8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported) October 16, 2014

Santa Fe Gold Corporation
(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction of Incorporation)

0-20430	84-1094315
(Commission File Number)	(IRS Employer Identification No.)

1219 Banner Mine Road, Lordsburg, NM 88045
(Address of Principal Executive Offices)(Zip Code)

Registrant's Telephone Number, Including Area Code (505) 255-4852

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[   ] Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)

[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[   ] Pre-commencement communications pursuant to Rule 13e-49(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement

     On July 15, 2014, Santa Fe Gold Corporation (“Santa Fe” or the “Company”) entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Canarc Resource Corp., a British Columbia, Canada corporation whose common shares are listed on the TSX Exchange under the symbol CCM (“Canarc”).

     Also, in connection with the Share Exchange Agreement, Santa Fe entered into a “best efforts” placement agency agreement with Euro Pacific Capital, Inc. (“Euro Pacific”) pursuant to which Euro Pacific agreed to use its “best efforts” to complete the private placement of Convertible Gold Notes in the aggregate principal amount between $20 million to $25 million. Euro Pacific did not place any securities or raised any capital for Santa Fe.

     The Share Exchange Agreement provided that it will terminate, unless a closing of the transactions contemplated thereby shall have occurred on or before October 15, 2014. Since the transactions did not close, the Share Exchange Agreement terminated pursuant to its terms on October 15, 2015.

     Because Euro Pacific failed to raise any capital pursuant to its best-efforts placement agreement, the Company has changed its operational strategy from a mine restart plan to a resource drilling and engineering program. Presently, in light of recent historical operational results, combined with lower metal prices, the Company is reporting no reserves for its Summit property. As such, and in light of the terminated Canarc Share Exchange Transaction, the Company’s strategy is to conduct additional technical work, including drilling and sampling, to reclassify some of the mineralized material at the Summit project as reserves. The Company intends to execute such strategy with the assistance of a potential strategic investor.

     Santa Fe’s independent special committee have met and discussed the termination of the Share Exchange Agreement and this change in operational strategy with Santa Fe’s senior secured creditor, Waterton Global Value, L.P. (“Waterton”) and Sandstorm Gold Ltd. (“Sandstorm”). Both Waterton and Sandstorm have indicated support for the Company’s resource drilling and strategic investor strategies. No assurances can be given that the company’s operational or strategic investor strategies will be successful.

Item 5.02.      Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

     In connection with the Share Exchange, Bradford Cooke, Chairman and Founder of Canarc and Founder and CEO of Endeavour Silver Corp. (NYSE:EXK and TSX:EDR) was been appointed as a director and Chairman of Santa Fe. Canarc CEO, Catalin Chiloflischi, Chief Executive Officer of Canarc was appointed President and Chief Executive Officer and Director of Santa Fe and Canarc President and Chief Operating Officer, Garry Biles was been appointed Chief Operating Officer of Santa Fe.

THE CANARC SALARIES DISPUTE

     On July 17, 2014, Santa Fe filed a Current Report on Form 8-K in connection with the Canarc Share Exchange Agreement (the “July 17 Form 8-K”). ITEM 5.02, DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS of the July 17, 2014 Form 8-K, provided, in pertinent part:

Until the closing of the proposed gold bond financing Messrs. Cooke, Chiloflischi and Biles will be serving without any cash compensation. In connection with their appointed to as executive Santa Fe officers, the Santa Fe Board granted each of Messrs. Cooke, Chiloflischi and Biles stock options to purchase 2.5 million shares of Santa Fe common stock for a period of four years at an initial exercise price of $0.055 per share, the closing sales price of Santa Fe’s common stock on the date of grant. These options vest upon the closing of the proposed gold bond financing. (emphasis added)

     Catalin Chiloflischi signed the July 17, 2014 Form 8-K in his capacity as President and Chief executive Officer of Santa Fe.

     After learning that Euro Pacific did not place any securities, on October 3, 2014, per written instructions of Catalin Chiloflischi, Allen Zhu, an accountant with Canarc, sent an invoice for an “allocation” of salaries and expenses paid by Canarc to its directors and employees, -- Messrs. Cooke, Chiloflischi, Biles and Zhu -- in the amount of $98,782.04 to Frank Mueller, Santa Fe’s CFO. In accordance with Santa Fe’s internal controls and procedures, Mr. Mueller objected to the invoice -- as it was not properly authorized. In response to this objection, on October 9, 2014, Canarc transmitted the same invoice, with one particularly noted addition -- Catalin Chiloflischi’s approving signature. Catalin Chiloflischi neither informed nor provided any of the non-Canarc affiliated directors with the $98,782.04 invoice.

