Santa Fe Metals Corp.

Santa Fe Metals Corp.

July 21, 2011 03:01 ET

Santa Fe Metals to Commence Multiple 2011 Work Programs

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 21, 2011) - Santa Fe Metals Corp. (TSX VENTURE:SFM) ("the Company") is pleased to report a comprehensive project update to outline multiple upcoming 2011 work programs now being planned at its "Cuatro Ciénegas," "Cuyoaco," and "Ahbau Creek" mineral properties located throughout Mexico and British Columbia.

Ian Smith, President & CEO, commented: "Santa Fe has recently acquired multiple prospective gold and silver properties in addition to our high grade copper oxide 'Cuatro Ciénegas' property, located in Coahuila, Mexico. We are currently establishing comprehensive work programs for each of the three prospects that are expected to commence shortly. We anticipate a very active 2011 work season with multiple simultaneous exploration programs including drilling, sampling, surveying, and mapping on all of our properties."

"Cuatro Ciénegas" Mexico: Copper, Silver, Lead, Zinc

Don Indio Claims Zone (Cuatro Ciénegas)

A channel sampling program has been implemented on the Don Indio claims which cover both limbs of a large anticline and follow the copper-silver rich Cupido formation as well as lead-zinc mineralisation in the northeast of the property.

Several historical mine workings were developed in 5km of strike length, along the richest zone of the mineralisation. In 1999 these workings were sampled by Stratabound Minerals Corp., who found "significant economic values of mineralisation" in all workings sampled. It is important to note that at the time this was reported the prices of metals were much lower than today (Cu $0.838/lb, Pb- $0.217/lb Zn 0.53, Ag $4.90; Stratabound Minerals Corp - Annual Report, 1999). Table 1 outlines the results of this study.



No. of Samples
Grades (Weighted Averages)
) Ag
) Cu
) Pb
) Zn
San Marcos West Level 1 20 53.24 1.55 3.06 5.09
Level 2 9 41.52 1.21 2.79 9.75
Level 3 7 180.8 5.28 4.71 5.22
Pilar Grande Level 1 17 88.58 2.59 0.84
Level 2 15 159.64 4.66 1.22
incl 1.2 m 1 258 7.53 2.68
and 2 m 1 380 11.1 5.16
and 1 m 1 576 16.82 0.56
Level 3 43 139.4 4.07 1.59
incl 3.6 m 4 262.91 7.68 1.78
and 1.75 m 3 123.86 3.62 2.49
and 1.2 m 2 235.25 6.87 2.3
and 1.85 m 3 285.3 8.33 3.19
Level 4 95 117.8 3.44 3.3
incl 3.01 m 4 376.03 10.98 3.93
and 2.05 m 3 113.6 3.32 2.16
and 1.1 m 1 497 14.51 4.7
Encalmada Level 1 26 49.5 1.45 0.53 4.38 4.72
El Rincon 22 42 1.23 1.5
Table 1 - Don Indio - Channel and Panel Sampling - Summary of Assay Results. Data taken from Stratabound Mineral Corp - Annual Report, 1999.

It should be noted that because of the orientation of the adits, channel samples were taken along the strike of the deposit and therefore do not represent assay values of the true width.

Prospecting of the entire 19km of strike length on the Don Indio property confirmed that Cu-Ag mineralisation is present where the contact is exposed (Stratabound resources property report – Cascabel, 1999). The widths and economic viability of these exposures will be assessed in future sampling programs).

The purpose of the current systematic channel sampling program is to both confirm the previous assay results, and to determine the true width and extent of the mineralisation within the adits. Based on the results of this program, a phase 2 program will be initiated to determine if the mineralisation extends continuously between the historical deposits, i.e. forming 5km of continuous mineralisation, and to determine if the mineralisation extends to the eastern limb of the anticline.

A phase 3 program will include underground drilling at the Pilar Grande and San Marcos West deposits.

El Granizo Claims Zone (Cuatro Ciénegas)

Santa Fe Metals is awaiting the temporary occupation permit required before construction can commence at the El Granizo claims component of the Cuatro Ciénegas project.

