10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _____ to _______

Commission File Number: 001-12974

SANTA FE GOLD CORPORATION
(Exact name of registrant as specified in its charter)

Delaware	84-1094315
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	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

N/A
Former name, former address, and former fiscal year, if changed since last report

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]      No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Check one:

Larger accelerated filer [   ]	Accelerated filer                   [   ]
Non-accelerated filer    [   ]	Smaller reporting company [X]
(Do not check if a smaller reporting company)

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [   ]      No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
131,229,228 shares outstanding as of November 17, 2014.

SANTA FE GOLD CORPORATION

INDEX TO FORM 10-Q

		Page
	PART I FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of September 30, 2014 (Unaudited) and June 30, 2014	3
	Consolidated Statements of Operations for the Three Months Ended September 30, 2014 and 2013, (Unaudited)	4
	Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2014 and 2013 (Unaudited)	5
	Notes to the Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31
Item 4.	Controls and Procedures	31
	PART II OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	34
SIGNATURES		35
CERTIFICATIONS

2

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SANTA FE GOLD CORPORATION

CONSOLIDATED BALANCE SHEETS

		September 30,			June 30,
		2014			2014
		(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	410		$	83,825
Accounts receivable		72,807			14,267
Inventory		-			40,000
Prepaid expenses and other current assets		249,870			247,069
Total Current Assets		323,087			385,161
MINERAL PROPERTIES		599,897			599,897
PROPERTY, PLANT AND EQUIPMENT, net of depreciation of $13,865,655 and $11,162,024, respectively		18,786,935			19,255,682
OTHER ASSETS:
Restricted cash		231,716			231,716
Mogollon option costs		876,509			876,509
Deferred financing costs, net		89,379			99,310
Total Other Assets		1,197,604			1,207,535
Total Assets	$	20,907,523		$	21,448,275
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	3,789,866		$	3,659,848
Accrued liabilities		7,626,245			8,024,162
Derivative instrument liabilities		804,839			292,124
Senior subordinated convertible notes payable, current portion, net of discounts of $5,696 and $17,937, respectively		444,304			432,063
Notes payable, current portion		9,416,664			9,200,666
Completion guarantee payable		3,359,873			3,359,873
Total Current Liabilities		25,441,791			24,968,736
LONG TERM LIABILITIES:
Senior subordinated convertible notes payable, net of current portion and		3,402,750			3,673,527
Asset retirement obligation		242,521			241,079
Total Liabilities		29,087,062			28,883,342
STOCKHOLDERS' (DEFICIT) :
Common stock, $.002 par value, 300,000,000 shares authorized; 131,229,228 and                 127,229,228 shares issued and outstanding, respectively		262,459			254,459
Additional paid in capital		78,484,962			78,292,962
Accumulated (deficit)		(86,926,960	)		(85,982,488	)
Total Stockholders' (Deficit)		(8,179,539	)		(7,435,067	)
Total Liabilities and Stockholders' (Deficit)	$	20,907,523		$	21,448,275

The accompanying notes are an integral part of the unaudited consolidated financial statements.

3

SANTA FE GOLD CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE (LOSS)

(Unaudited)

		Three Months Ended
		September 30,
		2014			2013
SALES, net	$	71,518		$	1,193,683
OPERATING COSTS AND EXPENSES:
Costs applicable to sales		40,000			2,176,917
Exploration and other mine related costs		194,726			90,613
General and administrative		369,643			843,238
Depreciation and amortization		482,248			774,460
Accretion of asset retirement obligation		1,442			513
Total Operating Costs and Expenses		1,088,059			3,885,741
LOSS FROM OPERATIONS		(1,016,541	)		(2,692,058	)
OTHER INCOME (EXPENSE):
Interest income					-
Foreign currency translation		301,152			12,289
(Loss) on derivative instrument liabilities		(512,715	)		(291,996	)
Accretion of discounts on notes payable		(12,241	)		(9,896	)
Financing costs - commodity supply agreements		756,372			(690,887	)
Finance charges		(25,125	)		-
Interest expense		(435,374	)		(327,027	)
Total Other (Expense)		72,069			(1,307,517	)
(LOSS) BEFORE PROVISION FOR INCOME TAXES		(944,472	)		(3,999,575	)
PROVISION FOR INCOME TAXES		-			-
NET (LOSS)		(944,472	)		(3,999,575	)
OTHER COMPREHENSIVE INCOME
Unrealized gain on marketable securities		-			-
NET COMPREHENSIVE (LOSS)	$	(944,472	)	$	(3,999,575	)
Basic and Diluted Per Share data
Net (Loss) - basic and diluted	$	(0.01	)	$	(0.03	)
Weighted Average Common Shares Outstanding:
Basic and diluted		130,620,532			117,599,598

The accompanying notes are an integral part of the unaudited consolidated financial statements.

4

SANTA FE GOLD CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		Three Months Ended
		September 30,
		2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(944,472	)	$	(3,999,575	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		482,248			774,460
Stock-based compensation		-			108,610
Accretion of discount on notes payable		12,241			9,896
Financing costs - commodity supply agreements		(756,371	)		690,887
Accretion of asset retirement obligation		1,442			513
Loss on derivative instrument liabilities		512,715			291,996
(Gain) on disposal of assets		-			(118,477	)
Amortization of deferred financing costs		9,931			81,745
Foreign currency translation		(301,152	)		(12,289	)
Net change in operating assets and liabilities:
Accounts receivable		(58,540	)		(552,468	)
Inventory		40,000			(138,421	)
Prepaid expenses and other current assets		(2,801	)		24,041
Mogollon option costs		-			(50,000	)
Accounts payable and accrued liabilities		718,846			1,612,835
Net Cash Used in Operating Activities		(285,913	)		(1,276,247	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of assets		-			249,000
Purchase of property, plant and equipment		(13,500	)		(139,359	)
Net Cash Provided by (Used) in Investing Activities		(13,500	)		109,641
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable		-			1,250,000
Proceeds from issuance of stock		-			-
Proceeds from notes payable		220,000			29,144
Payments on notes payable		(4,002	)		(54,219	)
Net Cash Provided by Financing Activities		215,998			1,224,925
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(83,415	)		58,319
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		83,825			115,094
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	410		$	173,413
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	216		$	7,015
Cash paid for income taxes	$	-		$	-
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Stock issued for accounts payable and accrued wages	$	200,000		$	-

The accompanying notes are an integral part of the unaudited consolidated financial statements.

5

SANTA FE GOLD CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2014

(UNAUDITED)

NOTE 1 – NATURE OF OPERATIONS

Santa Fe Gold Corporation (the “Company”) is a U.S. mining company incorporated in Delaware in August 1991. Its general business strategy is to acquire, explore, develop and mine mineral properties. The Company’s principal assets are the 100% owned Summit silver-gold property located in New Mexico, the leased Ortiz gold project in New Mexico and the 100% owned Black Canyon mica project in Arizona.

In May 2006, for a cash price of $1.3 million, the Company acquired 100% of the shares of The Lordsburg Mining Company (“Lordsburg Mining”), a New Mexico corporation. With the acquisition of Lordsburg Mining, the Company acquired the Summit project, consisting of approximately 117.6 acres of patented and approximately 520 acres of unpatented mining claims in Grant County, New Mexico; approximately 257 acres of patented mining claims in Hidalgo County, New Mexico; and milling equipment including a ball mill and floatation plant in Sierra County, New Mexico.

On June 30, 2008, Lordsburg Mining purchased from St. Cloud Mining Company, a New Mexico corporation, for a price of $841,500, mineral processing equipment and real property situated adjacent to the Banner mill site located south of Lordsburg, New Mexico. The equipment included in the purchase constitutes important components for the Banner mill processing facility, notably a portable crushing and screening plant and a feeding and conveying system. The real property included in the purchase consists of 70 patented and 5 unpatented mining claims, and assignments of mineral leases covering 17 patented and 6 unpatented mining claims. These mining claims and mineral leases, together with the patented mining claims Lordsburg Mining already owned in the area of the Banner mill site, cover approximately 1,500 acres (2.3 square miles) and comprise the core of the Virginia Mining District. Historical production of copper, gold and silver from the district has been substantial. Lordsburg Mining assumed certain potential environmental obligations in connection with the real property, including those related to reclamation of old workings, should such obligations arise in the future.

The Company commenced processing operations at the Banner Mill in March 2010. Commissioning of the mill proceeded and in July 2010, mill operations were expanded to two shifts per day, five days a week. In April 2012, the Company commenced commercial production at the Summit silver–gold mine. In November 2013 mining operations were suspended.

In September 2009, the Company formed a wholly owned Barbados subsidiary, Santa Fe Gold Barbados Corporation, in connection with the definitive gold sales agreement entered into on September 11, 2009. Under separate agreements, Santa Fe Gold Barbados Corporation sells refined gold to Sandstorm Gold, Ltd., and refined gold and silver to Waterton Global Value L.P. See NOTE 10– CONTINGENCIES AND COMMITMENTS.

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described in our annual report on Form 10-K for our year fiscal ended June 30, 2014 in addition to the other information included in this quarterly report.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Going Concern

The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due.

For the three months ended September 30, 2014, the Company incurred a loss of $944,472, had a total accumulated deficit of $86,926,960, and a working capital deficit of $25,118,704. The Company began revenue generating operations during the fiscal year ended June 30, 2011, through the sales of precious metals and flux material. Sales have decreased the in the most recent fiscal year during the reporting period due to the suspension of all mining operations in November 2013.

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On November 8, 2013, the Company suspended all mining operations and placed the mine and mill on a care and maintenance program. The Company is currently working to restructure its debts and obtain adequate capital to restart operations in the Company’s fiscal 2015 year.

To continue as a going concern, the Company is dependent on continued capital financing for project development, repayment of various debt facilities and payment of operating and financing expenses until production at the Summit mine site attains cash flow to cover the Company’s operating costs. The Company has no commitment from any party to provide additional working capital and there is no assurance that any funding will be available as needed, or if available, that its terms will be favorable or acceptable to the Company.

On July 15, 2014, 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"). Under the terms of the Share Exchange Agreement, the Company will issue 66,000,000 shares of its common stock to Canarc; and, in exchange, Canarc will issue 33,000,000 of its common shares to the Company (the "Share Exchange"). Upon consummation of the Share Exchange, the Company will own approximately 17 percent of Canarc's outstanding shares and Canarc will own approximately 34 percent of Santa Fe's outstanding common shares.

In connection with the Share Exchange Agreement, the Company entered into a “best efforts” placement agency agreement with Euro Pacific Capital, Inc. ("Euro Pacific") pursuant to which Euro Pacific agreed to act as placement agent for the Company and use its "best-efforts" to complete the proposed private placement of 8% Subordinated Secured Redeemable GLD Share Delivery Notes and a Detachable Common Stock Purchase Warrant in the aggregate principal amount between $20 million to $25 million. Euro Pacific did not place any securities or raise any capital for the Company. The Euro Pacific best efforts placement agency agreement expired by its terms on September 30, 2014.

The Share Exchange Agreement provided that it would terminate, unless a closing of the transactions contemplated 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, 2014.

At September 30, 2014, the Company was in default on payments totaling approximately $8.9 million under its Senior Secured Gold Stream Credit Agreement (the “Credit Agreement”) with Waterton and approximately $6.8 million under a gold stream agreement (the “Gold Stream Agreement”) with Sandstorm Gold Ltd. (“Sandstorm”). The Company’s consolidated financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Azco Mica, Inc., a Delaware corporation, The Lordsburg Mining Company, a New Mexico corporation, Minera Sandia, S.A. de C.V., a Mexican corporation and Santa Fe Gold Barbados Corporation, a Barbados corporation. All significant inter-company accounts and transactions have been eliminated in consolidation.

Reclassifications

Certain items in these consolidated financial statements have been reclassified to conform to the current year’s presentation.

Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates under different assumptions or conditions.

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Significant estimates are used when accounting for the Company’s carrying value of mineral properties, fixed assets, depreciation and amortization, accruals, derivative instrument liabilities, taxes and contingencies, asset retirement obligations, revenue recognition, and stock-based compensation which are discussed in the respective notes to the consolidated financial statements.

Fair Value Measurements

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximated their related fair values as of September 30, 2014 and June 30, 2014, due to the relatively short-term nature of these instruments. The carrying value of the Company’s convertible notes payable approximates the fair value based on the terms at which the Company could obtain similar financing and the short term nature of these instruments.

Cash and Cash Equivalents

The Company considers all liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash balances. Restricted cash is excluded from cash and cash equivalents and is included in other assets.

Accounts Receivable

Accounts receivable consist of trade receivables from precious metals sales of concentrate and flux. In evaluating the collectability of accounts receivable, the Company analyzes past results and identifies trends for each major payer source of revenue for the purpose of estimating an allowance for doubtful accounts. Data in each major payer source are regularly reviewed to evaluate the adequacy of the allowance, and actual write-offs are charged against the allowance. There was no allowance for doubtful accounts as of September 30, 2014, and June 30, 2014.

On June 30, 2013, the Company signed a Waiver of Default Letter (the “Letter”) with Waterton Global Value, L.P. (“Waterton”) wherein the Company agreed to sell, convey, assign and transfer certain accounts receivable as consideration for Waterton’s waiver for non-payment under the Senior Secured Gold Stream Agreement. The transfer of the accounts receivable to Waterton are to be treated as payment towards outstanding interest amounts with any remaining transfer of receivables to be treated as a payment towards other indebtedness under the Credit Agreement, including principal on the note. The valuation of receivables sold under the Letter was finalized at $1,018,056. Additionally, $813,919 of collected accounts receivable sold to Waterton still remains to be remitted to them and is recorded in Accrued Liabilities at September 30, 2014.

Inventory

Major types of inventories include ore stockpile inventories, in-process inventories, siliceous flux material inventories and concentrate inventories, as described below. Inventories are carried at the lower of average cost or net realizable value. The net realizable value of ore stockpile inventories and in-process inventories represents the estimated future sales price of the product based on current and future metals prices, less the estimated costs to complete production and bring the product to sale. Concentrate inventories and siliceous flux material inventories are carried at the lower of full cost of production or net realizable value based on current and future metals prices. Write-downs of inventory are reported as a component of costs applicable to sales.

Ore Stockpile Inventories: Ore stockpile inventories represent mineralized materials that have been mined and are available for further processing. Costs are allocated to ore stockpile inventories based on relative values of material stockpiled and processed using current mining costs incurred up to the point of stockpiling the ore, including applicable overhead, depreciation, and amortization. Material is removed from the stockpile at an average cost per ton. The current portion of ore stockpiles is determined based on the expected amounts to be processed within the next 12 months. Ore stockpile inventories not expected to be processed within the next 12 months, if any, are classified as long-term.

In-process Inventories: In-process inventories represent materials that are currently in the process of being converted to a saleable product. In-process inventories are valued at the lower of average cost or net realizable value attributable to the source material plus the in-process conversion costs, including applicable depreciation relating to the process facilities incurred to that point in the process.

8

Siliceous Flux Material Inventories: The siliceous flux material inventories represent ore stockpiles that have been crushed and screened to the customer’s specifications, and represent a saleable product.

Concentrate Inventories: Concentrates inventories include metal concentrates located either at the Company’s facilities or in transit to the customer’s port. Inventories consist of gold and silver metal concentrates and represent a saleable product.

Property, Equipment and Mine Development

Property and Equipment

Property and equipment are carried at cost. Maintenance and repairs that do not improve or extend the life of the respective assets are expensed as incurred. Expenditures for new property or equipment and expenditures that extend the useful lives of existing property and equipment are capitalized and recorded at cost. Upon retirement, sale or other disposition, the cost and accumulated amortization are eliminated and the gain or loss is included in operations. Depreciation is taken over the estimated useful lives of the assets using the straight-line method. The estimated useful lives of property and equipment are shown below. Land is not depreciated.

	Estimated Useful Life
Leasehold improvements	3 Years
Office furniture and equipment	3 Years
Mine processing equipment and buildings	7 – 20 Years
Plant	3 – 9 Years
Tailings	3 Years
Environmental and permits	7 Years
Asset retirement obligation	5 Years
Automotive	3 – 5 Years
Software	5 Years

Mine Development

Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, and the building of access ways, shafts, lateral access, drifts, ramps and other infrastructure in an underground mine. Costs incurred before mineralization is classified as proven and probable reserves are expensed and classified as exploration expense. Capitalization of mine development project costs, that meet the definition of an asset, begins once mineralization is classified as proven and probable reserves.

Drilling and related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body or converting non-reserve mineralization to proven and probable reserves. All other drilling and related costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs and then included as a component of costs applicable to sales.

Mine development is amortized using the units-of-production method based upon estimated recoverable tonnage in proven and probable reserves. To the extent that these costs benefit an entire ore body, they are amortized over the estimated life of the ore body. Costs incurred to access specific ore blocks or areas that only provide benefit over the life of that area are amortized over the estimated life of that specific ore body.

Mineral Properties

Mineral properties are capitalized at their fair value at the acquisition date, either as an individual asset purchase or as part of a business combination. When it is determined that a mineral property can be economically developed as a result of establishing reserves, subsequent mine development are capitalized and are amortized using the units of production method over the estimated life of the ore body based on estimated recoverable tonnage in proven and probable reserves.

The Company’s mineral rights generally are enforceable regardless of whether proven and probable reserves have been established. The Company has the ability and intent to renew mineral interests where the existing term is not sufficient to recover all identified and valued proven and probable reserves and/or undeveloped mineralized material.

9

Impairment of Long-Lived Assets

The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate the related carrying amounts may not be recoverable. The assets are subject to impairment consideration if events or circumstances indicate that their carrying amount might not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. When impairment is identified, the carrying amount of the asset is reduced to its estimated fair value which is generally derived from estimated discounted cash flows.

The Company is in continuing discussions with various strategic financing sources, including the Company’s two major creditors at this time. It is unknown if such discussions will be successful in attaining a financing facility and necessary debt restructure that would allow the Company to continue operations under a revised business plan.

If discussions with these financing sources are unsuccessful the Company will not be able to continue as a going concern, and will likely be forced to seek relief under the U.S. Bankruptcy Code. At that time the Company would have to evaluate the circumstances and the potential impairment on its long- lived assets.

As of September 30, 2014, and in light of continuing financing dialog with various potential financing sources, no events or circumstances have happened to indicate the related carrying values of long-lived assets may not be recoverable.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

The Company reviews the terms of convertible debt, equity instruments and other financing arrangements to determine whether there are embedded derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding options or warrants that may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity. The Company may also issue options or warrants to non-employees in connection with consulting or other services.

Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For warrant-based derivative financial instruments, the Company uses the Black-Scholes option pricing model to value the derivative instruments. To the extent that the initial fair values of the freestanding and/or bifurcated derivative instrument liabilities exceed the total proceeds received, an immediate charge to income is recognized, in order to initially record the derivative instrument liabilities at their fair value.

The discount from the face value of the convertible debt or equity instruments resulting from allocating some or all of the proceeds to the derivative instruments, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to income, usually using the effective interest method.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.

Reclamation Costs

Reclamation obligations are recognized when incurred and recorded as liabilities at fair value. The liability is accreted over time through periodic charges to earnings. In addition, the asset retirement cost is capitalized as part of the asset’s carrying value and amortized over the life of the related asset. Reclamation costs are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation costs. The reclamation obligation is based upon when spending for an existing disturbance will occur. The Company reviews, on an annual basis, unless otherwise deemed necessary, the reclamation obligation at each mine site in accordance with ASC guidance for reclamation obligations. As of September 30, 2014 and June 30, 2014, the Company had a reclamation obligation totaling $242,521 and $241,079, respectively.

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Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred physically, the price is fixed or determinable, no related obligations remain and collectability is probable.

Sales of all metals products sold directly to the Company’s metals buyers, including by-product metals, are recorded as revenues upon a buyer either taking physical delivery of the metals product in the case of siliceous flux material or upon the buyer receiving all required documentation necessary to take physical delivery of the metals product in the case of concentrate (generally at the time the product is loaded onto a shipping vessel at the originating port and the bill of lading is generated).

Revenues for metals products are recorded at current market prices at the time of delivery and are subsequently adjusted to the current market prices existing at the end of each reporting period. Due to the period of time existing between delivery and final settlement with the buyer, the Company estimates the prices at which sales will be settled. Changes in metals prices between delivery and final settlement will result in adjustments to revenues previously recorded.

Sales of metals products are recorded net of charges from the buyer for treatment, refining, smelting losses, and other negotiated charges. Charges are estimated upon shipment of product based on contractual terms, and actual charges do not vary materially from estimates. Costs charged by smelters include a metals payable fee, fixed treatment and refining costs per ton of product.

Net Loss Per Share

Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During the periods when they are anti-dilutive, common stock equivalents, if any, are not considered in the computation. For the three month periods ended September 30, 2014 and 2013, the impact of outstanding stock equivalents has not been included as they would be anti-dilutive.

Stock-Based Compensation

In connection with terms of employment with the Company’s executives and employees, the Company occasionally issues options to acquire its common stock. Awards are made at the discretion of the Board of Directors. Such options may be exercisable at varying exercise prices and generally vest over a period of six months to a year.

The Company accounts for share-based compensation based upon on the grant date fair value of the award. The Company estimates the fair value of the award using the Black-Scholes option pricing model for valuation of the share-based payments. The Company believes this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders. The simplified method is used to determine compensation expense since historical option exercise experience is limited. The compensation cost is recognized over the expected vesting period.

Recent Accounting Pronouncements

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which requires management to evaluate, in connection with financial statement preparation for each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued, and to provide related disclosures. ASU 2014-15 applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company has not studied this guidance and is not certain if the adoption of this guidance will have a material effect on its consolidated financial statements.

11

In May 2014, the FASB issued ASC updated No. 2014-09, "Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09). Under the amendments in this update, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in this update are effective for fiscal years and interim periods within those years beginning after December 15, 2016. Early adoption is not permitted. The new standard is required to be applied either retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of applying the update recognized at the date of initial application. The Company has not yet selected a transition method, and has not determined the impact, if any, that the new standard will have on its consolidated financial statements.

In June 2014, the FASB issued ASU 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which is effective for financial statements issued for interim and annual periods beginning on or after December 15, 2015. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. This standard is not expected to have an effect on the Company’s reported financial position or results of operations.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future consolidated financial statements.

NOTE 3 – INVENTORY

The following table provides the components of inventory as of:

		September 30,		June 30,
		2014		2014
Stockpiled ore	$	-	$	-
In-process material		-		-
Siliceous flux material		-		-
Precious metals concentrate		-		40,000
	$	-	$	40,000

NOTE 4 - ACCRUED LIABILITIES

Accrued liabilities consist of the following as of:

		September 30,		June 30,
		2014		2014
Interest	$	1,926,986	$	1,572,298
Vacation		50,830		57.602
Deferred and accrued payroll burden		130,896		133,890
Franchise taxes		12,753		8,503
Royalties		690,358		690,358
Merger costs, net		269,986		269,986
Other accrued expenses		230,022		133,958
Audit and accounting		71,885		111,825
Debt settlement		106,977		106,977
Property taxes		88,159		135,000
Receivables due Waterton		813,919		813,919
Commodity supply agreements		3,233,474		3,989,846
	$	7,626,245	$	8,024,162

(See NOTE 10 – CONTINGENCIES AND COMMITMENTS, regarding further details of Commodity supply agreements.)

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NOTE 5 - DERIVATIVE INSTRUMENT LIABILITIES

The fair market value of the derivative instruments liabilities at September 30, 2014, was determined to be $804,839 with the following assumptions: (1) risk free interest rate of 0.02% to 1.05%, (2) remaining contractual life of 0.06 to 2.96 years, (3) expected stock price volatility of 141.4% to 216.62%, and (4) expected dividend yield of zero. Based upon the change in fair value, the Company has recorded a loss on derivative instruments for the three months ended September 30, 2014, of $512,715 and a corresponding increase in the derivative instruments liability.

