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 March 31, 2015

[   ] 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: 139,596,648 shares outstanding as of May 18, 2015.

SANTA FE GOLD CORPORATION

INDEX TO FORM 10-Q

PART I

FINANCIAL INFORMATION

		Page
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of March 31, 2015 (Unaudited) and June 30, 2014	3
	Consolidated Statements of Operations for the Three and Nine Months Ended March 31, 2015 and 2014, (Unaudited)	4
	Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2015 and 2014 (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	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	33
Item 6.	Exhibits	33
SIGNATURES		33
CERTIFICATIONS

2

PART I
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SANTA FE GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS

		March 31,			June 30,
		2015			2014
		(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	109,876		$	83,825
Accounts receivable		-			14,267
Inventory		-			40,000
Prepaid expenses and other current assets		239,008			247,069
Total Current Assets		348,884			385,161
MINERAL PROPERTIES		599,897			599,897
PROPERTY, PLANT AND EQUIPMENT,                net of depreciation of $14,830,582 and $11,162,024, respectively		17,808,508			19,255,682
OTHER ASSETS:
Restricted cash		231,716			231,716
Mogollon option costs		-			876,509
Deferred financing costs, net		69,517			99,310
Total Other Assets		301,233			1,207,535
Total Assets	$	19,058,522		$	21,448,275
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	3,645,394		$	3,659,848
Accrued liabilities		8,510,235			8,024,162
Derivative instrument liabilities		1,247,780			292,124
Senior subordinated convertible notes payable, current portion, net                of discounts of $-0- and $17,937, respectively		3,448,710			432,063
Notes payable, current portion		9,388,488			9,200,666
Completion guarantee payable		3,359,873			3,359,873
Total Current Liabilities		29,600,480			24,968,736
LONG TERM LIABILITIES:
Senior subordinated convertible notes payable, net of current portion and                net of discounts $-0-.		-			3,673,527
Convertible notes, net of discounts of $206,101		5,010			-
Asset retirement obligation		245,494			241,079
Total Liabilities		29,850,984			28,883,342
STOCKHOLDERS' (DEFICIT) :
Common stock, $.002 par value, 300,000,000 shares authorized; 139,596,648 and                127,229,228 shares issued and outstanding, respectively		279,194			254,459
Stock subscription		50,000			-
Additional paid in capital		79,497,992			78,292,962
Accumulated (deficit)		(90,619,648	)		(85,982,488	)
Total Stockholders' (Deficit)		(10,792,462	)		(7,435,067	)
Total Liabilities and Stockholders' (Deficit)	$	19,058,522		$	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						Nine Months Ended
		March 31,						March 31,
		2015			2014			2015			2014
SALES, net	$	-		$	(205,761	)	$	64,389		$	2,013,496
OPERATING COSTS AND EXPENSES:
Costs applicable to sales		-			-			40,000			3,213,205
Exploration and other mine related costs		(13,079	)		503,226			1,223,431			737,403
General and administrative		368,904			1,038,668			1,545,788			2,942,713
Depreciation and amortization		482,463			541,928			1,447,175			1,977,247
Impairment of idle equipment		-			761,928			-			761,928
Gain on dosposition of assets		-			(134,995	)		-			(134,995	)
Accretion of asset retirement obligation		1,501			-			4,415			1,203
Total Operating Costs and Expenses		839,789			2,710,755			4,260,809			9,498,704
LOSS FROM OPERATIONS		(839,789	)		(2,916,516	)		(4,196,420	)		(7,485,208	)
OTHER INCOME (EXPENSE):
Miscellaneous income		-			-			-			13,387
Gain on debt extinguishment		-			615,781			62,940			615,781
Foreign currency translation		210,759			(237,403	)		761,839			12,774
(Loss) gain on derivative instrument liabilities		(866,827	)		134,138			(780,656	)		279,513
Accretion of discounts on notes payable		(3,688	)		(10,761	)		(22,947	)		(31,094	)
Financing costs - commodity supply agreements		1,087			(251,739	)		758,852			(736,384	)
Finance charges		(6	)		-			(25,034	)		-
Interest expense		(375,400	)		(319,508	)		(1,195,734	)		(1,000,243	)
Total Other (Expense)		(1,034,075	)		(69,492	)		(440,740	)		(846,266	)
(LOSS) BEFORE PROVISION FOR INCOME TAXES		(1,873,864	)		(2,986,008	)		(4,637,160	)		(8,331,474	)
PROVISION FOR INCOME TAXES		-			-			-			-
NET (LOSS)		(1,873,864	)		(2,986,008	)		(4,637,160	)		(8,331,474	)
OTHER COMPREHENSIVE INCOME
Unrealized gain on marketable securities		-			-			-			-
NET COMPREHENSIVE (LOSS)	$	(1,873,864	)	$	(2,986,008	)	$	(4,637,160	)	$	(8,331,474	)
Basic and Diluted Per Share data       Net (Loss) - basic and diluted	$	(0.01	)	$	(0.02	)	$	(0.03	)	$	(0.07	)
Weighted Average Common Shares Outstanding:       Basic and diluted		138,396,648			124,595,483			134,221,627			119,897,516

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

4

SANTA FE GOLD CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		Nine Months Ended
		March 31,
		2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(4,637,160	)	$	(8,331,474	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,447,175			1,977,247
Stock-based compensation		423,227			405,851
Accretion of discount on notes payable		22,947			31,094
Accretion of asset retirement obligation		4,415			1,203
Financing costs - commodity supply agreements		(755,852	)		-
Loss (gain) on derivative instruments		780,656			(279,513	)
(Gain) on disposal of assets		-			(134,995	)
(Gain) on debt extinguishment		(62,940	)		(615,781	)
Impairment of idle equipment		-			761,928
Amortization of deferred financing costs		29,793			176,607
Foreign currency translation		(761,839	)		(12,774	)
Net change in operating assets and liabilities:
Accounts receivable		14,267			273,797
Inventory		(127,320	)		122,558
Prepaid expenses and other current assets		175,381			79,568
Mogollon option costs		876,509			(102,245	)
Accounts payable and accrued liabilities		1,661,470			2,771,808
Net Cash Used in Operating Activities		(909,271	)		(2,875,121	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of assets		-			464,500
Purchase of property, plant and equipment		-			(201,940	)
Net Cash Provided by Investing Activities		-			262,560
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable		175,000			1,250,000
Proceeds from issuance of stock		502,500			-
Proceeds from notes payable		200,000			-
Proceeds from stock subscription		50,000			-
Meger advance		20,000			1,811,311
Payments on notes payable		(12,178	)		(153,080	)
Net Cash Provided by Financing Activities		935,322			2,908,231
INCREASE IN CASH AND CASH EQUIVALENTS		26,051			295,670
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		83,825			115,094
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	109,876		$	410,764
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	473		$	30,463
Cash paid for income taxes	$	-		$	-
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for convertible note and accrued interest	$	-		$	1,263,930
Stock issued for acrued wages and professional fees	$	200,000		$	-
Stock issued for debt conversion	$	104,038		$	-
Insurance financed with note payable	$	-		$	37,074

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

5

SANTA FE GOLD CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2015

(UNAUDITED)

NOTE 1 – NATURE OF OPERATIONS

Santa Fe Gold Corporation, a Delaware corporation (the “Santa Fe” or “Company”) is a U.S. copper, silver and gold exploration and mining company. The Company’s two principal projects are:

• The Lordsburg Copper Project, which consists of multiple square miles of patented and unpatented claims within the historic, inactive northern Lordsburg Mining district. The Lordsburg district is located along the middle of the Santa Rita lineament that extends from Copper Flats, through Santa Rita and Chico-Tyrone and into Mexico to Bisbee-Cananea. On June 30, 2008, The Lordsburg Mining Company (“Lordsburg Mining”), a New Mexico corporation, purchased from St. Cloud Mining Company, mineral processing equipment and real property situated adjacent to the Banner mill site located south of Lordsburg, New Mexico. 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 northern Lordsburg 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. In December 2014, the Company staked an additional 289 claims, increasing the Lordsburg Copper Project’s land position by approximately nine square miles to approximately 13 square miles.

• Our Summit Silver-Gold Project, a fully-permitted silver-gold mine and mill, located near Duncan, Arizona on the New Mexico-Arizona border. In 2006, the Company acquired all of the outstanding shares of Lordsburg Mining. With the acquisition of Lordsburg Mining, the Company acquired the Summit Silver-Gold 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. In April 2012, the Company commenced commercial production at the Summit silver–gold mine. In November 2013 mining operations were suspended at the Summit Silver-Gold Project and the project was placed on “care- and-maintenance.”

Santa Fe’s two primary strategic objectives include:

• Strategic Objectives -- Copper: To advance, with a strategic or financial partner, the Lordsburg Copper Project as a deep porphyry copper exploration project; and, to restart a high-grade underground copper mine in the Lordsburg mining district; and

• Strategic Objective -- Silver-Gold: To become a low-cost silver-gold producer by restarting the Summit Silver- Gold Project.

Presently, Santa Fe is in active discussions and negotiations with several strategic and financial partners concerning the Lordsburg Copper Project and the Company is exploring financing alternatives to restart the Summit Silver-Gold Project. No assurances can be given that the Company’s efforts will be successful. These interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended September 30, 2014, included in the Company’s Annual Report on Form 10-K, filed with the Security Exchange Commission on October 22, 2014, and amended on October 23,2014. See “Risk Factors -- 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” in the Company’s annual report on Form 10-K for our year fiscal ended June 30, 2014.

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.

The Company has incurred a loss of $4,637,160 for the nine months ended March 31, 2015. At March 31, 2015, the Company had a total accumulated deficit of $90,619,648 and a working capital deficit of $29,251,596. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company began revenue generating operations during the fiscal year ended June 30, 2011, through the sales of precious metals and flux material. On November 8, 2013 the Company suspended all mining operations and placed the mine and mill on a care and maintenance program. For the three months ended March 31, 2015, the Company did not engage in any mining activities and did generate any sales. The Company is currently working to restructure its debts and obtain adequate capital to restart operations in the Company’s fiscal 2015 year.

At March 31, 2015, the Company was in default on payments totaling approximately $9.3 million under its Senior Secured Gold Stream Credit Agreement (the “Credit Agreement”) with Waterton Global Value, L.P. (“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.

To continue as a going concern, the Company is dependent on continued capital financing for project development, refinancing or 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. Presently, the Company is in active discussions and negotiations with several strategic and financial partners concerning the Lordsburg Copper Project and the Company is exploring financing alternatives to restart the Summit Silver-Gold Project. No assurances can be given that the Company’s efforts will be successful. See “Risk Factors -- 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” in the Company’s annual report on Form 10-K for our year fiscal ended June 30, 2014.

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, 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 March 31, 2015 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 March 31, 2015 and June 30, 2014.

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 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 March 31, 2015.

Inventory

Major types of inventories include ore stockpile inventories, in-process inventories, siliceous flux material inventories and concentrate inventories. 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. The Company has no inventories at March 31, 2015.

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 active and continuing discussions with various strategic and financial financing sources concerning both the Summit Silver-Gold Project and/or the Lordsburg Copper Project. Additionally, the Company believes that it enjoys the support of Waterton, its major creditor at this time. It is unknown if such discussions will be successful in attaining a financing and necessary debt restructure that would allow the Company to continue operations under its current business plan.

If discussions with these strategic and/or 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 March 31, 2015, and in light of current financing dialog with various potential strategic and 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 March 31, 2015 and June 30, 2014, the Company had a reclamation obligation totaling $245,494 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 and nine month periods ended March 31, 2015 and 2014, 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 and issue stock in lieu of cash compensation. Awards are made at the discretion of the Board of Directors. Such options may be exercisable at varying exercise prices and generally vest when issued to 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.

Accounting Standards to be adopted in Future Periods

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.

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 - ACCRUED LIABILITIES

Accrued liabilities consist of the following as of:

		March 31,		June 30,
		2015		2014
Interest	$	2,630,315	$	1,572,298
Vacation		57,601		57,602
Deferred and accrued payroll burden		236,939		133,890
Franchise taxes		8,695		8,503
Royalties		732,293		690,358
Merger costs, net		269,986		269,986
Other accrued expenses		446,232		133,958
Audit and accounting		31,749		111,825
Debt settlement		-		106,977
Property taxes		46,184		135,000
Receivables due Waterton		813,919		813,919
Commodity supply agreements		3,236,322		3,989,846
	$	8,510,235	$	8,024,162

(See NOTE 9 – CONTINGENCIES AND COMMITMENTS, regarding further details of Commodity supply agreements.)

NOTE 4 - DERIVATIVE INSTRUMENT LIABILITIES

The fair market value of the derivative instrument liabilities at March 31, 2015, was determined to be $1,247,780 with the following assumptions: (1) risk free interest rate of 0.20% to 0.71%, (2) remaining contractual life of 0.75 to 2.46 years, (3) expected stock price volatility of 185.45% to 233.48%, 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 nine months ended March 31, 2015, of $780,656 and a corresponding increase in the derivative instruments liability.

		Derivative		Derivative		(Loss)for
		Liability as of		Liability as of		Nine months ended
		June 30, 2014		March 31, 2015		March 31, 2015
Warrants	$	292,124	$	1,247,780	$	(955,656	)
Amount allocated to note discount at inception						175,000
					$	(780,656	)

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 5 –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 expired on October 23, 2014 and the remaining 187,500 warrants expired on November 20, 2014.

