ASX Announcement 16 November 2012

1 MILLION OUNCES GOLD AND 40.6 MILLION POUNDS COPPER IN JORC COMPLIANT

RESOURCE ESTIMATE AT ORTIZ GOLD-COPPER PROJECT, NEW MEXICO Highlights

Measured and Indicated Resource of 0.973 million oz gold (plus 62,760 oz gold inferred resource) and 18,416 tonnes (40.6Mlb) copper estimated at Santa Fe’s Ortiz Project

SFEG Resource base now at 1.25M oz gold (of which approx. 126,000 ozs is gold equivalent)

One operating mine (Summit) currently producing at forecasted 28,000 oz gold equivalent per annum.

Ortiz Resource derived from two deposits; the Carache gold deposit and the Lukas gold-copper deposit (2.5km apart)

Significant exploration upside exists on Carache and Lukas deposits, as well as other areas within the project which have existing historic resource estimates

Historical metallurgical work suggests that low cost recovery options are available for the deposits - currently being optimised to include copper recoveries from the Lukas deposit

Historic studies to date also suggest the attractive economic viability of a high tonnage (2.7 million tpa), low cost gold operation.

JORC Resource will be incorporated into a Scoping Study to be completed by mid-year 2013.

Environmental permitting studies to commence in 2013.

International Goldfields Limited (ASX: IGS) (“IGS”) and US-based, Santa Fe Gold Corporation (OTCBB: SFEG) (“Santa Fe” or “SFEG”) have, as advised to the ASX on 12 October 2012, entered into a conditional Binding Heads of Agreement (“HoA”) that will combine the companies and create a significant production/exploration company.

One of the key advanced exploration assets of Santa Fe is the Ortiz Gold Project, in New Mexico.

In connection with anticipated merger, Santa Fe has delivered to IGS a recently-completed independent review of historical drilling, sampling and metallurgical data at the Ortiz Project, which has delineated a JORC Compliant gold resource estimation at the Ortiz Project of:

Ktonnes Gold (g/t) Gold (koz)

Total Measured Mineral Resource 9,076 1.241 362.20

Total Indicated Mineral Resource 15,647 1.214 610.93

TOTAL M&I Resource 24,723 1.224 973.13

Inferred Mineral Resource 2,653 0.736 62.76

Note: See Table 1 for full Mineral Resource breakdown (i.e. by deposit)

The independent JORC Compliant resource report estimates Measured and Indicated copper mineral resources from the Lukas deposit at 13 million tonnes (14.3 million short tons) at 0.142% total copper, for 18,400 tonnes (40.6Mlb) of contained copper. Inferred copper mineral resources from Lukas are an additional 1.0 million tonnes (1.1 million short tons) at 0.122% total copper, for 1,200 tonnes (2.7Mlb) contained copper. It is anticipated that the gold at Lukas (current Measured and Indicated resource of 378,200oz Au) is anticipated to be recovered within a copper concentrate.

The JORC Resource is based on 109,355m (358,684 ft) of core and reverse circulation drilling. The resource estimation has been prepared by Independent Mining Consultants, Inc. (IMC) and is reported in accordance with the JORC Code (2004). A technical report in Canadian National Instrument 43-101

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Compliant format with additional details for datasets and updated economic considerations utilised for the revised resource estimate is expected to be available for public distribution before the end of December 2012.

In 2005, an independent, though not JORC Compliant, study based on the 1992 historic resource estimation, evaluated the open pit mining of approximately 1.0 million ounces of gold from the Carache and Lukas gold deposits. This study, together with other historical independent evaluations and studies (including metallurgical test work) suggested that low cost recovery options may be available for the deposits. Previous studies are currently being re-evaluated and optimised to include copper recoveries from the Lukas deposit.

It is anticipated that IGS and Santa Fe will update these studies post-merger, in the context of the JORC Compliant resource, to verify the anticipated low-cost gold production potential of the project indicated in previous work. A Scoping Study for the Ortiz Project is expected to be completed by mid-year 2013. Environmental permitting studies are also expected to commence in Q1 2013.