		Derivative		Derivative		Loss for
		Liability as of		Liability as of		Three months ended
		June 30, 2014		September 30, 2014		September 30, 2014
Warrants	$	292,124	$	804,839	$	512,715

The entire amount of derivative instrument liabilities are classified as current due to the fact that settlement of the derivative instruments could be required within twelve months of the balance sheet date.

NOTE 6 –CONVERTIBLE NOTES PAYABLE

Senior Subordinated Convertible Notes

On October 30, 2007, the Company completed the placement of 10% Senior Subordinated Convertible Notes of $450,000. The notes were placed with three accredited investors for $150,000 each and bear interest at 10% per annum. The notes had term of 60 months at which time all remaining principal and interest was due. Interest accrued for 18 months from the date of closing. Interest on the outstanding principal balance was payable in quarterly installments commencing on the first day of the 19th month following closing. In connection with the transaction, the Company issued a five year warrant for each $2.50 invested, for a total of 180,000 warrants, each warrant giving the note holder the right to purchase one share of common stock at a price of $1.25 per share. At the option of the holders of the convertible notes, the outstanding principal and interest was convertible at any time into shares of the Company’s common stock at conversion price of $1.25 per share. The notes were to be automatically converted into common stock if the weighted average closing sales price of the stock exceeded $2.50 per share for ten consecutive trading days. The shares underlying the notes and warrants are to be registered on request of the note holders, provided the weighted average closing price of the stock exceeds $1.50 per share for ten consecutive trading days.

On October 31, 2012, the notes with the three accredited investors became due and payable. On January 15, 2013, the maturity dates for the convertible senior subordinated notes aggregating $450,000 were extended for a period of two years from the original maturity dates. Additionally, the convertible price of the notes was reduced to $0.40 and the automatic conversion price of $2.50 was reduced to $0.80. In connection with the extension of the notes, 562,500 warrants were issued with a strike price of $0.40 and term of two years from the original maturity dates; 375,000 warrants expiring on October 23, 2014 and the remaining 187,500 warrants with an expiration date of November 20, 2014.

At September 30, 2014 and June 30, 2014 the outstanding principal balance on the senior subordinated convertible notes, was $450,000.

Convertible Secured Notes

In October and November 2012, the Company received advances totaling A$3,900,000, representing cash proceeds of $3,985,000, from International Goldfields Limited (ASX: IGS) in fulfillment of an important condition of the Binding Heads of Agreement dated October 8, 2012 between the Company and IGS. The funds were advanced by way of two secured convertible notes. The convertible notes bear interest at a rate of 6% per annum, have a three-year term, and are secured by the Company’s contractual rights to the Mogollon property. The Company has the right to prepay the notes at any time without any premium or penalty. Should the Company fail to repay the notes on the maturity date or should an event of default occur, then IGS may choose to have the outstanding amounts repaid in the Company’s shares at a conversion rate equal to the daily volume weighted average sales price for the twenty trading days immediately preceding the date of conversion.

In June 2013, the Company negotiated an additional A$2.0 million capital injection from IGS by way of a secured convertible note. In conjunction with this financing, the Company agreed to explore a listing on the Singapore Catalist Stock Exchange (SGX-ST). The convertible note will bear interest at a rate of 10% per annum, has a maturity date of October 31, 2015, and is secured by the Company’s contractual rights in the Mogollon property. The note is repayable in cash or Santa Fe Gold stock, at IGS’s election, upon a refinancing of the Company’s loan from Waterton. Additionally, a facilitation fee of $300,000 common stock of the Company is due to IGS upon the first to occur of the maturity date, refinancing date of the note, or date that all principal and interest on the note is paid-in-full. As of March 31, 2014, the Company had received advances totaling $1,250,000 in connection with the secured convertible note. When the proposed Merger Agreement with Tyhee was signed, IGS and the Company agreed to have all outstanding amounts under the note satisfied by the issue of Company’s stock aggregating 9,259,259 shares. The Company recorded a gain of $615,781 on the extinguishment of the debt. The stock was issued pursuant to an exemption from registration under Regulation S of the Securities Act of 1933, as amended, and IGS is restricted from selling any of such stock into the US or to any US person.

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The components of the all convertible notes payable at September 30, 2014 and June 30, 2014 are as follows:

September 30, 2014:		Principal		Unamortized
		Amount		Discount			Net
Current portion	$	450,000	$	(5,696	)	$	444,304
Long-term portion, net of current		3,402,750		-			3,402,750
	$	3,852,750	$	(5,696	)	$	3,847,054

June 30, 2014:		Principal		Unamortized
		Amount		Discount			Net
Current portion	$	450,000	$	(17,937	)	$	432,063
Long-term portion, net of current		3,673,527		-			3,673,527
	$	4,123,527	$	(17,937	)	$	4,105,590

NOTE 7 – SENIOR SECURED GOLD STREAM CREDIT AGREEMENT

On December 23, 2011, the Company and its subsidiaries entered into a Senior Secured Gold Stream Credit Agreement (the “Credit Agreement”) Waterton. The Credit Agreement provided for two $10 million tranches and a $5 million revolving working capital facility. On December 23, 2011, the Company closed the first $10 million tranche of the Credit Agreement. The second $10 million tranche was earmarked to fund the strategic acquisition of Columbus Silver and was not drawn down due to the expiration of the Columbus Silver acquisition agreement.

Proceeds from the initial $10 million tranche of the Credit Agreement were used to retire the Company’s $5 million, 15% Senior Secured Bridge loan with Victory Park Capital Advisors, LLC, in addition to the payment of transaction fees and expenses. The Company utilized the remaining net proceeds for operations and working capital for the Summit silver-gold project.

The Credit Agreement provides for a 9% coupon and the initial $10 million tranche amortized over a 12-month term with the first payment due July 31, 2012. In connection with the transaction, the Company entered into a gold and silver sale agreement (the “Gold and Silver Supply Agreement”) to sell the gold and silver originating from the Summit property to Waterton. See NOTE 10 - CONTINGENCIES AND COMMITMENTS.

Pursuant to a series of guarantees, security agreements, deeds of trust, a mortgage and a stock pledge agreement, the senior obligations are secured by a first priority lien on the stock of the Company’s subsidiaries and on liens covering substantially all of the Company’s assets, with the exception of the Ortiz gold project, including the Summit silver-gold project, the Black Canyon mica project, and the Planet micaceous iron oxide project. Existing creditor, Sandstorm Gold (Barbados) Ltd., executed an intercreditor agreement that provides for subordination of its security interests in favor of Waterton. The outstanding principal amounts owed under the Credit Agreement are aggregated with Notes Payable for financial statement presentation. See NOTE 8 - NOTES PAYABLE.

On October 9, 2012, the Company entered into the First Amendment to the Credit Agreement which modified the due dates of certain principal payments on the note. The amendment provided for principal payments of $1,082,955 in October 2012, $500,000 on November 30, 2012, $-0- in December 2012 and January 2013, and $3,852,275 on February 28, 2013. All other principal payments remained unchanged and interest payments continued to be due monthly. The Company has not made the principal payments for February 2013 or subsequent months. In addition, interest payments for the three months ended September 30, 2014 have not been made and are included in accrued liabilities.

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On June 30, 2013, the Company signed a Waiver of Default Letter (the “Letter”) with Waterton Global Value, L.P. (“Waterton”) wherein the Company agreed to sell, convey, assign and transfer certain accounts receivable as consideration for a waiver for non-payment to Waterton under the Credit Agreement. The transfer of the accounts receivable to Waterton were applied as payment towards outstanding interest payable amounts first with any remaining transfer of receivables treated as payment towards other indebtedness under the Credit Agreement, including principal on the note. The measurement of receivables transferred was subject to revaluation in accordance with mark-to-market adjustments and final settlement of the invoices. The initial valuation of receivables under the Letter was $1,053,599 at June 30, 2013. Under terms of the Letter, interest payable was reduced by $116,693 and the principal portion of the note was reduced by $768,263, while the remaining $168,643 was recorded as financing costs in interest expense at June 30, 2013.

As of September 30, 2013, the valuation of receivables sold under the Letter was finalized at $1,018,056. Accordingly, final valuation adjustments were made to increase the principal portion of the note outstanding by $29,145 and to decrease financing costs by $6,398. After recording final valuation adjustments, the principal portion of the note was ultimately reduced by $739,118, while the amount recorded over two quarters as financing costs in interest expense was $162,245. There was no final valuation adjustment to interest payable. The outstanding principal balance on the note at September 30, 2014 and June 30, 2014 was $7,042,427 y. Additionally, $813,919 of collected accounts receivable sold to Waterton remains to be remitted to them and is recorded in accrued liabilities at September 30, 2014.

Waterton may revoke the waiver at any time and note the Company in default under the Credit Agreement. In the event that Debt Restructurings are not consummated, or should any of Waterton’s indebtedness be accelerated, the Company will not have adequate liquidity to fund its operations, meet its obligations (including its debt payment obligations) and continue as a going concern, and will likely be forced to seek relief under Chapter 11 or 15 of the U.S. Bankruptcy Code (or an involuntary petition for bankruptcy relief or similar creditor action may be filed against it).

NOTE 8 – NOTES PAYABLE

Pursuant to 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") on July 15, 2014, the Company and Carnac entered into an interim financing facility pursuant to which Canarc advanced $220,000 to the Company. The loan bears interest at a rate of 1% a month and is due and payable upon the closing of a gold bond financing by the Company or January 15, 2015, if the financing does not close.

On May 8, 2012, the Company entered into an installment sales contract for $46,379 to purchase certain equipment. The term of the agreement is for 36 months at an interest rate of 5.75%, with the equipment securing the loan. The principal balance owed on the note was $12,352 and $16,354 at September 30, 2014 and June 30, 2014, respectively.

On June 1, 2012, the Company entered into an installment sales contract for $593,657 to purchase certain equipment. The term of the agreement is for 48 months at an interest rate of 5.75%, with the equipment securing the loan. The principal balance owed on the note was $398,793 and $398,793 at September 30, 2014 and June 30, 2014, respectively. The Company has been unable to make its monthly payments since November 2013, is currently in default and the equipment has been returned to the vendor for sale..

In conjunction with the Merger Agreement, Tyhee and the Company entered into a Bridge Loan Agreement, pursuant to which Tyhee was obligated to advance up to $3 million to the Company in accordance with the terms thereof. Tyhee advanced the Company $1,745,092 under the Bridge Loan as of June 30, 2014. The Bridge Loan bears an annual interest rate of 24%. At this time the Company and Tyhee are in disagreement as to the due date of the Bridge Loan. Tyhee has provided the Company with purported notice of default under the Bridge Loan Agreement. Given the terms of the Bridge Loan and Merger Agreement, the Company believes Tyhee’s default notice is wrongful. At September 30, 2014 and June 30, 2014, the Company recorded merger expenses that are due to Tyhee of $269,986 and is included in accrued liabilities. This amount is net of a break fee of $300,000 due the Company from Tyhee.

15

The following summarizes notes payable, including the Senior Secured Gold Stream Credit Agreement, at:

		June 30,			June 30,
		2014			2014
Working capital advances,
interest at 1% per month, due January 15, 2015	$	220,000		$	-
Installment sales contract on equipment,
interest at 5.75%, payable in 36 monthly installments of $1,406, including
interest through June 2015.		12,352			16,354
Installment sales contract on equipment,
interest at 5.75%, payable in 48 monthly installments of $13,874,
including interest through July 2016.		398,793			398,793
Unsecured bridge loan note payable,
Interest at 2% monthly, payable August 17, 2014, six months after the first
advance on the bridge loan.		1,745,092			1,745,092
Senior Secured Gold Stream Credit Agreement, interest at
9.00% per annum, payable monthly in arrears, principal payments deferred
to July 2012; principal installments are $425,000 for July and August
2012, $870,455 monthly for September 2012 through June 2013 and
$445,450 in July 2013; Note amended October 9, 2012, principal
installments of $1,082,955 due October 2012, $500,000 November 2012,
$0 due December 2012 and January 2013, $3,852,275 February 2013,
$870,455 March through June 2013, and $445,450 in July 2013.		7,040,427			7,040,427
Total Outstanding Notes Payable		9,416,664			9,200,666
Less: Current portion		(9,416,664	)		(9,200,666	)
Notes payable, net of current portion and discount	$	--		$	--

The aggregate maturities of notes payable as of September 30, 2014, are as follows:

Year ending June 30, 2015	$	9,416,664
Total Outstanding Notes Payable	$	9,416,664

NOTE 9 – FAIR VALUE MEASUREMENTS

Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 –	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 –	Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly for substantially the full term of the asset or liability;
Level 3 –	Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Asset and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.

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The Company’s financial instruments consist of derivative instruments which are measured at fair value on a recurring basis. The derivatives are measured on their respective origination dates, at the end of each reporting period and at other points in time when necessary, such as modifications, using Level 3 inputs in accordance with GAAP. The Company does not report any financial assets or liabilities that it measures using Level 1 or 2 inputs. The fair value measurement of financial instruments and other assets as of September 30, 2014 and June 30, 2014 are as follows:

				Balance at September 30,
	Level 1	Level 2	Level 3	2014
Assets:	---	---	---	---
None
Liabilities:
Derivative instruments	---	---	$ 804,839	$ 804,839

				Balance at June 30,
	Level 1	Level 2	Level 3	2014
Assets:	---	---	---	---
None
Derivative instruments	---	---	$ 292,124	$ 292,124

The following represents a reconciliation of the changes in fair value of financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended September 30, 2014:

Derivative instruments liabilities at June 30, 2014	$	292,124
Loss on derivative instrument liabilities		512,715
Derivative instruments liabilities at September 30, 2014	$	804,839

NOTE 10 - CONTINGENCIES AND COMMITMENTS

Ortiz Gold Project

On August 1, 2004, the Company entered into an option and lease agreement with Ortiz Mines, Inc.(“Ortiz Mines”), a New Mexico corporation, whereby the Company acquired exclusive rights for exploration, development and mining of gold and other minerals on 57,267 acres (approximately 90 square miles) of the Ortiz Mine Grant in Santa Fe County, New Mexico. On November 1, 2007, the Company relinquished 14,970 acres and retained under lease 42,297 acres (66 square miles). On May 1, 2010, we agreed with Ortiz Mines, to amend the terms of the lease. Under the amended terms, the lease provides for an extension of the initial term from seven to ten years (17 years in certain circumstances), continuing year-to-year thereafter for so long as we are producing gold or other leased minerals in commercial quantities and otherwise are performing our obligations under the lease. Among other terms, the amended lease provides for annual lease payments of $130,000; a sliding-scale production royalty varying from 3% to 5% depending on the price of gold; the requirement that the Company comply with governmental permitting and other regulations; and other terms common in mining leases of this type. The Ortiz gold project is subject to a property identification agreement between the Company and our former President and Chief Executive Officer. The Company is conducting a strategic evaluation as whether or not to continue with the Ortiz Gold Project.

The minimum and maximum future payments due on this lease are as follows for the next five years and thereafter:

Payment Due Date	Minimum Due	Maximum Due
	($)	($)
February 1, 2015	130,000	260,000
February 1, 2016	130,000	260,000
February 1, 2017	130,000	260,000
February 1, 2018	130,000	260,000
February 1, 2019 and thereafter	130,000	260,000

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Summit Silver-Gold Project

The Summit project is subject to two underlying royalties and a net proceeds interest as follows: (1) a 7.5% royalty on net smelter returns toward an end price of $1,250,000; (2) a 5% royalty on net smelter returns toward an end price of $4,000,000 less any amount paid under the royalty described in (1); and (3) a net proceeds interest of 5% of net proceeds from sales of unbeneficiated mineralized rock until such time as the royalties described in (1) and (2) have been satisfied, and 10% of such net proceeds thereafter toward an end price of $2,400,000. The Summit silver-gold project is subject to a property identification agreement between the Company and the former President and Chief Executive Officer. The property identification agreement specifies that a 1% royalty be paid on the value of future production from the project.

No royalty expense was incurred during the three months ended September 30, 2014. At September 30, 2014, the Company had an accrued royalty liability of $690,358, which includes $208,179 payable to the Company’s former President and Chief Executive Officer.

Mogollon Option Agreement

On October 22, 2012, the Company entered into the Mogollon Option Agreement (the “Mogollon Option Agreement”) with Columbus following approval of the agreement by the TSX Venture Exchange. Under the agreement, the Company may acquire the Mogollon Project, Catron County, New Mexico, for payments aggregating $4,500,000 scheduled to be paid through the end of 2014. The Company paid an initial $100,000 upon the signing of the agreement and $150,000 upon approval of the agreement by the TSX Venture Exchange. The payment schedule called for $500,000 to be paid on or before December 30, 2012, and four payments of $937,500 each on June 30, 2013, December 30, 2013, June 30, 2014, and December 30, 2014. Additionally, the Company must maintain the property in good standing by paying underlying claim and lease payments.

On June 28, 2013 the Company entered into Amendment No. 1 to the Mogollon Option Agreement with Columbus. The amendment deferred the due dates of the option payments. In accordance with the amendment, the Company paid $50,000 in July 2013 and has an amended payment of $887,500 due on or before December 30, 2013, with three additional payments of $937,500 each due on June 30, 2014, December 30, 2014, and June 30, 2015. In consideration for the amendment, the Company transferred to Columbus its common shares held in the capital of Columbus Exploration Corporation valued at $11,914 at the time of transfer. The Company did not make the payment of $887,500 due on December 30, 2013.

On March 6, 2014, the Company entered into an Amended and Restated Mogollon Option Agreement with Columbus. Upon execution of the new agreement the Company paid $50,000. To exercise the option the Company had the right to pay an additional $950,000 upon the closing of the merger with Tyhee Gold. In return, the Company will earn a 100% interest in the Mogollon Project with no further payments due. Upon notice of termination of the Merger on March 21, 2014, the Company had the right for three months, until June 21, 2014, to exercise the option and make the remaining payment of $950,000 and earn 100% interest in the Mogollon Project.

On June 18, 2014, the Company entered into Amendment No. 1 to the Amended and Restated Mogollon Option Agreement with Columbus. The amendment extended the option exercise date from June 21, 2014 to November 21, 2014. Since the Company did not exercise the Mogollon option agreement, as restated and amended, it expired in accordance with its terms on November 21, 2014. As of September 30, 2014, the Company has made total payments of $876,509 under the various Option Agreements.

Commodity Supply Agreements

In September 2009, the Company entered into a definitive gold stream agreement (the “Gold Stream Agreement”) with Sandstorm to deliver a portion of the life-of-mine gold production (excluding all silver production) from the Company’s Summit silver-gold mine. Under the agreement the Company received advances of $4,000,000 as an upfront deposit, plus continue to receive future ongoing payments equal to the lesser of: $400 per ounce or the prevailing market price, (the “Fixed Price”) for each ounce of gold delivered pursuant to the agreement for the life of the mine. The Company purchases and delivers refined gold in order to satisfy the requirements of the Gold Stream Agreement and receives the Fixed Price per ounce in cash from Sandstorm. The difference between the prevailing market price and the Fixed Price per ounce for gold delivered is credited against the upfront deposit of $4,000,000 until the obligation is reduced to zero. Future ongoing payments for gold deliveries will continue at the Fixed Price per ounce with no additional credits or advances to be received from Sandstorm. In certain circumstances, including failure to meet minimum production rates, interruption in production due to permitting issues and customary events of default, the agreement may be terminated. In such event, the Company may be required to return to Sandstorm any remaining uncredited balance of the original $4,000,000 upfront deposit. Gold production subject to the agreement includes 50% of the first 10,000 ounces of gold produced, and 22% of the gold thereafter. The net cost of delivering refined gold along with other related transactional costs corresponding to the Gold Stream Agreement are recorded in Other Expenses as financing costs - commodity supply agreements.

18

On March 29, 2011, the Company entered into Amendment 1 for the Gold Stream Agreement. The amendment extended the original completion guarantee date from April 2011 to June 30, 2012. The completion guarantee test performs a calculation based upon that percentage of underproduction of gold produced relative to the amount of gold planned to have been produced as set out in the agreement. In exchange for the amended completion guarantee date, the Company agreed to deliver an additional 700 ounces of gold at equivalent sales terms over and above the original agreement. Under the terms of the amendment the delivery of the additional gold was to be made prior to June 30, 2011.

On June 28, 2011, the Company entered into Amendment 2 for the Gold Stream Agreement. The amendment extended the delivery date for the additional 700 ounces of gold agreed upon in Amendment 1 from June 30, 2011 until October 15, 2011. In exchange for the new deferred delivery date the Company agreed to pay a per diem of 3 ounces of gold for each day the additional gold under Amendment 1 remained outstanding past June 30, 2011 until the actual date of delivery, no later than October 15, 2011. On August 9, 2011 the Company satisfied the requirements of Amendment 2 and delivered 817 ounces of gold. The net cost of delivering the gold after receiving payment from Sandstorm of $400 per ounce delivered was $1,075,785.

At June 30, 2012, the Company calculated the completion guarantee payable provided by Amendment 1. Based upon the provisions of the Gold Stream Agreement and the related completion guarantee test, incremental financing charges totaling $504,049 were recognized and accrued at June 30, 2012. These accrued charges, combined with the remaining uncredited liability for the upfront deposit totaled $3,359,873 at September 30, 2014 and June 30, 2014, respectively, and are reported as the completion guarantee payable.

Under the Gold Stream Agreement the Company has a recorded an obligation at September 30, 2014, of 3,692 ounces of undelivered gold valued at approximately $3.0 million, net of the Fixed Price of $400 per ounce to be received upon delivery.

On December 23, 2011, the Company and its subsidiaries entered into a Senior Secured Gold Stream Credit Agreement (the “Credit Agreement”) with Waterton. The Credit Agreement provided for two $10 million tranches and a $5 million revolving working capital facility. On December 23, 2011, the Company closed the first $10 million tranche of the Credit Agreement. The second $10 million tranche, which was subject to several funding conditions, was earmarked to fund the strategic acquisition of Columbus. The acquisition did not occur and consequently the second tranche was not drawn down. As part of the transaction, the Company agreed pursuant to a gold and silver sale agreement (the “Gold and Silver Supply Agreement”) to sell refined gold and silver to Waterton for the life the Summit mine. Gold and silver subject to the agreement includes all gold and silver originating from the Summit property that is not otherwise committed to delivery to and purchased by Sandstorm, pursuant to the September 9, 2011 Gold Stream Agreement. The sales price for refined gold and silver is based upon a formulation which considers the London Bullion Market Association (“LBMA”) PM fix settlement price for each respective metal, less a discount of three percent for each metal, and a transaction cost of $1.75 per ounce for gold and $0.07 per ounce for silver. The discount on gold and silver is only applicable until and ceases after the latter of either, three years after all outstanding amounts due under the Senior Secured Gold Stream Credit Agreement have been repaid, or the date on which the Company has sold 125,000 gold equivalent ounces under the Gold and Silver Supply Agreement. The Company recorded an obligation of $218,811 and $611,503 at September 30, 2014 and June 30, 2014, respectively, related to the Gold and Silver Supply Agreement and is recorded in accrued liabilities.

The Company refers to the Gold Stream Agreement and Gold and Silver Supply Agreement collectively as the commodity supply agreements and records the costs related to these agreements in financing costs – commodity supply agreements.

NOTE 11 - STOCKHOLDERS’ EQUITY Issuance of Stock

On July 15, 2014, the Company entered into shares for debt settlements with five individuals wherein an aggregate of $200,000 of debt was settled by the aggregate issuance of 4,000,000 shares of common stock.

19

Issuance of Warrants

During the three months ended September 30, 2014, no warrants were issued and 112,263 warrants expired.

Stock Options and the 2007 Equity Incentive Plan

During the three months ended September 30, 2014, 7,500,000 options were granted and 6,525,000 options cancelled.