At March 31, 2015 and June 30, 2014 the outstanding principal balance on the senior subordinated convertible notes, was $450,000 and along with any unamortized discount is classified as current. The notes are currently due.

Holders of $300,000 original principal amount of the 10% Senior Subordinated Convertible Notes have indicated their desire to convert all outstanding principal and interest into shares of the Company’s common stock.

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 were 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). It was agreed that the convertible note would 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 total advances totaling only $1,250,000 in connection with the secured convertible note. IGS and the Company agreed to have all outstanding amounts under the note s 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.

On March 31, 2015, the total outstanding principal balance on the IGS Secured Convertible Note totaled $2,998,710 and accrued interest was $436,642.

Convertible Unsecured Note

On October 22, 2014 the Company signed a $500,000 Convertible Note with an Investor and received a Consideration of net proceeds $75,000, net an original issue discount (“OID) of $8,333. The Consideration on the Note has a Maturity date of two years from the Effective Date and has a 10% OID component attached to it. The Company may repay the Consideration at any time on or before 120 days from the Effect Date and the there would be no interest due on the Consideration. If the Company does not repay a Consideration on or before 120 days from its Effective Date, a one- time interest charge of 12% shall be applied to the principal sum. If the Company does not pay a Consideration prior to the 120-day period, the Company may not make further payments on this Note prior to Maturity Date without written approval from the Investor. The Investor may pay additional Consideration to the Company in such amounts and at such dates as the Investor may choose in its sole discretion.

The original consideration contains an embedded conversion option and is separated from the Note and accounted for as a derivative instrument at fair value and discount to the Note and is expensed over the life of the Note under the effective interest method.. The initial carrying value of the of the embedded conversion option exceeded the net proceeds received and created a derivative loss of $68,969 in the period ending December 31, 2014.

On February 25, 2015 a second Consideration tranche was delivered under this Convertible Note under the same terms and conditions. The tranche consideration contains an embedded conversion option and is separated from the Note and accounted for as a derivative instrument at fair value and discount to the Note and is expensed over the life of the Note under the effective interest method. The initial carrying value of the of the embedded conversion option exceeded the net proceeds received and created a derivative loss of $54,427 in the current period.

The conversion price is the lesser of $0.0425 or 65% of the lowest trade price in the 25 trading days previous to the conversion.

On January 15, 2015 the Company signed a $250,000 Convertible Note with an Investor and received a Consideration of net proceeds $50,000, net an original issue discount (“OID) of $5,556. The Consideration on the Note has a Maturity date of two years from payment of each Consideration and has a 10% OID component attached to it. A one- time interest charge of 12% is applied to the principal sum on the on the date of the Consideration. The Note principal and interest shall be paid at Maturity date or sooner as provided within the Note and conversion provisions. The Investor may pay additional Consideration to the Company in such amounts and at such dates as the Investor may choose in its sole discretion. The initial carrying value of the of the embedded conversion option exceeded the net proceeds received and created a derivative loss of $151,671 in the current period.

The conversion price is the lesser of $0.125 or 60% of the lowest trade price in the 25 trading days previous to the conversion.

The components of the all convertible notes payable at March 31, 2015 are as follows:

March 31, 2015:		Principal		Unamortized
		Amount		Discount			Net
Current portion,	$	450,000	$	-		$	450,000
Senior current portion		2,998,710		-			2,998,710
Total current		3,448,710		-			3,448,710
Convertible notes, long term portion		211,111		(206,101	)		5,010
Total convertible loans	$	3,659,821	$	206,101	)	$	3,453,720

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
Total convertible loans	$	4,123,527	$	(17,937	)	$	4,105,590

NOTE 6 – 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 9- 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 7 - 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 nine months ended March 31, 2015 have not been made and are included in accrued liabilities at March 31, 2015.

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. 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 December 31, 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 December 31, 2014 and June 30, 2014 was $7,042,427. Additionally, $813,919 of collected accounts receivable sold to Waterton remains to be remitted to them and is recorded in Accrued Liabilities at March 31, 2015.

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 7 – 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. The financing did close under this Agreement and this amount is outstanding at March 31, 2015 and in default , with $200,000 and $20,000 in Notes Payable current portion and Accrued Liabilities, respectively.

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 balance owed on the note was $4,177 and $16,354 at March 31, 2015 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 balance owed on the note was $398,793 and $398,793 at March 31, 2015 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 and remains unsold at March 31, 2015.

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 only $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. The Company has numerous claims against Tyhee resulting from the Merger Agreement, Tyhee’s failure to fund the total $3 million under the Bridge loan Agreement and Tyhee’s allocation of the proceeds from the Bridge Loan Agreement. 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.

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

		March 31,			June 30,
		2015			2014
Working capital advances,
interest at 1% per month, due January 15, 2015	$	200,000		$	-
Installment sales contract on equipment,
interest at 5.75%, payable in 36 monthly installments of $1,406, including
interest through June 2015.		4,177			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 December 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		9,388,488			9,200,666
Less: Current portion		(9,388,488	)		(9,200,666	)
Notes payable, net of current portion	$	--		$	--
The aggregate maturities of notes payable as of March 31, 2015, is as follows: Year ending June 30, 2015				$	9,388,488

NOTE 8 – 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 March 31, 2015 and June 30, 2014 are as follows:

						Balance at March 31,
	Level 1	Level 2		Level 3		2015
Assets:	---	---		---		---
None
Liabilities:
Derivative instruments	---	---	$	1,247,780	$	1,247,780

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

NOTE 9 - CONTINGENCIES AND COMMITMENTS

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.

A royalty expense was incurred during the nine months ended March 31, 2015 aggregating $41,935. At March 31, 2015, the Company had an accrued royalty liability of $732,293, which includes $222,362 payable to the Company’s former President and Chief Executive Officer.

Commodity Supply Agreements

In December 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 March 31, 2015, 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 March 31, 2015, of 3,709 ounces of undelivered gold valued at approximately $2.9 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 December 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 has a recorded obligation of $317,242 and $611,503 at March 31, 2015 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 10 - STOCKHOLDERS’ EQUITY

Issuance of Stock

On July15, 2014, the Company entered into shares for debt settlements with five creditors wherein an aggregate of $200,000 of debt was settled by the aggregate issuance of 4,000,000 shares of common stock.

On October 21, 2014, the Company issued 792,420 shares of common stock at a price of $0.135 per share to Muzz Investments, LLC, in regards to the Company’s obligation for costs incurred related to the 2006 sale of real properly in Glendale, Arizona, formerly owned by Azco Mica, Inc. A gain of $64,978 was recorded on the final extinguishment of the debt of $106,977.

On November 24, 2014, the Company entered into shares for liability settlements with two related party creditors wherein an aggregate of $40,000 of debt was settled by the aggregate issuance of 800,000 shares of common stock. A loss of $1,360 was recorded on the final extinguishment of the liabilities.

On November 24, 2014, the Company entered into shares for liability settlement with a creditor wherein an aggregate of $20,000 of debt was settled by the aggregate issuance of 400,000 shares of common stock. A loss of $680 was recorded on the final extinguishment of the liability.

On November 24, 2014, the Company sold 3,375,000 shares to an accredited investor and received net cash proceeds of $202,500. The shares were issued pursuant to an exemption from registration under Regulation S of the Securities Act of 1933, as amended.

On February 6, 2015, the Company sold 3,000,000 shares to an accredited investor and received net cash proceeds of $300,000. The shares and warrants were issued pursuant to an exemption from registration under Regulation S of the Securities Act of 1933, as amended.

Issuance of Warrants

During the nine months ended March 31, 2015, the Company issued 11,045,036 warrants and 12,082,457 warrants expired.

On October 22, 2014, in connection with a convertible note the Company initially issued 3,993,913 warrants expiring on October 22, 2016, giving the holder the right to purchase common stock at $0.026 per share with the note conversion. The convertible note is convertible at the lower of (a) $0.0425 or (b) 65% of the lowest trading price in the prior 25 trading days. Using the Black-Scholes option pricing model, the fair market value of the warrants at the time of issuance was determined to be $143,969 and exceeded the proceeds received and a derivative expense of $68,969 was recognized and the balance was recorded as a discount to the note to be amortized over the life of the note. The warrants were valued using the following significant assumptions: (1) a risk free interest rate of 0.41%, (2) expected life of 2.0 years, (3) expected stock price volatility of 172.35% and (4) expected dividend yield of zero. Based on the terms of the Note, warrants available at March 31, 2015 was reduced to 2,196,071 at a conversion price of $0.0425.

On November 24, 2014, in connection with a private placement of 3,375,000 shares of the Company’s common stock, the Company issued 3,375,000 warrants expiring on December 30, 2015, giving the holder the right to purchase common stock at $0.06 per share. Using the Black-Scholes option pricing model, the fair market value of the warrants at the time of issuance was determined to be $124,089. The warrants were valued using the following significant assumptions: (1) a risk free interest rate of 0.152%, (2) expected life of 1.01 years, (3) expected stock price volatility of 220.136% and (4) expected dividend yield of zero.

On January 15, 2015, in connection with a second convertible note the Company initially issued 2,586,160 warrants expiring on January 15, 2017, giving the holder the right to purchase common stock at $0.02406 per share with the note conversion. The convertible note is convertible at the lower of (a) $0.125 or (b) 60% of the lowest trading price in the prior 25 trading days. Using the Black-Scholes option pricing model, the fair market value of the warrants at the time of issuance was determined to be $201,671 and exceeded the proceeds received and a derivative expense of $151,671 was recognized and the balance was recorded as a discount to the note to be amortized over the life of the note. The warrants were valued using the following significant assumptions: (1) a risk free interest rate of 0.44%, (2) expected life of 2.0 years, (3) expected stock price volatility of 195.48% and (4) expected dividend yield of zero. Based on the terms of the Note, warrants available at March 31, 2015 was reduced to 926,765 at a conversion price of $0.06715.

On February 6, 2015, in connection with a private placement of 3,000,000 shares of the Company’s common stock, the Company issued 3,240,000 warrants expiring on February 6, 2019, giving the holder the right to purchase common stock at $0.15 per share. In the event the closing sales price of the common stock shall exceed $0.30 per share for five (5) consecutive trading days, unless exercised, the warrants shall expire upon fifteen (15) days written notice by the Company to the holder. Using the Black-Scholes option pricing model, the fair market value of the warrants at the time of issuance was determined to be $281,000. The warrants were valued using the following significant assumptions: (1) a risk free interest rate of 0.27%, (2) expected life of 1.0 year, (3) expected stock price volatility of 229.02% and (4) expected dividend yield of zero.

On February 25, 2015, in connection with a convertible note the Company initially issued 1,307,200 warrants expiring on February 25, 2017, giving the holder the right to purchase common stock at $0.0425 per share with the note conversion. The convertible note is convertible at the lower of (a) $0.0425 or (b) 65% of the lowest trading price in the prior 25 trading days. Using the Black-Scholes option pricing model, the fair market value of the warrants at the time of issuance was determined to be $155.199 and exceeded the proceeds received and a derivative expense of $105,199 was recognized and the balance was recorded as a discount to the note to be amortized over the life of the note. The warrants were valued using the following significant assumptions: (1) a risk free interest rate of 0.61%, (2) expected life of 2.0 years, (3) expected stock price volatility of 199.61% and (4) expected dividend yield of zero. Based on the terms of the Note, warrants available at March 31, 2015 remained at 1,307,200 at a conversion price of $0.0425.

Stock Options and the Amended and Restated Equity Incentive Plan

During the nine months ended March 31, 2015, 18,700,000 options were granted and 14,025,000 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 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 will terminate, unless a closing of the transactions contemplated shall have 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, 2015. The associated granted options did not vest and expired on October 15, 2014 according to the terms of the grant.

On October 17, 2014, the Company granted under the Company’s Amended and Restated Equity Incentive Plan 2,500,000 four year options at an exercise price of $0.05 per share to each of the two officers of the Company and a director, with the options vested on the date of the grant. The options were valued at $281,388 using the Black-Scholes option pricing model. The options were valued using the following assumptions: (1) a risk free interest rate of 0.391%, (2) expected life of 2.0 years, (3) stock price volatility of 170.017% and (4) expected dividend yield of zero. Stock-based compensation of $281,388 was recorded during the quarter ended December 31, 2014. The closing price on the date of the grant was $0.0488.

On December 31, 2014, the Company granted under the Company’s Amended and Restated Equity Incentive Plan an aggregate 3,500,000 four year options at an exercise price of $0.05 per share to three employees of the Company, with the options vested on the date of the grant. The options were valued at $130,099 using the Black-Scholes option pricing model. The options were valued using the following assumptions: (1) a risk free interest rate of 0.671%, (2) expected life of 2.0 years, (3) stock price volatility of 188.108% and (4) expected dividend yield of zero. Stock-based compensation of $130,099 was recorded during the quarter ended December 31, 2014. The closing price on the date of the grant was $0.0459.