Ends

For further information please contact:

Investors: Media:

Travis Schwertfeger CEO International Goldfields Limited T: +61 8 6382-5522 E: TSchwertfeger@intgold.com.au

David Tasker National Director, Investor Relations Professional Public Relations T: +61 8 93888 0944/ +61 433 112 936 E: david.tasker@ppr.com.au

About International Goldfields

International Goldfields is a precious metal focused producer/explorer; introducing production to the

Company through the strategic merger with US based Santa Fe Gold Corp. The proposed merged entity

will be a diversified, well-funded and low cost gold-silver explorer, developer and miner, listed on the

ASX and also traded on a major US exchange or on the OTC Bulletin Board, with projects located in

emerging mining districts including West Africa, Brazil and the southwest US.

The combined entity will have a projected initial market capitalisation of approximately A$70 million,

cash reserves of at least A$10 million, low-cost gold and silver production of 28,000 oz pa (gold

equivalent), an operating mill, near-term development assets and a portfolio of advanced exploration

assets.

Competent Person Statement

The information included in this release that relates to Santa Fe Gold resources for the Ortiz Project is based on

information compiled by Michael G. Hester, FAusIMM. Mr. Hester is employed as Vice President and Principal

Mining Engineer by Independent Mining Consultants, Inc. (IMC) of Tucson, Arizona, USA, and has worked as a

consultant in resource modeling, mine evaluation and mine development for 33 years in precious and base

metal deposits. Mr. Hester has sufficient experience which is relevant to the style of mineralization and type of

deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person. Mr.

Hester consents to the inclusion in the release of the matters based on his information in the form and context in

which it appears.

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ORTIZ GOLD-COPPER PROJECT – MINERAL RESOURCE ESTIMATE DETAILS

Project Location and Tenure

The Ortiz Gold-Copper Project consists of 171 contiguous square kilometres of the Ortiz Land Grant in

Santa Fe County, New Mexico (Figure 1). Santa Fe’s land tenure is based on a lease agreement with

Ortiz Mines, Inc. whereby Santa Fe has exclusive rights for exploration, development and mining of gold,

silver, copper and other minerals on the area of the Ortiz Land Grant. The initial term of the lease

extends until 2015 (in certain circumstances until 2022) and continues year-to-year thereafter for so

long as gold or other leased minerals are produced in commercial quantities. The agreement provides

for annual lease payments of US$130,000; a sliding-scale production royalty varying from 3% to 5%

depending on the price of gold; the requirement that Santa Fe comply with governmental permitting

and other regulations; and other terms common in mining leases of this type. The mineral and surface

rights have been severed so Santa Fe also will have to reach agreements with current surface right

owners for further development of the project.

The Ortiz Gold Project is located 48 kilometres (30 miles) by road northeast of Albuquerque, New

Mexico. The villages of Golden, Madrid and Cerrillos, with a combined population of less than 1,000

people, lie in and adjacent to the Project. Paved New Mexico Highway 14 traverses the western portion

of the Project. The main line of the Santa Fe Railway crosses the northeast corner of the Project. A

network of unimproved ranch roads provides access to the various land holdings. High-voltage electric

power lines cross the southern part of the Project.

Figure 1: Ortiz Project Location Map

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Terrain in the Project is hilly to mountainous, with elevations ranging from 1,830m (6,000ft) in the

valleys to nearly 2740m (9,000ft) in the Ortiz Mountains.

Project Mining History

Historic mining was conducted within the Project by Consolidated Gold Fields, which in 1973 leased the

eastern portion of the Land Grant from Ortiz Mines, Inc. and developed and mined the Cunningham Hill

deposit (Ortiz Mine). In the period 1980-1986, Gold Fields produced approximately 250,000 ounces of

gold from an open-pit, heap-leach operation. Historical production exceeded 350,000 ounces of gold.

Drilling by several companies up to the early 1990’s resulted in historical resource estimations as part of

a 1990 pre-feasibility study completed by Pegasus Gold Corporation in Joint Venture with LAC Minerals

(USA) Inc. The sampling database and resource estimate was audited by Independent Mining

Consultants, Inc. (IMC) in 1992. IMC subsequently updated the mineral resource estimate in 2006 for

AZCO Mining Inc. (now Santa Fe Gold) to allow for higher prevalent commodity prices and evolving

reporting standards such as Canada’s NI 43-101 standards.