Pursuant to Share Exchange Agreement with Canarc Resource Corp., the Company granted five year stock options for 7,500,000 shares of common stock at an exercise price of $0.055, the closing price on the date of grant. The stock options vest 100% upon the closing of a qualified financing. The expiry date would be July 15, 2019 if a qualified financing was consummated, or October 15, 2014 if a qualified financing was not consummated by October 31, 2014. A qualified financing is debt or equity financing of at least $20.0 million. The Share Exchange Agreement provided that it would terminate, unless a closing of the transactions contemplated occurred on or before October 31, 2014. The transactions did not close, and the Share Exchange Agreement terminated pursuant to its terms on October 31, 2014. The associated granted options did not vest and expired on October 15, 2014 according to the terms of the grant.

In addition to options under the 1989 Stock Option Plan and 2007 EIP, the Company previously issued non- plan options outside of these plans, exercisable over various terms up to a maximum of ten years.

Stock option and warrant activity, both within the 1989 Stock Option Plan and 2007 EIP and outside of these plans, for the three months ended September 30, 2014, are as follows:

	Stock Options		Stock Warrants
		Weighted		Weighted
		Average		Exercise
	Shares	Price	Shares	Price
Outstanding at June 30, 2014	8,925,000	$0.24	25,283,511	$0.62
Granted	7,500,000	$0.055	---	---
Canceled	(6,525,000)	$0.36	---	---
Expired	---	---	(112,263)	$1.06
Exercised	---	---	---	---
Outstanding at September 30, 2014	9,900,000	$0.12	25,171,248	$0.62

Stock options and warrants outstanding and exercisable at September 30, 2014, are as follows:

	Outstanding and Exercisable Options						Outstanding and Exercisable
								Warrants
			Weighted							Weighted
			Average							Average
			Contractual		Weighted					Contractual		Weighted
Exercise			Remaining		Average		Exercise			Remaining		Average
Price	Outstanding	Exercisable	Life		Exercise		Price	Outstanding	Exercisable	Life		Exercise
Range	Number	Number	(in Years)		Price		Range	Number	Number	(in Years)		Price
$0.055	7,500,000	--	.04	$	0.055	$	0.135	6,750,000	6,750,000	0.25	$	0.135
$0.08	400,000	400,000	4.28	$	0.08	$	0.38	523,434	523,434	2.96	$	0.38
$0.14	600,000	600,000	3.85	$	0.14	$	0.40	11,306,786	11,306,786	2.72	$	0.40
$0.32	450,000	450,000	3.25	$	0.32	$	0.87	500,000	500,000	1.84	$	0.87
$0.36	700,000	700,000	3.25	$	0.36	$	1.00	600,000	600,000	2.11	$	1.00
$1.00	250,000	250,000	.54	$	1.00	$	1.25	250,000	250,000	0.30	$	1.25
	--	--				$	1.50	933,334	933,334	1.13	$	1.50
	--	--				$	1.625	461,539	461,539	0.25	$	1.625
	--	--				$	1.70	3,846,155	3,846,155	0.31	$	1.70
	9,900,000	2,400,000						25,171,248	25,171,248
	Outstanding Options		.83	$	0.12		Outstanding Warrants			1.47	$	0.62
	Exercisable Options		3.29	$	0.32		Exercisable Warrants			1.47	$	0.62

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As of September 30, 2014, the aggregate intrinsic value of all stock options and warrants vested and expected to vest was $20,000 and the aggregate intrinsic value of currently exercisable stock options and warrants was $20,000. The intrinsic value of each option share is the difference between the fair market value of the common stock and the exercise price of such option or warrant share to the extent it is "in-the-money". Aggregate intrinsic value represents the value that would have been received by the holders of in-the-money options had they exercised their options on the last trading day of the quarter and sold the underlying shares at the closing stock price on such day. The intrinsic value calculation is based on the $0.13 closing stock price of the common stock on September 30, 2014. There were 400,000 options and warrants vested and exercisable as of September 30, 2014.

The total intrinsic value associated with options exercised during the three months ended September 30, 2014, was $-0-. Intrinsic value of exercised shares is the total value of such shares on the date of exercise less the cash received from the option or warrant holder to exercise the options.

The total fair value of options and warrants granted and extended during the three months ended September 30, 2014, was approximately $-0-. The total grant-date fair value of option and warrant shares vested during the three months ended September 30, 2014 was $-0-.

NOTE 12 – LEGAL PROCEEDINGS

In October 2013 Lone Mountain Ranch, LLC, owner of the surface estate overlying our Ortiz gold property, filed a lawsuit against the Company and our lessor, Ortiz Mines, Inc. The lawsuit seeks to clarify Lone Mountain Ranch's rights and obligations under the split estate regime. Specifically, Lone Mountain Ranch seeks a declaratory judgment that it may participate in permit hearings, agency proceedings, and private activities related to the permitting of the Ortiz project without being in violation of common law duties to not interfere with development of the mineral estate. The Company is conducting a strategic evaluation as whether or not to continue with the Ortiz Gold Project.

We are in litigation with two vendors for claims for approximately $140,400 and $125,876, respectively against us. We are in discussion with them regarding delaying payment until additional funding can be obtained. If the Company is unsuccessful in raising additional funding, we may not be able to pay resolve these lawsuits and our business may not continue as a going concern. In the event we cannot raise the necessary capital or we cannot restructure through negotiated modifications, we may be required to effect under court supervision pursuant to a voluntary bankruptcy filing under Chapter 11 or Chapter 7 of the U.S. Bankruptcy Code (“Chapter 11 or “Chapter 7”). See “Risk factors.”

We are subject from time to time to litigation, claims and suits arising in the ordinary course of business. Other than the above-described litigation, as of September 30, 2014, we were not a party to any material litigation, claim or suit whose outcome could have a material effect on our financial statements.

In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for its financial statements not to be misleading. The Company does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote.

Because litigation outcomes are inherently unpredictable, the Company’s evaluation of legal proceedings often involves a series of complex assessments by management about future events and can rely heavily on estimates and assumptions. If the assessments indicate that loss contingencies that could be material to any one of its financial statements are not probable, but are reasonably possible, or are probable, but cannot be estimated, then the Company discloses the nature of the loss contingencies, together with an estimate of the range of possible loss or a statement that such loss is not reasonably estimable. While the consequences of certain unresolved proceedings are not presently determinable, and an estimate of the probable and reasonably possible loss or range of loss in excess of amounts accrued for such proceedings cannot be reasonably made, an adverse outcome from such proceedings couldhave a material adverse effect on its financial statements in any given reporting period. However, in the opinion of Management, after consulting with legal counsel, the ultimate liability related to the current outstanding litigation is not expected to have a material adverse effect on its financial statements.

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NOTE 13 – SUBSEQUENT EVENTS

The Share Exchange Agreement dated July 15, 2014, provided that it will terminate, unless a closing of the transactions contemplated occurred on or before October 15, 2014. The transactions did not close and the Share Exchange Agreement terminated pursuant to its terms on October 31, 2014. The associated granted five year stock options for 7,500,000 shares of common stock at an exercise price of $0.055 did not vest and expired on October 15, 2014 according to the terms of the grant.

The Company did not exercise the Mogollon option agreement, as restated and amended, it expired in accordance with its terms on November 21, 2014. The Company will write down the payments of $876,509 made under the various Option Agreements in the second quarter ending December 31, 2014.

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ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Form 10-Q 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 Form 10-Q 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,

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• 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.

The Company does not intend to undertake to update the information in this Form 10-Q if any forward-looking statement later turns out to be inaccurate.

The following discussion summarizes the results of our operations for the three month period ended September 30, 2014, and compares those results to the three month period ended September 30, 2013. It also analyzes our financial condition at September 30, 2014. This discussion should be read in conjunction with the Management’s Discussion and Analysis, including the audited financial statements for the years ended June 30, 2014 and 2013 and Notes to the audited financial statements, in our Form 10-K for our fiscal year ended June 30, 2014.

The discussion also presents certain Non-GAAP performance measures that are important to management in its evaluation of our operational results and which are used by management to compare our performance with that of comparable peer group mining companies. For a detailed description of each of the Non-GAAP financial measures, please see discussion under Non-GAAP Measures.

Overview

During our current three month period ended September 30, 2014, we generated sales of $71,518 and incurred a net loss $944,472 as compared to the three month period ended September 30, 2013 in which we generated sales of $1,193,683 and incurred a net loss of $3,999,575. In order to fund operations in the fiscal year ended June 30, 2014, we relied on proceeds from the sale of gold and silver products aggregating $2,096,774, proceeds from notes of $1,792,116, proceeds from convertible debentures aggregating $1,250,000 and equipment net sales proceeds of $475,160. During the quarter ended September 30, 2014, the Company relied on short term loans aggregating $220,000 to meet the working capital needs of the Company.

The results of operations for the fiscal year ended June 30, 2014 reflect a continued under-capitalization of our Summit silver-gold project which requires additional funding to be able to achieve full project performance and sustained profitability. On November 8, 2013, we suspended all mining operations and placed its Summit mine and mill on a care and maintenance program due to significant operating losses resulting in part from this under-capitalization.

We are dependent on additional financing to resume our mining operations and continue our exploration efforts in the future if warranted. In the event that we are unable to raise additional capital to satisfy the terms and conditions of the negotiated restructuring of our senior secured indebtedness, we may be forced to seek reorganization or liquidation under the U.S. Bankruptcy Code.

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On July 15, 2014, we 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"). Under the terms of the Share Exchange Agreement, we will issue 66,000,000 shares of its common stock to Canarc; and, in exchange, Canarc will issue 33,000,000 of its common shares to the us (the "Share Exchange"). Upon consummation of the Share Exchange, would own approximately 17 % of Canarc's outstanding shares and Canarc would own approximately 34% of Santa Fe's outstanding common shares. The Share Exchange Agreement contains representations, warranties, conditions and covenants of the parties customary for transactions of this type. Commencing October 15, 2014, either Santa Fe or Canarc can terminate the Share Exchange Agreement.

On July 28, 2014, we entered into an amended and restated Agency Agreement with Euro Pacific Capital, Inc. ("Euro Pacific") pursuant to which Euro Pacific agreed to act as placement agent for the Company. In this regard, Euro Pacific committed to act as the Registrant's agent and use its "best-efforts" to complete the proposed private placement of 8% Subordinated Secured Redeemable GLD Share Delivery Notes and a Detachable Common Stock Purchase Warrant in the aggregate principal amount between $20 million to $25 million. The “best efforts” placement agreement expired on October 31, 2014. Euro Pacific did not sell any the Convertible Gold Notes or place any securities pursuant to its “best efforts” placement agency agreement with the Company.

The Share Exchange Agreement provided that it would terminate, unless a closing of the transactions contemplated 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, 2014.

The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. Should we be unable to continue as a going concern, we may be unable to realize the carrying value of our assets and to meet our obligations as they become due.

We have a total accumulated deficit of $86,926,960 at September 30, 2014. To continue as a going concern, we are dependent on continued fund raising. However, currently we have no commitment in place from any party to provide additional capital and there is no assurance that such funding will be available, or if available, that its terms will be favorable to us.

Basis of Presentation and Going Concern

The consolidated unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. Should we be unable to continue as a going concern, we may be unable to realize the carrying value of our assets and to meet our obligations as they become due.

At September 30, 2014, we have a total accumulated deficit of $86,926,960 and have a working capital deficit of $25,118,704. To continue as a going concern, we are dependent on continued fund raising or other a strategic alternative financing vehicles. See Liquidity and Capital Resources; Plan of Operation below for additional details.

Our consolidated unaudited financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue in existence.

Liquidity and Capital Resources; Plan of Operation

As of September 30, 2014, we had cash of $410 as compared to $83,825 at June 30, 2014 and we had a working capital deficit of $25,118,704. We also had an accumulated deficit of $86,926,960. Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

At September 30, 2014 we were in arrears on payments totaling approximately $8.9 million under its Senior Secured Gold Stream Credit Agreement (the “Credit Agreement”) with Waterton and approximately $6.8 million under a gold stream agreement (the “Gold Stream Agreement”) with Sandstorm.

On January 23, 2014, we entered into a definitive merger agreement (the “Merger Agreement”) with Tyhee Gold Corp. (TSX Venture: TDC) (“Tyhee”), and Tyhee Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Tyhee (“Merger Sub”), which was terminated on March 20, 2014, by the Company.

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The Merger Agreement provided that in the event that Tyhee failed to consummate a qualified financing of at least $20 million on or before March 15, 2014, then we could elect to terminate the Merger Agreement. Because Tyhee failed to timely consummate a qualified financing, Santa Fe’s Independent Special Committee determined that it was in the best interest of us and our stockholders to terminate the Merger Agreement. As such we provided Tyhee with notice of its election to terminate the Merger Agreement. The Merger Agreement provides that Tyhee shall promptly pay to us “break fee” of $300,000 due to failure to timely consummate a qualified financing by March 15, 2014.

In conjunction with the Merger Agreement, Tyhee and the Company entered into a Bridge Loan Agreement, pursuant to which Tyhee was obligated to advance up to $3.0 million to Santa Fe in accordance with the terms thereof. Tyhee advanced Santa Fe $1,745,092 of principal and accrued interest under the Bridge Loan. The Bridge Loan bears interest at a rate of 2.0% per month. At this time the Company and Tyree are in disagreement as to the due date of the Bridge Loan. Tyhee has provided Santa Fe with notice of default under the Bridge Loan Agreement. Given the terms of the Bridge Loan and Merger Agreement, Santa Fe believes Tyhee’s default notice is wrongful. At June 30, 2014, the Company recorded merger expenses that are due to Tyhee of $269,986 and is included in accrued liabilities. This amount is net of a break fee of $300,000 due the Company from Tyhee.

On June 30, 2013, the Company signed a Waiver of Default Letter (the “Letter”) with Waterton wherein the Company agreed to sell, convey, assign and transfer certain accounts receivable as consideration for a waiver for non-payment to Waterton under the Credit Agreement. Waterton may revoke the waiver at anytime and note the Company in default under the Credit Agreement. The transfer of the accounts receivable to Waterton were to be treated as payment towards outstanding interest payable amounts with any remaining transfer of receivables to be treated as a payment towards other indebtedness under the Credit Agreement, including principal on the note. The measurement of receivables transferred was subject to revaluation in accordance with mark-to-market adjustments and final settlement of the invoices. The valuation of receivables under the Letter was $1,053,599 at June 30, 2013. Under terms of the Letter, interest payable was reduced by $116,693 and the principal portion of the note was reduced by $768,263, while the remaining $168,643 was recorded as financing costs in interest expense at June 30, 2013.

On September 30, 2013, the valuation of receivables sold under the Letter was finalized at $1,018,056. Accordingly, final valuation adjustments were made to increase the principal portion of the note outstanding by $29,145 and to decrease financing costs by $6,398. After recording final valuation adjustments, the principal portion of the note was ultimately reduced by $739,118, while the amount recorded over two quarters as financing costs in interest expense was $162,245. There was no final valuation adjustment to interest payable. The outstanding principal balance on the note after reduction for the transferred receivables is $7,040,427 at June 30, 2014and $7,011,282 at June 30, 2013. Additionally, $813,919 of collected accounts receivable sold to Waterton remains to be remitted to them and is recorded in Accrued Liabilities at September 30, 2014.

Waterton may revoke the waiver at any time and note the Company in default under the Credit Agreement. In the event that Debt Restructurings are not consummated, or should any of Waterton’s indebtedness be accelerated, the Company will not have adequate liquidity to fund its operations, meet its obligations (including its debt payment obligations) and continue as a going concern, and will likely be forced to seek relief under Chapter 11 or 15 of the U.S. Bankruptcy Code (or an involuntary petition for bankruptcy relief or similar creditor action may be filed against it.

On July 15, 2014, we entered into a Share Exchange Agreement with Canarc. Under the terms of the Share Exchange Agreement, we would issue 66,000,000 shares of its common stock to Canarc; and, in exchange, Canarc would issue 33,000,000 of its common shares to the Company (the "Share Exchange"). Upon consummation of the Share Exchange, we would own approximately 17% of Canarc's outstanding shares and Canarc would own approximately 34% of Santa Fe's outstanding common shares. Commencing October 15, 2014, either Santa Fe or Canarc can terminate the Share Exchange Agreement.

In connection with the Share Exchange Agreement, the Company and Carnac entered into an interim financing facility pursuant to which Canarc advanced $220,000 to us. The loan bears interest at a rate of 1% per month and is due and payable upon the closing of a gold bond financing by us on or before January 15, 2015.

Effective October 15, 2014, either Santa Fe or Canarc may terminate the Share Exchange Agreement. If the transaction contemplated by the Share Exchange Agreement is not consummated and an alternative strategic relationship is not available to Santa Fe or if Santa Fe is unable to secure another experienced management team, or if the Company fails to restructure or refinance its secured indebtedness with Waterton and Sandstorm (the “Debt Restructurings”), or should any of such indebtedness be accelerated, the Company will not have adequate liquidity to fund its operations, meet its obligations (including its debt payment obligations) and continue as a going concern, and will likely be forced to seek relief under Chapters 11 or 7 of the U.S. Bankruptcy Code (or an involuntary petition for bankruptcy relief or similar creditor action may be filed against it).

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In July 2014 we entered into a shares for debt settlement with five individuals wherein an aggregate of $200,000 of debt was settled by the aggregate issuance of 4,000,000 shares of common stock.

On July 28, 2014, we entered into an amended and restated Agency Agreement with Euro Pacific Capital, Inc. ("Euro Pacific") pursuant to which Euro Pacific agreed to act as placement agent for the Company. In this regard, Euro Pacific committed to act as the Registrant's agent and use its "best-efforts" to complete the proposed private placement of 8% Subordinated Secured Redeemable GLD Share Delivery Notes and a Detachable Common Stock Purchase Warrant in the aggregate principal amount between $20 million to $25 million. The “best efforts” placement agreement expired September 30, 2014. Euro Pacific did not sell any the Convertible Gold Notes or place any securities pursuant to its “best efforts” placement agency agreement with the Company.

Pursuant to Share Exchange Agreement with Canarc, the Company granted five year stock options for 7,500,000 shares of common stock at an exercise price of $0.055, the closing price on the date of grant. The stock options vest 100% upon the closing of a qualified financing. The expiry date is July 15, 2019 if a qualified financing is consummated, or October 15, 2014 if a qualified financing is not consummated by October 31, 2014. A qualified financing is debt or equity financing of at least $20.0 million.

The Share Exchange Agreement provided that it would terminate, unless a closing of the transactions contemplated occurred on or before October 15, 2014. The transactions did not close, and the Share Exchange Agreement terminated pursuant to its terms on October 15, 2014. The associated granted options did not vest and expired on October 15, 2014 according to the terms of the grant.

Because Euro Pacific failed to place any securities, and because the gold and silver prices have declined sharply in recent months, 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 the Summit property. As such, 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.

Our management and independent special committee have both discussed this change in strategy with Santa Fe’s senior secured creditor, Waterton Global Value, L.P. (“Waterton”). Waterton has indicated support for the Company’s resource drilling strategy. In this regard, we are in advanced discussions with a qualified strategic investor to provide necessary funding to complete our anticipated resource drilling strategy and a restart the Summit mine and mill. No assurances can be given that funding for the drilling program will be secured or that the program will be successful. See “Risk Factors.”

Derivative Financial Instruments

In connection with the issuance of debt or equity instruments, we may issue options or warrants to purchase our common stock. In certain circumstances, these options or warrants may be classified as derivative liabilities, rather than as equity. Additionally, the debt or equity instruments may contain embedded derivative instruments, such as conversion options, which in certain circumstances, may be required to be bifurcated from the associated host instrument and accounted for separately as a derivative instrument liability.

The identification of, and accounting for, derivative instruments is complex. Our derivative instrument liabilities are revalued at the end of each reporting period, with changes in the fair value of the derivative liability recorded as charges or credits to income, in the period in which the changes occur. For warrants that are accounted for as a derivative instrument liability, we determined the fair value of these warrants using the Black-Scholes option pricing model. That model requires assumptions related to the remaining term of the instruments and risk-free rates of return, our current common stock price and expected dividend yield, and the expected volatility of our common stock price over the life of the warrants. The identification of, and accounting for, derivative instruments and the assumptions used to value them can significantly affect our consolidated financial statements.

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RESULTS OF OPERATIONS

Operating Results for the Three Months Ended September 30, 2014 and 2013

Sales, net

During the three months ended September 30, 2014, we recorded 71,518 in concentrate and flux sales, net of treatment charges, compared to $1,193,683 for the three months ended September 30, 2013, a decrease of $1,122,165. The change is the result of a drop-off in production as we suspended all mining operations in early November 2013 and placed the mine and mill on a care and maintenance program.

Costs applicable to sales

During the three months ended September 30, 2014, costs applicable to sales totaled $40,000 as compared to $2,176,917 for the same comparable period in 2013. The decrease for the period corresponds with the decrease in production of tons processed as compared to the prior year comparable period and reflected by our decision to temporarily suspend all mining operations in early November 2013.

Exploration

Exploration and other mine related costs were $196,168 for the three months ended September 30, 2014, as compared to $90,613 for the comparable period of measurement, an increase of $105,555. The increase in the current period of measurement is mainly attributable to various costs included in costs applicable to sales when in production were pushed down to exploration and other mine related costs during the post period of suspended mining operations.

General and Administrative

General and administrative expenses decreased to $369,643 for the three months ended September 30, 2014, from $843,238 for the comparative three month period ended September 30, 2013, a decrease of approximately $473,595, or 56%. General and administrative expenses include salaries and benefits, stock-based compensation, professional and consulting fees, marketing and investor relations, and travel costs. The decrease is mainly attributable to cutbacks in current operations due to the Company’s decision to suspended all mining operations in early November 2013 and placed the mine and mill on a care and maintenance program and cutbacks at the administrative support office including cancellation of the office lease.

Depreciation and Amortization

Depreciation and amortization expense decreased to $480,806 for the three months ended September 30, 2014, as compared to $774,459 for the three months ended September 30, 2013. The decrease in the current period is attributable primarily to the decrease in production and a corresponding decrease in the amortization of mine development costs which are amortized on a units-of-production basis. Reduced depreciation on fully depreciated equipment also contributed to the decrease.

Other Income and Expenses

Other income and (expenses) for the three months ended September 30, 2014, was $72,069 as compared to $(1,307,517) for the three months ended September 30, 2013, a decrease in other expenses of approximately $1,380,000.

The net decrease in other expenses for the three months ended September 30, 2014, compared to the same comparable period in 2013, is mainly comprised of the following components: increased gain recognized on foreign currency translation of approximately $280,000; an increased loss on derivative instrument liabilities of approximately $(221,000); a decrease in financing costs related to the commodity supply agreements approximating $1,447,000; and an increase in interest expense of approximately $108,000. Further information regarding the changes in the various components of Other Income and Expenses is discussed in the categories below.

Gain (Loss) on Derivative Financial Instruments

For the three months ended September 30, 2014, the loss on derivative financial instruments totaled $512,715 as compared to $291,996 for the three months ended September 30, 2013. The changes in derivative financial instruments are non-cash items and arise from adjustments to record the derivative financial instruments at fair values in accordance with pronounced accounting standards. These changes are attributable mainly to adjustments to record the change in fair value for the embedded conversion feature of derivative financial instruments, warrants previously issued under our registered direct offerings, changes in the market price of our common stock, which is a component of the calculation model, and the issuance of additional warrants resulting in derivative treatment. We use the Black-Scholes option pricing model to estimate the fair value of the derivative financial instruments. Because Black-Scholes uses our stock price, changes in the stock price will result in volatility to the earnings in future periods as we continue to reflect the derivative financial instruments at fair values.

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Financing costs – commodity supply agreements

The financing costs for commodity supply agreements relate directly to production for the period and the subsequent delivery of refined precious metals to Sandstorm and Waterton. These financing costs are adjusted period-to-period based upon the total number of undelivered gold and silver ounces outstanding at the end of each period valued at current spot prices. For the three months ended September 30, 2014, these adjusted financing costs resulted in $756,372 of income as compared to $(690,887) of expense for the three months ended September 30, 2013. The reduction of expense from September 30, 2013 period of measurement and subsequent recording of income in the current period is driven by the significant decrease in precious metals prices in the current period of measurement.