On January 2, 2015, the Company granted 100,000 five year options at an exercise price of $0.07 per share to each of the two directors, the closing price on the date of grant and the options vested on the date of the grant. The options were valued at $11,740 using the Black-Scholes option pricing model. The options were valued using the following assumptions: (1) a risk free interest rate of 0.86%, (2) expected life of 2.5 years, (3) stock price volatility of 176.55% and (4) expected dividend yield of zero. Stock-based compensation of $11,740 was recorded during the quarter ended March 31, 2015.

In addition to options under the 2007 EIP and the Amended and Restated Equity Incentive Plan, 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 2007 EIP Amended, the Restated Equity Incentive Plan and outside of these plans, for the nine months ended March 31, 2015, 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	18,700,000		$	0.05	11,045,036			0.08
Canceled	(14,025,000	)	$	0.13	---			---
Expired	---			---	(12,082,457	)	$	0.75
Exercised	---			---	---			---
Outstanding at March 31, 2015	13,600,000		$	0.10	24,246,090		$	0.32

Stock options and warrants outstanding and exercisable at March, 31, 2015, 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
$0.05	11,000,000	11,000,000	3.67	$	0.05	$	0.0425	3,503,271	3,503,271	1.69	$	0.0425
$0.07	200,000	200,000	4.76	$	0.07	$	0.06	3,375,000	3,375,000	0.5	$	0.06
$0.08	400,000	400,000	3.79	$	0.08	$	0.067	926,765	926,765	1.80	$	0.067
$0.14	600,000	600,000	3.35	$	0.14	$	0.15	3,240,000	3,240,000	3.89	$	0.15
$0.32	450,000	450,000	2.76	$	0.32	$	0.38	523.434	523.434	2.46	$	0.38
$0.36	700,000	700,000	2.76	$	0.36	$	0.40	10,744,286	10,744,286	2.36	$	0.40
$1.00	250,000	250,000	.04	$	1.00	$	0.87	500,000	500,000	1.34	$	0.87
	--	--				$	1.00	600,000	600,000	1.61	$	1.00
	--	--				$	1.50	833,334	833,334	0.75	$	1.50
	13,600,000	13,600,000						24,246,090	24,246,090
	Outstanding Options		3.53	$	0.10		Outstanding Warrants			2.13	$	0.32
	Exercisable Options		3.53	$	0.10		Exercisable Warrants			2.13	$	0.32

As of March 31, 2015, the aggregate intrinsic value of all stock options and warrants vested and expected to vest was $1,873,126 and the aggregate intrinsic value of currently exercisable stock options and warrants was $1,873,126. 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 $0.1483 closing stock price of the common stock on March 31, 2015.

The total intrinsic value associated with options exercised during the six months ended March 31, 2015, 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 during the nine months ended March 31, 2015, was approximately $1,329,444. The total grant-date fair value of option and warrant shares vested during the nine months ended March 31, 2015, was $1,329,144.

NOTE 11 – 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 conducted a strategic evaluation as whether or not to continue with the Ortiz Gold Project. Given the public opposition to the Ortiz Gold Project, Santa Fe has decided not to further pursue the Ortiz Gold Project.

We are in litigation with two vendors for claims for approximately $140,400 and $125,876, respectively against us. 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 in litigation with a purported royalty holder of our Summit Silver Gold Project. The purported royalty holder is seeking $500,000 in past due royalty payments and a return of the Summit mine. The Company believes that it has valid defenses against the claims has filed numerous counter-claims and cross-claims seeking damages significantly in excess of $500,000. If the Company is unsuccessful in the litigation or in raising additional funding, we may not be able to resolve this 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 December 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.

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 exploration 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;

• exploration for minerals is highly speculative and involves greater risk than many other businesses; as such, most exploration programs fail to result in the discovery of economic mineralization;

• we will require additional financing in the future to 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;

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

• our anticipated needs for working capital;

• our ability to secure financing;

• claims and legal proceedings against us;

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

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

• changes in the price of silver and gold;

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

• our projected sales and profitability;

• our growth strategies;

• anticipated trends in our industry;

• 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 and nine month periods ended March 31, 2015, and compares those results to the three and nine month periods ended March 31, 2014. It also analyzes our financial condition at March 31, 2015. 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

In April 2012, the Company commenced commercial production at the Summit silver–gold mine. On November 8, 2013, mining operations were suspended at the Summit Silver-Gold Project and the project was placed on “care-and-maintenance.” As such, we had no mining or milling operations during the three and nine month periods ended March 31, 2015.

During our nine month period ended March 31, 2015, we generated sales of $64,389 and incurred a net loss of $4,637,160, as compared to the nine month period ended March 31, 2014, in which we generated sales of $2,013,496 and incurred a net loss of $8,331,474.

In order to fund operations during the three month period ended March 31, 2015, we relied on proceeds from the sale of 3,000,000 shares of common stock to an accredited investor for net cash proceeds of $300,000 in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to the provisions of Regulation S thereunder. We also received $100,000 from two convertible notes.

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 $90,619,648 at March 31, 2015. To continue as a going concern, we are dependent on raising additional capital, consummating a strategic transaction and restructuring our indebtedness with our senior lenders. However, although we are in active discussions and negotiations with several potential strategic or financial partners, 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. 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.

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 March 31, 2015, we have a total accumulated deficit of $90,619,648 and have a working capital deficit of $29,251,596. To continue as a going concern, we are dependent on raising additional capital, consummating a strategic transaction and restructuring our indebtedness with our senior lenders. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. See “-- Liquidity and Capital Resources; Plan of Operation.”

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

On November 8, 2013, the Company suspended all mining operations and placed the mine and mill on a “care and maintenance” program.

As of March 31, 2015, we had cash of $109,876 as compared to $83,825 at June 30, 2014 and we had a working capital deficit of $29,251,596. Also, our accumulated deficit increased to $90,619,648. 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 December 31, 2014 we were in arrears on payments totaling approximately $9.3 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 June 30, 2013, the Company signed a Waiver of Default Letter (the “Waiver 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 Letter at anytime and note the Company in default under the Credit Agreement. 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).

Waterton has indicated its support for the Company’s efforts to secure and strategic and/or financial partner to advance Santa Fe’s Lordsburg Copper Project and restart its Summit Silver-Gold Project. In this regard, we are in active discussions and negotiations with several potential strategic or financial partners. 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. 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.

In connection with our Lordsburg Copper Project, we are pursuing a “farm-in agreement” with a strategic partner pursuant to which such partner will acquire an interest in the Lordsburg Copper Project by carrying out exploration work. As such, should we be successful in entering into a strategic “farm-in agreement” with a strategic partner, we do not anticipate that any significant capital expenditures would initially be required of us in advancing the Lordsburg Copper Project. However, no assurances can be given that such a strategic arrangement will be available, or if available, that its terms will be favorable to us.

Should Santa Fe decide to further advance its Lordsburg Copper Project without the assistance of a strategic partner; or, if a satisfactory strategic relationship cannot be negotiated on terms acceptable to Santa Fe, we anticipate advancing our Lordsburg Copper Project would require approximately $2.0 million, consisting of approximately $123,000 for additional geological mapping, soil sampling, drill core logging and analysis, $300,000 for additional geo-physical testing and analysis, and approximately $1.5 million for drilling two deep porphyry copper targets. No assurances can be given that we will be able to obtain any capital for such exploration efforts or that such an exploration strategy would be successful.

In connection with our Summit Silver-Gold Project restart strategy, we intend to outsource mining operations to an independent mining contractor that will provide the equipment and personnel necessary to restart the Summit mine. In connection with the outsourced restart strategy, we anticipate requiring approximately $2.5 million for capital improvements and working capital purposes, including approximately $1.0 million necessary to expand the tailings dam at our Lordsburg mill, $0.5 million for capital expenditures at the Summit mine and Lordsburg mill and $1.0 million for working capital.

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.

RESULTS OF OPERATIONS

Overview

In November 2013, we placed our Summit mine and Lordsburg mill on “care-and-maintenance.” As such, during the three and nine months ended March 31, 2015, we did not engage in any mining activities at the Summit mine and did not operate the Lordsburg mill. We did not have any sales and did not incur any associated mine operating costs during the three months ended March 31, 2015.

Operating Results for the Three Months Ended March 31, 2015 and 2014

Sales, net

During the three months ended March 31, 2015, we had o sales, compared to $(205,761) in price adjustments of precious metals and related refining costs. 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 March 31, 2015, as we had zero sales and we had no associated costs of sales and corresponds with our decision to temporarily suspend all mining operations in early November 2013.

Exploration

Exploration and other mine related costs were $(13,079 for the three months ended March 31, 2015, as compared to $503,226 for the comparable period of measurement, a decrease of $516,305. corresponds with our decision to temporarily suspend all mining operations in early November 2013.

General and Administrative

General and administrative expenses decreased to $368,904 for the three months ended March 31, 2015, from $1,038,668 for the comparative three month period ended March 31, 2014, a decrease of approximately $669,764, or 64%. General and administrative expenses include salaries and benefits, stock-based compensation, professional and consulting fees, professional fees relating to the transactions contemplated by the Canarc Share Exchange Agreement, which agreement expired in October 2014, 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 $482,463 for the three months ended March 31, 2015, as compared to $541,928 for the three months ended March 31, 2014. The decrease of $59,465 in the current period is attributable reduced depreciation on fully depreciated equipment and the return of a large piece of equipment to the vendor for sale also contributed to the decrease.

Other Income and Expense

Other expense for the three months ended March 31, 2015, was $(1,034,075) as compared to $(69,492) for the three months ended March 31, 2014, an increase in other expense of approximately $964,583. The net increase in other expense for the three months ended March 31, 2015, compared to the same comparable period in 2014, is mainly comprised of the following components: a decrease gain on extinguishment of debt of $615,781; an increased loss on derivative instrument liabilities of approximately $1,000,965 and increased interest expense of $55,892. These increased other expense items were offset by an increased gain recognized on foreign currency translation of approximately $448,162 and a reduction in financing costs – commodity supply agreements of $252,826. Further information regarding the changes in the various components of Other Income and Expenses is discussed in the categories below.

Foreign currency translation gain

For the three months ended March 31, 2015, the foreign currency translation gain totaling $210,759 related to the ICS Secured convertible note was recorded. On March 31, 2015, the total outstanding balances on all of the IGS Secured Convertible Notes totaled $3,180,840, which are denominated in Australian dollars (A$). This gain was the result of an increase in the US$ relative to the A$ during the three month periods.

Gain (Loss) on Derivative Financial Instruments

For the three months ended March 31, 2015, the loss on derivative financial instruments totaled $(866,827), as compared to a gain of $134,138 for the three months ended March 31, 2014. 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.

Interest expense

For the three months ended March 31, 2015, interest expense totaled $375,409 as compared to $319,508 for the three months ended March 31, 2014. The increase of approximately $55,892 is mainly attributable to the Tyhee note payable outstanding in the current period of measurement and a note payable pursuant to Share Exchange Agreement Exchange Agreement with Canarc Resource Corp. This was offset by interest in the comparable period a on a convertible note that was converted in March 2014.

Operating Results for the Nine Months Ended March 31, 2015 and 2014

Sales, net

During the nine months ended March 31, 2015, we sales of $64,389, compared to $2013,496 in concentrate and flux sales, net of treatment charge, a decrease of $1,949,107. 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 nine months March 31, 2015, we had associated costs of sales of $40,000 as compared to costs applicable to sales of $3,213,205 for the same comparable period in 2014. The decrease of $3,173,205 for the period corresponds with our decision to temporarily suspend all mining operations in early November 2013.

Exploration

Exploration and other mine related costs were $1,223,431 for the nine months ended March 31, 2015, as compared to $737,403 for the comparable period of measurement, an increase of $486,028. The increase in the current period of measurement is primarily attributable to the write-off of options payments totaling $876,509, which relate to the expiration of the Mogollon option agreement and offset by cost reductions with our decision to temporarily suspend all mining operations in early November 2013.

General and Administrative

General and administrative expenses decreased to $1,545,788 for the nine months ended March 31, 2015, from $2,942,713 for the comparative nine month period ended March 31, 2014, a decrease of approximately $1,396,925, or 47%. General and administrative expenses include salaries and benefits, stock-based compensation, professional and consulting fees , professional fees relating to the transactions contemplated by the Canarc Share Exchange Agreement, which agreement expired in October 2014, 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 $1,447,175 for the nine months ended March 31, 2015, as compared to $1,977,247 for the nine months ended March 31, 2014. The decrease of $530,072 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 and the return of a large piece of equipment to the vendor for sale also contributed to the decrease.

Other Income and Expense

Other income and (expenses) for the nine months ended March 31, 2015, was $(440,740) as compared to $(846,266) for the nine months ended March 31, 2014, a decrease in other expense of approximately $405,526. The net decrease in other expenses for the nine months ended March 31, 2015, compared to the same comparable period in 2014, is mainly comprised of the following components: increased gain on foreign currency translation of $749,065 and an increased gain recognized on financing costs – commodity supply agreements of approximately $1,495,236. These increased other income items were offset by a decrease gain on extinguishment of debt of $552,841; an increased loss on derivative instrument liabilities of approximately $1,060,169; an increase in finance charges of $25,034, and an increase in interest expense of approximately $195,491. Further information regarding the changes in the various components of Other Income and Expenses is discussed in the categories below.