Project Geology

The Ortiz Gold Project is underlain by mid-Tertiary monzonite and latite porphyry stocks, plugs, dikes

and sills that have intruded Paleozoic to early-Tertiary sedimentary rocks. The intrusive rocks are part of

the Ortiz Porphyry Belt. Structurally, the Grant straddles the Tijeras-Canoncito fault system, a northeast

trending zone of a deep-seated crustal break. The fault zonehas been active intermittently since

Precambrian time and has provided a zone of weakness for the emplacement of granitic magmas and

associated mineralization. Late-stage volcanism resulted in the formation of breccia pipes and zones of

intense fracturing that provided access for hydrothermal fluids carrying gold, silver, tungsten,

molybdenum and base metals.

Figure 2: Ortiz Project Resource Location and Regional Geology

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The Ortiz Porphyry Belt exhibits a number of styles of mineralisation that occur in a variety of geologic settings:

Gold mineralisation associated with a collapse breccia at Carache Canyon. The Carache gold deposit (Figure 3), relatively coarse-grained free gold is contained in

open space fractures developed in four gently dipping andesite porphyry sills and a sandstone unit around the collapsed margins of a breccia pipe.

Copper – gold skarns in calcareous rocks at Lukas Canyon and San Pedro. At the Lucas gold-copper deposit, mineralisation occurs in garnet skarn developed in a

limestone unit, the outcropping portion of which forms a dip slope at the surface. (Figure 4)

Gold-tungsten mineralisation in a breccia pipe at Cunningham Hill adjacent to a volcanic vent, the Ortiz diatreme.

Copper and gold disseminated in stockworks and fractures in monzonite at the Cunningham Gulch (gold) and Cerrillos (copper-gold) deposits (bulk tonnage low-grade “porphyry”-type deposits).

Lead – zinc – silver veins at the Cash Entry and other old mines north of Cerrillos. Lead – zinc – silver pipe-like mantos in limestone at the Carnahan mine, San Pedro area. Molybdenite in stockworks and fractures in the San Lazarus monzonite stock, San Pedro area. Placer gold deposits on Cunningham Mesa, on the northern pediment of the San Pedro

Mountains, and in most of the arroyos draining the Ortiz and San Pedro Mountains.

2012 Mineral Resource Estimation, Independent Mining Consultants Inc. (IMC)

Mineral Resource Estimate

The JORC Compliant Indicated, Measured and Inferred Resource as at November 2012 is shown in Table

1. The basis for the mineral resource estimate is bulk open pit mining. For Carache it is assumed that

processing will be by crushing and grinding, followed by gravity separation of the gold. For Lukas it is

assumed the gold and copper can be recovered by flotation as a copper concentrate that can be

shipped to a smelter.

Table 1: Mineral ResourceGold Gold

GOLD RESOURCE: Ktonnes (g/t) (koz)

Measured Mineral Resource

Carache Canyon Measured Resource 2,683 1.920 165.59

Lukas Canyon Measured Resource 6,393 0.957 196.61

Total Measured Mineral Resource 9,076 1.241 362.20

Indicated Mineral Resource

Carache Canyon Indicated Resource 9,058 1.474 429.36

Lukas Canyon Indicated Resource 6,589 0.857 181.58

Total Indicated Mineral Resource 15,647 1.214 610.93

Measured/Indicated Mineral Resource

Carache Measured/Indicated Resource 11,741 1.576 594.95

Lukas Measured/Indicated Resource 12,982 0.906 378.19

Total Measured/Indicated Resource 24,723 1.224 973.13

Inferred Mineral Resource

Carache Canyon Inferred Resource 1,658 0.891 47.53

Lukas Canyon Inferred Resource 994 0.477 15.23

Total Inferred Mineral Resource 2,653 0.736 62.76

Copper Copper

COPPER RESOURCE: Ktonnes (%) (klbs)

Measured Mineral Resource

Lukas Canyon Measured Resource 6,393 0.148 20,859

Indicated Mineral Resource

Lukas Canyon Indicated Resource 6,589 0.136 19,755

Measured/Indicated Mineral Resource

Lukas Measured/Indicated Resource 12,982 0.142 40,614

Inferred Mineral Resource

Lukas Canyon Inferred Resource 994 0.122 2,674

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A gold price of A$1500 (1A$ = 1US$) per ounce is used for mineral resource reporting. The 36-month

trailing average is currently about A$1,425. The US SEC uses this as a reference price for mineral

reserves, but slightly higher prices are typically used to define “other mineralised material”, i.e. mineral

resources.