Interest expense

For the three months ended September 30, 2014, interest expense totaled $435,374 as compared to $327,027 for the three months ended September 30, 2013. The increase of approximately $108,000 is mainly attributable to the Tyhee note payable outstanding in the current period of measurement.

Production Statistics, Sales Statistics, and Cash Costs

     Presented below are selected key operating measures for our Summit underground mine and Banner mill processing facility for the three months ended September 30, 2014 and September 30, 2013. In the presentation of our production statistics, we utilize the terms ‘contained metals’ and ‘payable metals’. Contained metals represent the number of ounces before metallurgical losses, primarily recoveries, and payable metals deductions levied by a smelter; whereas payable metals represents the number of ounces after metallurgical losses, primarily recoveries, and payable metals deductions levied by a smelter. Payable metals sold represent the final number of ounces which are used to record sales.

We temporarily suspended all mining operations in early November 2013 and placed the mine and mill on a care and maintenance program.

PRODUCTION STATISTICS

	3 Months	3 Months
	Ended	Ended
	9/30/14	9/30/13
Production Summary
Tons Processed	---	9,405
Tons Processed per Day	---	149
Grade
Average Gold Grade(oz./ton)	---	0.084
Average Silver Grade(oz./ton)	---	3.719
Contained Metals
Gold (Oz.'s)	---	782
Silver (Oz's.)	---	34,183

SALES STATISTICS

		3 Months			3 Months
		Ended			Ended
		9/30/14			9/30/13
Average metal prices - Realized
Gold (Oz's.)	$	1,256		$	1,375
Silver (Oz's.)	$	19		$	24
Payable metals sold
Gold (Oz.'s)		34			422
Silver (Oz's.)		1,768			25.648
Gold equivalent ounces sold
Gold Ounces		34			422
Gold Equivalent Ounces from Silver		27			421
Total Gold Equivalent Ounces		61			843
Sales (in thousands):
Gross before provisional pricing	$	76		$	1,303
Provisional pricing mark-to-market		---			(58	)
Gross after provisional pricing		76			1,245
Treatment and refining charges		(3	)		(51	)
Net Revenues	$	73		$	1,194
Average realized price per gold equivalent ounce:
Gross before adjustments	$	1,230		$	1,545
Provisional pricing mark-to-market		---			(69	)
Gross after provisional pricing		1,230			1,476
Treatment and refining charges		(54	)		(61	)
Net realized price per gold equivalent ounce	$	1,176		$	1,415

29

Total Cash Cost per Gold Equivalent Ounce Sold

We utilize total cash cost (including royalties and resource taxes) per gold equivalent ounce sold, calculated in accordance with the Gold Institute’s Standard, as one indicator for comparative monitoring of our mining operations from period to period. Total cash costs are calculated using cost of sales, plus treatment and refining charges (which are netted against revenues). Total cash costs are divided by gold equivalent ounces sold (gold sold, plus gold equivalent ounces of silver sold converted to gold using our realized gold price to silver price ratio to arrive at total cash cost per gold equivalent ounce sold.

We also utilize operating cash costs per gold equivalent ounce to measure our performance. The principal difference between operating cash costs and total cash costs is that operating cash costs exclude royalty payments and resource taxes whereas total cash costs include royalty payments and resource taxes. Total cash cost per ounce figures for all periods presented in this Management’s Discussion and Analysis are presented on an ounces sold basis. There can be no assurance that our reporting of these Non-GAAP measures is similar to that reported by other mining companies.

We have reconciled operating cash cost per gold equivalent ounce sold and total cash cost per gold equivalent ounce sold to reported U.S. GAAP measures in the table below. The most comparable financial measures to our operating cash cost and total cash cost is costs applicable to sales calculated in accordance with U.S. GAAP. Costs applicable to sales are obtained from the unaudited consolidated statements of operations.

The decrease in cash costs per gold equivalent ounce between the three month comparable periods is the result of a decrease in production resulting from fewer tons processed during the current period and accompanied by a decrease in the average grade for silver. Equipment issues and production downtime continued to be encountered during the current period, and the mining operations were suspended on November 8, 2013 pending the sourcing of sufficient capital to recapitalize the project and resume profitable operations.

CASH COST STATISTICS

		3 Months		3 Months
		Ended		Ended
		930/14		9/30/13
Total Gold Equivalent Ounces Sold		61		843
Costs applicable to sales	$	40,000	$	2,176,917
Treatment & Refining Charges	$	5,383	$	51,166
Royalties	$	---	$	69,645
Resource Taxes	$	---	$	(37,000	)
Total Operating Cash Costs	$	45,383	$	2,260,228
Operating Cash Cost per Gold Equivalent Ounce Sold	$	744	$	2,680
Operating Cash Costs	$	45,383	$	2,260,228
Royalties	$	---	$	(69,645	)
Resource Taxes	$	---	$	37,500
Total Cash Costs	$	45,383	$	2,228,083
Total Cash Cost per Gold Equivalent Ounce Sold	$	744	$	2,642

30

Factors Affecting Future Operating Results

We continue to deploy our plan to place the Company on an improved financial footing, including refinancing existing debt obligations and securing additional production equipment and corresponding working capital related to increased production. We plan to procure capital with a combination of short and long term financing arrangements and/or equity placements as required. If we are able to secure required financing on acceptable terms, we believe we will be in a position to execute our business plan on our current property sites and to strengthen our overall financial position.

Currently we have no current commitment from any party to provide additional working capital, or if one becomes available, there is no certainty that its terms will be favorable or acceptable to the Company. We are currently in process of discussions with various strategic financing alternatives. It is unknown if such discussions will be successful in attaining a financing facility which will allow the Company to continue operations under a revised business plan. If discussions with these financing sources are unsuccessful we will not be able to continue as a going concern, and will likely be forced to seek relief under the U.S. Bankruptcy Code.

Off-Balance Sheet Arrangements

Stock option holders have the right to exercise stock options on a cashless basis, whereby the stock option holders can exercise their stock options without cash payments to us whereby we will issue that number of stock of common shares based upon the difference between the market price of the common shares at the time of exercise and the exercise price of the stock options being exercised.

Contractual Obligations as of September 30, 2014

Contractual obligations	Payments due by period
	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years
Capital Lease Obligations	None
Operating Lease Obligations	None
Purchase Obligations	None
Asset Retirement Obligation	242,521				$242,521
Total	$242,521				$242,521

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material change in the market risks discussed in Item 7A of Santa Fe Gold’s Form 10-K for the fiscal year ended June 30, 2014.

ITEM 4 – CONTROLS AND PROCEDURES

We maintain “disclosure controls and procedures” (as defined in Rules 13a-15(d) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms, and that our disclosure controls and procedures are effective in alerting management on a timely basis to material information required to be disclosed in our periodic reports. Under the supervision of, and the participation of our management, our Chief Executive Officer, or persons performing similar functions, has conducted an evaluation of our disclosure controls and procedures as of September 30, 2014. This evaluation included certain areas in which we have made, and are continuing to make, changes to improve and enhance controls.

31

Based on this evaluation, our Chief Executive Officer and Principal Accounting Officer have concluded that our disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed by us in reports we file with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods required, and are effective in alerting management on a timely basis to material information required to be disclosed in our periodic reports.

During the quarter ended September 30, 2014, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In October 2013 Lone Mountain Ranch, LLC, owner of the surface estate overlying our Ortiz gold property, filed a lawsuit against the Company and our lessor, Ortiz Mines, Inc. The lawsuit seeks to clarify Lone Mountain Ranch's rights and obligations under the split estate regime. Specifically, Lone Mountain Ranch seeks a declaratory judgment that it may participate in permit hearings, agency proceedings, and private activities related to the permitting of the Ortiz project without being in violation of common law duties to not interfere with development of the mineral estate.

We are in litigation with two vendors for claims for approximately $140,400 and $125,876, respectively against us. We are in discussion with them regarding delaying payment until additional funding can be obtained. If the Company is unsuccessful in raising additional funding, we may not be able to pay resolve these lawsuits and our business may not continue as a going concern. In the event we cannot raise the necessary capital or we cannot restructure through negotiated modifications, we may be required to effect under court supervision pursuant to a voluntary bankruptcy filing under Chapter 11 or Chapter 7 of the U.S. Bankruptcy Code (“Chapter 11 or “Chapter 7”). See “Risk factors.”

We are subject from time to time to litigation, claims and suits arising in the ordinary course of business. Other than the above-described litigation, as of June 30 31, 2014, we were not a party to any material litigation, claim or suit whose outcome could have a material effect on our financial statements.

In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for its financial statements not to be misleading. The Company does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote.

Because litigation outcomes are inherently unpredictable, the Company’s evaluation of legal proceedings often involves a series of complex assessments by management about future events and can rely heavily on estimates and assumptions. If the assessments indicate that loss contingencies that could be material to any one of its financial statements are not probable, but are reasonably possible, or are probable, but cannot be estimated, then the Company discloses the nature of the loss contingencies, together with an estimate of the range of possible loss or a statement that such loss is not reasonably estimable. While the consequences of certain unresolved proceedings are not presently determinable, and an estimate of the probable and reasonably possible loss or range of loss in excess of amounts accrued for such proceedings cannot be reasonably made, an adverse outcome from such proceedings could have a material adverse effect on its financial statements in any given reporting period. However, in the opinion of Management, after consulting with legal counsel, the ultimate liability related to the current outstanding litigation is not expected to have a material adverse effect on its financial statements.

32

ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described in our annual report on Form 10-K for our year fiscal ended June 30, 2014, in addition to the other information included in this quarterly report. If any of the risks described actually occurs, our business, financial condition or results of operations would likely suffer. In that case, the trading price of our common stock could fall.

Except as set forth herein, as of September 30, 2014, there have not been any material changes to the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014, although we may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“The Act”) requires the operators of mines, including gold and silver mines, to include in each periodic report filed with the Securities and Exchange Commission certain specified disclosures regarding the company’s history of mine safety.

In evaluating these disclosures, consideration should be given to factors such as: (i) the number of citations and orders may vary depending on the size of the mine, (ii) the number of citations issued will vary from inspector to inspector and mine to mine, and (iii) citations and orders can be contested and appealed, and in that process, are often reduced in severity and amount, and are sometimes dismissed.

Specified disclosures relating to The Act and pertaining to the Summit Mine for the three months ended September 30, 2014 are as follows:

Item	Summit Mine 29-02356	Banner Mill 29-02357
Section 104 S&S Citations	9	0
Section 104(b) Orders	1	0
Section 104(d) Citations and Orders	1	0
Section 110(b)(2) Violations	0	0
Section 107(a) Orders	0	0
Total Dollar Value of MSHA Assessments Proposed	$ 6,996	0
Total Number of Mining Related Fatalities	0	0
Received Notice of Pattern of Violations Under Section 104e	No	No
Received Notice of Potential to Have Pattern Under Section 104e	No	No
Legal Actions Pending as of Last Day of Period	0	0
Legal Actions Initiated During Period	2	0
Legal Actions Resolved During Period	2	0

ITEM 5. OTHER INFORMATION

None

33

ITEM 6. EXHIBITS

(a) The following exhibits are filed as part of this report:

31.1	Certification of Principal Executive Officer and Principal Accounting Officer pursuant to Rule 13a-14a and Rule 15d-14(a).
32.1	Certification of Principal Executive Officer and Principal Accounting Officer pursuant to 18 U.S.C. – Section 1350.

34

SIGNATURES:

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 26, 2014	/s/ Jakes Jordaan
	Jakes Jordaan
	Chief Executive Officer, President, and Director

35

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Jakes Jordaan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Santa Fe Gold Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 26, 2014	/s/Jakes Jordaan
	Jakes Jordan
	Chief Executive Officer, President, and Director

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Frank G. Mueller, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Santa Fe Gold Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 26, 2014	/s/ Frank G. Mueller
	Frank G. Mueller
	Interim Chief Financial Officer
	Principal Accounting Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTOION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with this Quarterly Report of Santa Fe Gold Corporation, (the “Company”) on Form 10-Q for the three month period ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company, as of, and for the periods presented in the Report.

Date: November 26, 2014	/s/ Jakes Jordaan
	Jakes Jordan
	Chief Executive Officer, President, Director
	/s/ Frank G. Mueller
	Frank G. Mueller
	Interim Chief Financial Officer,
	Principal Accounting Officer

XML

Schedule of Property, Plant and Equipment, Estimated Useful Life (Details)	3 Months Ended
	Sep. 30, 2014
Leasehold Improvements [Member]
Property, Plant and Equipment, Useful Life	3 years
Office furniture and equipment [Member]
Property, Plant and Equipment, Useful Life	3 years
Mine development [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	7 years
Mine development [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life	20 years
Plant [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	3 years
Plant [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life	9 years
Tailings [Member]
Property, Plant and Equipment, Useful Life	3 years
Environmental and permits [Member]
Property, Plant and Equipment, Useful Life	7 years
Asset retirement obligation [Member]
Property, Plant and Equipment, Useful Life	5 years
Automotive [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	3 years
Automotive [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life	5 years
Software [Member]
Property, Plant and Equipment, Useful Life	5 years

XML

Schedule of Future Minimum and Maximum Lease Payments (Details) (Ortiz Mine Grant [Member], USD $)	Sep. 30, 2014
Ortiz Mine Grant [Member]
Capital Leases, Future Minimum Payments Due, Current	$ 130,000
Capital Leases, Future Maximum Payments Due, Current	260,000
Capital Leases, Future Minimum Payments Due in Two Years	130,000
Capital Leases, Future Maximum Payments Due in Two Years	260,000
Capital Leases, Future Minimum Payments Due in Three Years	130,000
Capital Leases, Future Maximum Payments Due in Three Years	260,000
Capital Leases, Future Minimum Payments Due in Four Years	130,000
Capital Leases, Future Maximum Payments Due in Four Years	260,000
Capital Leases, Future Minimum Payments Due Thereafter	130,000
Capital Leases, Future Maximum Payments Due Thereafter	$ 260,000

XML

Fair Value Measurements, Nonrecurring (Details) (USD $)	Sep. 30, 2014	Jun. 30, 2014
Derivative instruments	$ 804,839	$ 292,124
Level 1 [Member]
Derivative instruments	0	0
Level 2 [Member]
Derivative instruments	0	0
Level 3 [Member]
Derivative instruments	$ 804,839	$ 292,124

XML

SENIOR SECURED GOLD STREAM CREDIT AGREEMENT (Narrative) (Details) (USD $)	3 Months Ended			1 Months Ended		2 Months Ended	3 Months Ended	10 Months Ended				1 Months Ended						4 Months Ended	1 Months Ended		4 Months Ended	6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Jun. 30, 2014	Dec. 31, 2011 Two $10 million tranches [Member]	Dec. 23, 2011 $5 million revolving working capital facility [Member]	Aug. 31, 2012 Senior Secured Gold Stream Credit Agreement [Member]	Sep. 30, 2013 Senior Secured Gold Stream Credit Agreement [Member]	Jun. 30, 2013 Senior Secured Gold Stream Credit Agreement [Member]	Sep. 30, 2014 Senior Secured Gold Stream Credit Agreement [Member]	Jun. 30, 2014 Senior Secured Gold Stream Credit Agreement [Member]	Dec. 23, 2011 Senior Secured Gold Stream Credit Agreement [Member]	Jul. 31, 2013 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Feb. 28, 2013 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Jan. 31, 2013 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Dec. 31, 2012 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Nov. 30, 2012 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Oct. 31, 2012 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Jun. 30, 2013 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Dec. 31, 2011 Senior Secured Bridge loan [Member]	Jun. 30, 2013 Letter with Waterton [Member]	Sep. 30, 2013 Letter with Waterton [Member]	Jun. 30, 2013 Letter with Waterton [Member]	Sep. 30, 2014 Letter with Waterton [Member]
Proceeds from credit agreement				$ 10,000,000
Line of Credit					5,000,000
Credit agreements closed				10,000,000
Payments on notes payable	4,002	54,219																	5,000,000
Debt Instrument, Interest Rate, Stated Percentage									9.00%
Credit agreement, coupon rate											9.00%
Debt Instrument, Periodic Payment						425,000	445,450	870,455				445,450	3,852,275	0	0	500,000	1,082,955	870,455
Receivables Transferred																				1,053,599	1,018,056
Notes Reduction																				116,693
Interest Payable Reduction																				768,263
Financing Interest Expense																				168,643	6,398	162,245
Notes Payable	9,416,664		9,200,666						7,040,427	7,040,427
Increase in Notes Payable, Principal Portion																					29,145
Decrease in Notes Payable, Principal Portion																					739,118
Receivables due to Waterton	$ 813,919		$ 813,919																				$ 813,919

XML

NOTES PAYABLE (Tables)

3 Months Ended

Sep. 30, 2014

Schedule of Notes Payable [Table Text Block]

		June 30,			June 30,
		2014			2014
Working capital advances,
interest at 1% per month, due January 15, 2015	$	220,000		$	-
Installment sales contract on equipment,
interest at 5.75%, payable in 36 monthly installments of $1,406, including
interest through June 2015.		12,352			16,354
Installment sales contract on equipment,
interest at 5.75%, payable in 48 monthly installments of $13,874,
including interest through July 2016.		398,793			398,793
Unsecured bridge loan note payable,
Interest at 2% monthly, payable August 17, 2014, six months after the first
advance on the bridge loan.		1,745,092			1,745,092
Senior Secured Gold Stream Credit Agreement, interest at
9.00% per annum, payable monthly in arrears, principal payments deferred
to July 2012; principal installments are $425,000 for July and August
2012, $870,455 monthly for September 2012 through June 2013 and
$445,450 in July 2013; Note amended October 9, 2012, principal
installments of $1,082,955 due October 2012, $500,000 November 2012,
$0 due December 2012 and January 2013, $3,852,275 February 2013,
$870,455 March through June 2013, and $445,450 in July 2013.		7,040,427			7,040,427
Total Outstanding Notes Payable		9,416,664			9,200,666
Less: Current portion		(9,416,664	)		(9,200,666	)
Notes payable, net of current portion and discount	$	- -		$	- -

Schedule of Maturities of Notes Payable [Table Text Block]

Year ending June 30, 2015	$	9,416,664
Total Outstanding Notes Payable	$	9,416,664

XML

Disclosure of Share based Compensation Arrangements By Shares Based Payment Award and Warrants or Rights (Details) (USD $)	3 Months Ended
	Sep. 30, 2014	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding	9,900,000	8,925,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	2,400,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term	0 years 9 months 29 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.12	$ 0.24
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	3 years 3 months 14 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 0.32
Class of Warrant or Right, Outstanding	25,171,248	25,283,511
Class of Warrant or Right, Exercisable, Number	25,171,248
Class of Warrant or Right, Weighted Average Remaining Contractual Term	1 year 5 months 19 days
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 0.62	$ 0.62
Class of Warrant or Right, Exercisable Weighted Average Remaining Contractual Term	1 year 5 months 19 days
Class of Warrant or Right, Exercisable Weighted Average Exercise Price	$ 0.62
$0.055 Exercise Price [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding	7,500,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	0
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term	0 years 14 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.055
$0.08 Exercise Price [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding	400,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	400,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term	4 years 3 months 11 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.08
$0.14 Exercise Price [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding	600,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	600,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term	3 years 10 months 6 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.14
$0.32 Exercise Price [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding	450,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	450,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term	3 years 3 months
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.32
$0.36 Exercise Price [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding	700,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	700,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term	3 years 3 months
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.36
$1.00 Exercise Price [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding	250,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	250,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term	0 years 6 months 14 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 1.00
$0.135 Exercise Price [Member]
Class of Warrant or Right, Outstanding	6,750,000
Class of Warrant or Right, Exercisable, Number	6,750,000
Class of Warrant or Right, Weighted Average Remaining Contractual Term	0 years 3 months
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 0.135
$0.38 Exercise Price [Member]
Class of Warrant or Right, Outstanding	523,434
Class of Warrant or Right, Exercisable, Number	523,434
Class of Warrant or Right, Weighted Average Remaining Contractual Term	2 years 11 months 16 days
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 0.38
$0.40 Exercise Price [Member]
Class of Warrant or Right, Outstanding	11,306,786
Class of Warrant or Right, Exercisable, Number	11,306,786
Class of Warrant or Right, Weighted Average Remaining Contractual Term	2 years 8 months 19 days
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 0.40
$0.87 Exercise Price [Member]
Class of Warrant or Right, Outstanding	500,000
Class of Warrant or Right, Exercisable, Number	500,000
Class of Warrant or Right, Weighted Average Remaining Contractual Term	1 year 10 months 2 days
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 0.87
$1.00 Exercise Price [Member]
Class of Warrant or Right, Outstanding	600,000
Class of Warrant or Right, Exercisable, Number	600,000
Class of Warrant or Right, Weighted Average Remaining Contractual Term	2 years 1 month 10 days
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 1.00
$1.25 Exercise Price [Member]
Class of Warrant or Right, Outstanding	250,000
Class of Warrant or Right, Exercisable, Number	250,000
Class of Warrant or Right, Weighted Average Remaining Contractual Term	0 years 3 months 18 days
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 1.25
$1.50 Exercise Price [Member]
Class of Warrant or Right, Outstanding	933,334
Class of Warrant or Right, Exercisable, Number	933,334
Class of Warrant or Right, Weighted Average Remaining Contractual Term	1 year 1 month 17 days
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 1.50
$1.625 Exercise Price [Member]
Class of Warrant or Right, Outstanding	461,539
Class of Warrant or Right, Exercisable, Number	461,539
Class of Warrant or Right, Weighted Average Remaining Contractual Term	0 years 3 months
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 1.625
$1.70 Exercise Price [Member]
Class of Warrant or Right, Outstanding	3,846,155
Class of Warrant or Right, Exercisable, Number	3,846,155
Class of Warrant or Right, Weighted Average Remaining Contractual Term	0 years 3 months 22 days
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 1.70

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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance (Details) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Jun. 30, 2014
Derivative instrument liabilities	$ 804,839		$ 292,124
Gain (loss) on derivative instrument liabilities	(512,715)	(291,996)
Warrants
Derivative instrument liabilities	804,839		292,124
Gain (loss) on derivative instrument liabilities	$ (512,715)

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LEGAL PROCEEDINGS (Narrative) (Details) (USD $)	3 Months Ended
	Sep. 30, 2014
Vendor 1 [Member]
Loss Contingency, Damages Sought, Value	$ 140,400
Vendor 2 [Member]
Loss Contingency, Damages Sought, Value	$ 125,876

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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value (Details) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Beginning balance: Derivative instruments liabilities	$ 292,124
(Loss) on derivative instrument liabilities	(512,715)	(291,996)
Ending balance: Derivative instruments liabilities	$ 804,839

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ACCRUED LIABILITIES

3 Months Ended

Sep. 30, 2014

ACCRUED LIABILITIES [Text Block]

NOTE 4 - ACCRUED LIABILITIES

Accrued liabilities consist of the following as of:

		September 30,		June 30,
		2014		2014
Interest	$	1,926,986	$	1,572,298
Vacation		50,830		57.602
Deferred and accrued payroll burden		130,896		133,890
Franchise taxes		12,753		8,503
Royalties		690,358		690,358
Merger costs, net		269,986		269,986
Other accrued expenses		230,022		133,958
Audit and accounting		71,885		111,825
Debt settlement		106,977		106,977
Property taxes		88,159		135,000
Receivables due Waterton		813,919		813,919
Commodity supply agreements		3,233,474		3,989,846
	$	7,626,245	$	8,024,162

(See NOTE 10 – CONTINGENCIES AND COMMITMENTS, regarding further details of Commodity supply agreements.)