Foreign currency translation gain

For the nine months ended March 31, 2015, the foreign currency translation gain totaling $761,839 related to the ICS Secured convertible note. On March 31, 2015, the total outstanding balances on all of the IGS Secured Convertible Notes totaled $3,180,840, which are denominated in Australian dollars (A$). This gain was the result of an increase in the US$ relative to the A$ during the nine month periods,

Gain (Loss) on Derivative Financial Instruments

For the nine months ended March 31, 2015, the loss on derivative financial instruments totaled $(780,565), as compared to a gain of $279,513 for the nine months ended March 31, 2014. 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.

Interest expense

For the nine months ended March 31, 2015, interest expense totaled $1,195,734 as compared to $1,000,243 for the nine months ended March 31, 2014. The increase of approximately $195,491 is mainly attributable to the Tyhee note payable outstanding in the current period of and a note payable pursuant to Share Exchange Agreement Exchange Agreement with Canarc Resource Corp. This was offset by interest in the comparable period a on a convertible note that was converted in March 2014.

Production Statistics, Sales Statistics, and Cash Costs

We temporarily suspended all mining operations in early November 2013 and placed the mine and mill on a care and maintenance program. As such, for the nine months ended March 31, 2015, we had no mining operations.

PRODUCTION STATISTICS

	9 Months	9 Months
	Ended	Ended
	3/31/15	3/31/14
Production Summary
Tons Processed	---	15,726
Tons Processed per Day	---	125
Grade
Average Gold Grade(oz./ton)	---	0.093
Average Silver Grade(oz./ton)	---	3.878
Contained Metals
Gold (Oz.'s)	---	1,431
Silver (Oz's.)	---	59,789

SALES STATISTICS

		9 Months			9 Months
		Ended			Ended
		3/31/15			3/31/14
Average metal prices - Realized
Gold (Oz's.)	$	1,256		$	1,266
Silver (Oz's.)	$	19		$	22
Payable metals sold
Gold (Oz.'s)		34			938
Silver (Oz's.)		1,768			47,658
Gold equivalent ounces sold
Gold Ounces		34			938
Gold Equivalent Ounces from Silver		27			764
Total Gold Equivalent Ounces		61			1,702
Sales (in thousands):
Gross before provisional pricing	$	76		$	2,469
Provisional pricing mark-to-market		(9	)		(161	)
Gross after provisional pricing		67			2,308
Treatment and refining charges		(3	)		(88	)
Net Revenues	$	64		$	2,220
Average realized price per gold equivalent ounce:
Gross before adjustments	$	1,230		$	1,451
Provisional pricing mark-to-market		(120	)		(95	)
Gross after provisional pricing		1,110			1,356
Treatment and refining charges		(54	)		(52	)
Net realized price per gold equivalent ounce	$	1,056		$	1,304

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 increase in cash costs per gold equivalent ounce between the six 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 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

		9 Months			9 Months
		Ended			Ended
		3/31/15			3/31/14
Total Gold Equivalent Ounces Sold		61			1,702
Costs applicable to sales	$	40,000		$	3,213,205
Treatment & Refining Charges	$	5,383		$	88,485
Royalties	$	29,642		$	130,024
Resource Taxes	$	---		$	16,756
Total Operating Cash Costs	$	75,025		$	3,448,471
Operating Cash Cost per Gold Equivalent Ounce Sold	$	1,230		$	2,026
Operating Cash Costs	$	75,025		$	3,448,471
Royalties	$	(29,642	)	$	(130,024	)
Resource Taxes	$	---		$	(16,756	)
Total Cash Costs	$	45,383		$	3,301,690
Total Cash Cost per Gold Equivalent Ounce Sold	$	744		$	1,940

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 and Principal Accounting Officer, or persons performing similar functions, has conducted an evaluation of our disclosure controls and procedures as of March 31, 2015. This evaluation included certain areas in which we have made, and are continuing to make, changes to improve and enhance controls.

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 March 31, 2015, 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. The Company conducted a strategic evaluation as whether or not to continue with the Ortiz Gold Project. Given the public opposition to the Ortiz Gold Project, Santa Fe has decided not to further pursue the Ortiz Gold Project.

We are in litigation with two vendors for claims for approximately $140,400 and $125,876, respectively against us. 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 “Item 1A. Risk Factors.”

We are in litigation with a purported royalty holder of our Summit Silver Gold Project. The purported royalty holder is seeking $500,000 in past due royalty payments and a return of the Summit mine. The Company believes that it has valid defenses against the claims is filed numerous counter-claims and cross-claims seeking damages significantly in excess of $500,000. If the Company is unsuccessful in the litigation or in raising additional funding, we may not be able to resolve this 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 “Item 1A. 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 December 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.

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 March, 31, 2015, 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

On January 15, 2015 the Company signed a $250,000 Convertible Note with an Investor and received a Consideration of net proceeds $50,000, net an original issue discount (“OID) of $5,556. The Consideration on the Note has a Maturity date of two years from payment of each Consideration and has a 10% OID component attached to it. A one- time interest charge of 12% is applied to the principal sum on the on the date of the Consideration. The shares were issued pursuant to an exemption from registration under Section 4(2) and Regulation D of the Securities Act of 1933, as amended. The Company used the net proceeds for working capital.

On February 6, 2015, the Company sold 3,000,000 shares to an accredited investor and issued 3,240,000 warrants expiring on February 6, 201, giving the holder the right to purchase common stock at $0.15 per share, to an accredited investor and received net cash proceeds of $300,000. In the event the closing sales price of the common stock shall exceed $0.30 per share for five (5) consecutive trading days, unless exercised, the warrants shall expire upon fifteen (15) days written notice by the Company to the holder. The shares and warrants were issued pursuant to an exemption from registration under Regulation S of the Securities Act of 1933, as amended. The Company used the net proceeds for working capital.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

At December 30, 2014, the Company was in default on payments totaling approximately $9.0 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”). On June 30, 2013, the Company signed a Waiver of Default Letter with Waterton pursuant to which Waterton waived any defaults under the Credit Agreement. Waterton can revoke the Waiver of Default Letter at any time and note the company in default. Presently, Santa Fe is in active discussions and negotiations with several strategic and financial partners concerning the Lordsburg Copper Project and the Company is exploring financing alternatives to restart the Summit Silver-Gold Project. The Company intends to refinance or restructure all indebtedness to Waterton and Sandstorm in connection with a strategic or financing transaction. No assurances can be given that the Company’s efforts will be successful. See “Risk Factors -- 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” in the Company’s annual report on Form 10-K for our year fiscal ended June 30, 2014.

On January 23, 2014, we entered into a definitive merger agreement (the “Merger Agreement”) with Tyhee Gold Corp. (“Tyhee”), which was terminated on March 20, 2014, by the Company. 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. 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. Tyhee has failed to pay the $300,000 break-fee. 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 only $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. Tyhee has provided Santa Fe with notice of default under the Bridge Loan Agreement. Santa Fe believes that it has significant claims against Tyhee, including claims relating to Tyhee’s failure to pay the $300,000 break-fee, Tyhee’s failure to fully fund the Bridge Loan Agreement, Tyhee’s breach of its Confidentiality Agreement with Santa Fe, Tyhee’s tortious interference with Santa Fe’s contractual relationships and Tyhee’s tortious interference with Santa Fe’s prospective economic advantage.

Pursuant to Share Exchange Agreement (the "Share Exchange Agreement") with Canarc Resource Corp., a British Columbia, Canada corporation ("Canarc") dated July 15, 2014, the Company and Carnac entered into an interim financing facility pursuant to which Canarc advanced $200,000 to the Company. The loan was due and payable on January 15, 2015. Santa Fe believes that it has significant legal claims against Canarc and two of its officers and directors who contemporaneously served as officers and directors of Santa Fe.

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 March 31, 2015 are as follows:

Item	Summit Mine 29-02356	Banner Mill 29-02357
Section 104 S&S Citations	0	0
Section 104(b) Orders	0	0
Section 104(d) Citations and Orders	0	0
Section 110(b)(2) Violations	0	0
Section 107(a) Orders	0	0
Total Dollar Value of MSHA Assessments Proposed	0	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	0	0
Legal Actions Resolved During Period	0	0

ITEM 5. OTHER INFORMATION

     None

ITEM 6. EXHIBITS

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

31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14a and Rule 15d-14(a).
31.2	Certification of 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.

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: May 20, 2015	/s/ Jakes Jordaan
	Jakes Jordaan
	Chief Executive Officer, President, and Director

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: May 20, 2015	/s/ Jakes Jordaan
	Jakes Jordaan
	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: May 20, 2015	/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 March 31, 2015 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: May 20, 2015	/s/ Jakes Jordaan
	Jakes Jordaan
	Chief Executive Officer, President, Director
	/s/ Frank G. Mueller
	Frank G. Mueller
	Interim Chief Financial Officer,
	Principal Accounting Officer

XML

Fair Value Measurements, Nonrecurring (Details) (USD $)	Mar. 31, 2015	Jun. 30, 2014
Derivative instruments	$ 1,247,780	$ 292,124
Level 1 [Member]
Derivative instruments	0	0
Level 2 [Member]
Derivative instruments	0	0
Level 3 [Member]
Derivative instruments	$ 1,247,780	$ 292,124

XML

LEGAL PROCEEDINGS (Narrative) (Details) (USD $)	9 Months Ended
	Mar. 31, 2015
Vendor 1 [Member]
Loss Contingency, Damages Sought, Value	$ 140,400
Vendor 2 [Member]
Loss Contingency, Damages Sought, Value	125,876
Summit silver-gold mine [Member]
Loss Contingency, Damages Sought, Value	$ 500,000

XML

NATURE OF OPERATIONS (Narrative) (Details)	Mar. 31, 2015 sqmi	Jun. 30, 2008	May 31, 2006 acre
St. Cloud Mining Company [Member] | Purchase of Mining Claims [Member]
Area of Land	13
Number of Mining Claims	289
St. Cloud Mining Company [Member] | Patented mining claim [Member] | Assignments of Mining Claims [Member]
Number of Mining Claims		17
St. Cloud Mining Company [Member] | Patented mining claim [Member] | Purchase of Mining Claims [Member]
Number of Mining Claims		70
St. Cloud Mining Company [Member] | Unpatented mining claim [Member] | Assignments of Mining Claims [Member]
Number of Mining Claims		6
St. Cloud Mining Company [Member] | Unpatented mining claim [Member] | Purchase of Mining Claims [Member]
Number of Mining Claims		5
Summit silver-gold mine [Member] | Patented mining claim [Member]
Area of Land			117.6
Summit silver-gold mine [Member] | Patented mining claim [Member] | Hidalgo County, New Mexico [Member]
Area of Land			257
Summit silver-gold mine [Member] | Unpatented mining claim [Member] | Great County, New Mexico [Member]
Area of Land			520
Banner mill site [Member]
Area of Land		1,500

XML

Schedule of Convertible Notes Payable and Debentures (Details) (USD $)	Mar. 31, 2015	Jun. 30, 2014
Debt Instrument, Face Amount	$ 3,659,821	$ 4,123,527
Debt Instrument, Unamortized Discount	(206,101)	(17,937)
Debt Instrument, Carrying Amount	3,453,720	4,105,590
Convertible debt, Current Portion [Member]
Debt Instrument, Face Amount	450,000	450,000
Debt Instrument, Unamortized Discount	0	(17,937)
Debt Instrument, Carrying Amount	450,000	432,063
Senior Secured Convertible Debenture [Member]
Debt Instrument, Face Amount	2,998,710
Debt Instrument, Unamortized Discount	0
Debt Instrument, Carrying Amount	2,998,710
Convertible Debt, Current Portion, Total [Member]
Debt Instrument, Face Amount	3,448,710
Debt Instrument, Unamortized Discount	0
Debt Instrument, Carrying Amount	3,448,710
Convertible debt, Long-term portion [Member]
Debt Instrument, Face Amount	211,111	3,673,527
Debt Instrument, Unamortized Discount	(206,101)	0
Debt Instrument, Carrying Amount	$ 5,010	$ 3,673,527

XML

DERIVATIVE INSTRUMENT LIABILITIES

9 Months Ended

Mar. 31, 2015

DERIVATIVE INSTRUMENT LIABILITIES [Text Block]

NOTE 4 - DERIVATIVE INSTRUMENT LIABILITIES

The fair market value of the derivative instrument liabilities at March 31, 2015, was determined to be $1,247,780 with the following assumptions: (1) risk free interest rate of 0.20% to 0.71%, (2) remaining contractual life of 0.75 to 2.46 years, (3) expected stock price volatility of 185.45% to 233.48%, 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 nine months ended March 31, 2015, of $780,656 and a corresponding increase in the derivative instruments liability.

		Derivative		Derivative		(Loss)for
		Liability as of		Liability as of		Nine months ended
		June 30, 2014		March 31, 2015		March 31, 2015
Warrants	$	292,124	$	1,247,780	$	(955,656	)
Amount allocated to note discount at inception						175,000
					$	(780,656	)

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.