The floating cones used to define mineral resources were run with only Measured and Indicated

resources allowed to contribute to development of the cone shell, i.e. Inferred resource is considered as

waste for development of the shell. This is typical of the procedure a US reporter might use to define

“other mineralised material” since Inferred resource is typically not reported as such. For non-US

reporters it is common to allow Inferred resources to contribute to development of the cone shell,

which results in larger mineral resource estimates as done in previous resource estimates for the Ortiz

Project.

Carache Resource Model Parameters

The Carache Canyon resource cone contains 11.7 million tonnes (12.9M short tons) of measured and

indicated resource at 1.58 g/t (0.046 oz/st) gold for 595,000 contained ounces of gold. - Inferred

resource is an additional 1.7Mt (1.82Mst) at 0.89 g/t (0.026oz/st) gold for 47,500 contained gold

ounces. Total material in the cone shell is 116.6 million tonnes (128.5Mst) and maximum depth of that

cone is about 372m (1220 ft).

Figure 3: Carache Cross Section

The current Carache resource model was developed as follows:

1. The model is based on 15.24m by 15.24m by 6.1m (50ft by 50ft by 20ft) high blocks, the same model frame work as the 1992 models. The model is rotated 50 degrees to line up on the Pegasus geologic sections.

2. The geologic interpretation and assignment of lithology codes to the block model was done by Pegasus and has not been changed. The rock types include four different intrusive sills (Sills 1, 2, 3, and 4), two sandstone units (Harmon and Point Lookout), two shale units (Menefee and Mancos), some dikes, and the Tertiary Galisteo unit. Also, a significant structure is the Carache Canyon Breccia Pipe, which has caused brecciated

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versus non-brecciated versions of the various rock types. IMC reviewed the geologic interpretation in 1992 and was satisfied that it is reasonable.

3. In 1992 IMC developed a small structural zone along the western interior of the Carache Canyon Breccia Pipe where the lithology tends to dip quite steeply, almost vertical. Outside of this zone, including much of the Breccia Pipe, the lithology tends to dip about 20 degrees to the northeast.

4. The drillhole samples were composited, respecting rock types, into 3.05m (10 ft) geological composites. Almost 99% of the composites calculated by this method were of a length between 2.44m and 3.66m (8 ft and 12 ft) so there should not be any significant sample support size effects due to compositing. This compositing method is intended control smearing grades across rock type boundaries.

5. IMC capped gold grades of the composites at 13.7 g/t (0.4 oz/st) for grade estimation. This affected 27 composites, the highest of which was 29.8 g/t (0.87 oz/st).

6. The sills, the Point Lookout Sandstone, and the other sedimentary units (shales and Harmon Sandstone) were the three basic populations for grade estimation. Sill composites were only used to estimate sill blocks, Point Lookout composites were only used for the Point Lookout blocks, etc. The IMC structural boundary discussed in 3 above was not used for a hard boundary, but was important in that it controlled the orientation of the composite search for the block grade estimations.

7. A grade zone was established in each population, by indicator kriging, to segregate blocks into potential resource and waste populations. A discriminator of 0.17 g/t (0.005 oz/st) was used for the indicator kriging. Composites greater than 0.005 oz/st were assigned a value of 1 and composites less than 0.005 oz/st were assigned a value 0. The ones and zeros were kriged to obtain a value between 0 and 1 for each block that may be interpreted as the probability the block is above 0.005 oz/st gold. Blocks with a probability over 0.5 were considered as inside the mineralized zone (potential resource). Composites were also assigned a zone code based on the code of the block in which they were located.

8. Blocks designated as potential resource were estimated by ordinary kriging. For blocks outside of the structural zone (Point 3) the bearing of the major axis was N50oW with no dip. The minor axis dipped 20o NE. The maximum search radius was 61m (200 ft) in the primary and secondary axes directions and 15.2m (50 ft) in the tertiary (near vertical) direction. A maximum of 10 composites, a minimum of one composite and a maximum of three composites per hole were used to assign grade. The estimation parameters for the indicator kriging used to develop the ore zone was similar except a minimum of two composites were required. The variogram parameters for the estimations were developed in the 1992 study.