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Schedule of Convertible Notes Payable and Debentures (Details) (USD $)	Sep. 30, 2014	Jun. 30, 2014
Debt Instrument, Face Amount	$ 3,852,750	$ 4,123,527
Debt Instrument, Unamortized Discount	(5,696)	(17,937)
Debt Instrument, Carrying Amount	3,847,054	4,105,590
Convertible debt, Current Portion [Member]
Debt Instrument, Face Amount	450,000	450,000
Debt Instrument, Unamortized Discount	(5,696)	(17,937)
Debt Instrument, Carrying Amount	444,304	432,063
Convertible debt, Long-term portion [Member]
Debt Instrument, Face Amount	3,402,750	3,673,527
Debt Instrument, Unamortized Discount	0	0
Debt Instrument, Carrying Amount	$ 3,402,750	$ 3,673,527

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NATURE OF OPERATIONS (Narrative) (Details) (USD $)	1 Months Ended					1 Months Ended
	Jun. 30, 2008 St. Cloud Mining Company [Member]	Jun. 30, 2008 St. Cloud Mining Company [Member] Patented mining claim [Member] Assignments of Mining Claims [Member]	Jun. 30, 2008 St. Cloud Mining Company [Member] Patented mining claim [Member] Purchase of Mining Claims [Member]	Jun. 30, 2008 St. Cloud Mining Company [Member] Unpatented mining claim [Member] Assignments of Mining Claims [Member]	Jun. 30, 2008 St. Cloud Mining Company [Member] Unpatented mining claim [Member] Purchase of Mining Claims [Member]	May 31, 2006 Lordsburg Mining [Member]	Sep. 30, 2014 Summit silver-gold mine [Member]	May 31, 2006 Summit silver-gold mine [Member] Patented mining claim [Member] acre	May 31, 2006 Summit silver-gold mine [Member] Patented mining claim [Member] Hidalgo County, New Mexico [Member] acre	May 31, 2006 Summit silver-gold mine [Member] Unpatented mining claim [Member] Great County, New Mexico [Member] acre	Sep. 30, 2014 Black Canyon mica project [Member]	Jun. 30, 2008 Banner mill site [Member] sqmi	Jun. 30, 2008 Banner mill site [Member] acre
Mineral Property, Interest Held							100.00%				100.00%
Business Combination, Consideration Transferred	$ 841,500					$ 1,300,000
Business Acquisition, Percentage of Voting Interests Acquired						100.00%
Area of Land								117.6	257	520		2.3	1,500
Number of Mining Claims		17	70	6	5

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STOCKHOLDERS' EQUITY (Tables)

3 Months Ended

Sep. 30, 2014

Schedule of Share-based Compensation, Stock Options, and Warrants or Rights Activity [Table Text Block]

	Stock Options		Stock Warrants
		Weighted		Weighted
		Average		Exercise
	Shares	Price	Shares	Price
Outstanding at June 30, 2014	8,925,000	$0.24	25,283,511	$0.62
Granted	7,500,000	$0.055	- --	- --
Canceled	(6,525,000)	$0.36	- --	- --
Expired	- --	- --	(112,263)	$1.06
Exercised	- --	- --	- --	- --
Outstanding at September 30, 2014	9,900,000	$0.12	25,171,248	$0.62

Disclosure of Share based Compensation Arrangements By Shares Based Payment Award and Warrants or Rights [Table Text Block]

	Outstanding and Exercisable Options						O utstanding and Exercisable
								Warrants
			Weighted							Weighted
			Average							Average
			Contractual		Weighted					Contractual		Weighted
Exercise			Remaining		Average		Exercise			Remaining		Average
Price	Outstanding	Exercisable	Life		Exercise		Price	Outstanding	Exercisable	Life		Exercise
Range	Number	Number	(in Years)		Price		Range	Number	Number	(in Years)		Price
$0.055	7,500,000	- -	.04	$	0.055	$	0.135	6,750,000	6,750,000	0.25	$	0.135
$0.08	400,000	400,000	4.28	$	0.08	$	0.38	523,434	523,434	2.96	$	0.38
$0.14	600,000	600,000	3.85	$	0.14	$	0.40	11,306,786	11,306,786	2.72	$	0.40
$0.32	450,000	450,000	3.25	$	0.32	$	0.87	500,000	500,000	1.84	$	0.87
$0.36	700,000	700,000	3.25	$	0.36	$	1.00	600,000	600,000	2.11	$	1.00
$1.00	250,000	250,000	.54	$	1.00	$	1.25	250,000	250,000	0.30	$	1.25
	- -	- -				$	1.50	933,334	933,334	1.13	$	1.50
	- -	- -				$	1.625	461,539	461,539	0.25	$	1.625
	- -	- -				$	1.70	3,846,155	3,846,155	0.31	$	1.70
	9,900,000	2,400,000						25,171,248	25,171,248
	Outstanding Options		.83	$	0.12		Outstanding Warrants			1.47	$	0.62
	Exercisable Options		3.29	$	0.32		Exercisable Warrants			1.47	$	0.62

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Schedule of Notes Payable (Details) (USD $)			3 Months Ended			3 Months Ended				2 Months Ended	3 Months Ended	10 Months Ended			1 Months Ended						4 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Sep. 30, 2014 Installment sales contract 1 [Member]	Jun. 30, 2014 Installment sales contract 1 [Member]	May 31, 2012 Installment sales contract 1 [Member]	Sep. 30, 2014 Installment sales contract 2 [Member]	Jun. 30, 2014 Installment sales contract 2 [Member]	Jun. 30, 2012 Installment sales contract 2 [Member]	Sep. 30, 2014 Unsecured bridge loan note payable [Member]	Aug. 31, 2012 Senior Secured Gold Stream Credit Agreement [Member]	Sep. 30, 2013 Senior Secured Gold Stream Credit Agreement [Member]	Jun. 30, 2013 Senior Secured Gold Stream Credit Agreement [Member]	Sep. 30, 2014 Senior Secured Gold Stream Credit Agreement [Member]	Jun. 30, 2014 Senior Secured Gold Stream Credit Agreement [Member]	Jul. 31, 2013 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Feb. 28, 2013 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Jan. 31, 2013 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Dec. 31, 2012 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Nov. 30, 2012 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Oct. 31, 2012 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Jun. 30, 2013 Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]	Sep. 30, 2014 Carnac [Member]	Jul. 15, 2014 Carnac [Member]	Jun. 30, 2014 Carnac [Member]
Debt Instrument, Interest Rate, Stated Percentage			5.75%		5.75%	5.75%		5.75%	2.00%				9.00%									1.00%	1.00%
Debt Instrument, Number of Monthly Installments			36			48
Debt Instrument, Periodic Payment			$ 1,406			$ 13,874				$ 425,000	$ 445,450	$ 870,455			$ 445,450	$ 3,852,275	$ 0	$ 0	$ 500,000	$ 1,082,955	$ 870,455
Total Outstanding Notes Payable	9,416,664	9,200,666	12,352	16,354		398,793	398,793		1,745,092				7,040,427	7,040,427								220,000	220,000	0
Less: Current portion	(9,416,664)	(9,200,666)
Notes payable, net of current portion and discount	$ 0	$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $)	3 Months Ended			1 Months Ended	4 Months Ended					1 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Jun. 30, 2014	Jun. 30, 2013 Letter with Waterton [Member]	Sep. 30, 2013 Letter with Waterton [Member]	Sep. 30, 2014 Letter with Waterton [Member]	Sep. 30, 2014 Gold Stream Agreement [Member]	Sep. 30, 2014 Waterton [Member]	Jul. 15, 2014 Euro Pacific [Member]	Jul. 31, 2014 Euro Pacific [Member] Minimum [Member]	Jul. 31, 2014 Euro Pacific [Member] Maximum [Member]	Jul. 31, 2014 Carnac [Member]	Sep. 30, 2014 Carnac [Member]	Jul. 15, 2014 Carnac [Member]
Net loss	$ 944,472	$ 3,999,575
Accumulated Deficit	86,926,960		85,982,488
Working Capital Deficit	25,118,704
Shares to be Issued														66,000,000
Shares to be Received														33,000,000
Subsidiary or Equity Method Investee, Cumulative Percentage Ownership after All Transactions												17.00%
Sale of Stock, Percentage of Ownership after Transaction												34.00%
Debt Instrument, Interest Rate, Stated Percentage									8.00%				1.00%	1.00%
Notes Issued										20,000,000	25,000,000
Debt Default, Amount							6,800,000	8,900,000
Receivables Transferred				1,053,599	1,018,056
Accrued liabilities	7,626,245		8,024,162			813,919
Asset retirement obligation	$ 242,521		$ 241,079

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DERIVATIVE INSTRUMENT LIABILITIES (Narrative) (Details) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Jun. 30, 2014
Derivative instrument liabilities	$ 804,839		$ 292,124
Gain (loss) on derivative instrument liabilities	$ (512,715)	$ (291,996)
Derivative Instruments, Liabilities [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%
Derivative Instruments, Liabilities [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.02%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	0 years 22 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	141.40%
Derivative Instruments, Liabilities [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	1.05%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	2 years 11 months 16 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	216.62%

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INVENTORY

3 Months Ended

Sep. 30, 2014

INVENTORY [Text Block]

NOTE 3 – INVENTORY

The following table provides the components of inventory as of:

		September 30,		June 30,
		2014		2014
Stockpiled ore	$	-	$	-
In-process material		-		-
Siliceous flux material		-		-
Precious metals concentrate		-		40,000
	$	-	$	40,000

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CONVERTIBLE NOTES PAYABLE (Narrative) (Details)	3 Months Ended		1 Months Ended					1 Months Ended				1 Months Ended			2 Months Ended
	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Jan. 31, 2013 Expire October 23, 2014 [Member]	Jan. 31, 2013 Expire November 20, 2014 [Member]	Jan. 31, 2013 Extension of convertible notes payable to three accredited investors [Member] USD ($)	Jan. 15, 2013 Extension of convertible notes payable to three accredited investors [Member] USD ($)	Oct. 30, 2007 Extension of convertible notes payable to three accredited investors [Member] USD ($)	Oct. 31, 2007 10% Convertible Senior Subordinated Notes [Member] USD ($)	Sep. 30, 2014 10% Convertible Senior Subordinated Notes [Member] USD ($)	Jun. 30, 2014 10% Convertible Senior Subordinated Notes [Member] USD ($)	Oct. 30, 2007 10% Convertible Senior Subordinated Notes [Member] USD ($)	Oct. 31, 2007 10% Convertible Senior Subordinated Notes, amount per investor [Member] USD ($)	Jul. 31, 2013 International Goldfields Limited [Member] Convertible Secured Notes [Member] USD ($)	Jul. 31, 2013 International Goldfields Limited [Member] Convertible Secured Notes [Member] AUD	Nov. 30, 2012 Binding Heads of Agreement [Member] International Goldfields Limited [Member] USD ($)	Nov. 30, 2012 Binding Heads of Agreement [Member] International Goldfields Limited [Member] AUD	Jun. 30, 2014 Binding Heads of Agreement [Member] International Goldfields Limited [Member]
Notes Issued								$ 450,000				$ 150,000
Debt Instrument, Contractual Term								60 months
Debt Instrument, Interest Rate, Stated Percentage											10.00%		10.00%	10.00%			6.00%
Class of Warrant or Right, Grants in Period, Contractual Term					2 years			5 years
Value of Note Issued per Warrant issued								2.50
Class of Warrant or Right, Grants in Period, Net of Forfeitures	0		375,000	187,500	562,500			180,000
Class of Warrant or Right, Grants in Period, Exercise Price								$ 1.25
Debt Instrument, Convertible, Conversion Price						$ 0.40					$ 1.25
Debt Instrument, Convertible, Automatic Conversion Price						$ 0.80	$ 2.50
Senior subordinated convertible notes payable, net of discount	3,402,750	3,673,527							450,000	450,000
Facilitation fee													300,000
Proceeds from Advances Received													1,250,000
Stock Issued to satisfy notes													9,259,259	9,259,259
Gain on debt extinguishment													615,781
Proceeds from Secured Notes Payable														2,000,000	$ 3,985,000	3,900,000
Class of Warrant or Right, Grants in Period, Strike Price					$ 0.40

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Schedule of Inventory, Current (Details) (USD $)	Sep. 30, 2014	Jun. 30, 2014
Stockpiled ore	$ 0	$ 0
In-process material	0	0
Siliceous flux material	0	0
Precious metals concentrate	0	40,000
Inventory, Net	$ 0	$ 40,000

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CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2014	Jun. 30, 2014
CURRENT ASSETS:
Cash and cash equivalents	$ 410	$ 83,825
Accounts receivable	72,807	14,267
Inventory	0	40,000
Prepaid expenses and other current assets	249,870	247,069
Total Current Assets	323,087	385,161
MINERAL PROPERTIES	599,897	599,897
PROPERTY, PLANT AND EQUIPMENT, net of depreciation of $13,865,655 and $11,162,024, respectively	18,786,935	19,255,682
OTHER ASSETS:
Restricted cash	231,716	231,716
Mogollon option costs	876,509	876,509
Deferred financing costs, net	89,379	99,310
Total Other Assets	1,197,604	1,207,535
Total Assets	20,907,523	21,448,275
CURRENT LIABILITIES:
Accounts payable	3,789,866	3,659,848
Accrued liabilities	7,626,245	8,024,162
Derivative instrument liabilities	804,839	292,124
Senior subordinated convertible notes payable, current portion, net of discounts of $5,696 and $17,937, respectively	444,304	432,063
Notes payable, current portion	9,416,664	9,200,666
Completion guarantee payable	3,359,873	3,359,873
Total Current Liabilities	25,441,791	24,968,736
LONG TERM LIABILITIES:
Senior subordinated convertible notes payable, net of current portion and	3,402,750	3,673,527
Asset retirement obligation	242,521	241,079
Total Liabilities	29,087,062	28,883,342
STOCKHOLDERS' (DEFICIT) :
Common stock, $.002 par value, 300,000,000 shares authorized; 131,229,228 and 127,229,228 shares issued and outstanding, respectively	262,459	254,459
Additional paid in capital	78,484,962	78,292,962
Accumulated (deficit)	(86,926,960)	(85,982,488)
Total Stockholders' (Deficit)	(8,179,539)	(7,435,067)
Total Liabilities and Stockholders' (Deficit)	$ 20,907,523	$ 21,448,275

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Schedule of Maturities of Notes Payable (Details) (USD $)	Sep. 30, 2014	Jun. 30, 2014
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months	$ 9,416,664
Total Outstanding Notes Payable	$ 9,416,664	$ 9,200,666

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NATURE OF OPERATIONS

3 Months Ended

Sep. 30, 2014

NATURE OF OPERATIONS [Text Block]

NOTE 1 – NATURE OF OPERATIONS

Santa Fe Gold Corporation (the “Company”) is a U.S. mining company incorporated in Delaware in August 1991. Its general business strategy is to acquire, explore, develop and mine mineral properties. The Company’s principal assets are the 100% owned Summit silver-gold property located in New Mexico, the leased Ortiz gold project in New Mexico and the 100% owned Black Canyon mica project in Arizona.

In May 2006, for a cash price of $1.3 million, the Company acquired 100% of the shares of The Lordsburg Mining Company (“Lordsburg Mining”), a New Mexico corporation. With the acquisition of Lordsburg Mining, the Company acquired the Summit project, consisting of approximately 117.6 acres of patented and approximately 520 acres of unpatented mining claims in Grant County, New Mexico; approximately 257 acres of patented mining claims in Hidalgo County, New Mexico; and milling equipment including a ball mill and floatation plant in Sierra County, New Mexico.

On June 30, 2008, Lordsburg Mining purchased from St. Cloud Mining Company, a New Mexico corporation, for a price of $841,500, mineral processing equipment and real property situated adjacent to the Banner mill site located south of Lordsburg, New Mexico. The equipment included in the purchase constitutes important components for the Banner mill processing facility, notably a portable crushing and screening plant and a feeding and conveying system. The real property included in the purchase consists of 70 patented and 5 unpatented mining claims, and assignments of mineral leases covering 17 patented and 6 unpatented mining claims. These mining claims and mineral leases, together with the patented mining claims Lordsburg Mining already owned in the area of the Banner mill site, cover approximately 1,500 acres ( 2.3 square miles) and comprise the core of the Virginia Mining District. Historical production of copper, gold and silver from the district has been substantial. Lordsburg Mining assumed certain potential environmental obligations in connection with the real property, including those related to reclamation of old workings, should such obligations arise in the future.

The Company commenced processing operations at the Banner Mill in March 2010. Commissioning of the mill proceeded and in July 2010, mill operations were expanded to two shifts per day, five days a week. In April 2012, the Company commenced commercial production at the Summit silver–gold mine. In November 2013 mining operations were suspended.

In September 2009, the Company formed a wholly owned Barbados subsidiary, Santa Fe Gold Barbados Corporation, in connection with the definitive gold sales agreement entered into on September 11, 2009. Under separate agreements, Santa Fe Gold Barbados Corporation sells refined gold to Sandstorm Gold, Ltd., and refined gold and silver to Waterton Global Value L.P. See NOTE 10– CONTINGENCIES AND COMMITMENTS.

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described in our annual report on Form 10-K for our year fiscal ended June 30, 2014 in addition to the other information included in this quarterly report.

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CONTINGENCIES AND COMMITMENTS (Narrative) (Details) (USD $)	12 Months Ended									1 Months Ended								1 Months Ended					2 Months Ended	27 Months Ended	1 Months Ended			6 Months Ended	1 Months Ended	21 Months Ended		1 Months Ended		2 Months Ended					1 Months Ended						1 Months Ended
	Jun. 30, 2012	Sep. 30, 2014	Jun. 30, 2014	Sep. 30, 2014 Net Smelter Returns $0 to $1,250,000 [Member]	Sep. 30, 2014 Net Smelter Returns $1,251,000 to $4,000,000 [Member]	Sep. 30, 2014 Sales of unbeneficiated mineralized rock before Net Smelter Returns of $4,000,000 [Member]	Sep. 30, 2014 Sales of unbeneficiated mineralized rock after Net Smelter Returns of $4,000,000, towards an end price of $2,400,000 [Member]	Sep. 30, 2014 Future Production [Member]	Sep. 30, 2014 President and CEO [Member]	Oct. 31, 2007 Ortiz Mine Grant [Member] acre	Aug. 31, 2004 Ortiz Mine Grant [Member] acre	Aug. 31, 2004 Ortiz Mine Grant [Member] sqmi	Sep. 30, 2014 Ortiz Mine Grant [Member]	Nov. 01, 2007 Ortiz Mine Grant [Member] sqmi	Nov. 01, 2007 Ortiz Mine Grant [Member] acre	Sep. 30, 2014 Ortiz Mine Grant [Member] Minimum [Member]	Sep. 30, 2014 Ortiz Mine Grant [Member] Maximum [Member]	Dec. 31, 2014 Mogollon Project [Member]	Jun. 30, 2014 Mogollon Project [Member]	Dec. 31, 2013 Mogollon Project [Member]	Jun. 30, 2013 Mogollon Project [Member]	Oct. 31, 2012 Mogollon Project [Member]	Dec. 31, 2012 Mogollon Project [Member]	Dec. 31, 2014 Mogollon Project [Member]	Dec. 31, 2014 Mogollon Option Agreement Amendment 1 [Member]	Jun. 30, 2014 Mogollon Option Agreement Amendment 1 [Member]	Jun. 30, 2013 Mogollon Option Agreement Amendment 1 [Member]	Dec. 30, 2013 Mogollon Option Agreement Amendment 1 [Member]	Mar. 31, 2014 Amended and Restated Mongollon Option Agreement [Member]	Jun. 30, 2014 Amended and Restated Mongollon Option Agreement [Member]	Sep. 30, 2014 Gold Stream Agreement [Member]	Dec. 31, 2011 Two $10 million tranches [Member]	Dec. 23, 2011 $5 million revolving working capital facility [Member]	Oct. 31, 2009 Definitive Gold sale agreement with Sandstorm [Member] Summit silver-gold mine [Member]	Sep. 11, 2009 Definitive Gold sale agreement with Sandstorm [Member] Summit silver-gold mine [Member]	Sep. 11, 2009 Definitive Gold sale agreement with Sandstorm [Member] Summit silver-gold mine [Member] First 10,000 ounces of gold produced [Member]	Sep. 11, 2009 Definitive Gold sale agreement with Sandstorm [Member] Summit silver-gold mine [Member] Gold produced after first 10,000 ounces [Member]	Mar. 29, 2011 Definitive Gold sale agreement with Sandstorm Amendment 1 [Member] Summit silver-gold mine [Member]	Aug. 31, 2011 Definitive Gold sale agreement with Sandstorm Amendment 2 [Member] Summit silver-gold mine [Member]	Aug. 09, 2011 Definitive Gold sale agreement with Sandstorm Amendment 2 [Member] Summit silver-gold mine [Member]	Jun. 28, 2011 Definitive Gold sale agreement with Sandstorm Amendment 2 [Member] Summit silver-gold mine [Member]	Sep. 30, 2014 Gold and Silver Supply Agreement [Member]	Jun. 30, 2014 Gold and Silver Supply Agreement [Member]	Sep. 09, 2011 Gold and Silver Supply Agreement [Member]	Oct. 31, 2012 Upon approval by the TSX Venture Exchange [Member] Mogollon Project [Member]
Area of Land Acquired											57,267	90
Area of Land Relinquished										14,970
Area of Land														66	42,297
Capital Leases, Future Minimum Payments Due, Next Twelve Months													$ 130,000
Sliding scale production royalty																3.00%	5.00%
Accrued Royalty Liability		690,358							208,179
Proceeds from Other Deposits																																		4,000,000
Price per Ounce of Gold																															400				400					400
Gold production subject to the agreement																																				50.00%	22.00%
Additional ounces of gold required																																						700			700
Ounces of gold delivered																																							817
Net cost of delivering gold																																							1,075,785
Completion guarantee payable		3,359,873	3,359,873
Increase in Completion guarantee payable	504,049
Proceeds from credit agreement																																10,000,000
Line of Credit																																	5,000,000
Credit agreements closed																																10,000,000
Transaction Cost per Ounce of Gold																																												1.75
Transaction Cost per Ounce of Silver																																												0.07
Commitment, Sale of Ounces of Gold																															3,692													125,000
Supply Commitment, Remaining Minimum Amount Committed																															3,000,000											611,503	218,811
Mineral Property, Royalty Percentage				7.50%	5.00%	5.00%	10.00%	1.00%
Payments to Acquire Mineral Rights																		937,500	937,500	937,500	937,500	100,000	500,000	4,500,000	937,500	937,500	50,000	887,500	50,000	876,509															150,000
Value of Shares Transferred																											11,914
Value of Missed Payment																												887,500
Further Amounts to Pay to Exercise the Option																													$ 950,000
Mineral Project, Ownership Percentage																													100.00%

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ACCRUED LIABILITIES (Tables)

3 Months Ended

Sep. 30, 2014

Schedule of Accrued Liabilities [Table Text Block]

		September 30,		June 30,
		2014		2014
Interest	$	1,926,986	$	1,572,298
Vacation		50,830		57.602
Deferred and accrued payroll burden		130,896		133,890
Franchise taxes		12,753		8,503
Royalties		690,358		690,358
Merger costs, net		269,986		269,986
Other accrued expenses		230,022		133,958
Audit and accounting		71,885		111,825
Debt settlement		106,977		106,977
Property taxes		88,159		135,000
Receivables due Waterton		813,919		813,919
Commodity supply agreements		3,233,474		3,989,846
	$	7,626,245	$	8,024,162

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STOCKHOLDERS' EQUITY (Narrative) (Details) (USD $)	1 Months Ended	3 Months Ended
	Jul. 31, 2014	Sep. 30, 2014
Debt Conversion, Converted Instrument, Amount	$ 200,000
Debt Conversion, Converted Instrument, Shares Issued	4,000,000
Class of Warrant or Right, Expirations in Period		112,263
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures		7,500,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period		6,525,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price		$ 0.055
Share-based Compensation Arrangement by Share-based Payment Award, Options and Warrants, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value		20,000
Share-based Compensation Arrangement by Share-based Payment Award, Options and Warrants, Exercisable, Intrinsic Value		20,000
Share Price		$ 0.13
Share-based Compensation Arrangement by Share-based Payment Award, Options and Warrants, Vested, Exercisable, In the Money Units		400,000
Share-based Compensation Arrangement by Share-based Payment Award, Options and Warrants, Exercises in Period, Total Intrinsic Value		0
Share-based Compensation Arrangement by Share-based Payment Award, Options and Warrants, Grants in Period, Fair Value		0
Share-based Compensation Arrangement by Share-based Payment Award, Options and Warrants, Vested in Period, Grant Date Fair Value		0
Carnac [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures		7,500,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Contractual Term		5 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price		$ 0.055
Qualified Financing Requirement		$ 20,000,000

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CONVERTIBLE NOTES PAYABLE (Tables)

3 Months Ended

12 Months Ended

Sep. 30, 2014

Jun. 30, 2014

Schedule of Convertible Notes Payable and Debentures [Table Text Block]

September 30, 2014:		Principal		Unamortized
		Amount		Discount			Net
Current portion	$	450,000	$	(5,696	)	$	444,304
Long-term portion, net of current		3,402,750		-			3,402,750
	$	3,852,750	$	(5,696	)	$	3,847,054

June 30, 2014:		Principal		Unamortized
		Amount		Discount			Net
Current portion	$	450,000	$	(17,937	)	$	432,063
Long-term portion, net of current		3,673,527		-			3,673,527
	$	4,123,527	$	(17,937	)	$	4,105,590

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Sep. 30, 2014

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Text Block]

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Going Concern

The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due.

