Each one in plain English, with the numbers worked through for a shareholder.
26 Mar 2024material agreement termination▼ BadMajor
Santa Fe withdrew from a mining and mill project near Duncan, Arizona, after the water rights holders cancelled the mine agreement around mid-November 2023 and the proposed financing from a Texas firm looked too costly (interest above prime, monthly mine payments rising to $175,000, and a cash flow projection about $500,000 lower). It will write down $1,400,000 of mineral rights in the quarter ending March 31, 2024, and says it will refocus on the TMRC/Alhambra project, so this ends a new project that the filings so far had not mentioned.
Santa Fe says it completed the purchase of all the stock of Bullard's Peak Corporation from Black Hawk Consolidated Mines for $3,115,365, with a 2% net smelter royalty to the seller in perpetuity. This resolves the instalment and termination thread from late 2018; the claims are now described as 13 patented and 82 unpatented claims in the Black Hawk district (earlier filings said 5 patented). The press release says it has started preliminary talks with potential mining companies, investors and JV partners, and the Chairman says he has put $400,000 into 5 million shares at $0.08.
Santa Fe says it now takes the position that its November 2017 agreements to buy four British Columbia placer claims were never binding, citing false statements by the sellers and unmet conditions, and has asked for its Can$260,000 back. It says it no longer owns any rights to those claims; this follows the November 2018 default notice and the sellers' threat of legal action, and the company is still weighing its remedies.
Santa Fe says a special committee found its former CEO Thomas Laws owes it $1,335,046 (before penalties and interest) over transactions of about $1 million between July 2016 and March 2018; $379,660 has been recovered, including $375,000 paid by Laws and a $4,660 credit. The company says its FY June 30, 2017 financials can't be relied on and will be restated (approx. $500,000 lower current assets, $245,933 lower net equipment, approx. $697,000 lower net income), and it sued in November 2018 in Luna and Grant County courts for a $930,000 judgment and foreclosure on property and an airplane pledged under Laws' note. The filing also says the Bankruptcy case was dismissed in June 2016, with about $20 million of debt reinstated, which resolves the open question on the Chapter 11 outcome; Bullard's Peak balance is now $350,365 after a further $100,000 paid on Oct 31, 2018, and the British Columbia claims are in default (Can$140,000 and 10,000,000 shares still owed, sellers threatening legal action).
Under an amendment effective October 15, 2018, Santa Fe paid the Bullard's Peak seller $100,000 and the seller withdrew its August termination and waived existing defaults. The remaining $450,365 is due in three payments: $100,000 by October 31, $100,000 by November 30 and $250,365 by December 31, 2018. If any payment is missed, Santa Fe loses all its rights and the seller keeps the money paid. This resolves the termination reported on October 5, but the filing does not show the payments being made.
Santa Fe said several earlier press releases (2016–2018) with tonnage, revenue and silver-ounce estimates, including $757 million of projected revenue and $839 million of silver value, did not meet SEC Industry Guide 7 and should not be relied upon. It has removed them from its website. It reports no proven or probable reserves, has done no preliminary economic assessment, and a January 2018 release wrongly said the final $500,000 Alhambra payment had been made. It holds rights to claims in New Mexico's Black Hawk district and elsewhere, has not started exploration and lacks funding for it. The seller of Bullard's Peak terminated the $3.0 million purchase in August 2018 with $500,000 still owed; talks on payment were preliminary.
On July 16, 2018 Santa Fe's audit committee dismissed MaloneBailey and appointed TAAD, LLP as auditor for the fiscal year ending June 30, 2018. MaloneBailey's reports for fiscal 2016 and 2017 included a going-concern warning, and it had flagged material weaknesses in internal controls; the filing reports no disagreements.
On September 19, 2016 Santa Fe engaged MaloneBailey, LLP as its new auditors and said it intends to bring its overdue SEC filings current, starting with the audit for the fiscal year ended June 30, 2015. This shows the company had fallen behind on reporting after the 2015 Chapter 11 filing; the filing does not state the outcome of the bankruptcy.