9. For blocks inside the structural zone the maximum search radius was 61m (200 ft) in the N50oW direction, 61m (200 ft) vertical and 15.2m (50 ft) in the N40oE direction. The same number of composites applied.

10. A resource classification code (measured, indicated, and inferred resources) was also assigned to the model blocks by IMC. The code was based on the number of holes used for kriging and also on the kriging standard deviations. Blocks estimated with four or more holes were minimally classified as indicated. For blocks estimated with one, two, or three holes the distinction between measured-indicated and inferred was based on the kriging standard deviation. Only about four percent of blocks estimated with one hole were designated as indicated; these would have required the hole to be very close to the block. About 15% of the blocks with the lowest kriging standard deviations were classified as measured resource; blocks estimated with one hole were not included in these.

11. The tonnage factors (bulk densities) used were developed by Pegasus, by rock type, for the 1992 study.

12. IMC uses a floating cone shell to define mineral resources for prospective open pit projects to demonstrate compliance with the “reasonable prospects for eventual economic extraction” clause of Canada’s National Instrument 43-101 (NI 43-101) and Australia’s JORC code. Table 2 shows the economic and recovery parameters used to

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develop the floating cone shells and calculate the cut-off grades used for the resource estimation. The Carache resources are reported at a gold cut-off grade of 0.10 g/t (0.003 oz/st).

It is the opinion of IMC that the current Carache Canyon resource block model is adequate for the

mineral resource estimate and the Scoping Study that is in progress.

Lukas Resource Model Parameters

The Lukas Canyon resource cone contains 13.0 million tonnes (14.3Mst) of measured and indicated

resource at 0.91 g/t (0.026oz/st) gold and 0.142% copper for 378,200 contained ounces of gold and 19.6

tonnes (40.6 million pounds) of copper. Inferred resource is an additional 0.99Mt (1.0Mst) at 0.48g/t

(0.014 oz/st) gold and 0.122% copper for 15,200 contained gold ounces and 1,225 tonnes (2.7Mlbs) of

copper. Total material in the cone shell is 53.2 million tonnes (58.6Mst) and maximum depth of that pit

cone is about 195m (640 ft) in the north of the pit cone outline.

Figure4: Lukas Cross Section

Table 2. Carache Economic Parameters

Parameter Units Value

Commodity Prices:

Gold Price Per Ounce (US$) 1500

Mining Cost Per Total Tonne:

Base Mining Cost (US$) 2.20

Processing and G&A Per Ore Tonne

Processing Cost (US$) 3.31

G&A Cost (US$) 0.55

Total Processing and G&A (US$) 3.86

Recoveries and Payables:

Plant Recovery (%) 90.0%

Refinery Payable (%) 98.0%

Royalty (%) 5.0%

Refining Cost Per Ounce (US$) 2.00

Gold Cutoff Grades

Breakeven Cutoff (g/t) 0.15

Internal Cutoff (g/t) 0.10

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The current Lukas resource model was developed as follows:

1. The model is based on 15.24m north south by 7.62m east west by 6.1m high (50ft north-south by 25ft east-west by 20ft high) blocks, the same model frame work as the 1992 model.

2. The geologic interpretation and assignment of lithology codes to the block model was done by Pegasus and has not been changed. The most important ore host is the Greenhorn Garnet Skarn unit. The other rock types coded into the block model are the Carlile and Graneros siltsone/shale units, the Greenhorn Limestone, and some intrusive material. IMC reviewed the geologic interpretation in 1992 and was satisfied that it is reasonable.

3. The drillhole samples were composited, respecting rock types, in what IMC would term “3.05m (10 ft) geological composites”. Within a rock type the algorithm generates equal length composites as close as possible to the 3.05m (10 ft) target size. Almost 94% of the composites calculated by this method were of a length between 2.44m and 3.66m (8 ft and 12 ft) so there should not be any significant sample support size effects due to compositing. This compositing method is intended control smearing grades across rock type boundaries.