     On October 7, 2014, Dr. Michael Heeley resigned as member of the Board of Directors of Santa Fe Gold Corporation, as well as from its Audit Committee, Compensation Committee and Independent Special Committee. As disclosed in the Company’s Current Report on Form 8-K filed October 9, 2014, Dr. Heeley cited as a reason for his resignation his belief “that the current management team neither welcomes nor appreciates constructive independent advice. As such, I believe that my ability to effectively serve Santa Fe in the future is compromised.”

     Mr. Mueller brought the matter of Canarc allocating its officer and director salaries and expenses promptly to the attention of Erich Hofer, as Chairman of the Audit Committee. After reviewing the Canarc Invoice with Santa Fe’s corporate counsel, on October 9, 2014. Mr. Hofer informed Mr. Chiloflischi that Santa Fe cannot accept Canarc’s invoice. On October 10, 2014, Mr. Bradford Cooke, who then served as Chairman to both Santa Fe and Canarc, responded to Mr. Hofer’s email rejecting the Canarc invoice as follows: “If you do not accept Canarc’s invoice, then we should terminate the share exchange agreement now and litigate…”

     On October 10, 2014, after being informed by Santa Fe’s corporate counsel that there is “no valid contractual basis whatsoever” for Canarc to demand Santa Fe to reimburse Canarc for amounts Canarc paid to its officers and directors, Mr. Hofer, as Chairman of the Audit Committee, sent to Canarc a letter explaining why Santa Fe cannot accept the invoice. A copy of Mr. Hofer’s letter, dated October 10, 2014, is attached to this form 8-K as Exhibit 99.2 (the “Termination and Litigation Response Letter”). Mr. Cooke did not respond to the Termination and Litigation Response Letter but Mr. Chiloflischi raised an agenda item for the next board meeting to “discuss, decide and make changes in they way Santa Fe is governed at the board level and managed going forward.”

THE FORM 10-K DISCLOSURE DISPUTE

     In connection with the preparation of the Company’s Annual report on Form 10-K for the fiscal year ended June 30, 2014 (the “2014 Form 10-K”), corporate counsel to Santa Fe advised Santa Fe to include the following disclosures in Item 1, “Business-- Recent Developments” of its 2014 Form 10-K:

On July 17, 2014, in connection with the Share Exchange Agreement, the Company filed a Form 8-K, which disclosed the Company’s agreement with Canarc that “until the closing of the proposed gold bond financing Messrs. Cooke, Chiloflischi and Biles will be serving without any cash compensation.” On October 3, 2014, Canarc sent an invoice for payment of “allocated” Canarc salaries and expenses for Messrs. Cooke, Chiloflischi, Biles and Yee’s management and expenses fees in the amount of $98,782.04. After consultation with the Company’s corporate counsel, the Audit Committee determined that Canarc’s demand for payment of such fees was without any valid basis and contradicts the Company’s public disclosures. As such, the Company informed Canarc that the Company cannot accept such invoice from Canarc. In response, Mr. Cooke, Chairman of both the Company and Canarc, demanded that unless the Company accepts Canarc’s invoice, Canarc will terminate the share exchange agreement now and litigate. The Company has informed Canarc that it cannot accept Canarc’s invoice. Subsequently, Canarc has withdrawn the invoice as well as its litigation and termination threats. However, conflicts of interests exist among Canarc affiliated members of the board of directors, on the one hand, and Santa Fe and its stockholders, on the other hand. See Risk Factors – “Conflicts of interest exist among the Company, members of our management team and directors affiliated with Canarc. Canarc affiliated members of our management team and two of our directors owe fiduciary duties to both the Company and Canarc, which may permit them to favor Canarc’s interests to the detriment of Santa Fe and its stockholders.”

Mr. Jordaan advised that the following be added as the third Risk Factor in the 2014 Form 10-K:

Conflicts of interest exist among the Company, members of our management team and directors affiliated with Canarc. Canarc affiliated members of our management team and two of our directors owe fiduciary duties to both the Company and Canarc, which may permit them to favor Canarc’s interests to the detriment of Santa Fe and its stockholders.

     Our Chairman, Bradford Cooke, also serves as Chairman of Canarc. Our President and Chief Executive Officer, Catalin Chiloflischi, also serves as President and Chief Executive Officer of Canarc. Gary Biles our Chief Operating Officer, also serves as Vive President – Operations of Canarc. Two of our directors, Messrs. Cooke and Chiloflischi also serve as directors of Canarc.