On August 26, 2015 Santa Fe and several subsidiaries filed for Chapter 11 bankruptcy in Delaware, which triggered default and acceleration of its debts, subject to the automatic stay. The listed debts include about $12.8 million and $5.63 million to Waterton, about $6.5 million to Sandstorm, $2,998,710 to IGS and $1,745,082 to Tyhee, plus smaller notes. The filing does not say what happens to shareholders, so their treatment is unresolved. The Waterton and Sandstorm restructurings contemplated in early 2014 did not resolve the debt.
Santa Fe signed an amended agency agreement with Euro Pacific Capital to try, on a best-efforts basis, to place $20–22 million of 8% subordinated secured notes with warrants. It also announced an updated Summit mine resource estimate by Moose Mountain Technical Services under Canadian NI 43-101 rules; the filing gives no figures. The financing is not completed, and the filing does not say what the money is for. The 8-K is signed by a new CEO, Catalin Chiloflischi, replacing W. Pierce Carson; the filing does not explain the change.
On June 17, 2014 Santa Fe pushed the due date of its $950,000 Mogollon option payment to Columbus Exploration from June 21 to November 21, 2014. It must also make two non-refundable payments: $12,350 now and about $59,000 due by the earlier of exercising the option or November 21, 2014. This continues the series of Mogollon deadline extensions, now that the Tyhee merger is off.
On March 20, 2014 Santa Fe terminated the Tyhee merger agreement because Tyhee did not complete its required $20 million financing by March 15, 2014. Santa Fe has asked Tyhee to promptly pay the $300,000 break fee and says it will resume talks with private equity funds and interview investment banks. This ends the Tyhee deal; the Waterton and Sandstorm restructurings and the bridge loan tied to it are not addressed in the filing, and no equity treatment is final.
On March 6, 2014 Santa Fe again amended its Mogollon option with Columbus Exploration: US$50,000 immediately, then a mandatory US$950,000 when the Tyhee merger closes. If the merger does not close, Santa Fe may pay US$950,000 within three months of the cancellation announcement to earn 100%. This replaces the 2013 schedule of larger payments in June and December 2014 and June 2015; other terms are unchanged.
Santa Fe reported that IGS's A$2.0 million secured convertible note from June 2013 was converted into 9,259,259 new Santa Fe shares, issued January 31, 2014 under Regulation S, with IGS barred from selling them into the US. This carries out the conversion flagged in the January Tyhee merger filing and adds shares for existing holders to be diluted by. The Tyhee merger was still pending at this point.
As of February 14, 2014, Tyhee had advanced $1,515,832 of the up-to-$3.0 million bridge loan to Santa Fe. The interest rate is stated as 2% a month, whereas the January filing said 18% a year. The loan is due if the Tyhee merger agreement is terminated, or becomes an intercompany loan if the merger completes. The merger is still pending.
On January 23, 2014 Santa Fe signed a new merger agreement with Tyhee Gold Corp (TSXV: TDC): each Santa Fe share would become 0.9 Tyhee share plus 0.45 of a warrant (Cd$0.25 strike, four years), with Santa Fe becoming a Tyhee subsidiary. It needs Santa Fe shareholder approval, SEC and TSX Venture approvals, Tyhee raising at least $20 million, and restructuring of senior secured debt (term sheets with Waterton, about $10.0 million, and Sandstorm, about $7.1 million). Tyhee will lend up to $3.0 million at 18% as a bridge loan. IGS's A$2.0 million note converts into 9,259,259 Santa Fe shares. The filing does not say what became of the IGS merger signed in February 2013, though this deal appears to replace it (inference). The deal is not complete, so equity treatment is unresolved. The filing text is truncated, so some terms are not captured here.
On June 28, 2013 Santa Fe agreed with IGS to receive another A$2.0 million via a secured convertible note (10% interest, due Oct 31, 2015, secured on the Mogollon rights), bringing IGS's investment to A$6.0 million. To get a consent and waiver from Waterton, Santa Fe agreed to pay down Waterton debt by assigning about $1.2 million of receivables from earlier metal sales. The Waterton waiver is described as a 'Waiver of Default', and the filing does not say what default. The pending IGS merger is not mentioned as completed.
On June 28, 2013 Santa Fe amended the Mogollon option with Columbus Exploration (formerly Columbus Silver), pushing payments later: $50,000 by July 1, 2013, $887,500 by Dec 30, 2013, then three payments of $937,500 through June 30, 2015. In return it gave Columbus the 250,000 Columbus shares it held. This relaxes the original schedule, which had $500,000 due Dec 30, 2012 and the final payment Dec 30, 2014.