Channel sampling completed by the Company in 2009 returned the following results (Table 2):



) Grades (Weighted Averages)
) Cu
El Granizo

Channel 1 7.2 37.13 1.75
incl 2.3 86.19 3.67
Channel 2 5.9 63.81 2.70
incl 3.2 82.28 3.46
Channel 3 6.5 42.07 1.49
incl 3.5 73.10 2.33
Channel 4 7 20.29 0.86
incl 3.2 41.69 1.72
Channel 5 9.6 20.82 1.28
incl 6.8 27.112 1.59
Channel 6 4.5 8.56 1.17
Channel 7 5.55 7.16 0.73
incl 2.65 12.48 1.07
Channel 8 9.6 10.48 0.57
incl 3.5 24.28 1.39
Table 2 - Results of channel sampling completed in 2009.

The Company plans to mine 1,000 tonnes per day of high grade copper oxide (+/- 2.00% CuOx) via underground exploration drifts. This material will be crushed to approximately 1" and stacked on heap leach pads where it will be irrigated with sulphuric acid. Pregnant solution of primarily copper sulphate will be passed over scrap iron to produce cement copper of purity >85% Cu, a proven, centuries-old process. Laboratory testwork conducted at Inspectorate's metallurgical laboratory in Richmond, BC has achieved cement copper purities of up to 95% Cu. A feasibility study has not been completed and there is no certainty the proposed operations will be economically viable.

Cuatro Ciénegas is 100% owned by the Company subject only to a final annual payment of US$100,000 due in April 2012, and a royalty of 3.5% that can be reduced to 2.5% in consideration for a payment of US$1 million.

Samples were taken from a series of vertical channels in outcrop on the property. Sample collection was supervised by Pedro Rocha Marquez, a qualified person under National Instrument 43-101. Channels were continuous and had a width of 10 cm and 3-5 cm depth. Samples were sealed in plastic bags and transported to the Inspectorate de Mexico Laboratory for preparation and analysis. Sample analysis was by AR digest, and analyzed by ICP-ES method. Silver results were determined by fire assay and gravimetric finish.

"Cuyoaco" Mexico: Gold, Silver, Copper

The Cuyoaco property has the potential to host both a high-grade gold system with near term production potential and a large copper-gold skarn deposit. It is located in the Talpizaco-Tateno Mining District in the northwest of Puebla State, approximately 155 kilometres northeast of Puebla city, and is a historic copper and gold project. The property covers 643 hectares over three separate mineralised targets: the Magistral Cu skarn, the California Cu-Au skarn and the Santa Elena dyke-hosted Au system. In total, 12 adits, numerous trenches and a few shallow shafts were developed historically to explore and exploit these targets.

Sampling in May 2011 by Santa Fe Metals Corp of high grade skarn-type mineralisation in both outcrop and dump rock returned values of 3.79% copper + 1 ppm Au and. Previous sampling reports have confirmed the existence of high grade gold, returning 15 grams/ton gold (NI 43-101 report - Tribe, 2008) and drill intercepts grading as high as 28 metres of 1.3g/t gold (Report from The Geological Service of Mexico (SGM), Santa Anita Project 2006).

The mineralisation is hosted within altered Jurassic-Cretaceous limestones that surround a large granodioritic pluton. Two outstanding properties within the same setting are the San Martin, in Zacatecas, and the Santa Maria de la Paz in San Luis Potosi (NI 43-101 report - Tribe, 2008). The location and surface extent of mineralisation was determined by geophysics, soil geochemistry, drilling and resampling of the historical workings. These have revealed three separate drill targets.

A drilling program is being planned that will test the depth and strike length of the previously drilled Santa Anita mineralisation zone in the east of the property.

Pursuant to the terms of a definitive agreement dated July 16, 2011, subject only to regulatory approval, the Company may earn up to 100% of Cuyoaco in consideration for cash payments and share issuances as follows:

Cash – US$ Shares Interest earned
On receipt of regulatory approval 100,000 360,000 -
1st year anniversary 100,000 360,000 -
2nd year anniversary 100,000 360,000 -
3rd year anniversary 100,000 360,000 60%
4th year anniversary 90,000 360,000 -
5th year anniversary 10,000 6,000,000 20%
TOTAL 500,000 7,800,000 100%

SFM may, at its option, accelerate the schedule of payments and share issuances.