XML

SENIOR SECURED GOLD STREAM CREDIT AGREEMENT (Narrative) (Details) (USD $)	9 Months Ended		1 Months Ended	2 Months Ended	6 Months Ended	10 Months Ended	1 Months Ended						4 Months Ended	1 Months Ended	4 Months Ended	6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2011	Aug. 31, 2012	Dec. 31, 2013	Jun. 30, 2013	Jul. 31, 2013	Feb. 28, 2013	Jan. 31, 2013	Dec. 31, 2012	Nov. 30, 2012	Oct. 31, 2012	Jun. 30, 2013	Jun. 30, 2013	Sep. 30, 2013	Jun. 30, 2013	Jun. 30, 2014	Dec. 23, 2011	Dec. 31, 2014
Payments on notes payable	$ 12,178	$ 153,080
Notes Payable	9,388,488																9,200,666
Receivables due to Waterton	813,919																813,919
Two $10 million tranches [Member]
Proceeds from credit agreement			10,000,000
Credit agreements closed			10,000,000
$5 million revolving working capital facility [Member]
Line of Credit																		5,000,000
Senior Secured Gold Stream Credit Agreement [Member]
Debt Instrument, Interest Rate, Stated Percentage	9.00%
Credit agreement, coupon rate																		9.00%
Debt Instrument, Periodic Payment				425,000	445,450	870,455
Notes Payable	7,040,427																7,040,427		7,042,427
Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]
Debt Instrument, Periodic Payment							445,450	3,852,275	0	0	500,000	1,082,955	870,455
Senior Secured Bridge loan [Member]
Payments on notes payable			5,000,000
Letter with Waterton [Member]
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
Increase in Notes Payable, Principal Portion															29,145
Decrease in Notes Payable, Principal Portion															739,118
Receivables due to Waterton	$ 813,919

XML

CONVERTIBLE NOTES PAYABLE (Narrative) (Details)	1 Months Ended				3 Months Ended		9 Months Ended			1 Months Ended					9 Months Ended	1 Months Ended					1 Months Ended				1 Months Ended				2 Months Ended
	Feb. 28, 2015 USD ($)	Jan. 31, 2015 USD ($)	Nov. 30, 2014 USD ($)	Oct. 31, 2014 USD ($)	Mar. 31, 2015 USD ($)	Mar. 31, 2014 USD ($)	Mar. 31, 2015 USD ($)	Mar. 31, 2014 USD ($)	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 ($)	Oct. 30, 2007 Extension of convertible notes payable to three accredited investors [Member] USD ($)	Mar. 31, 2015 10% Convertible Senior Subordinated Notes, Holders Who Desire to Convert Principal Into Shares [Member] USD ($)	Feb. 28, 2015 Convertible Unsecured Note [Member] USD ($)	Jan. 31, 2015 Convertible Unsecured Note [Member] USD ($)	Oct. 31, 2014 Convertible Unsecured Note [Member] USD ($)	Jan. 15, 2015 Convertible Unsecured Note [Member] USD ($)	Oct. 22, 2014 Convertible Unsecured Note [Member] USD ($)	Oct. 31, 2007 10% Convertible Senior Subordinated Notes [Member] USD ($)	Mar. 31, 2015 10% Convertible Senior Subordinated Notes [Member] USD ($)	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	Mar. 31, 2015 International Goldfields Limited [Member] Convertible Secured Notes [Member] USD ($)	Nov. 30, 2012 Binding Heads of Agreement [Member] International Goldfields Limited [Member] USD ($)	Nov. 30, 2012 Binding Heads of Agreement [Member] International Goldfields Limited [Member] AUD
Notes Issued															$ 300,000		$ 250,000	$ 500,000			$ 450,000				$ 150,000
Debt Instrument, Contractual Term																	2 years	2 years			60 months
Debt Instrument, Interest Rate, Stated Percentage															10.00%				12.00%	12.00%				10.00%		10.00%	10.00%		6.00%	6.00%
Class of Warrant or Right, Grants in Period, Contractual Term																					5 years
Value of Note Issued per Warrant issued																					2.50
Class of Warrant or Right, Grants in Period, Net of Forfeitures	1,307,200	2,586,160	3,375,000	3,993,913			11,045,036			375,000	187,500	562,500									180,000
Class of Warrant or Right, Grants in Period, Exercise Price	$ 0.0425	$ 0.02406	$ 0.06	$ 0.026																	$ 1.25
Debt Instrument, Convertible, Conversion Price				$ 0.0425	$ 0.125		$ 0.125						$ 0.40						$ 0.125	$ 0.0425				$ 1.25
Debt Instrument, Convertible, Automatic Conversion Price													$ 0.80	$ 2.50
Senior subordinated convertible notes payable, net of discount					0		0		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				64,978	0	615,781	62,940	615,781																		615,781
Proceeds from Secured Notes Payable																											2,000,000		3,985,000	3,900,000
Proceeds from Unsecured Notes Payable																	50,000	75,000
Notes Issued, Original Issue Discount																	5,556	8,333
Notes Issued, Original Issue Discount, Percentage																	10.00%	10.00%
Derivative, Loss on Derivative	105,199	151,671		68,969												54,427	151,671	68,969
Convertible notes payable					5,010		5,010		0																			2,998,710
Accrued Interest Due					$ 2,630,315		$ 2,630,315		$ 1,572,298																			$ 436,642
Class of Warrant or Right, Grants in Period, Strike Price												$ 0.40

XML

NOTES PAYABLE (Narrative) (Details) (USD $)	1 Months Ended
	Feb. 14, 2014	May 31, 2012	Jun. 30, 2012	Mar. 31, 2015	Jun. 30, 2014	Jan. 23, 2014	Jul. 15, 2014
Notes Payable				$ 9,388,488	$ 9,200,666
Accrued liabilities				8,510,235	8,024,162
Tyhee Bridge Loan Agreement [Member]
Debt Instrument, Interest Rate, Stated Percentage	24.00%
Accrued liabilities				269,986
Obligated Advances Receivable, Amount						3,000,000
Proceeds from Advances	1,745,092
Break Fee				300,000
Installment sales contract 1 [Member]
Notes Payable				4,177	16,354
Debt Instrument, Interest Rate, Stated Percentage		5.75%		5.75%
Installment sales contract		46,379		4,177	16,354
Notes Issued, Term		36 months
Installment sales contract 2 [Member]
Notes Payable				398,793	398,793
Debt Instrument, Interest Rate, Stated Percentage			5.75%	5.75%
Installment sales contract			593,657	398,793	398,793
Notes Issued, Term			48 months
Carnac [Member]
Notes Payable				200,000	0		220,000
Debt Instrument, Interest Rate, Stated Percentage				1.00%			1.00%
Accrued liabilities				$ 20,000

XML

CONTINGENCIES AND COMMITMENTS (Narrative) (Details) (USD $)	9 Months Ended	12 Months Ended	1 Months Ended	2 Months Ended	1 Months Ended
	Mar. 31, 2015	Jun. 30, 2012	Dec. 31, 2011	Oct. 31, 2009	Aug. 31, 2011	Jun. 30, 2014	Dec. 23, 2011	Sep. 11, 2009	Mar. 29, 2011	Aug. 09, 2011	Jun. 28, 2011	Sep. 09, 2011
Royalty Expense	$ 41,935
Accrued Royalty Liability	732,293
Increase in Completion guarantee payable		504,049
Completion guarantee payable	3,359,873					3,359,873
Net Smelter Returns $0 to $1,250,000 [Member]
Mineral Property, Royalty Percentage	7.50%
Net Smelter Returns $1,251,000 to $4,000,000 [Member]
Mineral Property, Royalty Percentage	5.00%
Sales of unbeneficiated mineralized rock before Net Smelter Returns of $4,000,000 [Member]
Mineral Property, Royalty Percentage	5.00%
Sales of unbeneficiated mineralized rock after Net Smelter Returns of $4,000,000, towards an end price of $2,400,000 [Member]
Mineral Property, Royalty Percentage	10.00%
Future Production [Member]
Mineral Property, Royalty Percentage	1.00%
President and CEO [Member]
Accrued Royalty Liability	222,362
Gold Stream Agreement [Member]
Price per Ounce of Gold	400
Commitment, Sale of Ounces of Gold	3,709
Supply Commitment, Remaining Minimum Amount Committed	2,900,000
Two $10 million tranches [Member]
Proceeds from credit agreement			10,000,000
Credit agreements closed			10,000,000
$5 million revolving working capital facility [Member]
Line of Credit							5,000,000
Definitive Gold sale agreement with Sandstorm [Member] | Summit silver-gold mine [Member]
Proceeds from Other Deposits				4,000,000
Price per Ounce of Gold								400
Definitive Gold sale agreement with Sandstorm [Member] | Summit silver-gold mine [Member] | First 10,000 ounces of gold produced [Member]
Gold production subject to the agreement								50.00%
Definitive Gold sale agreement with Sandstorm [Member] | Summit silver-gold mine [Member] | Gold produced after first 10,000 ounces [Member]
Gold production subject to the agreement								22.00%
Definitive Gold sale agreement with Sandstorm Amendment 1 [Member] | Summit silver-gold mine [Member]
Additional ounces of gold required									700
Definitive Gold sale agreement with Sandstorm Amendment 2 [Member] | Summit silver-gold mine [Member]
Price per Ounce of Gold										400
Additional ounces of gold required											700
Ounces of gold delivered					817
Net cost of delivering gold					1,075,785
Gold and Silver Supply Agreement [Member]
Commitment, Sale of Ounces of Gold												125,000
Supply Commitment, Remaining Minimum Amount Committed	317,242					611,503
Transaction Cost per Ounce of Gold												1.75
Transaction Cost per Ounce of Silver												$ 0.07

XML

ACCRUED LIABILITIES

9 Months Ended

Mar. 31, 2015

ACCRUED LIABILITIES [Text Block]

NOTE 3 - ACCRUED LIABILITIES

Accrued liabilities consist of the following as of:

		March 31,		June 30,
		2015		2 014
Interest	$	2,630,315	$	1,572,298
Vacation		57,601		57,602
Deferred and accrued payroll burden		236,939		133,890
Franchise taxes		8,695		8,503
Royalties		732,293		690,358
Merger costs, net		269,986		269,986
Other accrued expenses		446,232		133,958
Audit and accounting		31,749		111,825
Debt settlement		-		106,977
Property taxes		46,184		135,000
Receivables due Waterton		813,919		813,919
Commodity supply agreements		3,236,322		3,989,846
	$	8,510,235	$	8,024,162

(See NOTE 9 – CONTINGENCIES AND COMMITMENTS, regarding further details of Commodity supply agreements.)

XML

STOCKHOLDERS' EQUITY (Narrative) (Details) (USD $)	1 Months Ended						3 Months Ended		9 Months Ended
	Feb. 28, 2015	Jan. 31, 2015	Dec. 31, 2014	Nov. 30, 2014	Oct. 31, 2014	Jul. 31, 2014	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014	Oct. 17, 2014	Jun. 30, 2014
Debt Conversion, Converted Instrument, Amount						$ 200,000
Debt Conversion, Converted Instrument, Shares Issued						4,000,000
Stock Issued During Period, Shares, Settlement of Debt					792,420
Share Price			$ 0.0459		$ 0.135		$ 0.1483		$ 0.1483		$ 0.0488
Gain on debt extinguishment					64,978		0	615,781	62,940	615,781
Extinguishment of Debt, Amount					106,977
Stock Issued During Period, Shares, Issued for Cash	3,000,000			3,375,000
Proceeds from Issuance of Common Stock	300,000			202,500					502,500	0
Class of Warrant or Right, Grants in Period, Net of Forfeitures	1,307,200	2,586,160		3,375,000	3,993,913				11,045,036
Class of Warrant or Right, Expirations in Period									12,082,457
Debt Instrument, Convertible, Conversion Price					$ 0.0425		$ 0.125		$ 0.125
Derivative, Loss on Derivative	105,199	151,671			68,969
Warrants Issued During Period, Value	155.199	201,671		124,089	143,969
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Risk Free Interest Rate	0.61%	0.44%		0.152%	0.41%
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Term	2 years	2 years		1 year 4 days	2 years
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Volatility Rate	199.61%	195.48%		220.136%	172.35%
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Dividend Rate	0.00%	0.00%		0.00%	0.00%
Class of Warrant or Right, Grants in Period, Exercise Price	$ 0.0425	$ 0.02406		$ 0.06	$ 0.026
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures		100,000	3,500,000		2,500,000				18,700,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price		$ 0.07	$ 0.05		$ 0.05				$ 0.05
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period									14,025,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Contractual Term		5 years	4 years		4 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value		$ 11,740	$ 130,099		$ 281,388
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate		0.86%	0.671%		0.391%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term		2 years 6 months	2 years		2 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate		176.55%	188.108%		170.017%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate		0.00%	0.00%		0.00%				0.00%
Share-based Compensation		11,740	130,099		281,388				423,227	405,851
Convertible notes payable							5,010		5,010			0
Share-based Compensation Arrangement by Share-based Payment Award, Options and Warrants, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value							1,873,126		1,873,126
Share-based Compensation Arrangement by Share-based Payment Award, Options and Warrants, Exercisable, Intrinsic Value							1,873,126		1,873,126
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									1,329,444
Share-based Compensation Arrangement by Share-based Payment Award, Options and Warrants, Vested in Period, Grant Date Fair Value									1,329,144
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate									0.20%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term									0 years 9 months
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate									185.45%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate									0.71%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term									2 years 5 months 16 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate									233.48%
Warrant Exercise Price Adjustment 1 [Member]
Class of Warrant or Right, Grants in Period, Net of Forfeitures					2,196,071
Class of Warrant or Right, Grants in Period, Exercise Price					$ 0.0425
Warrant Exercise Price Adjustment 2 [Member]
Class of Warrant or Right, Grants in Period, Net of Forfeitures		926,765
Class of Warrant or Right, Grants in Period, Exercise Price		$ 0.06715
Two related party creditors [Member]
Stock Issued During Period, Shares, Settlement of Debt				800,000
Gain on debt extinguishment				1,360
Extinguishment of Debt, Amount				40,000
A creditor [Member]
Stock Issued During Period, Shares, Settlement of Debt				400,000
Gain on debt extinguishment				680
Extinguishment of Debt, Amount				20,000
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, Weighted Average Exercise Price									$ 0.055
Qualified Financing Requirement									20,000,000
Private Placement [Member]
Stock Issued During Period, Shares, Issued for Cash	3,000,000
Class of Warrant or Right, Grants in Period, Net of Forfeitures	3,240,000
Warrants Issued During Period, Value	$ 281,000
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Risk Free Interest Rate	0.27%
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Term	1 year
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Volatility Rate	229.02%
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Dividend Rate	0.00%
Class of Warrant or Right, Grants in Period, Exercise Price	$ 0.15