4. IMC capped gold grades of the composites at 6.86 g/t (0.2 oz/st) for grade estimation. This affected 14 composites, the highest of which was 24.7 g/t (0.72 oz/st). IMC also capped copper grades at 0.9% total copper. This affected 15 composites, the highest of which was 2.5% copper.

5. Two populations were used for grade estimation. The Greenhorn Garnet Skarn blocks were only estimated with Greenhorn Garnet Skarn composites. The other units, the Carlile, Graneros, and intrusives were lumped together as the second population.

6. Contouring the base of the Greenhorn Garnet Skarn indicated about nine different structural zones evidenced by changes in the orientation and elevation of bedding. These zones were incorporated into the model and used for grade estimation. They were not considered hard boundaries, but they did control the orientation of the composite search for the block grade estimations.

7. For gold, a grade zone was established, by indicator kriging, in each population to segregate blocks into potential resource and waste populations. A discriminator of 0.17 g/t (0.005 oz/st) was used for the indicator kriging. Composites greater than 0.005 oz/st were assigned a value of 1 and composites less than 0.005 oz/st were assigned a value 0. The ones and zeros were kriged to obtain a value between 0 and 1 for each block that may be interpreted as the probability the block is above 0.005 oz/st gold. Blocks with a probability over 0.5 were considered as inside the mineralized zone (potential resource). Composites were also assigned a zone code based on the code of the block in which they were located.

8. Block designated as potential resource were estimated by ordinary kriging. The orientation of the search varied by structural zone. The maximum search radius was 76.2m (250 ft) along strike, 106.7m (350 ft) down dip, and 15.2m (50 ft) in the tertiary (near vertical) direction. A maximum of 10 composites, a minimum of one composite and a maximum of three composites per hole were used to assign grade. The estimation parameters for the indicator kriging used to develop the ore zone was similar except a minimum of two composites were required. The variogram parameters used for the estimations were developed for the 1992 study.

9. Copper grades were estimated by ordinary kriging, without the grade zoning. As with gold, the Greenhorn Garnet Skarn was treated as a separate population from the other units, which were lumped together. The structural zones were also used to control the orientation of the composite searches.

10. A resource classification code (measured, indicated, and inferred resources) was assigned to the Greenhorn Garnet Skarn model blocks by IMC. The code was based on the number of holes used for kriging and the kriging standard deviations. Blocks estimated with four or more holes were minimally classified as indicated. For blocks estimated with one, two, or three holes the distinction between measured-indicated and inferred was based on the kriging standard deviation. Less than one percent of blocks estimated with one hole were

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designated as indicated; these would have required the hole to be very close to the block. About 20% of the blocks with the lowest kriging standard deviations were classified as measured resource; blocks estimated with one hole were not included in these. Blocks outside the Garnet Skarn are all considered inferred at this time due to sparse copper assays outside of the Garnet Skarn and the dependence of the proposed process on copper.

11. Tonnage factors (bulk densities) used were developed by rock type by Pegasus For the 1992 study.

12. IMC uses a floating cone shell to define mineral resources for prospective open pit projects to demonstrate compliance with the “reasonable prospects for eventual economic extraction” clause of Canada’s National Instrument 43-101 (NI 43-101) and Australia’s JORC code. Table 3 shows the economic and recovery parameters used to develop the floating cone shells and calculate the cut-off grades used for the resource estimation The Lukas resources are based on a gold equivalent cut-off grade of 0.14 g/t (0.004 oz/st).

It is the opinion of IMC that the Lukas resource model is adequate for the current mineral resource

estimate and for the Scoping Study that is in progress. More sampling for copper needs to be done

before studies beyond the Scoping Study level of accuracy can be performed. Copper assays are sparse

outside of the Garnet Skarn rock type.