For the three months ended September 30, 2014, the Company incurred a loss of $944,472, had a total accumulated deficit of $86,926,960, and a working capital deficit of $25,118,704. The Company began revenue generating operations during the fiscal year ended June 30, 2011, through the sales of precious metals and flux material. Sales have decreased the in the most recent fiscal year during the reporting period due to the suspension of all mining operations in November 2013.

On November 8, 2013, the Company suspended all mining operations and placed the mine and mill on a care and maintenance program. The Company is currently working to restructure its debts and obtain adequate capital to restart operations in the Company’s fiscal 2015 year.

To continue as a going concern, the Company is dependent on continued capital financing for project development, repayment of various debt facilities and payment of operating and financing expenses until production at the Summit mine site attains cash flow to cover the Company’s operating costs. The Company has no commitment from any party to provide additional working capital and there is no assurance that any funding will be available as needed, or if available, that its terms will be favorable or acceptable to the Company.

On July 15, 2014, 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"). Under the terms of the Share Exchange Agreement, the Company will issue 66,000,000 shares of its common stock to Canarc; and, in exchange, Canarc will issue 33,000,000 of its common shares to the Company (the "Share Exchange"). Upon consummation of the Share Exchange, the Company will own approximately 17 percent of Canarc's outstanding shares and Canarc will own approximately 34 percent of Santa Fe's outstanding common shares.

In connection with the Share Exchange Agreement, the Company entered into a “best efforts” placement agency agreement with Euro Pacific Capital, Inc. ("Euro Pacific") pursuant to which Euro Pacific agreed to act as placement agent for the Company and use its "best-efforts" to complete the proposed private placement of 8% Subordinated Secured Redeemable GLD Share Delivery Notes and a Detachable Common Stock Purchase Warrant in the aggregate principal amount between $20 million to $25 million. Euro Pacific did not place any securities or raise any capital for the Company. The Euro Pacific best efforts placement agency agreement expired by its terms on September 30, 2014.

The Share Exchange Agreement provided that it would terminate, unless a closing of the transactions contemplated 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, 2014.

At September 30, 2014, the Company was in default on payments totaling approximately $8.9 million under its Senior Secured Gold Stream Credit Agreement (the “Credit Agreement”) with Waterton and approximately $6.8 million under a gold stream agreement (the “Gold Stream Agreement”) with Sandstorm Gold Ltd. (“Sandstorm”). The Company’s consolidated financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Azco Mica, Inc., a Delaware corporation, The Lordsburg Mining Company, a New Mexico corporation, Minera Sandia, S.A. de C.V., a Mexican corporation and Santa Fe Gold Barbados Corporation, a Barbados corporation. All significant inter-company accounts and transactions have been eliminated in consolidation.

Reclassifications

Certain items in these consolidated financial statements have been reclassified to conform to the current year’s presentation.

Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates under different assumptions or conditions.

Significant estimates are used when accounting for the Company’s carrying value of mineral properties, fixed assets, depreciation and amortization, accruals, derivative instrument liabilities, taxes and contingencies, asset retirement obligations, revenue recognition, and stock-based compensation which are discussed in the respective notes to the consolidated financial statements.

Fair Value Measurements

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximated their related fair values as of September 30, 2014 and June 30, 2014, due to the relatively short-term nature of these instruments. The carrying value of the Company’s convertible notes payable approximates the fair value based on the terms at which the Company could obtain similar financing and the short term nature of these instruments.

Cash and Cash Equivalents

The Company considers all liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash balances. Restricted cash is excluded from cash and cash equivalents and is included in other assets.

Accounts Receivable

Accounts receivable consist of trade receivables from precious metals sales of concentrate and flux. In evaluating the collectability of accounts receivable, the Company analyzes past results and identifies trends for each major payer source of revenue for the purpose of estimating an allowance for doubtful accounts. Data in each major payer source are regularly reviewed to evaluate the adequacy of the allowance, and actual write-offs are charged against the allowance. There was no allowance for doubtful accounts as of September 30, 2014, and June 30, 2014.

On June 30, 2013, the Company signed a Waiver of Default Letter (the “Letter”) with Waterton Global Value, L.P. (“Waterton”) wherein the Company agreed to sell, convey, assign and transfer certain accounts receivable as consideration for Waterton’s waiver for non-payment under the Senior Secured Gold Stream Agreement. The transfer of the accounts receivable to Waterton are to be treated as payment towards outstanding interest amounts with any remaining transfer of receivables to be treated as a payment towards other indebtedness under the Credit Agreement, including principal on the note. The valuation of receivables sold under the Letter was finalized at $1,018,056. Additionally, $813,919 of collected accounts receivable sold to Waterton still remains to be remitted to them and is recorded in Accrued Liabilities at September 30, 2014.

Inventory

Major types of inventories include ore stockpile inventories, in-process inventories, siliceous flux material inventories and concentrate inventories, as described below. Inventories are carried at the lower of average cost or net realizable value. The net realizable value of ore stockpile inventories and in-process inventories represents the estimated future sales price of the product based on current and future metals prices, less the estimated costs to complete production and bring the product to sale. Concentrate inventories and siliceous flux material inventories are carried at the lower of full cost of production or net realizable value based on current and future metals prices. Write-downs of inventory are reported as a component of costs applicable to sales.

Ore Stockpile Inventories: Ore stockpile inventories represent mineralized materials that have been mined and are available for further processing. Costs are allocated to ore stockpile inventories based on relative values of material stockpiled and processed using current mining costs incurred up to the point of stockpiling the ore, including applicable overhead, depreciation, and amortization. Material is removed from the stockpile at an average cost per ton. The current portion of ore stockpiles is determined based on the expected amounts to be processed within the next 12 months. Ore stockpile inventories not expected to be processed within the next 12 months, if any, are classified as long-term.

In-process Inventories: In-process inventories represent materials that are currently in the process of being converted to a saleable product. In-process inventories are valued at the lower of average cost or net realizable value attributable to the source material plus the in-process conversion costs, including applicable depreciation relating to the process facilities incurred to that point in the process.

Siliceous Flux Material Inventories: The siliceous flux material inventories represent ore stockpiles that have been crushed and screened to the customer’s specifications, and represent a saleable product.

Concentrate Inventories: Concentrates inventories include metal concentrates located either at the Company’s facilities or in transit to the customer’s port. Inventories consist of gold and silver metal concentrates and represent a saleable product.

Property, Equipment and Mine Development

Property and Equipment

Property and equipment are carried at cost. Maintenance and repairs that do not improve or extend the life of the respective assets are expensed as incurred. Expenditures for new property or equipment and expenditures that extend the useful lives of existing property and equipment are capitalized and recorded at cost. Upon retirement, sale or other disposition, the cost and accumulated amortization are eliminated and the gain or loss is included in operations. Depreciation is taken over the estimated useful lives of the assets using the straight-line method. The estimated useful lives of property and equipment are shown below. Land is not depreciated.

	Estimated Useful Life
Leasehold improvements	3 Years
Office furniture and equipment	3 Years
Mine processing equipment and buildings	7 – 20 Years
Plant	3 – 9 Years
Tailings	3 Years
Environmental and permits	7 Years
Asset retirement obligation	5 Years
Automotive	3 – 5 Years
Software	5 Years

Mine Development

Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, and the building of access ways, shafts, lateral access, drifts, ramps and other infrastructure in an underground mine. Costs incurred before mineralization is classified as proven and probable reserves are expensed and classified as exploration expense. Capitalization of mine development project costs, that meet the definition of an asset, begins once mineralization is classified as proven and probable reserves.

Drilling and related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body or converting non-reserve mineralization to proven and probable reserves. All other drilling and related costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs and then included as a component of costs applicable to sales.

Mine development is amortized using the units-of-production method based upon estimated recoverable tonnage in proven and probable reserves. To the extent that these costs benefit an entire ore body, they are amortized over the estimated life of the ore body. Costs incurred to access specific ore blocks or areas that only provide benefit over the life of that area are amortized over the estimated life of that specific ore body.

Mineral Properties

Mineral properties are capitalized at their fair value at the acquisition date, either as an individual asset purchase or as part of a business combination. When it is determined that a mineral property can be economically developed as a result of establishing reserves, subsequent mine development are capitalized and are amortized using the units of production method over the estimated life of the ore body based on estimated recoverable tonnage in proven and probable reserves.

The Company’s mineral rights generally are enforceable regardless of whether proven and probable reserves have been established. The Company has the ability and intent to renew mineral interests where the existing term is not sufficient to recover all identified and valued proven and probable reserves and/or undeveloped mineralized material.

Impairment of Long-Lived Assets

The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate the related carrying amounts may not be recoverable. The assets are subject to impairment consideration if events or circumstances indicate that their carrying amount might not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. When impairment is identified, the carrying amount of the asset is reduced to its estimated fair value which is generally derived from estimated discounted cash flows.

The Company is in continuing discussions with various strategic financing sources, including the Company’s two major creditors at this time. It is unknown if such discussions will be successful in attaining a financing facility and necessary debt restructure that would allow the Company to continue operations under a revised business plan.

If discussions with these financing sources are unsuccessful the Company will not be able to continue as a going concern, and will likely be forced to seek relief under the U.S. Bankruptcy Code. At that time the Company would have to evaluate the circumstances and the potential impairment on its long- lived assets.

As of September 30, 2014, and in light of continuing financing dialog with various potential financing sources, no events or circumstances have happened to indicate the related carrying values of long-lived assets may not be recoverable.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

The Company reviews the terms of convertible debt, equity instruments and other financing arrangements to determine whether there are embedded derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding options or warrants that may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity. The Company may also issue options or warrants to non-employees in connection with consulting or other services.

Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For warrant-based derivative financial instruments, the Company uses the Black-Scholes option pricing model to value the derivative instruments. To the extent that the initial fair values of the freestanding and/or bifurcated derivative instrument liabilities exceed the total proceeds received, an immediate charge to income is recognized, in order to initially record the derivative instrument liabilities at their fair value.

The discount from the face value of the convertible debt or equity instruments resulting from allocating some or all of the proceeds to the derivative instruments, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to income, usually using the effective interest method.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.

Reclamation Costs

Reclamation obligations are recognized when incurred and recorded as liabilities at fair value. The liability is accreted over time through periodic charges to earnings. In addition, the asset retirement cost is capitalized as part of the asset’s carrying value and amortized over the life of the related asset. Reclamation costs are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation costs. The reclamation obligation is based upon when spending for an existing disturbance will occur. The Company reviews, on an annual basis, unless otherwise deemed necessary, the reclamation obligation at each mine site in accordance with ASC guidance for reclamation obligations. As of September 30, 2014 and June 30, 2014, the Company had a reclamation obligation totaling $242,521 and $241,079, respectively.

Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred physically, the price is fixed or determinable, no related obligations remain and collectability is probable.

Sales of all metals products sold directly to the Company’s metals buyers, including by-product metals, are recorded as revenues upon a buyer either taking physical delivery of the metals product in the case of siliceous flux material or upon the buyer receiving all required documentation necessary to take physical delivery of the metals product in the case of concentrate (generally at the time the product is loaded onto a shipping vessel at the originating port and the bill of lading is generated).

Revenues for metals products are recorded at current market prices at the time of delivery and are subsequently adjusted to the current market prices existing at the end of each reporting period. Due to the period of time existing between delivery and final settlement with the buyer, the Company estimates the prices at which sales will be settled. Changes in metals prices between delivery and final settlement will result in adjustments to revenues previously recorded.

Sales of metals products are recorded net of charges from the buyer for treatment, refining, smelting losses, and other negotiated charges. Charges are estimated upon shipment of product based on contractual terms, and actual charges do not vary materially from estimates. Costs charged by smelters include a metals payable fee, fixed treatment and refining costs per ton of product.

Net Loss Per Share

Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During the periods when they are anti-dilutive, common stock equivalents, if any, are not considered in the computation. For the three month periods ended September 30, 2014 and 2013, the impact of outstanding stock equivalents has not been included as they would be anti-dilutive.

Stock-Based Compensation

In connection with terms of employment with the Company’s executives and employees, the Company occasionally issues options to acquire its common stock. Awards are made at the discretion of the Board of Directors. Such options may be exercisable at varying exercise prices and generally vest over a period of six months to a year.

The Company accounts for share-based compensation based upon on the grant date fair value of the award. The Company estimates the fair value of the award using the Black-Scholes option pricing model for valuation of the share-based payments. The Company believes this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders. The simplified method is used to determine compensation expense since historical option exercise experience is limited. The compensation cost is recognized over the expected vesting period.

Recent Accounting Pronouncements

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which requires management to evaluate, in connection with financial statement preparation for each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued, and to provide related disclosures. ASU 2014-15 applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company has not studied this guidance and is not certain if the adoption of this guidance will have a material effect on its consolidated financial statements.

In May 2014, the FASB issued ASC updated No. 2014-09, "Revenue from Contracts with Customers (Topic 606)”(ASU 2014-09). Under the amendments in this update, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in this update are effective for fiscal years and interim periods within those years beginning after December 15, 2016. Early adoption is not permitted. The new standard is required to be applied either retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of applying the update recognized at the date of initial application. The Company has not yet selected a transition method, and has not determined the impact, if any, that the new standard will have on its consolidated financial statements.

In June 2014, the FASB issued ASU 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which is effective for financial statements issued for interim and annual periods beginning on or after December 15, 2015. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. This standard is not expected to have an effect on the Company’s reported financial position or results of operations.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future consolidated financial statements.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2014	Jun. 30, 2014
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 13,865,655	$ 11,162,024
Debt Instrument Unamortized Discount Senior Subordinated Convertible Notes Payable Current	$ 5,696	$ 17,937
Common Stock, Par Value Per Share	$ 0.002	$ 0.002
Common Stock, Shares Authorized	300,000,000	300,000,000
Common Stock, Shares, Issued	131,229,228	127,229,228
Common Stock, Shares, Outstanding	131,229,228	127,229,228

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LEGAL PROCEEDINGS

3 Months Ended

Sep. 30, 2014

LEGAL PROCEEDINGS [Text Block]

NOTE 12 – LEGAL PROCEEDINGS

In October 2013 Lone Mountain Ranch, LLC, owner of the surface estate overlying our Ortiz gold property, filed a lawsuit against the Company and our lessor, Ortiz Mines, Inc. The lawsuit seeks to clarify Lone Mountain Ranch's rights and obligations under the split estate regime. Specifically, Lone Mountain Ranch seeks a declaratory judgment that it may participate in permit hearings, agency proceedings, and private activities related to the permitting of the Ortiz project without being in violation of common law duties to not interfere with development of the mineral estate. The Company is conducting a strategic evaluation as whether or not to continue with the Ortiz Gold Project.

We are in litigation with two vendors for claims for approximately $140,400 and $125,876, respectively against us. We are in discussion with them regarding delaying payment until additional funding can be obtained. If the Company is unsuccessful in raising additional funding, we may not be able to pay resolve these lawsuits and our business may not continue as a going concern. In the event we cannot raise the necessary capital or we cannot restructure through negotiated modifications, we may be required to effect under court supervision pursuant to a voluntary bankruptcy filing under Chapter 11 or Chapter 7 of the U.S. Bankruptcy Code (“Chapter 11 or “Chapter 7”). See “Risk factors.”

We are subject from time to time to litigation, claims and suits arising in the ordinary course of business. Other than the above-described litigation, as of September 30, 2014, we were not a party to any material litigation, claim or suit whose outcome could have a material effect on our financial statements.

In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for its financial statements not to be misleading. The Company does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote.

Because litigation outcomes are inherently unpredictable, the Company’s evaluation of legal proceedings often involves a series of complex assessments by management about future events and can rely heavily on estimates and assumptions. If the assessments indicate that loss contingencies that could be material to any one of its financial statements are not probable, but are reasonably possible, or are probable, but cannot be estimated, then the Company discloses the nature of the loss contingencies, together with an estimate of the range of possible loss or a statement that such loss is not reasonably estimable. While the consequences of certain unresolved proceedings are not presently determinable, and an estimate of the probable and reasonably possible loss or range of loss in excess of amounts accrued for such proceedings cannot be reasonably made, an adverse outcome from such proceedings couldhave a material adverse effect on its financial statements in any given reporting period. However, in the opinion of Management, after consulting with legal counsel, the ultimate liability related to the current outstanding litigation is not expected to have a material adverse effect on its financial statements.

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Document and Entity Information	3 Months Ended
	Sep. 30, 2014	Nov. 17, 2014
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Trading Symbol	sfeg
Entity Registrant Name	Santa Fe Gold CORP
Entity Central Index Key	0000851726
Current Fiscal Year End Date	--06-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		131,229,228
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

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SUBSEQUENT EVENTS

3 Months Ended

Sep. 30, 2014

SUBSEQUENT EVENTS [Text Block]

NOTE 13 – SUBSEQUENT EVENTS

The Share Exchange Agreement dated July 15, 2014, provided that it will terminate, unless a closing of the transactions contemplated occurred on or before October 15, 2014. The transactions did not close and the Share Exchange Agreement terminated pursuant to its terms on October 31, 2014. The associated granted five year stock options for 7,500,000 shares of common stock at an exercise price of $0.055 did not vest and expired on October 15, 2014 according to the terms of the grant.

The Company did not exercise the Mogollon option agreement, as restated and amended, it expired in accordance with its terms on November 21, 2014. The Company will write down the payments of $876,509 made under the various Option Agreements in the second quarter ending December 31, 2014.

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
SALES, net	$ 71,518	$ 1,193,683
OPERATING COSTS AND EXPENSES:
Costs applicable to sales	40,000	2,176,917
Exploration and other mine related costs	194,726	90,613
General and administrative	369,643	843,238
Depreciation and amortization	482,248	774,460
Accretion of asset retirement obligation	1,442	513
Total Operating Costs and Expenses	1,088,059	3,885,741
LOSS FROM OPERATIONS	(1,016,541)	(2,692,058)
OTHER INCOME (EXPENSE):
Interest income	0	0
Foreign currency translation	301,152	12,289
(Loss) on derivative instrument liabilities	(512,715)	(291,996)
Accretion of discounts on notes payable	(12,241)	(9,896)
Financing costs - commodity supply agreements	756,372	(690,887)
Finance charges	(25,125)	0
Interest expense	(435,374)	(327,027)
Total Other (Expense)	72,069	(1,307,517)
(LOSS) BEFORE PROVISION FOR INCOME TAXES	(944,472)	(3,999,575)
PROVISION FOR INCOME TAXES	0	0
NET (LOSS)	(944,472)	(3,999,575)
OTHER COMPREHENSIVE INCOME
Unrealized gain on marketable securities	0	0
NET COMPREHENSIVE (LOSS)	$ (944,472)	$ (3,999,575)
Basic and Diluted Per Share data Net (Loss) - basic and diluted	$ (0.01)	$ (0.03)
Weighted Average Common Shares Outstanding: Basic and diluted	130,620,532	117,599,598

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SENIOR SECURED GOLD STREAM CREDIT AGREEMENT

3 Months Ended

Sep. 30, 2014

SENIOR SECURED GOLD STREAM CREDIT AGREEMENT [Text Block]

NOTE 7 – SENIOR SECURED GOLD STREAM CREDIT AGREEMENT

On December 23, 2011, the Company and its subsidiaries entered into a Senior Secured Gold Stream Credit Agreement (the “Credit Agreement”) Waterton. The Credit Agreement provided for two $10 million tranches and a $5 million revolving working capital facility. On December 23, 2011, the Company closed the first $10 million tranche of the Credit Agreement. The second $10 million tranche was earmarked to fund the strategic acquisition of Columbus Silver and was not drawn down due to the expiration of the Columbus Silver acquisition agreement.

Proceeds from the initial $10 million tranche of the Credit Agreement were used to retire the Company’s $5 million, 15% Senior Secured Bridge loan with Victory Park Capital Advisors, LLC, in addition to the payment of transaction fees and expenses. The Company utilized the remaining net proceeds for operations and working capital for the Summit silver-gold project.

The Credit Agreement provides for a 9% coupon and the initial $10 million tranche amortized over a 12 -month term with the first payment due July 31, 2012. In connection with the transaction, the Company entered into a gold and silver sale agreement (the “Gold and Silver Supply Agreement”) to sell the gold and silver originating from the Summit property to Waterton. See NOTE 10 - CONTINGENCIES AND COMMITMENTS.

Pursuant to a series of guarantees, security agreements, deeds of trust, a mortgage and a stock pledge agreement, the senior obligations are secured by a first priority lien on the stock of the Company’s subsidiaries and on liens covering substantially all of the Company’s assets, with the exception of the Ortiz gold project, including the Summit silver-gold project, the Black Canyon mica project, and the Planet micaceous iron oxide project. Existing creditor, Sandstorm Gold (Barbados) Ltd., executed an intercreditor agreement that provides for subordination of its security interests in favor of Waterton. The outstanding principal amounts owed under the Credit Agreement are aggregated with Notes Payable for financial statement presentation. See NOTE 8 - NOTES PAYABLE.

On October 9, 2012, the Company entered into the First Amendment to the Credit Agreement which modified the due dates of certain principal payments on the note. The amendment provided for principal payments of $1,082,955 in October 2012, $500,000 on November 30, 2012, $-in December 2012 and January 2013, and $3,852,275 on February 28, 2013. All other principal payments remained unchanged and interest payments continued to be due monthly. The Company has not made the principal payments for February 2013 or subsequent months. In addition, interest payments for the three months ended September 30, 2014 have not been made and are included in accrued liabilities.

On June 30, 2013, the Company signed a Waiver of Default Letter (the “Letter”) with Waterton Global Value, L.P. (“Waterton”) wherein the Company agreed to sell, convey, assign and transfer certain accounts receivable as consideration for a waiver for non-payment to Waterton under the Credit Agreement. The transfer of the accounts receivable to Waterton were applied as payment towards outstanding interest payable amounts first with any remaining transfer of receivables treated as payment towards other indebtedness under the Credit Agreement, including principal on the note. The measurement of receivables transferred was subject to revaluation in accordance with mark-to-market adjustments and final settlement of the invoices. The initial valuation of receivables under the Letter was $1,053,599 at June 30, 2013. Under terms of the Letter, interest payable was reduced by $116,693 and the principal portion of the note was reduced by $768,263, while the remaining $168,643 was recorded as financing costs in interest expense at June 30, 2013.

