Santa Fe Gold CORP

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.

material agreement termination

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.

asset acquisition disposition

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).

capital raising announcement

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.

material agreement

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.

resource reserve update

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.

bankruptcy or receivership

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.

material agreement

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.

material agreement

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.

business combination

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.

material agreement

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.

business combination

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.

material agreement

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.

material agreement

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.

business combination

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.

material agreement

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.

material agreement

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.

business combination

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.

capital raising announcement

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.

business combination

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.

material agreement termination

On August 2, 2011 Santa Fe Gold closed a $5 million senior secured loan from Victory Park Capital, netting $4,555,000. It carries 15% interest, matures in six months, and is secured by substantially all assets except the Ortiz project; equity raised above $5.0 million must repay it. Sulane and Sandstorm subordinated their security, and 500,000 warrants at $1.00 were issued. This expensive short-term debt now ranks ahead of the Sulane debenture and Sandstorm.

material agreement

On September 24, 2010 Santa Fe Gold signed a non-binding memorandum of understanding to acquire Columbus Silver Corporation (TSXV: CSC) for Santa Fe shares, at 1 Santa Fe share per 5.82515 Columbus shares. About 8,787,527 shares (valued around $9.93 million) would be issued, leaving Columbus holders with 8.63% of the company. It needs Canadian court approval, board, exchange, regulatory and Columbus shareholder approvals.

business combination

Santa Fe Gold agreed to sell $10.0 million of units to 23 institutional investors through Rodman & Renshaw: 7,692,310 shares plus warrants for 3,846,155 more shares at $1.70, with closing scheduled for January 20, 2010. Expected net proceeds are about $9,350,000, to be used for general purposes including Summit working capital, more feed for the Lordsburg mill, the Ortiz and Pilar gold projects and acquisitions. This is the offering off the shelf registration filed in late 2009; it adds shares and warrants (dilution), and the company agreed not to issue more stock for 90 days.

material agreement

On September 11, 2009 the company signed a gold sale agreement with Sandstorm Resources for $4.0 million upfront, of which $500,000 is paid and $3.5 million depends on conditions including receiving all permits to build and operate Summit. Sandstorm gets 50% of the first 10,000 ounces of gold and 22% afterward (possibly cut to 15% if performance targets are met), paying the lesser of $400 per ounce or market price. If conditions aren't met by January 11, 2010 and Sandstorm terminates, the $500,000 becomes a loan; the deposit may also have to be returned in some termination events.

asset acquisition disposition

Effective June 30, 2009 the company and Sulane Holdings, holder of the $13.5 million debentures, amended the deal: $974,360 of accrued interest converted into 974,360 shares at $1.00, and interest for the September and December 2009 quarters will also be paid in shares at $1.00. Sulane may elect share payment for later interest, and waived any default. This conserves cash but increases the share count.

capital raising announcement

On December 21, 2007 the company agreed to a $13,500,000 7% senior secured convertible debenture with one investor, paid out on a schedule tied to 2008 construction needs for the Summit project. It is secured by the Summit real and personal property, converts at $1.00, and carries warrants at $1.00 for every $2.00 of principal (exercisable July 1, 2010 to December 31, 2014); there is a $270,000 management fee. This is far larger than earlier financings and brings both Summit funding and dilution risk.

capital raising announcement

Azco said its quarterly results for December 31, 2006 and March 31, 2007 should no longer be relied on, after SEC comments led it to fix how it accounted for the November 2006 Muzz settlement. A $638,537 derivative liability tied to the Muzz warrants was moved to equity instead of counting toward the gain, so the gain on settling the lease is smaller. The earlier reported gain was $3,521,817, and the company says revenue, cash flow and total stockholders' deficit were unaffected. This revises the gain flagged in earlier filings.

financial restatement

On February 26, 2007 Azco amended the 2006 convertible note deal with its five investors. The deadline to file a resale registration statement moved from November 5, 2006 to April 30, 2007 and the effectiveness deadline from February 4, 2007 to July 31, 2007, and the investors gave up all liquidated damages for the missed deadlines. Azco issued 1,750,000 new warrants at $1.25 for five years and will ask shareholders to raise authorized shares from 100 million to 200 million. Notes total $3,781,662, convertible at $1.00. This continues the registration thread and adds dilution.

capital raising announcement

On November 3, 2006 Azco sold its Glendale, Arizona land and buildings (about five acres, a 5,000 sq. ft. office and an 18,000 sq. ft. mill building) to Muzz Investments, keeping its mica processing equipment. In return Muzz cancelled the 2002 financing lease, which Azco had defaulted on after 12 payments, and Azco issued 2,550,000 restricted shares and provided for exercise of Muzz's 2,550,000 warrants. This removes about $6.26 million of liabilities and is expected to produce a gain of about $4.46 million in the December 2006 quarter, but adds 2,550,000 new shares (plus the warrant exercise) for Muzz.

asset acquisition disposition

In September 2006 Azco renegotiated the March convertible notes held by five investors: maturity moved from August 31, 2007 to January 1, 2008, the first installment moved to February 1, 2007, and the conversion and warrant prices fell from $1.58 to $1.00. The investors also bought another $1,000,000 of notes, bringing total outstanding principal, interest and damages to $3,754,357, with 500,000 new warrants at $1.00. The lower prices mean more potential dilution for existing shareholders.

capital raising announcement

On May 4, 2006 Azco bought all of The Lordsburg Mining Company from Imagin Minerals for $1,300,000 from general funds. This gives it the Summit project mining claims in New Mexico (subject to royalties and a net proceeds interest), two state permits, and idle milling equipment it plans to move to a mill site. Financial statements were promised by July 15, 2006.

asset acquisition disposition

Azco raised $2,500,000 (about $2,270,000 net) in March 2006 from four institutional investors through 7% senior secured convertible notes, with warrants and rights to buy more notes. The notes convert at $1.58 per share, the warrants cover 791,139 shares at $1.58, and Azco can repay in cash or shares. Azco must register the shares for resale and pay 1% a month in damages if it is late, so existing shareholders face possible dilution.

capital raising announcement

Mr. Raftery resigned as Azco's auditor because he had not received final approval from the Public Accounting Oversight Board to audit public companies, so he could not issue the audit report for the year ended June 30, 2003. Azco hired Semple & Cooper, LLP of Phoenix effective February 14, 2004, its third auditor arrangement in about five months.

auditor change

PricewaterhouseCoopers resigned as Azco's auditor on September 5, 2003. Its reports for fiscal 2001 and 2002 included a paragraph expressing substantial doubt about Azco's ability to continue as a going concern, and the filing reports no disagreements with the auditor.

auditor change

Azco Mining (the filer, which appears under the Santa Fe Gold name) sold all its shares in its Mexican company Cobre del Mayo to Frontera Cobre del Mayo, Inc. on April 10, 2003. It received $200,000 at closing and is due $50,000 three months later, plus deferred payments tied to construction start ($250,000, or $500,000 if COMEX copper is above $1.00/lb) and commercial production ($500,000, or $1,000,000 above $1.00/lb). It also gets a $0.02/lb royalty in quarters when copper averages at least $1.20/lb, until deferred payments and royalty total $4,750,000; the later payments depend on the Piedras Verdes copper project going ahead.

asset acquisition disposition