An independent NI 43-101 Technical Report was prepared by independent consultant Norm Tribe, P. Eng in 2008. The Inspectorate de Mexico conducted sample preparation and analysis. Sample analysis was by AR digest, and analyzed by ICP-ES method. Silver results are by fire assay and gravimetric finish.

"Ahbau Creek" British Columbia: Gold

The Ahbau Creek Gold prospect is located in central British Columbia to the northwest of the world famous, prolific gold producing Cariboo mining district which is currently undergoing a renaissance. It covers 3,357 hectares of both placer and lode claims over a large portion of historic placer workings that were estimated to contain 150,000,000 cubic metres of workable material (Lodi Mines Ltd. Notes on Lodi and Ahbau River, 1960). Historic gold production from placer workings during the early 1900s was estimated at 1.07 million grams of gold (Property File Cyprus Anvil Mullett, W.S., 1961). As a qualified person has not done sufficient work to classify this historical estimate as current mineral resources, the issuer is not treating the historical estimate as current mineral resources and the historical estimate should not be relied upon.

Upcoming Work (Ahbau Creek)

Santa Fe Metals is currently planning a sampling program that aims to test the concentration and extent of gold within the gravels as well as testing the underlying bed rock. This work will start later this year.

Santa Fe Metals Corp believes that their strength lies in the experience of their management

R. Stuart ("Tookie") Angus – Chairman and Director

Mr. Angus is an independent consultant to the mining industry. Previously, he was Managing Director – Mergers and Acquisitions with Endeavour Financial Corporation, which provides financial advisory services to the mining and minerals industries. Prior to joining Endeavour Financial in 2003, Mr. Angus was a senior partner with the Vancouver law firm of Fasken Martineau DuMoulin and head of its Global Mining Group from February 2001 to October 2003. Prior to that he was a senior partner with the Vancouver law firm of Stikeman Elliott from 1996 to 2001. Mr. Angus has also served as a director and officer of various public companies.

Ian Smith – President & CEO & Director

B.E. (Mining) Hons, F.AusIMM, M.CIM, M.SME, CP Mgmt;

Mr. Smith a mining engineering graduate of the University of Queensland, Australia, has over 40 years of experience in corporate, operations, and project management and consulting within the international base, precious metals and coal industries. He is a director of several public companies and is President & CEO of Santa Fe Metals Corp. More recently he was President & CEO of BC Metals Corp. that had engineered the Red Chris copper/gold porphyry project for development in northwest BC prior to being acquired by Imperial Metals Corp. His involvement with other large scale copper operations at a senior management level include the Bougainville Copper and La Caridad mines in Papua New Guinea and Mexico respectively and the Zambian Copperbelt. Mr. Smith was President and founding partner of one of North America's most successful mining industry consulting companies until purchased by Canadian interests in 1995.

Douglas R. Brett, C.A. – Chief Financial Officer and Director

Mr. Brett has been employed in public practice accounting for more than 20 years. He was the Chief Financial Officer of BC Metals Corporation of Vancouver, BC, from August 2003 to February 2007, has served as an officer and director of other public companies and has considerable experience in tax-related mineral exploration matters. Mr. Brett is a Chartered Accountant and has been a member of the Institute of Chartered Accountants of British Columbia since December 1982. He is also a member of the Canadian Tax Foundation. Mr. Brett obtained his B.Sc. in computer science and mathematics from the University of British Columbia.

The technical information in this news release has been prepared in accordance with the Canadian regulatory requirements set out in National Instrument 43-101 and reviewed by Pedro Rocha Marquez, a qualified person under National Instrument 43-101.


IAN SMITH, President & CEO

This release contains forward-looking statements, including statements relating to Santa Fe Metals' future plans and objectives with respect to the exploration and development of its properties. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in Santa Fe Metals' business, including risks inherent in resource exploration and development. There can be no assurance that economic resources will be developed at any of its properties. Actual results may vary materially from those described in forward-looking statements.

The TSX Venture Exchange Inc. does not accept responsibility for the adequacy or accuracy of this news release.

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