     Since the Share Exchange Agreement has not been consummated, conflicts of interest exist between the Canarc affiliated members of our management team and Canarc affiliated board members, on the one hand, and us and our stockholders, on the other hand. As a result of these conflicts, the Canarc affiliated members of our management team may favor the interests of Canarc and its shareholders over our interests or the Santa Fe and its stockholders. These conflicts include, among others, the following:

• Pursuing a strategy to place Santa Fe into receiver or bankruptcy;

• Entering into agreements between Santa Fe and Canarc that are more favorable to Canarc than to Santa Fe and its stockholders;

• The Canarc affiliated officers and directors are not prohibited from engaging in other businesses or activities, including pursuing corporate opportunities that may be beneficial to Santa Fe or that might be in direct competition with us;

• The Canarc affiliated officers and directors may cause us to pay Canarc or its affiliates for the cost of Canarc’s existing management team and directors;

• The Canarc affiliated officers and directors may determine how we restructure the Share Exchange Agreement and the structure of any restructurings with our creditors; and

• The Canarc affiliated officers and directors may not pursue available strategic alternatives that are superior to Santa Fe and its stockholders than extending or restructuring a transaction with Canarc.

In limiting these conflicts of interest, Santa Fe has created an Independent Special Committee (the “ISC”). On October 7, 2014, Dr. Michael Heeley resigned as a member of Santa Fe’s board of directors and as a member of the ISC stating that the current management team neither welcomes nor appreciates his constructive advice. As such, he believed that his ability to effectively serve Santa Fe in the future has been compromised. Should remaining members of the ISC resign or the Canarc affiliated directors be successful in limiting the role of the ISC, the ability to mitigate existing conflicts of interest will be compromised, which could have a material adverse effect upon the Company and its stockholders.

     Messrs. Cooke and Chiloflischi repeatedly requested that Mr. Jordaan withdraw the above-referenced comments to the 2014 Form 10-K and that the 2014 Form 10-K be filed without the above disclosures. Mr. Jordaan steadfastly refused. Mr. Jordaan offered to withdrawn as legal counsel but Mr. Hofer, as independent director, insisted that Mr. Jordaan remain as legal counsel.

     Next, on October 15, 2014, Mr. Chiloflischi informed Jakes Jordaan:

Please be advised that due to the additional disclosure that you have insisted to be included in Company’s 10K, just a few hours ahead of the filing deadline at a point when all officers and directors (except yourself) have already provided written signatures for report filing, the Company was unable to file the 10K report in time. The only way to resolve this controversial situation that was created by your last minute request for additional disclosure is for the Company to engage independent legal counsel on this matter. However, please also be reminded that considering Company’s financial position in my role as CEO, I am unable to appoint independent legal counsel for this matter due to lack of financial resources.

     In response, on October 15, 2014, Mr. Jordaan advised Mr. Chiloflischi that a solution to the disclosure deadlock could be to place the issue before the SEC for determination:

You are misrepresenting the record in that both Erich Hofer and I have agreed to file the Form 10-K only with my proposed changes. My conversation with Erich and the subsequent email from Erich confirm this fact.

What I found most astonishing from your email is that you did not even consult with legal counsel in reaching your determinative disclosure position, which is the reason for Santa Fe still being unable to file its Form 10-K. From your CV it does not appear that you have a US law degree or ever been affiliated with a US public company. As such, to borrow Brad’s terminology, it is apparent that your baseless disclosure position is only to cover your behind.

Since Santa Fe cannot hire another set of lawyers, I propose we detail the facts, with support, and submit all the facts to the SEC for determination if disclosure is the necessary under the US securities laws. This can be done directly to our prior 1934 Act examiner or as part of a formal SEC No Action process. Since I informally ran the issue past a nationally recognized legal colleague, I am most certain as to what the SEC’s position will be -- disclose.

     Without any prior notice of their intention to resign, on October 16, 2014, Santa Fe received the resignation letters of the Company’s all Canarc affiliated officers and directors. Messrs. Cooke, Chiloflischi, Biles and Philip Yee. Copies of their respective resignation letters, all dated October 16, 2014, is filed as Exhibit 99.3 – 99.6 and incorporated by reference herein.

     Effective October 17, 2014, Mr. Jordaan accepted the Santa Fe board of directors appointment as Chief Executive Officer.