XML

Schedule of Share-based Compensation, Stock Options, and Warrants or Rights Activity (Details) (USD $)	1 Months Ended					9 Months Ended
	Feb. 28, 2015	Jan. 31, 2015	Dec. 31, 2014	Nov. 30, 2014	Oct. 31, 2014	Mar. 31, 2015
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		100,000	3,500,000		2,500,000	18,700,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price		$ 0.07	$ 0.05		$ 0.05	$ 0.05
Class of Warrant or Right, Grants in Period, Net of Forfeitures	1,307,200	2,586,160		3,375,000	3,993,913	11,045,036
Class of Warrant or Right, Grants in Period, Weighted Average Exercise Price						$ 0.08
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period						(14,025,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price						$ 0.13
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						(12,082,457)
Class of Warrant or Right, Expirations in Period, Weighted Average Exercise Price						$ 0.75
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						13,600,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, End of Period						$ 0.10
Class of Warrant or Right, Outstanding, End of Period						24,246,090
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price, End of Period						$ 0.32

XML

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2015	Jun. 30, 2014
CURRENT ASSETS:
Cash and cash equivalents	$ 109,876	$ 83,825
Accounts receivable	0	14,267
Inventory	0	40,000
Prepaid expenses and other current assets	239,008	247,069
Total Current Assets	348,884	385,161
MINERAL PROPERTIES	599,897	599,897
PROPERTY, PLANT AND EQUIPMENT, net of depreciation of $14,830,582 and $11,162,024, respectively	17,808,508	19,255,682
OTHER ASSETS:
Restricted cash	231,716	231,716
Mogollon option costs	0	876,509
Deferred financing costs, net	69,517	99,310
Total Other Assets	301,233	1,207,535
Total Assets	19,058,522	21,448,275
CURRENT LIABILITIES:
Accounts payable	3,645,394	3,659,848
Accrued liabilities	8,510,235	8,024,162
Derivative instrument liabilities	1,247,780	292,124
Senior subordinated convertible notes payable, current portion, net of discounts of $-0- and $17,937, respectively	3,448,710	432,063
Notes payable, current portion	9,388,488	9,200,666
Completion guarantee payable	3,359,873	3,359,873
Total Current Liabilities	29,600,480	24,968,736
LONG TERM LIABILITIES:
Senior subordinated convertible notes payable, net of current portion and net of discounts $-0-.	0	3,673,527
Convertible notes, net of discounts of $206,101	5,010	0
Asset retirement obligation	245,494	241,079
Total Liabilities	29,850,984	28,883,342
STOCKHOLDERS' (DEFICIT) :
Common stock, $.002 par value, 300,000,000 shares authorized; 139,596,648 and 127,229,228 shares issued and outstanding, respectively	279,194	254,459
Stock subscription	50,000	0
Additional paid in capital	79,497,992	78,292,962
Accumulated (deficit)	(90,619,648)	(85,982,488)
Total Stockholders' (Deficit)	(10,792,462)	(7,435,067)
Total Liabilities and Stockholders' (Deficit)	$ 19,058,522	$ 21,448,275

XML

NATURE OF OPERATIONS

9 Months Ended

Mar. 31, 2015

NATURE OF OPERATIONS [Text Block]

NOTE 1 – NATURE OF OPERATIONS

Santa Fe Gold Corporation, a Delaware corporation (the “Santa Fe” or “Company”) is a U.S. copper, silver and gold exploration and mining company. The Company’s two principal projects are:

• The Lordsburg Copper Project , which consists of multiple square miles of patented and unpatented claims within the historic, inactive northern Lordsburg Mining district. The Lordsburg district is located along the middle of the Santa Rita lineament that extends from Copper Flats, through Santa Rita and Chico-Tyrone and into Mexico to Bisbee-Cananea. On June 30, 2008, The Lordsburg Mining Company (“Lordsburg Mining”), a New Mexico corporation, purchased from St. Cloud Mining Company, mineral processing equipment and real property situated adjacent to the Banner mill site located south of Lordsburg, New Mexico. 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 northern Lordsburg 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. In December 2014, the Company staked an additional 289 claims, increasing the Lordsburg Copper Project’s land position by approximately nine square miles to approximately 13 square miles.

• Our Summit Silver-Gold Project , a fully-permitted silver-gold mine and mill, located near Duncan, Arizona on the New Mexico-Arizona border. In 2006, the Company acquired all of the outstanding shares of Lordsburg Mining. With the acquisition of Lordsburg Mining, the Company acquired the Summit Silver-Gold 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. In April 2012, the Company commenced commercial production at the Summit silver–gold mine. In November 2013 mining operations were suspended at the Summit Silver-Gold Project and the project was placed on “care- and-maintenance.”

Santa Fe’s two primary strategic objectives include:

• Strategic Objectives -- Copper : To advance, with a strategic or financial partner, the Lordsburg Copper Project as a deep porphyry copper exploration project; and, to restart a high-grade underground copper mine in the Lordsburg mining district; and

• Strategic Objective -- Silver-Gold : To become a low-cost silver-gold producer by restarting the Summit Silver- Gold Project.

Presently, Santa Fe is in active discussions and negotiations with several strategic and financial partners concerning the Lordsburg Copper Project and the Company is exploring financing alternatives to restart the Summit Silver-Gold Project. No assurances can be given that the Company’s efforts will be successful. These interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended September 30, 2014, included in the Company’s Annual Report on Form 10-K, filed with the Security Exchange Commission on October 22, 2014, and amended on October 23,2014. See “Risk Factors -- 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 ” in the Company’s annual report on Form 10-K for our year fiscal ended June 30, 2014.

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Schedule of Accrued Liabilities (Details) (USD $)	Mar. 31, 2015	Jun. 30, 2014
Interest	$ 2,630,315	$ 1,572,298
Vacation	57,601	57,602
Deferred and accrued payroll burden	236,939	133,890
Franchise taxes	8,695	8,503
Royalties	732,293	690,358
Merger costs, net	269,986	269,986
Other accrued expenses	446,232	133,958
Audit and accounting	31,749	111,825
Debt settlement	0	106,977
Property taxes	46,184	135,000
Receivables due to Waterton	813,919	813,919
Commodity supply agreements	3,236,322	3,989,846
Accrued Liabilities, Current	$ 8,510,235	$ 8,024,162

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NOTES PAYABLE (Tables)

9 Months Ended

Mar. 31, 2015

Schedule of Notes Payable [Table Text Block]

		March 31,			June 30,
		2015			2014
Working capital advances,
interest at 1% per month, due January 15, 2015	$	200,000		$	-
Installment sales contract on equipment,
interest at 5.75% payable in 36 monthly installments of $1,406, including
interest through June 2015.		4,177			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 December 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		9,388,488			9,200,666
Less: Current portion		(9,388,488	)		(9,200,666	)
Notes payable, net of current portion	$	- -		$	- -
The aggregate maturities of notes payable as of March 31, 2015, is as follows: Year ending June 30, 2015				$	9,388,488

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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance (Details) (USD $)	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014	Jun. 30, 2014
Derivative instrument liabilities	$ 1,247,780		$ 1,247,780		$ 292,124
Amount allocated to warrants at inception			175,000
Gain (loss) on derivative instrument liabilities	(866,827)	134,138	(780,656)	279,513
Warrants
Derivative instrument liabilities	1,247,780		1,247,780		292,124
Gain (loss) on derivative instrument liabilities			$ (955,656)

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STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Mar. 31, 2015

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	18,700,000		$	0.05	11,045,036			0.08
Canceled	(14,025,000	)	$	0.13	- --			- --
Expired	- --			- --	(12,082,457	)	$	0.75
Exercised	- --			- --	- --			- --
Outstanding at March 31, 2015	13,600,000		$	0.10	24,246,090		$	0.32

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
$0.05	11,000,000	11,000,000	3.67	$	0.05	$	0.0425	3,503,271	3,503,271	1.69	$	0.0425
$0.07	200,000	200,000	4.76	$	0.07	$	0.06	3,375,000	3,375,000	0.5	$	0.06
$0.08	400,000	400,000	3.79	$	0.08	$	0.067	926,765	926,765	1.80	$	0.067
$0.14	600,000	600,000	3.35	$	0.14	$	0.15	3,240,000	3,240,000	3.89	$	0.15
$0.32	450,000	450,000	2.76	$	0.32	$	0.38	523.434	523.434	2.46	$	0.38
$0.36	700,000	700,000	2.76	$	0.36	$	0.40	10,744,286	10,744,286	2.36	$	0.40
$1.00	250,000	250,000	.04	$	1.00	$	0.87	500,000	500,000	1.34	$	0.87
	- -	- -				$	1.00	600,000	600,000	1.61	$	1.00
	- -	- -				$	1.50	833,334	833,334	0.75	$	1.50
	13,600,000	13,600,000						24,246,090	24,246,090
	Outstanding Options		3.53	$	0.10		Outstanding Warrants			2.13	$	0.32
	Exercisable Options		3.53	$	0.10		Exercisable Warrants			2.13	$	0.32

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Mar. 31, 2015

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.

The Company has incurred a loss of $4,637,160 for the nine months ended March 31, 2015. At March 31, 2015, the Company had a total accumulated deficit of $90,619,648 and a working capital deficit of $29,251,596. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company began revenue generating operations during the fiscal year ended June 30, 2011, through the sales of precious metals and flux material. On November 8, 2013 the Company suspended all mining operations and placed the mine and mill on a care and maintenance program. For the three months ended March 31, 2015, the Company did not engage in any mining activities and did generate any sales. The Company is currently working to restructure its debts and obtain adequate capital to restart operations in the Company’s fiscal 2015 year.

At March 31, 2015, the Company was in default on payments totaling approximately $9.3 million under its Senior Secured Gold Stream Credit Agreement (the “Credit Agreement”) with Waterton Global Value, L.P. (“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.

To continue as a going concern, the Company is dependent on continued capital financing for project development, refinancing or 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. Presently, the Company is in active discussions and negotiations with several strategic and financial partners concerning the Lordsburg Copper Project and the Company is exploring financing alternatives to restart the Summit Silver-Gold Project. No assurances can be given that the Company’s efforts will be successful. See “Risk Factors -- 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 ” in the Company’s annual report on Form 10-K for our year fiscal ended June 30, 2014.

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, 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 March 31, 2015 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 March 31, 2015 and June 30, 2014.

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 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 March 31, 2015.

Inventory

Major types of inventories include ore stockpile inventories, in-process inventories, siliceous flux material inventories and concentrate inventories. 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. The Company has no inventories at March 31, 2015.

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 active and continuing discussions with various strategic and financial financing sources concerning both the Summit Silver-Gold Project and/or the Lordsburg Copper Project. Additionally, the Company believes that it enjoys the support of Waterton, its major creditor at this time. It is unknown if such discussions will be successful in attaining a financing and necessary debt restructure that would allow the Company to continue operations under its current business plan.

If discussions with these strategic and/or 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 March 31, 2015, and in light of current financing dialog with various potential strategic and 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 March 31, 2015 and June 30, 2014, the Company had a reclamation obligation totaling $245,494 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 and nine month periods ended March 31, 2015 and 2014, 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 and issue stock in lieu of cash compensation. Awards are made at the discretion of the Board of Directors. Such options may be exercisable at varying exercise prices and generally vest when issued to 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.

Accounting Standards to be adopted in Future Periods

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.

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 $)	Mar. 31, 2015	Jun. 30, 2014
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 14,830,582	$ 11,162,024
Debt Instrument Unamortized Discount Senior Subordinated Convertible Notes Payable Current	0	17,937
Debt Instrument Unamortized Discount Senior Subordinated Convertible Notes Payable Non Current	0	0
Debt Instrument Unamortized Discount Convertible Notes Payable Non Current	$ 206,101
Common Stock, Par Value Per Share	$ 0.002	$ 0.002
Common Stock, Shares Authorized	300,000,000	300,000,000
Common Stock, Shares, Issued	139,596,648	127,229,228
Common Stock, Shares, Outstanding	139,596,648	127,229,228

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Mar. 31, 2015

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.

