, a world renowned gold and silver rich mining region.
The first question might be, with emphasis on the history of the district and why it is a renowned Gold and Silver mining region, it may also be beneficial to know how much Gold and Silver has been produced in the past and how it may offer some guidance and perspective for future production, given you tend to find more gold in gold country and many older mines are currently being revived worldwide, some with outstanding results.
It begins with historic testimony to the fact that some 152,000 ounces of Gold and 3.6 million ounces of Silver have been produced to date that in today's money would equal approximately $300 Million and given past history of how much more gold is often as yet undiscovered, this would certainly bode well for Santa Fe Gold's future, given the sizable other discoveries and district estimates that have been implied.
According to a NI 43-101 report in the public domain based on drill holes, extensive data and research by a qualified person, Santa Fe Gold's Billali Mine contains and could produce a minimum 219,000 tons of ore averaging 12.8 oz/ton silver and 0.244 oz/ton gold and also elaborated on the fact that there was potential for further development at depth and to surface and laterally.
At current prices this would equal some $130 Million or about 5 x Santa Fe's current share price. Given the history and potential value of the district, you have to ask yourself what motivated Santa Fe to decide to purchase all eleven mines in the Steeple Rock district they currently own. And, how in time, they plan to develop and bring all of them into production. Evidently, the geological signatures and structures of each mine suggest they could hold similar resources to the Billali Mine throughout. Since they are developing the Jim Crow mine first, it stands to reason this mine most likely has similar potential to the Billali mine and could be even larger as some of the other mines reputed to be.
Since the Santa Fe Gold acquired 10 other mnes within the district, there could be the equivalent in most or all of these mines of equal or considerable similar potential to the Billali mine, or even in some cases greater, as a number of mines could comprise a larger area or footprint than the Billali Mine, something that as additional exploration and development progresses could be significant.
And to prove this point: Additional trends discovered by Biron Bay Resources Toronto Canada identified a resource of 1.45 million tons of ore grading 0.18 oz/ton gold and 10.3 oz per ton silver with additional mineralised zones intercepted in drill holes. Yes, that's what it reported: Additional mineralized zones intercepted in drill holes.
In today's currency at the grades indicated, this identified resource indicated alone, could amount to upward of $700 Million with further upside potential, presenting a potentially exceptionally optimistic outlook for Santa Fe Gold's near term, medium and longer term future.
In light of this, it looks as if Santa Fe Gold has pulled off a considerable coup, having secured these previously hard to acquire mines on what appear to be very good terms.
Thus, the argument for doing so looks compelling given the overall resource potential especially with the epithermal signature and veinous nature and additional potential above, laterally and at depth, likely to be developable in all of these mines.
Moreover, it would appear that some of these similar drill holes and trends referred to by Santa Fe Gold in recent press releases suggest this is clearly why Santa Fe Gold has acquired such a significant foothold in the Steeple Rock Billali mining district. In fact, being able to secure substantial land holdings within a highly coveted mining district spanning a total of 10 additional mines to the Billali is a remarkable accomplishment and would be quite difficult to repeat today, given the recent rise in metals prices.
For now, the company is currently focused on bringing the premier Jim Crow Mine into production and according to recent press releases, expects to follow with the Imperial and Three Brothers mines and thereafter the Billali Mine with a goal to have four operating mines over the next year. Clearly, the company would not have embarked on this venture or achieved such rapid progress to date, without realizing promising results and relying on the advice of some highly regarded geologist(s) valuable experience and guidance as well as potential output projections.
Therefore, Santa Fe Gold's intent to acquire and secure what appears to be an enviable portfolio of a total of sixteen mining properties spread across two renowned historic mining districts, with large tracts of land, affording near to medium term potential certainly portends a bright future for the company, especially in light of rising metals prices.
Voluminous historic underlying data helps to present a more realistic portrayal of Santa Fe Gold's potential contained in the eleven mines it currently controls in the Steeple Rock district and as these types of epithermal vein deposits suggest, there could be quite substantial additional potential both laterally and a depth across all of these mines and territories.
It should also be noted, its further afield five silver mine complex in the Black Hawk Alhambra district is reputed to contain exceptionally high grade silver in a unique in the world five element geological anomaly containing Cobalt, Manganese, Lithium, Uranium and Silver, similar to only a handful of like mines in the world, among them major silver producing mines in Czech Republic that reputedly financed parts of South Eastern Europe for 100 years, Germany and Morocco and most notably the Cobalt mine in Ontario Canada which produced in excess of 550 million ounces of Silver.
Again, not including the much larger potential Santa Fe Gold's five silver mines may hold, the fact that in its last press release Santa Fe Gold announced its intent to increase its daily output ten fold, ie., from an initial 50 tons per day to 500 tons per day from aggregate mines, likely over the next year or so, speaks volumes as to its upside potential and thus so, should be able to bear out why most mining companies in their first year of production are often able to achieve: Multi-fold gains proportional to their increase in output.
For this reason Santa Fe Gold appears well poised not just from a near term productive output and cash flow standpoint, but longer term in its capacity to have multiple gold and silver mines in production, anchored by a potentially higher than average intrinsic values contained in two particular and notably large tracts and land positions with multi-decade gold and silver productive potential that should enable Santa Fe Gold in time to become a premier mid tier mining company in the United States.