     There are no arrangements or understandings between Mr. Jordaan and any other persons pursuant to which he was elected as an officer. Mr. Jordaan is a member of The Jordaan Law Firm, PLLC, which firm provides legal services to the Company. Except as described herein, Mr. Jordaan has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

     Mr. Jordaan does not have a family relationship with any member of the Board or any executive officer of the Company.

Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits.

(c) Exhibits

The following exhibits are filed herewith:

Exhibit
Number	Description
99.1	Press release dated October 17, 2014
99.2	Letter from Erich Hofer to Bradford Cooke dated October 10, 2014
99.3	Resignation Letter from Bradford Cooke dated October 16, 2014
99.4	Resignation Letter from Catalin Chiloflischi dated October 16, 2014
99.5	Resignation Letter from Gary Biles dated October 16, 2014
99.6	Resignation Letter from Philip Yee dated October 16, 2014

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.

	SANTA FE GOLD CORPORATION
	(Registrant)
Date: October 17, 2014	/s/ Frank Mueller
	Frank Mueller
	Chief Financial Officer

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press release dated October 17, 2014
99.2	Letter from Erich Hofer to Bradford Cooke dated October 10, 2014
99.2	Resignation Letter from Bradford Cooke dated October 16, 2014
99.3	Resignation Letter from Catalin Chiloflischi dated October 16, 2014
99.4	Resignation Letter from Gary Biles dated October 16, 2014
99.5	Resignation Letter from Philip Yee dated October 16, 2014

EX-99.1

 
1219 Banner Mine Road, Lordsburg, NM 88045 | Tel: 505-255-4852 | www.santafegoldcorp.com

Santa Fe Gold Announces Termination of Canarc Share Exchange Agreement,
Resignations of Canarc Affiliated Directors and Officers and
Appointment of Jakes Jordaan Chief Executive Officer and
Erich Hofer as Chairman of the Board

     LORDSBURG, New Mexico – October 17, 2014 – Santa Fe Gold Corporation (OTCBB: SFEG) today announced that the Share Exchange Agreement (the “Share Exchange Agreement”) with Canarc Resource Corp., a British Columbia, Canada corporation, whose common shares are listed on the TSX Exchange under the symbol CCM (“Canarc”) has terminated in accordance with its terms. The Share Exchange Agreement provided that it will terminate, unless a closing of the transactions contemplated thereby shall have occurred on or before October 15, 2014. Since the share exchange with Canarc did not close, the Share Exchange Agreement terminated pursuant to its terms on October 15, 2014.

     In connection with the Share Exchange Agreement, Santa Fe entered into a “best efforts” placement agency agreement with Euro Pacific Capital, Inc. (“Euro Pacific”) pursuant to which Euro Pacific agreed to use its “best efforts” to complete the private placement of Convertible Gold Notes in the aggregate principal amount between $20 million to $25 million. Euro Pacific did not place any securities or raised any capital for Santa Fe.

     Because Euro Pacific failed to raise any capital pursuant to its best-efforts placement agreement, the Company has changed its operational strategy from a mine restart plan to a resource drilling and engineering program. Presently, in light of recent historical operational results, combined with lower metal prices, the Company is reporting no reserves for its Summit property. As such, and in light of the terminated Canarc Share Exchange Transaction, the Company’s strategy is to conduct additional technical work, including drilling and sampling, to reclassify some of the mineralized material at the Summit project as reserves. The Company intends to execute such strategy with the assistance of a potential strategic investor.

     Santa Fe’s independent special committee have met and discussed the termination of the Share Exchange Agreement, changes in management and the change in operational strategy with Santa Fe’s senior secured creditors, Waterton Global Value, L.P. (“Waterton”) and Sandstorm Gold Ltd. (“Sandstorm”). Both Waterton and Sandstorm have indicated support for the Company’s resource drilling and strategic investor strategies. No assurances can be given that the Company’s operational or strategic investor strategies will be successful.

     In connection with the resignation of all Canarc affiliated officers and directors, Jakes Jordaan has replaced Catalin Chiloflischi as President and Chief Executive Officer and Mr. Erich Hofer has replaced Bradford Cooke as Chairman of the Board of Directors. Mr. Hofer has been elected as Chairman of the Board and sole member of the Independent Special Committee.

     Said Mr. Jordaan, Santa Fe’s new Chief Executive Officer, “although no assurances can be given, we believe that once Santa Fe completes a resource drilling and engineering program, Santa Fe should be able to secure capital necessary to restart the Summit. We intend to execute this strategy with the support of our senior lenders and with a qualified strategic industry partner.”