The Company has incurred a loss of $4,637,160 for the nine months ended March 31, 2015. At March 31, 2015, the Company had a total accumulated deficit of $90,619,648 and a working capital deficit of $29,251,596. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company began revenue generating operations during the fiscal year ended June 30, 2011, through the sales of precious metals and flux material. On November 8, 2013 the Company suspended all mining operations and placed the mine and mill on a care and maintenance program. For the three months ended March 31, 2015, the Company did not engage in any mining activities and did generate any sales. The Company is currently working to restructure its debts and obtain adequate capital to restart operations in the Company’s fiscal 2015 year.

At March 31, 2015, the Company was in default on payments totaling approximately $9.3 million under its Senior Secured Gold Stream Credit Agreement (the “Credit Agreement”) with Waterton Global Value, L.P. (“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.

To continue as a going concern, the Company is dependent on continued capital financing for project development, refinancing or 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. Presently, the Company is in active discussions and negotiations with several strategic and financial partners concerning the Lordsburg Copper Project and the Company is exploring financing alternatives to restart the Summit Silver-Gold Project. No assurances can be given that the Company’s efforts will be successful. See “Risk Factors -- 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 ” in the Company’s annual report on Form 10-K for our year fiscal ended June 30, 2014.

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, 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 March 31, 2015 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 March 31, 2015 and June 30, 2014.

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 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 March 31, 2015.

Inventory [Policy Text Block]

Inventory

Major types of inventories include ore stockpile inventories, in-process inventories, siliceous flux material inventories and concentrate inventories. 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. The Company has no inventories at March 31, 2015.

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 active and continuing discussions with various strategic and financial financing sources concerning both the Summit Silver-Gold Project and/or the Lordsburg Copper Project. Additionally, the Company believes that it enjoys the support of Waterton, its major creditor at this time. It is unknown if such discussions will be successful in attaining a financing and necessary debt restructure that would allow the Company to continue operations under its current business plan.

If discussions with these strategic and/or 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 March 31, 2015, and in light of current financing dialog with various potential strategic and 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 March 31, 2015 and June 30, 2014, the Company had a reclamation obligation totaling $245,494 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 and nine month periods ended March 31, 2015 and 2014, 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 and issue stock in lieu of cash compensation. Awards are made at the discretion of the Board of Directors. Such options may be exercisable at varying exercise prices and generally vest when issued to 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.

Accounting Standards to be adopted in Future Periods [Policy Text Block]

Accounting Standards to be adopted in Future Periods

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.

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.

XML

Document and Entity Information	9 Months Ended
	Mar. 31, 2015	May 18, 2015
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
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		139,596,648
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Mar. 31, 2015

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

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
SALES, net	$ 0	$ (205,761)	$ 64,389	$ 2,013,496
OPERATING COSTS AND EXPENSES:
Costs applicable to sales	0	0	40,000	3,213,205
Exploration and other mine related costs	(13,079)	503,226	1,223,431	737,403
General and administrative	368,904	1,038,668	1,545,788	2,942,713
Depreciation and amortization	482,463	541,928	1,447,175	1,977,247
Impairment of idle equipment	0	761,928	0	761,928
Gain on dosposition of assets	0	(134,995)	0	(134,995)
Accretion of asset retirement obligation	1,501	0	4,415	1,203
Total Operating Costs and Expenses	839,789	2,710,755	4,260,809	9,498,704
LOSS FROM OPERATIONS	(839,789)	(2,916,516)	(4,196,420)	(7,485,208)
OTHER INCOME (EXPENSE):
Miscellaneous income	0	0	0	13,387
Gain on debt extinguishment	0	615,781	62,940	615,781
Foreign currency translation	210,759	(237,403)	761,839	12,774
(Loss) gain on derivative instrument liabilities	(866,827)	134,138	(780,656)	279,513
Accretion of discounts on notes payable	(3,688)	(10,761)	(22,947)	(31,094)
Financing costs - commodity supply agreements	1,087	(251,739)	758,852	(736,384)
Finance charges	(6)	0	(25,034)	0
Interest expense	(375,400)	(319,508)	(1,195,734)	(1,000,243)
Total Other (Expense)	(1,034,075)	(69,492)	(440,740)	(846,266)
(LOSS) BEFORE PROVISION FOR INCOME TAXES	(1,873,864)	(2,986,008)	(4,637,160)	(8,331,474)
PROVISION FOR INCOME TAXES	0	0	0	0
NET (LOSS)	(1,873,864)	(2,986,008)	(4,637,160)	(8,331,474)
OTHER COMPREHENSIVE INCOME
Unrealized gain on marketable securities	0	0	0	0
NET COMPREHENSIVE (LOSS)	$ (1,873,864)	$ (2,986,008)	$ (4,637,160)	$ (8,331,474)
Basic and Diluted Per Share data Net (Loss) - basic and diluted	$ (0.01)	$ (0.02)	$ (0.03)	$ (0.07)
Weighted Average Common Shares Outstanding: Basic and diluted	138,396,648	124,595,483	134,221,627	119,897,516

XML

NOTES PAYABLE

9 Months Ended

Mar. 31, 2015

NOTES PAYABLE [Text Block]

NOTE 7 – 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. The financing did close under this Agreement and this amount is outstanding at March 31, 2015 and in default , with $200,000 and $20,000 in Notes Payable current portion and Accrued Liabilities, respectively.

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 balance owed on the note was $4,177 and $16,354 at March 31, 2015 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 balance owed on the note was $398,793 and $398,793 at March 31, 2015 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 and remains unsold at March 31, 2015.

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 only $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. The Company has numerous claims against Tyhee resulting from the Merger Agreement, Tyhee’s failure to fund the total $3 million under the Bridge loan Agreement and Tyhee’s allocation of the proceeds from the Bridge Loan Agreement. 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.

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

		March 31,			June 30,
		2015			2014
Working capital advances,
interest at 1% per month, due January 15, 2015	$	200,000		$	-
Installment sales contract on equipment,
interest at 5.75% payable in 36 monthly installments of $1,406, including
interest through June 2015.		4,177			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 December 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		9,388,488			9,200,666
Less: Current portion		(9,388,488	)		(9,200,666	)
Notes payable, net of current portion	$	- -		$	- -
The aggregate maturities of notes payable as of March 31, 2015, is as follows: Year ending June 30, 2015				$	9,388,488

XML

SENIOR SECURED GOLD STREAM CREDIT AGREEMENT

9 Months Ended

Mar. 31, 2015

SENIOR SECURED GOLD STREAM CREDIT AGREEMENT [Text Block]

NOTE 6 – 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 9- 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 7 - 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 nine months ended March 31, 2015 have not been made and are included in accrued liabilities at March 31, 2015.

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. 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 December 31, 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 December 31, 2014 and June 30, 2014 was $7,042,427. Additionally, $813,919 of collected accounts receivable sold to Waterton remains to be remitted to them and is recorded in Accrued Liabilities at March 31, 2015.

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).

XML

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

12 Months Ended

Mar. 31, 2015

Jun. 30, 2014

Fair Value Measurements, Nonrecurring [Table Text Block]

						Balance at March 31,
	Level 1	Level 2		Level 3		2015
Assets:	- --	- --		- --		- --
None
Liabilities:
Derivative instruments	- --	- --	$	1,247,780	$	1,247,780

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

XML

ACCRUED LIABILITIES (Tables)

9 Months Ended

Mar. 31, 2015

Schedule of Accrued Liabilities [Table Text Block]

		March 31,		June 30,
		2015		2 014
Interest	$	2,630,315	$	1,572,298
Vacation		57,601		57,602
Deferred and accrued payroll burden		236,939		133,890
Franchise taxes		8,695		8,503
Royalties		732,293		690,358
Merger costs, net		269,986		269,986
Other accrued expenses		446,232		133,958
Audit and accounting		31,749		111,825
Debt settlement		-		106,977
Property taxes		46,184		135,000
Receivables due Waterton		813,919		813,919
Commodity supply agreements		3,236,322		3,989,846
	$	8,510,235	$	8,024,162

XML

STOCKHOLDERS' EQUITY

9 Months Ended

Mar. 31, 2015

STOCKHOLDERS' EQUITY [Text Block]

NOTE 10 - STOCKHOLDERS’ EQUITY

Issuance of Stock

On July15, 2014, the Company entered into shares for debt settlements with five creditors wherein an aggregate of $200,000 of debt was settled by the aggregate issuance of 4,000,000 shares of common stock.

On October 21, 2014, the Company issued 792,420 shares of common stock at a price of $0.135 per share to Muzz Investments, LLC, in regards to the Company’s obligation for costs incurred related to the 2006 sale of real properly in Glendale, Arizona, formerly owned by Azco Mica, Inc. A gain of $64,978 was recorded on the final extinguishment of the debt of $106,977.

On November 24, 2014, the Company entered into shares for liability settlements with two related party creditors wherein an aggregate of $40,000 of debt was settled by the aggregate issuance of 800,000 shares of common stock. A loss of $1,360 was recorded on the final extinguishment of the liabilities.

On November 24, 2014, the Company entered into shares for liability settlement with a creditor wherein an aggregate of $20,000 of debt was settled by the aggregate issuance of 400,000 shares of common stock. A loss of $680 was recorded on the final extinguishment of the liability.

On November 24, 2014, the Company sold 3,375,000 shares to an accredited investor and received net cash proceeds of $202,500. The shares were issued pursuant to an exemption from registration under Regulation S of the Securities Act of 1933, as amended.

On February 6, 2015, the Company sold 3,000,000 shares to an accredited investor and received net cash proceeds of $300,000. The shares and warrants were issued pursuant to an exemption from registration under Regulation S of the Securities Act of 1933, as amended.

Issuance of Warrants

During the nine months ended March 31, 2015, the Company issued 11,045,036 warrants and 12,082,457 warrants expired.

On October 22, 2014, in connection with a convertible note the Company initially issued 3,993,913 warrants expiring on October 22, 2016, giving the holder the right to purchase common stock at $0.026 per share with the note conversion. The convertible note is convertible at the lower of (a) $0.0425 or (b) 65% of the lowest trading price in the prior 25 trading days. Using the Black-Scholes option pricing model, the fair market value of the warrants at the time of issuance was determined to be $143,969 and exceeded the proceeds received and a derivative expense of $68,969 was recognized and the balance was recorded as a discount to the note to be amortized over the life of the note. The warrants were valued using the following significant assumptions: (1) a risk free interest rate of 0.41%, (2) expected life of 2.0 years, (3) expected stock price volatility of 172.35% and (4) expected dividend yield of zero. Based on the terms of the Note, warrants available at March 31, 2015 was reduced to 2,196,071 at a conversion price of $0.0425.

On November 24, 2014, in connection with a private placement of 3,375,000 shares of the Company’s common stock, the Company issued 3,375,000 warrants expiring on December 30, 2015, giving the holder the right to purchase common stock at $0.06 per share. Using the Black-Scholes option pricing model, the fair market value of the warrants at the time of issuance was determined to be $124,089. The warrants were valued using the following significant assumptions: (1) a risk free interest rate of 0.152%, (2) expected life of 1.01 years, (3) expected stock price volatility of 220.136% and (4) expected dividend yield of zero.

On January 15, 2015, in connection with a second convertible note the Company initially issued 2,586,160 warrants expiring on January 15, 2017, giving the holder the right to purchase common stock at $0.02406 per share with the note conversion. The convertible note is convertible at the lower of (a) $0.125 or (b) 60% of the lowest trading price in the prior 25 trading days. Using the Black-Scholes option pricing model, the fair market value of the warrants at the time of issuance was determined to be $201,671 and exceeded the proceeds received and a derivative expense of $151,671 was recognized and the balance was recorded as a discount to the note to be amortized over the life of the note. The warrants were valued using the following significant assumptions: (1) a risk free interest rate of 0.44%, (2) expected life of 2.0 years, (3) expected stock price volatility of 195.48% and (4) expected dividend yield of zero. Based on the terms of the Note, warrants available at March 31, 2015 was reduced to 926,765 at a conversion price of $0.06715.

On February 6, 2015, in connection with a private placement of 3,000,000 shares of the Company’s common stock, the Company issued 3,240,000 warrants expiring on February 6, 2019, giving the holder the right to purchase common stock at $0.15 per share. In the event the closing sales price of the common stock shall exceed $0.30 per share for five (5) consecutive trading days, unless exercised, the warrants shall expire upon fifteen (15) days written notice by the Company to the holder. Using the Black-Scholes option pricing model, the fair market value of the warrants at the time of issuance was determined to be $281,000. The warrants were valued using the following significant assumptions: (1) a risk free interest rate of 0.27%, (2) expected life of 1.0 year, (3) expected stock price volatility of 229.02% and (4) expected dividend yield of zero.

On February 25, 2015, in connection with a convertible note the Company initially issued 1,307,200 warrants expiring on February 25, 2017, giving the holder the right to purchase common stock at $0.0425 per share with the note conversion. The convertible note is convertible at the lower of (a) $0.0425 or (b) 65% of the lowest trading price in the prior 25 trading days. Using the Black-Scholes option pricing model, the fair market value of the warrants at the time of issuance was determined to be $155.199 and exceeded the proceeds received and a derivative expense of $105,199 was recognized and the balance was recorded as a discount to the note to be amortized over the life of the note. The warrants were valued using the following significant assumptions: (1) a risk free interest rate of 0.61%, (2) expected life of 2.0 years, (3) expected stock price volatility of 199.61% and (4) expected dividend yield of zero. Based on the terms of the Note, warrants available at March 31, 2015 remained at 1,307,200 at a conversion price of $0.0425.

