Santa Fe Gold Corporation announce the execution of a letter agreement to pursue, negotiate and subsequently enter into a joint venture agreement with Texas Mineral Resources Corp. (OTCQB:TMRC) to jointly explore and develop a targeted silver property to be selected by TMRC among patented and unpatented mining claims held by Santa Fe Gold within the Black Hawk Mining District in Grant County, New Mexico. Completion of a joint venture agreement is subject to the successful outcome of a multi-phase exploration plan to be undertaken in the near future by TMRC.

The Black Hawk Mining District is located approximately thirteen miles west of Silver City, New Mexico. As documented in USGS, New Mexico state reports, and Society of Mining Engineers reports, mineralization in this district, in general geological terms, consists of numerous, narrow carbonate veins containing high silver values in randomly distributed small lenses or “shoots”. It is one of a well-known geologic type of mineral deposit generally referred to as the “five element veins.” Worldwide, approximately twenty of these types of deposits have been identified, including the historically important silver mining camps of Cobalt, (Ontario, Canada), Joachimsthal, (Czech Republic), Anneberg, (Saxony) and the Port Radium district in Northwest Territory, (Canada).

The signature characteristics of these types of deposits, as reported, are high silver grades and its occurrence as native (metallic) silver, as well as the modest size of these historic mines relative to their productivity. The two principal historic mines in the Black Hawk district, the Black Hawk and the Alhambra, operated in the early 1890's and both closed after the silver price collapse of 1893. Engineering grade information from these mines is non-existent.

Under terms of the letter agreement TMRC plans to conduct a district-wide evaluation among the patented and unpatented claims held by Santa Fe Gold consisting of geologic mapping, sampling, trenching, radiometric surveying, geophysics, drilling and/or other methods as warranted. Based on the district-wide evaluation, TMRC will designate one 80-acre tract as the “Project Area” and commence, at its expense, detailed exploration work. The property covered in the letter agreement is approximately 1,300 acres and covers approximately 75% of the known mining district.

The area to be studied also includes a two-mile radius “area of Interest”. It is expected that upon completion of a “bankable feasibility study” TMRC and SFEG will then jointly fund and develop the deposit on an ownership basis of TMRC 50.5% and SFEG 49.5%, with TMRC serving as the project operator. The letter agreement also provides TMRC the option to participate in other projects within the “area of interest” should SFEG elect to seek outside participation in their exploration and development.

It is planned that exploration will be designed to proceed in phases, each based on the success of the previous, thereby limiting financial risk and expense. Phase One is expected to focus on identifying shallow targets with close spaced electro-geophysical arrays from the surface and testing them with targeted diamond drill holes. The effective depth of penetration of this method remains uncertain but is estimated to be in the 75 to 150-foot range.

The company estimate that, subject to regulatory permitting, weather and availability of contractors and equipment, will require up to nine months to complete Phase One. Phase Two, assuming Phase One is successful, is expected to include drilling of a series of percussion drill holes parallel to the vein at a relatively close spacing to a nominal depth of 500 feet. Geophysical surveying will likely be conducted by placing electrodes at varying intervals within the drill holes.

Number, spacing and depth of these “survey holes” will be determined by the results of Phase One. Phase Three, assuming Phase Two is successful, is expected to consist of deepening the “survey holes” and extending the geophysical survey to depth.