About Santa Fe Gold:

Santa Fe Gold is a U.S.-based mining and exploration enterprise focused on acquiring and developing gold, silver, copper and industrial mineral properties. Santa Fe controls: (i) the Summit mine and Lordsburg mill in southwestern New Mexico; (ii) a substantial land position at the Lordsburg mill, comprising the core of the Lordsburg Mining District; (iii) the Ortiz gold property in north-central New Mexico, estimated to contain two million ounces of gold; (iv) the Black Canyon mica mine and processing facility near Phoenix, Arizona; and (v) a large resource of micaceous iron oxide (MIO) in western Arizona.

To learn more about Santa Fe Gold, visit www.santafegoldcorp.com.

Forward Looking Statements:

This Press Release contains certain “forward-looking” statements as such term is defined by the Securities and Exchange Commission in its rules, regulations and releases, which represent the Company’s expectations or beliefs, including but not limited to, statements concerning the Company’s strategy, operations, economic performance, financial condition, resource drilling strategies, investments, and future operational plans. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intent,” “could,” “estimate,” “might,” “plan,” “predict” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements. This Press Release contains forward-looking statements, many assuming that the Company secures adequate financing and is able to continue as a going concern, including statements regarding, among other things:

• our ability to continue as a going concern;

• we will require additional financing in the future restart production at the Summit Mine property and to bring it into sustained commercial production;

• our dependence on our Summit project for our future operating revenue, which property currently has limited proven or probable reserves;

• our mineralized material calculations at the Summit property and other projects are only estimates and are based principally on historic data;

• actual capital costs, operating costs, production and economic returns may differ significantly from those that we have anticipated;

• exposure to all of the risks associated with restarting and establishing new mining operations, if the development of one or more of our mineral projects is found to be economically feasible;

• title to some of our mineral properties may be uncertain or defective;

• land reclamation and mine closure may be burdensome and costly;

• significant risk and hazards associated with mining operations;

• we will require additional financing in the future to develop a mine at any other projects, including the Ortiz and Mogollon projects;

• the requirements that we obtain, maintain and renew environmental, construction and mining permits, which is often a costly and time-consuming process and may be opposed by local environmental group;

• our anticipated needs for working capital;

• our ability to secure financing;

• claims and legal proceedings against us;

• our lack of necessary financial resources to complete development of our projects and the uncertainty of our future financing plans,

• our exposure to material costs, liabilities and obligations as a result of environmental laws and regulations (including changes thereto) and permits;

• changes in the price of silver and gold;

• extensive regulation by the U.S. government as well as state and local governments;

• our projected sales and profitability;

• our growth strategies,;

• anticipated trends in our industry;

• unfavorable weather conditions;

• the lack of commercial acceptance of our product or by-products;

• problems regarding availability of materials and equipment;

• failure of equipment to process or operate in accordance with specifications, including expected throughput, which could prevent the production of commercially viable output; and

• our ability to seek out and acquire high quality gold, silver and/or copper properties.

EX-99.2

SANTA FE GOLD CORPORATION

HIGHWAY 494

LORDSBURG, NM 88045
 

October 10, 2014

VIA ELECTRONIC MAIL

Canarc Resource Corp.
Suite 301, 700 West Pender Street
Vancouver, BC, Canada
V6C 1G8Mr. Gregory Alyassin
Attn:	Bradford Cooke
	Catalin Chiloflischi

RE: Canarc Resource Corp. (“Canarc”) Invoice No. 1524 (the” Canarc Invoice”)

Dear Brad and Catalin:

     Reference is made to the Canarc Invoice and an email from Brad Cooke, which provides:

If you do not accept Canarc’s invoice, then we should terminate the share exchange agreement now and litigate as Jakes has repeatedly threatened. Kindly inform us tomorrow whether you accept our invoices or not.

     As detailed below, there is no contractual basis whatsoever pursuant to which Santa Fe can make any payments in regard to the Canarc Invoice or capitulate to your demand regarding the recognition of a $98,782.04 obligation pursuant to a non-existing management agreement.

     As you know, on July 15, 2014, Santa Fe and Canarc entered into a Share Exchange Agreement (the “SEA”). The SEA made no reference to a management agreement with Canarc -- pursuant to which Canarc (not the individuals) is now claiming “reimbursement” for salaries Canarc paid to its employees. Furthermore, on July 17, 2014, Catalin Chiloflischi signed a Form 8-K, which was filed with the SEC. In accordance with United States securities laws, this Form 8-K disclosed all material agreements and understandings between Santa Fe and Canarc and included as Exhibits all material agreements relating to the share exchange transaction. Not a single reference to a management agreement was made in the Form 8-K, because no such agreement exists.

