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 Gold CORP shareholders approved the routine matters put to a vote at the company's annual meeting (director elections, auditor ratification, and the executive-pay advisory vote).
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.