Table 3. Lukas Economic Parameters

Parameter Units Value

Commodity Prices:

Gold Price Per Ounce (US$) 1500

Copper Price Per Pound (US$) 3.50

Mining Cost Per Total Tonne:

Base Mining Cost (US$) 2.20

Processing and G&A Per Ore Tonne

Processing Cost (US$) 3.86

G&A Cost (US$) 0.55

Total Processing and G&A (US$) 4.41

Plant Recovery:

Plant Recovery of Gold (%) 70.0%

Plant Recovery of Copper (%) 70.0%

Smelter/Refinery Payables:

Gold Payable (%) 98.0%

Copper Payable (%) 96.4%

Royalty (%) 5.0%

Copper SRF Per Pound (US$) 0.480

Gold Refining Cost Per Ounce (US$) 6.00

NSR Factors

Gold Factor (Note 1) (US$) 31.30

Copper Factor (Note 2) (US$) 42.68

Cu Multiplier for Gold Equiv (Note 3) (none) 1.363

Gold Equivalent Cutoff Grades

Breakeven Cutoff (g/t) 0.21

Internal Cutoff (g/t) 0.14

Notes:

1. NSR of 1 tonne of 1 g/t gold.

NSR Au = ($1500-$6)x0.70x0.98x(1-0.05)x1g/t/31.103=$31.30

2. NSR of 1 tonne of 1% copper.

NSR Cu = ($3.50-0.48)x0.70x0.964x(1-0.05)x22.046lb/%x1%Cu=$42.68

3. Copper Factor / Gold Factor ($42.68/$31.30)

Gold Equiv (g/t) = Gold +1.363 x Copper

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Available data

Drilling by other companies from 1972-1990 identified gold mineralisation in several deposits, with

initial exploration by Molycorp and Conoco completed between 1968 and 1973. Extensive modern

exploration was initiated by LAC minerals in 1984

The LAC-Pegasus Joint Venture carried out the majority of delineation drill work in the western portion

of the Ortiz Project area from 1989-1992, largely focused on two deposits in the southwestern part of

the project area, namely the Carache Canyon (“Carache”) and Lukas Canyon (“Lukas”) deposits. These

two deposits were the subject of 109,355 metres (358,684 feet) of core and reverse-circulation drilling,

metallurgical testing and pre-feasibility studies carried out by the LAC-Pegasus Joint Venture and by

consulting firms and contractors engaged by the Joint Venture.

In 1989, the LAC-Pegasus Joint Venture started a decline into the Carache deposit for the purpose of

bulk sampling and to provide drilling access for shallow and deep exploration targets. However, after

advancing 524 metres (1,719 feet) the decline was halted due to a temporary water inflow coupled with

regulatory and permitting issues. In the face of a declining gold price, mining development of the

Carache or Lukas deposits did not proceed, and the project ultimately was cancelled and the lease

returned to Ortiz Mines, Inc. Subsequently, no additional exploration was carried out and the property

remained dormant until Santa Fe leased it in August 2004.

Table 4: Drill Database Statistics:

No. of Holes Total Drilling

No. of Samples

Avg Sample Interval

Carache Database 302

76,922m

(252,370ft) 44,777

1.52m

(5 ft)

Lukas Database 547

32,413m

(106,314ft) 32,413

1.52m

(5 ft)

Quality Assurance/Quality Control (Qa/Qc)

Due to the coarse gold issues at Carache a significant number of check assays were done, including both

repeat assays of the same pulp and duplicates from coarse reject material. Analytical procedures

included both standard fire assays and metallic screen assays. IMC reviewed the various assays in detail

in 1992 for an audit of the database and mineral resource. The database contains assay intervals with

up to four different fire assay determinations and up to six different metallic screen determinations.

Ultimately, all available gold assays for a particular assay interval are averaged together to obtain a final

value, resulting in gold assay results for 42,815 of the 44,777 drilled intervals (96%). Though, at

Carache, the precision of any single assay is quite low, they should provide a reasonable estimate of

contained mineral resources when aggregated together. The samples were further aggregated into

3.05m (10 ft) composites for resource estimation and up to 10 composites were used to assign grades

to model blocks.

Due to difficulty of replicating assays at the Carache resource area because of coarse gold issues, only

drilling completed after 1989 is utilised in the resource estimation (an additional 128 diamond core

holes completed by LAC and Conoco are not included in the database).

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Review of the Lukas check assays showed a much higher degree of precision, as expressed by the better

replication of gold assays where about 487 metallic screen assays were done. The coarse gold evident at

Carache is not an issue at Lukas.

IMC also conducted a comparison of core and reverse circulation drilling and concluded that both

sampling types were acceptable for resource estimation.

Bulk densities were assigned to the Carache and Lukas resource models based on lithology. IMC did not

audit these results, but the values used appear reasonable.

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