On February 15, 2013 Santa Fe signed a merger agreement with International Goldfields (IGS), turning the October Heads of Agreement into a definitive deal. Each Santa Fe share converts into 12.3254627 IGS shares (delivered as ADRs), leaving Santa Fe holders with about 61.6% of IGS on the filing's stated assumption. Closing needs IGS to raise a Qualified Equity Financing (at least A$10 million cash) before March 14, 2013, plus shareholder, SEC and NYSE MKT approvals. Santa Fe would become an IGS subsidiary, and options and warrants stay outstanding as rights over IGS shares. The deal is not yet complete, so no equity treatment is final.
On November 5, 2012 Santa Fe received about $4.0 million from International Goldfields through two secured convertible notes, satisfying a condition of the October Heads of Agreement. The notes are to be forgiven if the proposed merger completes, which is expected in the first quarter of 2013. The filing does not say what happens to the notes if the merger fails.
Santa Fe closed an option agreement (signed Sept 19, 2012) with Columbus Silver to acquire the Mogollon property for $4.5 million in total payments, with $250,000 already paid and the rest due from Dec 30, 2012 through Dec 30, 2014. The earlier plan of arrangement to buy Columbus expired May 31, 2012; the parties released each other, and about $1.06 million Santa Fe had advanced is non-refundable. This replaces the full Columbus acquisition with an option on the Mogollon property only.
On October 11, 2012 Santa Fe Gold announced a Binding Heads of Agreement to pursue a business combination with International Goldfields Limited (ASX: IGS). The boards of both companies approved the key terms, subject to due diligence, definitive agreements and approvals, and they are targeting a first quarter 2013 closing. The filing gives no exchange terms.
On June 20, 2012 Santa Fe signed an equity line with Glengrove Small Cap Value, which committed to buy up to $15.0 million of new shares over about 24 months at Santa Fe's choice, at a 5.0% to 5.5% discount to market. Santa Fe agreed to issue 666,666 shares to Glengrove on signing, so existing shareholders face dilution as the line is used.
On May 22, 2012 Santa Fe Gold and Ortiz Mines settled the lawsuit over the termination of Santa Fe's lease on about 66 square miles of the Ortiz Mine Grant. Santa Fe agreed to spend at least $500,000 by November 22, 2012 and at least $1 million in total by May 22, 2013 on project work programs.
On December 15, 2011 Santa Fe Gold signed a definitive Arrangement Agreement to buy Columbus Silver for Cdn $0.20 per share in cash (about $10 million), aiming to close by March 31, 2012 and no later than May 31, 2012. On January 5, 2012 it said the Waterton second tranche satisfies the financing condition; shareholder and regulatory approvals remain. This turns the September memorandum into a binding agreement and resolves the funding condition.
30 Dec 2011capital raising announcement● NeutralMajor
On December 23, 2011 Santa Fe Gold signed a Waterton credit agreement: two $10 million tranches plus a $5 million revolver, 9% coupon, 30-month term. The first $10 million closed, with $5 million used to retire the Victory Park loan. Summit gold and silver (and Mogollon, if Columbus closes) must be sold to Waterton, and Sandstorm's security was subordinated. Separately, Sulane converted its $13.5 million debenture into 13,500,000 shares at $1.00, removing that debt but greatly increasing the share count. This resolves the Victory Park loan and Sulane debenture.
On September 6, 2011 Santa Fe Gold signed a new memorandum with Columbus Silver replacing the share-swap terms with a cash offer of Cdn $0.20 per share (about Cdn $9,977,285). It will provide bridge financing of $513,716 through December 2011. Columbus can terminate if Santa Fe has not secured firm funding by November 30, 2011. This changes the earlier share-exchange structure, so no new Santa Fe shares are needed for it.
Santa Fe Gold sued Ortiz Mines in federal court after Ortiz purported to terminate the Ortiz Mine Grant lease (about 90 square miles) and demanded more money to let it continue. Santa Fe says it paid all lease payments (over $750,000 to date) and obtained a dry-mining general permit on August 19, 2011, and intends to vigorously pursue the claim. This puts the Ortiz gold project at risk.