As of September 30, 2013, the valuation of receivables sold under the Letter was finalized at $1,018,056. Accordingly, final valuation adjustments were made to increase the principal portion of the note outstanding by $29,145 and to decrease financing costs by $6,398. After recording final valuation adjustments, the principal portion of the note was ultimately reduced by $739,118, while the amount recorded over two quarters as financing costs in interest expense was $162,245. There was no final valuation adjustment to interest payable. The outstanding principal balance on the note at September 30, 2014 and June 30, 2014 was $7,042,427 y. Additionally, $813,919 of collected accounts receivable sold to Waterton remains to be remitted to them and is recorded in accrued liabilities at September 30, 2014.

Waterton may revoke the waiver at any time and note the Company in default under the Credit Agreement. In the event that Debt Restructurings are not consummated, or should any of Waterton’s indebtedness be accelerated, the Company will not have adequate liquidity to fund its operations, meet its obligations (including its debt payment obligations) and continue as a going concern, and will likely be forced to seek relief under Chapter 11 or 15 of the U.S. Bankruptcy Code (or an involuntary petition for bankruptcy relief or similar creditor action may be filed against it).

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CONVERTIBLE NOTES PAYABLE

3 Months Ended

Sep. 30, 2014

CONVERTIBLE NOTES PAYABLE [Text Block]

NOTE 6 –CONVERTIBLE NOTES PAYABLE

Senior Subordinated Convertible Notes

On October 30, 2007, the Company completed the placement of 10% Senior Subordinated Convertible Notes of $450,000. The notes were placed with three accredited investors for $150,000 each and bear interest at 10% per annum. The notes had term of 60 months at which time all remaining principal and interest was due. Interest accrued for 18 months from the date of closing. Interest on the outstanding principal balance was payable in quarterly installments commencing on the first day of the 19th month following closing. In connection with the transaction, the Company issued a five year warrant for each $2.50 invested, for a total of 180,000 warrants, each warrant giving the note holder the right to purchase one share of common stock at a price of $1.25 per share. At the option of the holders of the convertible notes, the outstanding principal and interest was convertible at any time into shares of the Company’s common stock at conversion price of $1.25 per share. The notes were to be automatically converted into common stock if the weighted average closing sales price of the stock exceeded $2.50 per share for ten consecutive trading days. The shares underlying the notes and warrants are to be registered on request of the note holders, provided the weighted average closing price of the stock exceeds $1.50 per share for ten consecutive trading days.

On October 31, 2012, the notes with the three accredited investors became due and payable. On January 15, 2013, the maturity dates for the convertible senior subordinated notes aggregating $450,000 were extended for a period of two years from the original maturity dates. Additionally, the convertible price of the notes was reduced to $0.40 and the automatic conversion price of $2.50 was reduced to $0.80. In connection with the extension of the notes, 562,500 warrants were issued with a strike price of $0.40 and term of two years from the original maturity dates; 375,000 warrants expiring on October 23, 2014 and the remaining 187,500 warrants with an expiration date of November 20, 2014.

At September 30, 2014 and June 30, 2014 the outstanding principal balance on the senior subordinated convertible notes, was $450,000.

Convertible Secured Notes

In October and November 2012, the Company received advances totaling A$3,900,000, representing cash proceeds of $3,985,000, from International Goldfields Limited (ASX: IGS) in fulfillment of an important condition of the Binding Heads of Agreement dated October 8, 2012 between the Company and IGS. The funds were advanced by way of two secured convertible notes. The convertible notes bear interest at a rate of 6% per annum, have a three-year term, and are secured by the Company’s contractual rights to the Mogollon property. The Company has the right to prepay the notes at any time without any premium or penalty. Should the Company fail to repay the notes on the maturity date or should an event of default occur, then IGS may choose to have the outstanding amounts repaid in the Company’s shares at a conversion rate equal to the daily volume weighted average sales price for the twenty trading days immediately preceding the date of conversion.

In June 2013, the Company negotiated an additional A$2.0 million capital injection from IGS by way of a secured convertible note. In conjunction with this financing, the Company agreed to explore a listing on the Singapore Catalist Stock Exchange (SGX-ST). The convertible note will bear interest at a rate of 10% per annum, has a maturity date of October 31, 2015, and is secured by the Company’s contractual rights in the Mogollon property. The note is repayable in cash or Santa Fe Gold stock, at IGS’s election, upon a refinancing of the Company’s loan from Waterton. Additionally, a facilitation fee of $300,000 common stock of the Company is due to IGS upon the first to occur of the maturity date, refinancing date of the note, or date that all principal and interest on the note is paid-in-full. As of March 31, 2014, the Company had received advances totaling $1,250,000 in connection with the secured convertible note. When the proposed Merger Agreement with Tyhee was signed, IGS and the Company agreed to have all outstanding amounts under the note satisfied by the issue of Company’s stock aggregating 9,259,259 shares. The Company recorded a gain of $615,781 on the extinguishment of the debt. The stock was issued pursuant to an exemption from registration under Regulation S of the Securities Act of 1933, as amended, and IGS is restricted from selling any of such stock into the US or to any US person.

The components of the all convertible notes payable at September 30, 2014 and June 30, 2014 are as follows:

September 30, 2014:		Principal		Unamortized
		Amount		Discount			Net
Current portion	$	450,000	$	(5,696	)	$	444,304
Long-term portion, net of current		3,402,750		-			3,402,750
	$	3,852,750	$	(5,696	)	$	3,847,054

June 30, 2014:		Principal		Unamortized
		Amount		Discount			Net
Current portion	$	450,000	$	(17,937	)	$	432,063
Long-term portion, net of current		3,673,527		-			3,673,527
	$	4,123,527	$	(17,937	)	$	4,105,590

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DERIVATIVE INSTRUMENT LIABILITIES (Tables)

3 Months Ended

Sep. 30, 2014

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block]

		Derivative		Derivative		Loss for
		Liability as of		Liability as of		Three months ended
		June 30, 2014		September 30, 2014		September 30, 2014
Warrants	$	292,124	$	804,839	$	512,715

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Sep. 30, 2014

Basis of Presentation and Going Concern [Policy Text Block]

Basis of Presentation and Going Concern

The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due.

For the three months ended September 30, 2014, the Company incurred a loss of $944,472, had a total accumulated deficit of $86,926,960, and a working capital deficit of $25,118,704. The Company began revenue generating operations during the fiscal year ended June 30, 2011, through the sales of precious metals and flux material. Sales have decreased the in the most recent fiscal year during the reporting period due to the suspension of all mining operations in November 2013.

On November 8, 2013, the Company suspended all mining operations and placed the mine and mill on a care and maintenance program. The Company is currently working to restructure its debts and obtain adequate capital to restart operations in the Company’s fiscal 2015 year.

To continue as a going concern, the Company is dependent on continued capital financing for project development, repayment of various debt facilities and payment of operating and financing expenses until production at the Summit mine site attains cash flow to cover the Company’s operating costs. The Company has no commitment from any party to provide additional working capital and there is no assurance that any funding will be available as needed, or if available, that its terms will be favorable or acceptable to the Company.

On July 15, 2014, 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"). Under the terms of the Share Exchange Agreement, the Company will issue 66,000,000 shares of its common stock to Canarc; and, in exchange, Canarc will issue 33,000,000 of its common shares to the Company (the "Share Exchange"). Upon consummation of the Share Exchange, the Company will own approximately 17 percent of Canarc's outstanding shares and Canarc will own approximately 34 percent of Santa Fe's outstanding common shares.

In connection with the Share Exchange Agreement, the Company entered into a “best efforts” placement agency agreement with Euro Pacific Capital, Inc. ("Euro Pacific") pursuant to which Euro Pacific agreed to act as placement agent for the Company and use its "best-efforts" to complete the proposed private placement of 8% Subordinated Secured Redeemable GLD Share Delivery Notes and a Detachable Common Stock Purchase Warrant in the aggregate principal amount between $20 million to $25 million. Euro Pacific did not place any securities or raise any capital for the Company. The Euro Pacific best efforts placement agency agreement expired by its terms on September 30, 2014.

The Share Exchange Agreement provided that it would terminate, unless a closing of the transactions contemplated 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, 2014.

At September 30, 2014, the Company was in default on payments totaling approximately $8.9 million under its Senior Secured Gold Stream Credit Agreement (the “Credit Agreement”) with Waterton and approximately $6.8 million under a gold stream agreement (the “Gold Stream Agreement”) with Sandstorm Gold Ltd. (“Sandstorm”). The Company’s consolidated financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Principles of Consolidation [Policy Text Block]

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Azco Mica, Inc., a Delaware corporation, The Lordsburg Mining Company, a New Mexico corporation, Minera Sandia, S.A. de C.V., a Mexican corporation and Santa Fe Gold Barbados Corporation, a Barbados corporation. All significant inter-company accounts and transactions have been eliminated in consolidation.

Reclassifications [Policy Text Block]

Reclassifications

Certain items in these consolidated financial statements have been reclassified to conform to the current year’s presentation.

Estimates [Policy Text Block]

Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates under different assumptions or conditions.

Significant estimates are used when accounting for the Company’s carrying value of mineral properties, fixed assets, depreciation and amortization, accruals, derivative instrument liabilities, taxes and contingencies, asset retirement obligations, revenue recognition, and stock-based compensation which are discussed in the respective notes to the consolidated financial statements.

Fair Value Measurements [Policy Text Block]

Fair Value Measurements

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximated their related fair values as of September 30, 2014 and June 30, 2014, due to the relatively short-term nature of these instruments. The carrying value of the Company’s convertible notes payable approximates the fair value based on the terms at which the Company could obtain similar financing and the short term nature of these instruments.

Cash and Cash Equivalents [Policy Text Block]

Cash and Cash Equivalents

The Company considers all liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash balances. Restricted cash is excluded from cash and cash equivalents and is included in other assets.

Accounts Receivable [Policy Text Block]

Accounts Receivable

Accounts receivable consist of trade receivables from precious metals sales of concentrate and flux. In evaluating the collectability of accounts receivable, the Company analyzes past results and identifies trends for each major payer source of revenue for the purpose of estimating an allowance for doubtful accounts. Data in each major payer source are regularly reviewed to evaluate the adequacy of the allowance, and actual write-offs are charged against the allowance. There was no allowance for doubtful accounts as of September 30, 2014, and June 30, 2014.

On June 30, 2013, the Company signed a Waiver of Default Letter (the “Letter”) with Waterton Global Value, L.P. (“Waterton”) wherein the Company agreed to sell, convey, assign and transfer certain accounts receivable as consideration for Waterton’s waiver for non-payment under the Senior Secured Gold Stream Agreement. The transfer of the accounts receivable to Waterton are to be treated as payment towards outstanding interest amounts with any remaining transfer of receivables to be treated as a payment towards other indebtedness under the Credit Agreement, including principal on the note. The valuation of receivables sold under the Letter was finalized at $1,018,056. Additionally, $813,919 of collected accounts receivable sold to Waterton still remains to be remitted to them and is recorded in Accrued Liabilities at September 30, 2014.

Inventory [Policy Text Block]

Inventory

Major types of inventories include ore stockpile inventories, in-process inventories, siliceous flux material inventories and concentrate inventories, as described below. Inventories are carried at the lower of average cost or net realizable value. The net realizable value of ore stockpile inventories and in-process inventories represents the estimated future sales price of the product based on current and future metals prices, less the estimated costs to complete production and bring the product to sale. Concentrate inventories and siliceous flux material inventories are carried at the lower of full cost of production or net realizable value based on current and future metals prices. Write-downs of inventory are reported as a component of costs applicable to sales.

Ore Stockpile Inventories: Ore stockpile inventories represent mineralized materials that have been mined and are available for further processing. Costs are allocated to ore stockpile inventories based on relative values of material stockpiled and processed using current mining costs incurred up to the point of stockpiling the ore, including applicable overhead, depreciation, and amortization. Material is removed from the stockpile at an average cost per ton. The current portion of ore stockpiles is determined based on the expected amounts to be processed within the next 12 months. Ore stockpile inventories not expected to be processed within the next 12 months, if any, are classified as long-term.

In-process Inventories: In-process inventories represent materials that are currently in the process of being converted to a saleable product. In-process inventories are valued at the lower of average cost or net realizable value attributable to the source material plus the in-process conversion costs, including applicable depreciation relating to the process facilities incurred to that point in the process.

Siliceous Flux Material Inventories: The siliceous flux material inventories represent ore stockpiles that have been crushed and screened to the customer’s specifications, and represent a saleable product.

Concentrate Inventories: Concentrates inventories include metal concentrates located either at the Company’s facilities or in transit to the customer’s port. Inventories consist of gold and silver metal concentrates and represent a saleable product.

Property, Equipment and Mine Development [Policy Text Block]

Property, Equipment and Mine Development

Property and Equipment

Property and equipment are carried at cost. Maintenance and repairs that do not improve or extend the life of the respective assets are expensed as incurred. Expenditures for new property or equipment and expenditures that extend the useful lives of existing property and equipment are capitalized and recorded at cost. Upon retirement, sale or other disposition, the cost and accumulated amortization are eliminated and the gain or loss is included in operations. Depreciation is taken over the estimated useful lives of the assets using the straight-line method. The estimated useful lives of property and equipment are shown below. Land is not depreciated.

	Estimated Useful Life
Leasehold improvements	3 Years
Office furniture and equipment	3 Years
Mine processing equipment and buildings	7 – 20 Years
Plant	3 – 9 Years
Tailings	3 Years
Environmental and permits	7 Years
Asset retirement obligation	5 Years
Automotive	3 – 5 Years
Software	5 Years

Mine Development

Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, and the building of access ways, shafts, lateral access, drifts, ramps and other infrastructure in an underground mine. Costs incurred before mineralization is classified as proven and probable reserves are expensed and classified as exploration expense. Capitalization of mine development project costs, that meet the definition of an asset, begins once mineralization is classified as proven and probable reserves.

Drilling and related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body or converting non-reserve mineralization to proven and probable reserves. All other drilling and related costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs and then included as a component of costs applicable to sales.

Mine development is amortized using the units-of-production method based upon estimated recoverable tonnage in proven and probable reserves. To the extent that these costs benefit an entire ore body, they are amortized over the estimated life of the ore body. Costs incurred to access specific ore blocks or areas that only provide benefit over the life of that area are amortized over the estimated life of that specific ore body.

Mineral Properties [Policy Text Block]

Mineral Properties

Mineral properties are capitalized at their fair value at the acquisition date, either as an individual asset purchase or as part of a business combination. When it is determined that a mineral property can be economically developed as a result of establishing reserves, subsequent mine development are capitalized and are amortized using the units of production method over the estimated life of the ore body based on estimated recoverable tonnage in proven and probable reserves.

The Company’s mineral rights generally are enforceable regardless of whether proven and probable reserves have been established. The Company has the ability and intent to renew mineral interests where the existing term is not sufficient to recover all identified and valued proven and probable reserves and/or undeveloped mineralized material.

Impairment of Long-Lived Assets [Policy Text Block]

Impairment of Long-Lived Assets

The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate the related carrying amounts may not be recoverable. The assets are subject to impairment consideration if events or circumstances indicate that their carrying amount might not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. When impairment is identified, the carrying amount of the asset is reduced to its estimated fair value which is generally derived from estimated discounted cash flows.

The Company is in continuing discussions with various strategic financing sources, including the Company’s two major creditors at this time. It is unknown if such discussions will be successful in attaining a financing facility and necessary debt restructure that would allow the Company to continue operations under a revised business plan.

If discussions with these financing sources are unsuccessful the Company will not be able to continue as a going concern, and will likely be forced to seek relief under the U.S. Bankruptcy Code. At that time the Company would have to evaluate the circumstances and the potential impairment on its long- lived assets.

As of September 30, 2014, and in light of continuing financing dialog with various potential financing sources, no events or circumstances have happened to indicate the related carrying values of long-lived assets may not be recoverable.

Derivative Financial Instruments [Policy Text Block]

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

The Company reviews the terms of convertible debt, equity instruments and other financing arrangements to determine whether there are embedded derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding options or warrants that may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity. The Company may also issue options or warrants to non-employees in connection with consulting or other services.

Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For warrant-based derivative financial instruments, the Company uses the Black-Scholes option pricing model to value the derivative instruments. To the extent that the initial fair values of the freestanding and/or bifurcated derivative instrument liabilities exceed the total proceeds received, an immediate charge to income is recognized, in order to initially record the derivative instrument liabilities at their fair value.

The discount from the face value of the convertible debt or equity instruments resulting from allocating some or all of the proceeds to the derivative instruments, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to income, usually using the effective interest method.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.

Reclamation Costs [Policy Text Block]

Reclamation Costs

Reclamation obligations are recognized when incurred and recorded as liabilities at fair value. The liability is accreted over time through periodic charges to earnings. In addition, the asset retirement cost is capitalized as part of the asset’s carrying value and amortized over the life of the related asset. Reclamation costs are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation costs. The reclamation obligation is based upon when spending for an existing disturbance will occur. The Company reviews, on an annual basis, unless otherwise deemed necessary, the reclamation obligation at each mine site in accordance with ASC guidance for reclamation obligations. As of September 30, 2014 and June 30, 2014, the Company had a reclamation obligation totaling $242,521 and $241,079, respectively.

Revenue Recognition [Policy Text Block]

Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred physically, the price is fixed or determinable, no related obligations remain and collectability is probable.

Sales of all metals products sold directly to the Company’s metals buyers, including by-product metals, are recorded as revenues upon a buyer either taking physical delivery of the metals product in the case of siliceous flux material or upon the buyer receiving all required documentation necessary to take physical delivery of the metals product in the case of concentrate (generally at the time the product is loaded onto a shipping vessel at the originating port and the bill of lading is generated).

Revenues for metals products are recorded at current market prices at the time of delivery and are subsequently adjusted to the current market prices existing at the end of each reporting period. Due to the period of time existing between delivery and final settlement with the buyer, the Company estimates the prices at which sales will be settled. Changes in metals prices between delivery and final settlement will result in adjustments to revenues previously recorded.

Sales of metals products are recorded net of charges from the buyer for treatment, refining, smelting losses, and other negotiated charges. Charges are estimated upon shipment of product based on contractual terms, and actual charges do not vary materially from estimates. Costs charged by smelters include a metals payable fee, fixed treatment and refining costs per ton of product.

Net Loss Per Share [Policy Text Block]

Net Loss Per Share

Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During the periods when they are anti-dilutive, common stock equivalents, if any, are not considered in the computation. For the three month periods ended September 30, 2014 and 2013, the impact of outstanding stock equivalents has not been included as they would be anti-dilutive.

Stock-Based Compensation [Policy Text Block]

Stock-Based Compensation

In connection with terms of employment with the Company’s executives and employees, the Company occasionally issues options to acquire its common stock. Awards are made at the discretion of the Board of Directors. Such options may be exercisable at varying exercise prices and generally vest over a period of six months to a year.

The Company accounts for share-based compensation based upon on the grant date fair value of the award. The Company estimates the fair value of the award using the Black-Scholes option pricing model for valuation of the share-based payments. The Company believes this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders. The simplified method is used to determine compensation expense since historical option exercise experience is limited. The compensation cost is recognized over the expected vesting period.

Recent Accounting Pronouncements [Policy Text Block]

Recent Accounting Pronouncements

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which requires management to evaluate, in connection with financial statement preparation for each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued, and to provide related disclosures. ASU 2014-15 applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company has not studied this guidance and is not certain if the adoption of this guidance will have a material effect on its consolidated financial statements.

In May 2014, the FASB issued ASC updated No. 2014-09, "Revenue from Contracts with Customers (Topic 606)”(ASU 2014-09). Under the amendments in this update, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in this update are effective for fiscal years and interim periods within those years beginning after December 15, 2016. Early adoption is not permitted. The new standard is required to be applied either retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of applying the update recognized at the date of initial application. The Company has not yet selected a transition method, and has not determined the impact, if any, that the new standard will have on its consolidated financial statements.

In June 2014, the FASB issued ASU 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which is effective for financial statements issued for interim and annual periods beginning on or after December 15, 2015. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. This standard is not expected to have an effect on the Company’s reported financial position or results of operations.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future consolidated financial statements.

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CONTINGENCIES AND COMMITMENTS

3 Months Ended

Sep. 30, 2014

CONTINGENCIES AND COMMITMENTS [Text Block]

NOTE 10 - CONTINGENCIES AND COMMITMENTS

Ortiz Gold Project

On August 1, 2004, the Company entered into an option and lease agreement with Ortiz Mines, Inc.(“Ortiz Mines”), a New Mexico corporation, whereby the Company acquired exclusive rights for exploration, development and mining of gold and other minerals on 57,267 acres (approximately 90 square miles) of the Ortiz Mine Grant in Santa Fe County, New Mexico. On November 1, 2007, the Company relinquished 14,970 acres and retained under lease 42,297 acres (66 square miles). On May 1, 2010, we agreed with Ortiz Mines, to amend the terms of the lease. Under the amended terms, the lease provides for an extension of the initial term from seven to ten years (17 years in certain circumstances), continuing year-to-year thereafter for so long as we are producing gold or other leased minerals in commercial quantities and otherwise are performing our obligations under the lease. Among other terms, the amended lease provides for annual lease payments of $130,000 ; a sliding-scale production royalty varying from 3% to 5% depending on the price of gold; the requirement that the Company comply with governmental permitting and other regulations; and other terms common in mining leases of this type. The Ortiz gold project is subject to a property identification agreement between the Company and our former President and Chief Executive Officer. The Company is conducting a strategic evaluation as whether or not to continue with the Ortiz Gold Project.

The minimum and maximum future payments due on this lease are as follows for the next five years and thereafter:

Payment Due Date	Minimum Due	Maximum Due
	($)	($)
February 1, 2015	130,000	260,000
February 1, 2016	130,000	260,000
February 1, 2017	130,000	260,000
February 1, 2018	130,000	260,000
February 1, 2019 and thereafter	130,000	260,000

Summit Silver-Gold Project

The Summit project is subject to two underlying royalties and a net proceeds interest as follows: (1) a 7.5% royalty on net smelter returns toward an end price of $1,250,000 ; (2) a 5% royalty on net smelter returns toward an end price of $4,000,000 less any amount paid under the royalty described in (1); and (3) a net proceeds interest of 5% of net proceeds from sales of unbeneficiated mineralized rock until such time as the royalties described in (1) and (2) have been satisfied, and 10% of such net proceeds thereafter toward an end price of $2,400,000. The Summit silver-gold project is subject to a property identification agreement between the Company and the former President and Chief Executive Officer. The property identification agreement specifies that a 1% royalty be paid on the value of future production from the project.

No royalty expense was incurred during the three months ended September 30, 2014. At September 30, 2014, the Company had an accrued royalty liability of $690,358, which includes $208,179 payable to the Company’s former President and Chief Executive Officer.

Mogollon Option Agreement

On October 22, 2012, the Company entered into the Mogollon Option Agreement (the “Mogollon Option Agreement”) with Columbus following approval of the agreement by the TSX Venture Exchange. Under the agreement, the Company may acquire the Mogollon Project, Catron County, New Mexico, for payments aggregating $4,500,000 scheduled to be paid through the end of 2014. The Company paid an initial $100,000 upon the signing of the agreement and $150,000 upon approval of the agreement by the TSX Venture Exchange. The payment schedule called for $500,000 to be paid on or before December 30, 2012, and four payments of $937,500 each on June 30, 2013, December 30, 2013, June 30, 2014, and December 30, 2014. Additionally, the Company must maintain the property in good standing by paying underlying claim and lease payments.

On June 28, 2013 the Company entered into Amendment No. 1 to the Mogollon Option Agreement with Columbus. The amendment deferred the due dates of the option payments. In accordance with the amendment, the Company paid $50,000 in July 2013 and has an amended payment of $887,500 due on or before December 30, 2013, with three additional payments of $937,500 each due on June 30, 2014, December 30, 2014, and June 30, 2015. In consideration for the amendment, the Company transferred to Columbus its common shares held in the capital of Columbus Exploration Corporation valued at $11,914 at the time of transfer. The Company did not make the payment of $887,500 due on December 30, 2013.

