Friday, January 30, 2009

Top 30 Reasons to own Santa Fe Gold Corp SFEG


Santa Fe Gold Corp Overview

The over-riding question in assessing the prospects of any company is: What's my edge? In other words what does this company have going for it that others don't or what is the absolute compelling reasoning for buying into this venture. For Santa Fe Gold, the answer is relatively simple: It has a superior business model that should rank among the best and most profitable in the World, with estimated production costs below $300 oz.

This means, that for every ounce produced at current prices of $850, Santa Fe should net at around $550 per oz.

But one hidden benefit, not immediately apparent to most has been Santa Fe's acquisition costs, among the lowest in the industry, to the point that at the current price of $0.60 you are buying Santa Fe's nigh on 3 Million ounces of in-ground Gold, at a nearly unheard of price of $15 per ounce and over the next few months with one of the lowest costs of production of Gold, Silver and Copper on the planet, as SFEG ramps up to full output, the company will be selling that Gold at close to $850 and netting $550 per oz for potential 36 fold gains over cost. In addition to the 30 reasons listed below, a new and perhaps overwhelmingly compelling reason to be buying Santa Fe is for its potential major new Copper Gold discovery at Lordsburg NM, as it may be a takeover target.

Top Thirty Reasons to Buy Santa Fe Gold Corp SFEG
1. Impeccable resumes, extensive experience, integrity, honest management and premier Gold consultants.
2. Five World Class properties all in the politically stable United States with very low capital production costs.
3. All five properties have huge upside exploration and production potential above what's currently assessed.
4. Significant insider ownership in excess of 20% of the outstanding stock with a number of very large owners.
5. More than 24 potential acquisitions currently under review with several acquisitions that could be imminent.
6. All properties are low cost producers and are very sizeable in Global terms with two, potentially the largest.
7. Stock is presently extremely undervalued compared to its peers and is a hard to beat way to buy into Gold.
8. Extra revenues from companies in the surrounding areas will be using Santa Fe's Gold processing facilities.
9. Loyal shareholder base in strong hands, with one of the relatively strongest performing Gold price profiles.
10. Clean balance sheet. Company is realitively unknown at this time, which makes the stock potentially even more undervalued and as it earns its way towards $3 its huge upside potential could become more recognized.
11. Outstanding management team that includes former the President and CEO of Exxon Minerals and former Head of Exploration Task force for Exxon Minerals both of whom are credited with numerous major discoveries all around the World along with one of the most experienced mine managers, formerly with Hecla Mining Inc.
12. One of the World's foremost explorationists as its President and CEO, formerly head of Exxon's Task Force.
13. Dr W Pierce Carson has a PhD in Economic and Structural Geology, a Masters in Ore Deposits from Stanford and Bachelors Degree in Geology, from Princeton. Former head of Exploration for North America for Kennecott Copper and numerous other entities Worldwide, credited with an exceptional record of significant discoveries, numerous acquisitions and startup to completion of several very substantial Gold and other mining operations.
14. Has completely turned around, restructured and reorganized Santa Fe Gold, including an almost miraculous elimination of $6.24 Million in debt plus added gain of $4.6 Million within the same year is some accomplisment.
15. Has quietly been on an acquisition program at the rate of one major project per year, so far to date, and has currently 24 additional acquisitions under consideration, with the possibility of several to be completed in 2009.
16. Has increased in-ground assets of the company by more than $3 Billion with prospect of still greater gains.
17. Superb upside exploration potential on its existing or newly acquired properties that could mean addition of literally miilions of ounces of additional Gold, Silver and Copper that could double or triple its entire valuation.
18. With the prospect of imminent acquisitions that could mean millions of additional ounces of Gold, Silver or equivalent, significant valuation increase is likely to be recognized or even anticipated investment premium.
19. With production imminent at its Summit Silver Gold Mine and expected to be very significantly cash flow positive, Santa Fe's self-sustainability for the foreseeable future, not only looks assured it's ability to strongly leverage its income, to fund other projects and thus significantly increase its revenues in the years ahead, to perhaps by as much as tenfold, is a tantalizing prospect indeed for this company, as will be its ability to fund further acquisitions and an aggressive exploration and expansion program in its proven cost effective model.
20. Through deft and frugal management, Santa Fe is expected to bring the Summit Silver Gold project on line considerably under budget, potentially saving millions that could accrue to one quarter's worth of cash profit.
21. Considerable interest is being shown by institutions in Santa Fe Gold Corp and it could become the target of a potential takeover, or the possibility of some attractive joint ventures can also not be ruled out any time.
22. With the Ortiz Gold representing a potential huge increase in mining revenues, at the initial level of about hundred thousand ounces per year output and later additional undergroung production, could inrease overall output to almost double that amount revenues could actually grow to hundreds of millions within a few years.
23. The recently acquired Virginia Minining district with potentially upwards of 1 Million ounces of Gold and in times past has already produced over $1 Billion in Gold output at today's adjusted for inflation prices, this area represents another significant revenue and income source for the company for many years into the future.
24. As owner of the World's largest and purest Mica deposit, this project could be brought into production in the near future thru joint venture and based on a 20 year mine life, is currently valued between $1.5 and $2 Billion, incidentally, that valuation is based only about 5% of this massive reserve that has thus far been drilled out.
25. Owner of the World's largest Micacaeous Iron Ore (MIO) deposit and 60% of Global reserves the New Planet MIO project is a near limitless resource with maybe enough reserves to supply the World for the next 50 years.
26. Using the most recent takeover matrix valuations, Santa Fe is worth anywhere between $5 ~ $30 per share and that would be only for its Gold and Silver holdings and would not include the large MIO or Mica properties.
27. By almost every measure, SFEG is extremely undervalued at current prices and its breakup value of each component valuation were added together, could put valuation of anywhere between $8 and $15 per share.
28. With zero debt and nearly 45 Million in tax credits, Santa Fe Gold Corp represents an uncommonly attractive acquistion to a larger entity for its lucrative taxation bonus and for investors in Santa Fe the future looks bright.
29. Santa Fe is a lean and mean profit machine in the making with disciplined and very able management team.
30. With indepth research intial strong buy target to $3 and numerous strong buy recommendations from very prestigious names and research reports, Santa Fe is poised to become more recognized as a new mainstream entity that appears poised to become a mid-tier mining conglomerate, with multiple million oz Gold reserves.
A number of notable analysts have written very positive extensive reports on Santa Fe over the past 3 years.

In Summary Santa Fe Gold Corp appears to be an uncommonly undervalued mining investment proposition at current metals prices, especially as it works up to full production from its Summit Silver-Gold Mine. Revenues are expected to be in the realm of $32 Million, with a net of at around $20 Million plus and this should equate to between 15 and 25 cents per share, essentially justifying a share price of upwards of $5, at 20 times earnings, however in the event Gold might double, that would be a whole lot more and SFEG could soar as high as $20.

Report by Financial Intelligence

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