Canarc Resource featured on the first page of Albuquerque Journal
Canarc's recently announced strategic transaction with Santa Fe Gold has been featured on the first page of Albuquerque Journal on Saturday July 19, 2014.
Deal could revive Santa Fe Gold
A fresh partnership with a Canadian mining company could pump new life into Santa Fe Gold Corp.'s gold and silver operations in southwestern New Mexico.
Canarc Resources Corp. in Vancouver has agreed to acquire a 34 percent stake in Santa Fe Gold in a stock exchange that will, in turn, give the Albuquerque-based mining company a 17 percent share in Canarc.
Both Canarc and Santa Fe Gold, which owns the state's only commercial-scale gold and silver mining project near Lordsburg, are penny-stock companies that trade on the over-the-counter bulletin board.
But Canarc, which also trades on the Toronto Stock Exchange, is directly affiliated with a blockbuster silver mining and exploration firm, Endeavour Silver Corp. That company, which trades on the Toronto and New York Stock Exchanges, has three active silver mines in Mexico and boasts a market capitalization of more than $600 million.
Under the new partnership, Canarc and Endeavour founder Bradford Cooke has now become chairman of Santa Fe's board. Canarc CEO Catalin Chiloflischi is now CEO of the Albuquerque company.
Chiloflischi said Endeavour, which launched in 2004, has grown rapidly in Mexico by acquiring promising but financially strapped mining projects to inject new life into them, and the company hopes to do the same in New Mexico.
"We look for troubled assets and bring expertise to the table to turn them around and grow them," Chiloflischi told the Journal. "That approach has successfully built Endeavour in just 10 years into a company in the range of $600 million to $700 million today."
Santa Fe Gold fits the mold, with potentially high-value assets through its Summit gold and silver mine near the Arizona border in Grant County and its flotation mill in Lordsburg. The company employed 50 people there until last November, when it shut down operations because it lacked sufficient investment funds to fully equip and operate its facilities.
Like many other junior mining companies, Santa Fe Gold has suffered from the downturn in metal prices in the last couple of years, with gold falling from about $1,900 per ounce in 2012 to about $1,200 now.
"Many companies have gone under, but that means there are a number of turnaround opportunities for us, and that's what we see with Santa Fe Gold," Chiloflischi said.
The new partners are now helping to raise $22 million with gold bonds through investment advisor Euro Pacific Capital,. And two of Santa Fe Gold's principal creditors are working to restructure about $20 million in debt as a result of the new partnership.
"As a major shareholder, I think this is a good deal for the company," said Pierce Carson, Santa Fe's former CEO, who remains one of its largest shareholders.
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For More Information - Please contact:
Catalin Chiloflischi, CEO
Toll Free: 1-877-684-9700
Tel: (604) 685-9700
Fax: (604) 685-9744
Email: [email protected]
CAVEAT: This article may contain forward looking statements. The Company seeks Safe Harbour in regards to such statements. The Company has no opinion as to the accuracy or completeness of articles prepared by other parties, and readers should not rely on them and should seek advice from their own investment advisors. Investors should also note that development and exploration plans and timelines are subject to change and investors should refer to company's recent disclosure to confirm such information.