On March 6, 2014, the Company entered into an Amended and Restated Mogollon Option Agreement with Columbus. Upon execution of the new agreement the Company paid $50,000. To exercise the option the Company had the right to pay an additional $950,000 upon the closing of the merger with Tyhee Gold. In return, the Company will earn a 100% interest in the Mogollon Project with no further payments due. Upon notice of termination of the Merger on March 21, 2014, the Company had the right for three months, until June 21, 2014, to exercise the option and make the remaining payment of $950,000 and earn 100% interest in the Mogollon Project.

On June 18, 2014, the Company entered into Amendment No. 1 to the Amended and Restated Mogollon Option Agreement with Columbus. The amendment extended the option exercise date from June 21, 2014 to November 21, 2014. Since the Company did not exercise the Mogollon option agreement, as restated and amended, it expired in accordance with its terms on November 21, 2014. As of September 30, 2014, the Company has made total payments of $876,509 under the various Option Agreements.

Commodity Supply Agreements

In September 2009, the Company entered into a definitive gold stream agreement (the “Gold Stream Agreement”) with Sandstorm to deliver a portion of the life-of-mine gold production (excluding all silver production) from the Company’s Summit silver-gold mine. Under the agreement the Company received advances of $4,000,000 as an upfront deposit, plus continue to receive future ongoing payments equal to the lesser of: $400 per ounce or the prevailing market price, (the “Fixed Price”) for each ounce of gold delivered pursuant to the agreement for the life of the mine. The Company purchases and delivers refined gold in order to satisfy the requirements of the Gold Stream Agreement and receives the Fixed Price per ounce in cash from Sandstorm. The difference between the prevailing market price and the Fixed Price per ounce for gold delivered is credited against the upfront deposit of $4,000,000 until the obligation is reduced to zero. Future ongoing payments for gold deliveries will continue at the Fixed Price per ounce with no additional credits or advances to be received from Sandstorm. In certain circumstances, including failure to meet minimum production rates, interruption in production due to permitting issues and customary events of default, the agreement may be terminated. In such event, the Company may be required to return to Sandstorm any remaining uncredited balance of the original $4,000,000 upfront deposit. Gold production subject to the agreement includes 50% of the first 10,000 ounces of gold produced, and 22% of the gold thereafter. The net cost of delivering refined gold along with other related transactional costs corresponding to the Gold Stream Agreement are recorded in Other Expenses as financing costs - commodity supply agreements.

On March 29, 2011, the Company entered into Amendment 1 for the Gold Stream Agreement. The amendment extended the original completion guarantee date from April 2011 to June 30, 2012. The completion guarantee test performs a calculation based upon that percentage of underproduction of gold produced relative to the amount of gold planned to have been produced as set out in the agreement. In exchange for the amended completion guarantee date, the Company agreed to deliver an additional 700 ounces of gold at equivalent sales terms over and above the original agreement. Under the terms of the amendment the delivery of the additional gold was to be made prior to June 30, 2011.

On June 28, 2011, the Company entered into Amendment 2 for the Gold Stream Agreement. The amendment extended the delivery date for the additional 700 ounces of gold agreed upon in Amendment 1 from June 30, 2011 until October 15, 2011. In exchange for the new deferred delivery date the Company agreed to pay a per diem of 3 ounces of gold for each day the additional gold under Amendment 1 remained outstanding past June 30, 2011 until the actual date of delivery, no later than October 15, 2011. On August 9, 2011 the Company satisfied the requirements of Amendment 2 and delivered 817 ounces of gold. The net cost of delivering the gold after receiving payment from Sandstorm of $400 per ounce delivered was $1,075,785.

At June 30, 2012, the Company calculated the completion guarantee payable provided by Amendment 1. Based upon the provisions of the Gold Stream Agreement and the related completion guarantee test, incremental financing charges totaling $504,049 were recognized and accrued at June 30, 2012. These accrued charges, combined with the remaining uncredited liability for the upfront deposit totaled $3,359,873 at September 30, 2014 and June 30, 2014, respectively, and are reported as the completion guarantee payable.

Under the Gold Stream Agreement the Company has a recorded an obligation at September 30, 2014, of 3,692 ounces of undelivered gold valued at approximately $3.0 million, net of the Fixed Price of $400 per ounce to be received upon delivery.

On December 23, 2011, the Company and its subsidiaries entered into a Senior Secured Gold Stream Credit Agreement (the “Credit Agreement”) with Waterton. The Credit Agreement provided for two $10 million tranches and a $5 million revolving working capital facility. On December 23, 2011, the Company closed the first $10 million tranche of the Credit Agreement. The second $10 million tranche, which was subject to several funding conditions, was earmarked to fund the strategic acquisition of Columbus. The acquisition did not occur and consequently the second tranche was not drawn down. As part of the transaction, the Company agreed pursuant to a gold and silver sale agreement (the “Gold and Silver Supply Agreement”) to sell refined gold and silver to Waterton for the life the Summit mine. Gold and silver subject to the agreement includes all gold and silver originating from the Summit property that is not otherwise committed to delivery to and purchased by Sandstorm, pursuant to the September 9, 2011 Gold Stream Agreement. The sales price for refined gold and silver is based upon a formulation which considers the London Bullion Market Association (“LBMA”) PM fix settlement price for each respective metal, less a discount of three percent for each metal, and a transaction cost of $1.75 per ounce for gold and $0.07 per ounce for silver. The discount on gold and silver is only applicable until and ceases after the latter of either, three years after all outstanding amounts due under the Senior Secured Gold Stream Credit Agreement have been repaid, or the date on which the Company has sold 125,000 gold equivalent ounces under the Gold and Silver Supply Agreement. The Company recorded an obligation of $218,811 and $611,503 at September 30, 2014 and June 30, 2014, respectively, related to the Gold and Silver Supply Agreement and is recorded in accrued liabilities.

The Company refers to the Gold Stream Agreement and Gold and Silver Supply Agreement collectively as the commodity supply agreements and records the costs related to these agreements in financing costs – commodity supply agreements.

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NOTES PAYABLE

3 Months Ended

Sep. 30, 2014

NOTES PAYABLE [Text Block]

NOTE 8 – NOTES PAYABLE

Pursuant to 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") on July 15, 2014, the Company and Carnac entered into an interim financing facility pursuant to which Canarc advanced $220,000 to the Company. The loan bears interest at a rate of 1% a month and is due and payable upon the closing of a gold bond financing by the Company or January 15, 2015, if the financing does not close.

On May 8, 2012, the Company entered into an installment sales contract for $46,379 to purchase certain equipment. The term of the agreement is for 36 months at an interest rate of 5.75%, with the equipment securing the loan. The principal balance owed on the note was $12,352 and $16,354 at September 30, 2014 and June 30, 2014, respectively.

On June 1, 2012, the Company entered into an installment sales contract for $593,657 to purchase certain equipment. The term of the agreement is for 48 months at an interest rate of 5.75%, with the equipment securing the loan. The principal balance owed on the note was $398,793 and $398,793 at September 30, 2014 and June 30, 2014, respectively. The Company has been unable to make its monthly payments since November 2013, is currently in default and the equipment has been returned to the vendor for sale..

In conjunction with the Merger Agreement, Tyhee and the Company entered into a Bridge Loan Agreement, pursuant to which Tyhee was obligated to advance up to $3 million to the Company in accordance with the terms thereof. Tyhee advanced the Company $1,745,092 under the Bridge Loan as of June 30, 2014. The Bridge Loan bears an annual interest rate of 24%. At this time the Company and Tyhee are in disagreement as to the due date of the Bridge Loan. Tyhee has provided the Company with purported notice of default under the Bridge Loan Agreement. Given the terms of the Bridge Loan and Merger Agreement, the Company believes Tyhee’s default notice is wrongful. At September 30, 2014 and June 30, 2014, the Company recorded merger expenses that are due to Tyhee of $269,986 and is included in accrued liabilities. This amount is net of a break fee of $300,000 due the Company from Tyhee.

The following summarizes notes payable, including the Senior Secured Gold Stream Credit Agreement, at:

		June 30,			June 30,
		2014			2014
Working capital advances,
interest at 1% per month, due January 15, 2015	$	220,000		$	-
Installment sales contract on equipment,
interest at 5.75%, payable in 36 monthly installments of $1,406, including
interest through June 2015.		12,352			16,354
Installment sales contract on equipment,
interest at 5.75%, payable in 48 monthly installments of $13,874,
including interest through July 2016.		398,793			398,793
Unsecured bridge loan note payable,
Interest at 2% monthly, payable August 17, 2014, six months after the first
advance on the bridge loan.		1,745,092			1,745,092
Senior Secured Gold Stream Credit Agreement, interest at
9.00% per annum, payable monthly in arrears, principal payments deferred
to July 2012; principal installments are $425,000 for July and August
2012, $870,455 monthly for September 2012 through June 2013 and
$445,450 in July 2013; Note amended October 9, 2012, principal
installments of $1,082,955 due October 2012, $500,000 November 2012,
$0 due December 2012 and January 2013, $3,852,275 February 2013,
$870,455 March through June 2013, and $445,450 in July 2013.		7,040,427			7,040,427
Total Outstanding Notes Payable		9,416,664			9,200,666
Less: Current portion		(9,416,664	)		(9,200,666	)
Notes payable, net of current portion and discount	$	- -		$	- -

The aggregate maturities of notes payable as of September 30, 2014, are as follows:

Year ending June 30, 2015	$	9,416,664
Total Outstanding Notes Payable	$	9,416,664

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FAIR VALUE MEASUREMENTS

3 Months Ended

Sep. 30, 2014

FAIR VALUE MEASUREMENTS [Text Block]

NOTE 9 – FAIR VALUE MEASUREMENTS

Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 –	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 –	Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly for substantially the full term of the asset or liability;
Level 3 –	Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Asset and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.

The Company’s financial instruments consist of derivative instruments which are measured at fair value on a recurring basis. The derivatives are measured on their respective origination dates, at the end of each reporting period and at other points in time when necessary, such as modifications, using Level 3 inputs in accordance with GAAP. The Company does not report any financial assets or liabilities that it measures using Level 1 or 2 inputs. The fair value measurement of financial instruments and other assets as of September 30, 2014 and June 30, 2014 are as follows:

				Balance at September 30,
	Level 1	Level 2	Level 3	2014
Assets:	- --	- --	- --	- --
None
Liabilities:
Derivative instruments	- --	- --	$804,839	$804,839

				Balance at June 30,
	Level 1	Level 2	Level 3	2014
Assets:	- --	- --	- --	- --
None
Derivative instruments	- --	- --	$292,124	$292,124

The following represents a reconciliation of the changes in fair value of financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended September 30, 2014:

Derivative instruments liabilities at June 30, 2014	$	292,124
Loss on derivative instrument liabilities		512,715
Derivative instruments liabilities at September 30, 2014	$	804,839

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STOCKHOLDERS' EQUITY

3 Months Ended

Sep. 30, 2014

STOCKHOLDERS' EQUITY [Text Block]

NOTE 11 - STOCKHOLDERS’ EQUITY Issuance of Stock

On July 15, 2014, the Company entered into shares for debt settlements with five individuals wherein an aggregate of $200,000 of debt was settled by the aggregate issuance of 4,000,000 shares of common stock.

Issuance of Warrants

During the three months ended September 30, 2014, no warrants were issued and 112,263 warrants expired .

Stock Options and the 2007 Equity Incentive Plan

During the three months ended September 30, 2014, 7,500,000 options were granted and 6,525,000 options cancelled .

Pursuant to Share Exchange Agreement with Canarc Resource Corp., the Company granted five year stock options for 7,500,000 shares of common stock at an exercise price of $0.055, the closing price on the date of grant. The stock options vest 100% upon the closing of a qualified financing. The expiry date would be July 15, 2019 if a qualified financing was consummated, or October 15, 2014 if a qualified financing was not consummated by October 31, 2014. A qualified financing is debt or equity financing of at least $20.0 million. The Share Exchange Agreement provided that it would terminate, unless a closing of the transactions contemplated occurred on or before October 31, 2014. The transactions did not close, and the Share Exchange Agreement terminated pursuant to its terms on October 31, 2014. The associated granted options did not vest and expired on October 15, 2014 according to the terms of the grant.

In addition to options under the 1989 Stock Option Plan and 2007 EIP, the Company previously issued non- plan options outside of these plans, exercisable over various terms up to a maximum of ten years.

Stock option and warrant activity, both within the 1989 Stock Option Plan and 2007 EIP and outside of these plans, for the three months ended September 30, 2014, are as follows:

	Stock Options		Stock Warrants
		Weighted		Weighted
		Average		Exercise
	Shares	Price	Shares	Price
Outstanding at June 30, 2014	8,925,000	$0.24	25,283,511	$0.62
Granted	7,500,000	$0.055	- --	- --
Canceled	(6,525,000)	$0.36	- --	- --
Expired	- --	- --	(112,263)	$1.06
Exercised	- --	- --	- --	- --
Outstanding at September 30, 2014	9,900,000	$0.12	25,171,248	$0.62

Stock options and warrants outstanding and exercisable at September 30, 2014, are as follows:

	Outstanding and Exercisable Options						O utstanding and Exercisable
								Warrants
			Weighted							Weighted
			Average							Average
			Contractual		Weighted					Contractual		Weighted
Exercise			Remaining		Average		Exercise			Remaining		Average
Price	Outstanding	Exercisable	Life		Exercise		Price	Outstanding	Exercisable	Life		Exercise
Range	Number	Number	(in Years)		Price		Range	Number	Number	(in Years)		Price
$0.055	7,500,000	- -	.04	$	0.055	$	0.135	6,750,000	6,750,000	0.25	$	0.135
$0.08	400,000	400,000	4.28	$	0.08	$	0.38	523,434	523,434	2.96	$	0.38
$0.14	600,000	600,000	3.85	$	0.14	$	0.40	11,306,786	11,306,786	2.72	$	0.40
$0.32	450,000	450,000	3.25	$	0.32	$	0.87	500,000	500,000	1.84	$	0.87
$0.36	700,000	700,000	3.25	$	0.36	$	1.00	600,000	600,000	2.11	$	1.00
$1.00	250,000	250,000	.54	$	1.00	$	1.25	250,000	250,000	0.30	$	1.25
	- -	- -				$	1.50	933,334	933,334	1.13	$	1.50
	- -	- -				$	1.625	461,539	461,539	0.25	$	1.625
	- -	- -				$	1.70	3,846,155	3,846,155	0.31	$	1.70
	9,900,000	2,400,000						25,171,248	25,171,248
	Outstanding Options		.83	$	0.12		Outstanding Warrants			1.47	$	0.62
	Exercisable Options		3.29	$	0.32		Exercisable Warrants			1.47	$	0.62

As of September 30, 2014, the aggregate intrinsic value of all stock options and warrants vested and expected to vest was $20,000 and the aggregate intrinsic value of currently exercisable stock options and warrants was $20,000. The intrinsic value of each option share is the difference between the fair market value of the common stock and the exercise price of such option or warrant share to the extent it is "in-the-money". Aggregate intrinsic value represents the value that would have been received by the holders of in-the-money options had they exercised their options on the last trading day of the quarter and sold the underlying shares at the closing stock price on such day. The intrinsic value calculation is based on the $0.13 closing stock price of the common stock on September 30, 2014. There were 400,000 options and warrants vested and exercisable as of September 30, 2014 in the money.

The total intrinsic value associated with options exercised during the three months ended September 30, 2014, was $0. Intrinsic value of exercised shares is the total value of such shares on the date of exercise less the cash received from the option or warrant holder to exercise the options.

The total fair value of options and warrants granted and extended during the three months ended September 30, 2014, was approximately $0. The total grant-date fair value of option and warrant shares vested during the three months ended September 30, 2014 was $0.

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NOTES PAYABLE (Narrative) (Details) (USD $)			1 Months Ended			1 Months Ended			1 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Feb. 14, 2014 Tyhee Bridge Loan Agreement [Member]	Sep. 30, 2014 Tyhee Bridge Loan Agreement [Member]	Jan. 23, 2014 Tyhee Bridge Loan Agreement [Member]	May 31, 2012 Installment sales contract 1 [Member]	Sep. 30, 2014 Installment sales contract 1 [Member]	Jun. 30, 2014 Installment sales contract 1 [Member]	Jun. 30, 2012 Installment sales contract 2 [Member]	Sep. 30, 2014 Installment sales contract 2 [Member]	Jun. 30, 2014 Installment sales contract 2 [Member]	Sep. 30, 2014 Carnac [Member]	Jul. 15, 2014 Carnac [Member]	Jun. 30, 2014 Carnac [Member]
Notes Payable	$ 9,416,664	$ 9,200,666					$ 12,352	$ 16,354		$ 398,793	$ 398,793	$ 220,000	$ 220,000	$ 0
Debt Instrument, Interest Rate, Stated Percentage			24.00%			5.75%	5.75%		5.75%	5.75%		1.00%	1.00%
Obligated Advances Receivable, Amount					3,000,000
Proceeds from Advances			1,745,092
Installment sales contract						46,379	12,352	16,354	593,657	398,793	398,793
Notes Issued, Term						36 months			48 months
Accrued liabilities	7,626,245	8,024,162		269,986
Break Fee				$ 300,000

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INVENTORY (Tables)

3 Months Ended

Sep. 30, 2014

Schedule of Inventory, Current [Table Text Block]

		September 30,		June 30,
		2014		2014
Stockpiled ore	$	-	$	-
In-process material		-		-
Siliceous flux material		-		-
Precious metals concentrate		-		40,000
	$	-	$	40,000

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

12 Months Ended

Sep. 30, 2014

Jun. 30, 2014

Fair Value Measurements, Nonrecurring [Table Text Block]

				Balance at September 30,
	Level 1	Level 2	Level 3	2014
Assets:	- --	- --	- --	- --
None
Liabilities:
Derivative instruments	- --	- --	$804,839	$804,839

				Balance at June 30,
	Level 1	Level 2	Level 3	2014
Assets:	- --	- --	- --	- --
None
Derivative instruments	- --	- --	$292,124	$292,124

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

Derivative instruments liabilities at June 30, 2014	$	292,124
Loss on derivative instrument liabilities		512,715
Derivative instruments liabilities at September 30, 2014	$	804,839

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Schedule of Share-based Compensation, Stock Options, and Warrants or Rights Activity (Details) (USD $)	3 Months Ended
	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning of Period	8,925,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning of Period	$ 0.24
Class of Warrant or Right, Outstanding, Beginning of Period	25,283,511
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price, Beginning of Period	$ 0.62
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	7,500,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 0.055
Class of Warrant or Right, Grants in Period, Net of Forfeitures	0
Class of Warrant or Right, Grants in Period, Weighted Average Exercise Price	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period	(6,525,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price	$ 0.36
Class of Warrant or Right, Forfeitures in Period	0
Class of Warrant or Right, Forfeitures in Period, Weighted Average Exercise Price	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price	$ 0
Class of Warrant or Right, Expirations in Period	(112,263)
Class of Warrant or Right, Expirations in Period, Weighted Average Exercise Price	$ 1.06
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price	$ 0
Class of Warrant or Right, Exercises in Period	0
Class of Warrant or Right, Exercises in Period, Weighted Average Exercise Price	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, End of Period	9,900,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, End of Period	$ 0.12
Class of Warrant or Right, Outstanding, End of Period	25,171,248
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price, End of Period	$ 0.62

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Schedule of Accrued Liabilities (Details) (USD $)	Sep. 30, 2014	Jun. 30, 2014
Interest	$ 1,926,986	$ 1,572,298
Vacation	50,830	57.602
Deferred and accrued payroll burden	130,896	133,890
Franchise taxes	12,753	8,503
Royalties	690,358	690,358
Merger costs, net	269,986	269,986
Other	230,022	133,958
Audit	71,885	111,825
Debt settlement	106,977	106,977
Property taxes	88,159	135,000
Receivables due to Waterton	813,919	813,919
Commodity supply agreements	3,233,474	3,989,846
Accrued Liabilities, Current	$ 7,626,245	$ 8,024,162

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (944,472)	$ (3,999,575)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	482,248	774,460
Stock-based compensation	0	108,610
Accretion of discount on notes payable	12,241	9,896
Financing costs - commodity supply agreements	(756,371)	690,887
Accretion of asset retirement obligation	1,442	513
Loss on derivative instrument liabilities	512,715	291,996
(Gain) on disposal of assets	0	(118,477)
Amortization of deferred financing costs	9,931	81,745
Foreign currency translation	(301,152)	(12,289)
Net change in operating assets and liabilities:
Accounts receivable	(58,540)	(552,468)
Inventory	40,000	(138,421)
Prepaid expenses and other current assets	(2,801)	24,041
Mogollon option costs	0	(50,000)
Accounts payable and accrued liabilities	718,846	1,612,835
Net Cash Used in Operating Activities	(285,913)	(1,276,247)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of assets	0	249,000
Purchase of property, plant and equipment	(13,500)	(139,359)
Net Cash Provided by (Used) in Investing Activities	(13,500)	109,641
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable	0	1,250,000
Proceeds from issuance of stock	0	0
Proceeds from notes payable	220,000	29,144
Payments on notes payable	(4,002)	(54,219)
Net Cash Provided by Financing Activities	215,998	1,224,925
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(83,415)	58,319
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	83,825	115,094
CASH AND CASH EQUIVALENTS, END OF PERIOD	410	173,413
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	216	7,015
Cash paid for income taxes	0	0
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for accounts payable and accrued wages	$ 200,000	$ 0

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DERIVATIVE INSTRUMENT LIABILITIES

3 Months Ended

Sep. 30, 2014

DERIVATIVE INSTRUMENT LIABILITIES [Text Block]

NOTE 5 - DERIVATIVE INSTRUMENT LIABILITIES

The fair market value of the derivative instruments liabilities at September 30, 2014, was determined to be $804,839 with the following assumptions: (1) risk free interest rate of 0.02% to 1.05%, (2) remaining contractual life of 0.06 to 2.96 years, (3) expected stock price volatility of 141.4% to 216.62%, and (4) expected dividend yield of zero. Based upon the change in fair value, the Company has recorded a loss on derivative instruments for the three months ended September 30, 2014, of $512,715 and a corresponding increase in the derivative instruments liability.

		Derivative		Derivative		Loss for
		Liability as of		Liability as of		Three months ended
		June 30, 2014		September 30, 2014		September 30, 2014
Warrants	$	292,124	$	804,839	$	512,715

The entire amount of derivative instrument liabilities are classified as current due to the fact that settlement of the derivative instruments could be required within twelve months of the balance sheet date.

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CONTINGENCIES AND COMMITMENTS (Tables)

3 Months Ended

Sep. 30, 2014

Schedule of Future Minimum and Maximum Lease Payments [Table Text Block]

Payment Due Date	Minimum Due	Maximum Due
	($)	($)
February 1, 2015	130,000	260,000
February 1, 2016	130,000	260,000
February 1, 2017	130,000	260,000
February 1, 2018	130,000	260,000
February 1, 2019 and thereafter	130,000	260,000

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SUBSEQUENT EVENTS (Narrative) (Details) (USD $)	3 Months Ended
	Sep. 30, 2014	Jun. 30, 2014
Subsequent Events, Stock Options Expired	7,500,000
Subsequent Events, Stock Options Expired, Exercise Price	$ 0.055
Mogollon option costs	$ 876,509	$ 876,509

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Sep. 30, 2014

Schedule of Property, Plant and Equipment, Estimated Useful Life [Table Text Block]

	Estimated Useful Life
Leasehold improvements	3 Years
Office furniture and equipment	3 Years
Mine processing equipment and buildings	7 – 20 Years
Plant	3 – 9 Years
Tailings	3 Years
Environmental and permits	7 Years
Asset retirement obligation	5 Years
Automotive	3 – 5 Years
Software	5 Years