Today’s announcement from gold explorer Santa Fe Gold Corporation (SFEG) could finally be the spark the penny stock needed to get itself back on track. Reporting pre-market increased revenues and net earning for the period ended September 30, 2012 just over a month after filing their 10-K for the fiscal year ended June 30, 2012, SFEG stock is one to have a close watch on the volume side of things considering how undervalued it is at its current price.
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SFEG Stock Chart
Market Cap: 31.73M
Close: 0.27, no change
Dollar Volume: $41,470
50 day Moving Average: 0.3405
200 day Moving Average: 0.6175
Issued and Outstanding: 117,537,970
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Prior to the market open, Sante Fe Gold reported a 130% increase in revenue to a record $5.9 million for the three months ended September 30, 2012 coupled with a 55% increase in earnings from mining operations to $1.4 million for the three months ended September 30, 2012. The revenue numbers for the quarter are more than 50% those reported for the entire fiscal year ended June 30, 2012.
Just look at the revenue numbers for the last three fiscal years for Santa Fe Gold:
- 2012: $11,531,869
- 2011: $6,440,897
- 2010: $320,145
Furthermore, the gold exploration Company gave guidance for the future quarter by reporting that:
• On October 22, 2012, the Company closed an option agreement with Columbus Silver Corporation to acquire the Mogollon Project, Catron County, New Mexico, in exchange for payments aggregating $4,500,000 scheduled to be paid through the end of 2014.
• On October 11, 2012, the Company signed a Binding Heads of Agreement to pursue a merger with International Goldfields Limited (IGS.AX). Upon completion of the proposed merger and a $5.0 million placement into IGS, existing SFEG and IGS shareholders are expected to own 61.57% and 27.11%, respectively, of the outstanding shares of the combined company’s common stock. The transaction is expected to close in the first quarter of calendar 2013.
• On November 7, 2012, the Company received $4.0 million in loan advances from IGS in fulfillment of a condition of the Binding Heads of Agreement.
About SFEG Stock
Santa Fe Gold Corporation is a U.S. mining company focused on acquiring, exploring and developing mineral properties. The Company’s principal assets are the 100% owned Summit silver-gold property located in New Mexico, the leased Ortiz gold project in New Mexico and the 100% owned Black Canyon mica project in Arizona.
Click here to view the SEC filings for SFEG.
Bottom Line: SFEG is am undervalued penny stock and worth a watch. Based on the 5 and 10 day average volume numbers, 127,269 and 145,167 respectively, look for a breakout before getting involved. With SFEG stock trading .07 below its 50 day moving average, today’s pre-market news could easily bank in a 25% gain.
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