International Goldfields Limited and US-based Santa Fe Gold Corporation are pleased to announce the execution of a binding Definitive Merger Agreement, whereby the entities will merge and Santa Fe will become a wholly owned subsidiary of IGS. 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, with projects located in key projects located in New Mexico (USA), Arizona (USA) and Brazil. The combined entity will have an initial market capitalisation of approximately A$70 million, cash reserves of at least A$10 million (assuming a minimum of A$5 million is raised) with additional financing well advanced by way of off take/project financing, significant uplift in the profitability and production of the Summit mine as the main high grade ore body at Summit is accessed, an operating mill, near term development assets and a portfolio of advanced exploration assets.

Commenting on the signing of the Definitive Agreement, IGS chief executive officer Travis Schwertfeger said, “We are pleased to have reached this important milestone in the merger process and look forward to completing the transaction in the coming months and building a combined gold company with solid production, yet significant upside.” Santa Fe President and Chief Executive Mr Pierce Carson said, “the two companies have individually and collectively achieved a number of key advances in recent months, which in our view provides further evidence as to the exciting opportunities being created by this merger.” The Merger Agreement replaces the conditional Heads of Agreement, with the terms of the transactions and related conditions in line with those detailed in ASX announcement dated 12 October 2012.

IGS obtained shareholder approval for the proposed merger, together with an associated capital raising ($5-$15M) in November 2012. Santa Fe shareholder approval, which is the last approval required under the transaction, will be obtained in conjunction with a Form F-4 Registration Statement to be lodged with the US Securities and Exchange Commission in the coming month. Both parties estimate that the merger will be completed in the second calendar quarter of 2013.