     This non-existing management agreement was referenced in the non-binding MOU that has been replaced by the SEA. Because Brad Cooke, Catalin Chiloflischi and Gary Biles elected to become officers and directors of Santa Fe, there was no need for Canarc to manage Santa Fe pursuant to a management agreement. Therefore, since Brad Cooke, Catalin Chiloflischi and Gary Biles became employees of Santa Fe, the SEA was not structured with a management agreement with Canarc as initially contemplated by the non-binding MOU. In this regard, please note particularly that Brad Cooke, Catalin Chiloflischi and Gary Biles were pleased to accept a most generous equity incentive package from Santa Fe: 7.5 million incentive options that would fully vest and be exercisable at $.05 per share upon closing of a qualified financing (assuming a price of $.30 per share, this compensation package would have a current cash value in excess of $2.0 million). As such, not only did Brad Cooke, Catalin Chiloflischi and Gary Biles receive their salaries, options and other benefits on the Canarc side, they were also generously compensated for their roles at Santa Fe.

Mr. Bradford Cooke
Mr. Catalin Chiloflischi
Canarc Resource Corp.
October 10, 2014
Page 2

     Since there exist no contractual obligation on behalf of Santa Fe to reimburse Canarc for its employee costs, assuming such liabilities would constitute corporate waste and a clear breach of Santa Fe’s officers and directors’ fiduciary duties to Santa Fe. Therefore, Santa Fe will not accept the Canarc Invoice.

SANTA FE GOLD CORPORATION
	_/s/ Erich Hofer
By:	Erich Hofer
	Chairman of Audit Committee

cc:	Frank Mueller
	Jakes Jordaan

EX-99.3

EX-99.4

Catalin Chiloflischi

October 16, 2014

Board of Directors
Santa Fe Gold Corporation (via email, mail and fax: 505-255-4851)
PO BOX 25201, Albuquerque, New Mexico , 87125, USA

Attn: Jakes Jordaan, Director (via email) jakes@jordaanlaw.com;
          Erich Hoffer, Director (via email) ehofer@santafegoldcorp.com;
    cc: Frank Muller, Interim CFO & Corp Secretary (via email) fmueller@santafegoldcorp.com

Re: Resignation

Gentlemen:

Considering that my appointment to the board of directors was contemplated in the Share Exchange Agreement dated July 15, 2014, by and between the Corporation and Canarc Resource Corp., which was effectively terminated on October 16, 2014, I hereby resign as a member of the board of directors of Santa Fe Gold Corporation (“Corporation”) and my position as Chief Executive Officer and President of the Corporation effective immediately with the termination of the Share Exchange Agreement. Since my appointment I have worked diligently to satisfy my fiduciary duties and responsibilities to the Corporation with complete dedication and undivided loyalty to the Corporation and its stakeholders.

At the recent meetings of the board of directors of the Corporation, you were apprised of my concerns with respect to the Corporation, including circumstances related to the liquidity of the Corporation, the work completed to date, the Corporation’s ability to continue as a going concern and the nature of last minute disclosure raised by Jakes Jordaan hours before the filing deadline for Corporation’s annual report on Form 10-K that resulted in the 10-K report to not be filed by the Corporation.

I, along with other members of the board of directors and officers of the Corporation, have expressed concerns for the record that Jakes Jordaan has a significant personal and financial interest in the Corporation that gives rise to conflicts of interests and causes him to advocate for actions that are not in the best interests of the Corporation or its shareholders. I believe that his actions give rise to irreconcilable differences and prevent me from fulfilling my fiduciary responsibilities to the Corporation to the best of my ability. In anticipation of the board of directors meeting held on October 14, 2014, I formally asked the sole independent board member, Mr. Erich Hoffer, to fulfill his fiduciary duties and address these conflicts of interest on behalf of the Corporation and its stakeholders and to consider implementing changes in the way the Company is governed and managed considering the matters at hand. However, my request was ignored and to the contrary Mr. Erich Hoffer advocated confirming Mr. Jordaan as legal counsel and member of the independent special committee (ISC).

Consequently, I reserve the right to furnish a response to the Corporation’s Item 5.02 disclosure of Form 8-K in accordance with Item 5.02(a)(3) of Form 8-K.

Respectfully,

Catalin Chiloflischiz

EX-99.5

EX-99.6