Stock Options and the Amended and Restated Equity Incentive Plan

During the nine months ended March 31, 2015, 18,700,000 options were granted and 14,025,000 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 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 will terminate, unless a closing of the transactions contemplated shall have 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, 2015. The associated granted options did not vest and expired on October 15, 2014 according to the terms of the grant.

On October 17, 2014, the Company granted under the Company’s Amended and Restated Equity Incentive Plan 2,500,000 four year options at an exercise price of $0.05 per share to each of the two officers of the Company and a director, with the options vested on the date of the grant. The options were valued at $281,388 using the Black-Scholes option pricing model. The options were valued using the following assumptions: (1) a risk free interest rate of 0.391%, (2) expected life of 2.0 years, (3) stock price volatility of 170.017% and (4) expected dividend yield of zero. Stock-based compensation of $281,388 was recorded during the quarter ended December 31, 2014. The closing price on the date of the grant was $0.0488.

On December 31, 2014, the Company granted under the Company’s Amended and Restated Equity Incentive Plan an aggregate 3,500,000 four year options at an exercise price of $0.05 per share to three employees of the Company, with the options vested on the date of the grant. The options were valued at $130,099 using the Black-Scholes option pricing model. The options were valued using the following assumptions: (1) a risk free interest rate of 0.671%, (2) expected life of 2.0 years, (3) stock price volatility of 188.108% and (4) expected dividend yield of zero. Stock-based compensation of $130,099 was recorded during the quarter ended December 31, 2014. The closing price on the date of the grant was $0.0459.

On January 2, 2015, the Company granted 100,000 five year options at an exercise price of $0.07 per share to each of the two directors, the closing price on the date of grant and the options vested on the date of the grant. The options were valued at $11,740 using the Black-Scholes option pricing model. The options were valued using the following assumptions: (1) a risk free interest rate of 0.86%, (2) expected life of 2.5 years, (3) stock price volatility of 176.55% and (4) expected dividend yield of zero. Stock-based compensation of $11,740 was recorded during the quarter ended March 31, 2015.

In addition to options under the 2007 EIP and the Amended and Restated Equity Incentive Plan, 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 2007 EIP Amended, the Restated Equity Incentive Plan and outside of these plans, for the nine months ended March 31, 2015, 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	18,700,000		$	0.05	11,045,036			0.08
Canceled	(14,025,000	)	$	0.13	- --			- --
Expired	- --			- --	(12,082,457	)	$	0.75
Exercised	- --			- --	- --			- --
Outstanding at March 31, 2015	13,600,000		$	0.10	24,246,090		$	0.32

Stock options and warrants outstanding and exercisable at March, 31, 2015, 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
$0.05	11,000,000	11,000,000	3.67	$	0.05	$	0.0425	3,503,271	3,503,271	1.69	$	0.0425
$0.07	200,000	200,000	4.76	$	0.07	$	0.06	3,375,000	3,375,000	0.5	$	0.06
$0.08	400,000	400,000	3.79	$	0.08	$	0.067	926,765	926,765	1.80	$	0.067
$0.14	600,000	600,000	3.35	$	0.14	$	0.15	3,240,000	3,240,000	3.89	$	0.15
$0.32	450,000	450,000	2.76	$	0.32	$	0.38	523.434	523.434	2.46	$	0.38
$0.36	700,000	700,000	2.76	$	0.36	$	0.40	10,744,286	10,744,286	2.36	$	0.40
$1.00	250,000	250,000	.04	$	1.00	$	0.87	500,000	500,000	1.34	$	0.87
	- -	- -				$	1.00	600,000	600,000	1.61	$	1.00
	- -	- -				$	1.50	833,334	833,334	0.75	$	1.50
	13,600,000	13,600,000						24,246,090	24,246,090
	Outstanding Options		3.53	$	0.10		Outstanding Warrants			2.13	$	0.32
	Exercisable Options		3.53	$	0.10		Exercisable Warrants			2.13	$	0.32

As of March 31, 2015, the aggregate intrinsic value of all stock options and warrants vested and expected to vest was $1,873,126 and the aggregate intrinsic value of currently exercisable stock options and warrants was $1,873,126. 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 $0.1483 closing stock price of the common stock on March 31, 2015.

The total intrinsic value associated with options exercised during the six months ended March 31, 2015, was $- 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 during the nine months ended March 31, 2015, was approximately $1,329,444. The total grant-date fair value of option and warrant shares vested during the nine months ended March 31, 2015, was $1,329,144.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Mar. 31, 2015

FAIR VALUE MEASUREMENTS [Text Block]

NOTE 8 – 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 March 31, 2015 and June 30, 2014 are as follows:

						Balance at March 31,
	Level 1	Level 2		Level 3		2015
Assets:	- --	- --		- --		- --
None
Liabilities:
Derivative instruments	- --	- --	$	1,247,780	$	1,247,780

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

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CONTINGENCIES AND COMMITMENTS

9 Months Ended

Mar. 31, 2015

CONTINGENCIES AND COMMITMENTS [Text Block]

NOTE 9 - CONTINGENCIES AND COMMITMENTS

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.

A royalty expense was incurred during the nine months ended March 31, 2015 aggregating $41,935. At March 31, 2015, the Company had an accrued royalty liability of $732,293, which includes $222,362 payable to the Company’s former President and Chief Executive Officer.

Commodity Supply Agreements

In December 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 March 31, 2015, 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 March 31, 2015, of 3,709 ounces of undelivered gold valued at approximately $2.9 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 December 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 has a recorded obligation of $317,242 and $611,503 at March 31, 2015 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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LEGAL PROCEEDINGS

9 Months Ended

Mar. 31, 2015

LEGAL PROCEEDINGS [Text Block]

NOTE 11 – 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 conducted a strategic evaluation as whether or not to continue with the Ortiz Gold Project. Given the public opposition to the Ortiz Gold Project, Santa Fe has decided not to further pursue the Ortiz Gold Project.

We are in litigation with two vendors for claims for approximately $140,400 and $125,876, respectively against us. 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 in litigation with a purported royalty holder of our Summit Silver Gold Project. The purported royalty holder is seeking $500,000 in past due royalty payments and a return of the Summit mine. The Company believes that it has valid defenses against the claims has filed numerous counter-claims and cross-claims seeking damages significantly in excess of $500,000. If the Company is unsuccessful in the litigation or in raising additional funding, we may not be able to resolve this 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 December 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.

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Schedule of Property, Plant and Equipment, Estimated Useful Life (Details)	9 Months Ended
	Mar. 31, 2015
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 processing equipment and buildings [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	7 years
Mine processing equipment and buildings [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

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CONVERTIBLE NOTES PAYABLE (Tables)

9 Months Ended

Mar. 31, 2015

Jun. 30, 2014

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

March 31, 2015:		Principal		Unamortized
		Amount		Discount			Net
Current portion,	$	450,000	$	-		$	450,000
Senior current portion		2,998,710		-			2,998,710
Total current		3,448,710		-			3,448,710
Convertible notes, long term portion		211,111		(206,101	)		5,010
Total convertible loans	$	3,659,821	$	206,101	)	$	3,453,720

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
Total convertible loans	$	4,123,527	$	(17,937	)	$	4,105,590

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended	9 Months Ended		1 Months Ended	4 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014	Mar. 31, 2015	Mar. 31, 2014	Jun. 30, 2013	Sep. 30, 2013	Jun. 30, 2014
Net loss	$ 1,873,864	$ 2,986,008	$ 4,637,160	$ 4,637,160	$ 8,331,474
Accumulated Deficit	90,619,648			90,619,648				85,982,488
Working Capital Deficit	29,251,596			29,251,596
Accrued liabilities	8,510,235			8,510,235				8,024,162
Asset retirement obligation	245,494			245,494				241,079
Letter with Waterton [Member]
Receivables Transferred						1,053,599	1,018,056
Accrued liabilities	813,919			813,919
Gold Stream Agreement [Member]
Debt Default, Amount	6,800,000			6,800,000
Waterton [Member]
Debt Default, Amount	$ 9,300,000			$ 9,300,000

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Disclosure of Share based Compensation Arrangements By Shares Based Payment Award and Warrants or Rights (Details) (USD $)	9 Months Ended
	Mar. 31, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding	13,600,000	8,925,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	13,600,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term	3 years 6 months 11 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.10	$ 0.24
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	3 years 6 months 11 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 0.10
Class of Warrant or Right, Outstanding	24,246,090	25,283,511
Class of Warrant or Right, Exercisable, Number	24,246,090
Class of Warrant or Right, Weighted Average Remaining Contractual Term	2 years 1 month 17 days
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 0.32	$ 0.62
Class of Warrant or Right, Exercisable Weighted Average Remaining Contractual Term	2 years 1 month 17 days
Class of Warrant or Right, Exercisable Weighted Average Exercise Price	$ 0.32
$0.05 Exercise Price [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding	11,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	11,000,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term	3 years 8 months 1 day
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.05
$0.07 Exercise Price [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding	200,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	200,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term	4 years 9 months 4 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 0.07
$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	3 years 9 months 14 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 4 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	2 years 9 months 4 days
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	2 years 9 months 4 days
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
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 1.00
$0.0425 Exercise Price [Member]
Class of Warrant or Right, Outstanding	3,503,271
Class of Warrant or Right, Exercisable, Number	3,503,271
Class of Warrant or Right, Weighted Average Remaining Contractual Term	1 year 8 months 8 days
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 0.0425
$0.06 Exercise Price [Member]
Class of Warrant or Right, Outstanding	3,375,000
Class of Warrant or Right, Exercisable, Number	3,375,000
Class of Warrant or Right, Weighted Average Remaining Contractual Term	0 years 6 months
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 0.06
$0.067 Exercise Price [Member]
Class of Warrant or Right, Outstanding	926,765
Class of Warrant or Right, Exercisable, Number	926,765
Class of Warrant or Right, Weighted Average Remaining Contractual Term	1 year 9 months 18 days
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 0.067
$0.15 Exercise Price [Member]
Class of Warrant or Right, Outstanding	3,240,000
Class of Warrant or Right, Exercisable, Number	3,240,000
Class of Warrant or Right, Weighted Average Remaining Contractual Term	3 years 10 months 20 days
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 0.15
$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 5 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	10,744,286
Class of Warrant or Right, Exercisable, Number	10,744,286
Class of Warrant or Right, Weighted Average Remaining Contractual Term	2 years 4 months 10 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 4 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	1 year 7 months 10 days
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 1.00
$1.50 Exercise Price [Member]
Class of Warrant or Right, Outstanding	833,334
Class of Warrant or Right, Exercisable, Number	833,334
Class of Warrant or Right, Weighted Average Remaining Contractual Term	0 years 9 months
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price	$ 1.50

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (4,637,160)	$ (8,331,474)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,447,175	1,977,247
Stock-based compensation	423,227	405,851
Accretion of discount on notes payable	22,947	31,094
Accretion of asset retirement obligation	4,415	1,203
Financing costs - commodity supply agreements	(755,852)	0
Loss (gain) on derivative instruments	780,656	(279,513)
(Gain) on disposal of assets	0	(134,995)
(Gain) on debt extinguishment	(62,940)	(615,781)
Impairment of idle equipment	0	761,928
Amortization of deferred financing costs	29,793	176,607
Foreign currency translation	(761,839)	(12,774)
Net change in operating assets and liabilities:
Accounts receivable	14,267	273,797
Inventory	(127,320)	122,558
Prepaid expenses and other current assets	175,381	79,568
Mogollon option costs	876,509	(102,245)
Accounts payable and accrued liabilities	1,661,470	2,771,808
Net Cash Used in Operating Activities	(909,271)	(2,875,121)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of assets	0	464,500
Purchase of property, plant and equipment	0	(201,940)
Net Cash Provided by Investing Activities	0	262,560
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable	175,000	1,250,000
Proceeds from issuance of stock	502,500	0
Proceeds from notes payable	200,000	0
Proceeds from stock subscription	50,000	0
Meger advance	20,000	1,811,311
Payments on notes payable	(12,178)	(153,080)
Net Cash Provided by Financing Activities	935,322	2,908,231
INCREASE IN CASH AND CASH EQUIVALENTS	26,051	295,670
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	83,825	115,094
CASH AND CASH EQUIVALENTS, END OF PERIOD	109,876	410,764
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	473	30,463
Cash paid for income taxes	0	0
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for convertible note and accrued interest	0	1,263,930
Stock issued for acrued wages and professional fees	200,000	0
Stock issued for debt conversion	104,038	0
Insurance financed with note payable	$ 0	$ 37,074

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CONVERTIBLE NOTES PAYABLE

9 Months Ended

Mar. 31, 2015

CONVERTIBLE NOTES PAYABLE [Text Block]

NOTE 5 –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 expired on October 23, 2014 and the remaining 187,500 warrants expired on November 20, 2014.

At March 31, 2015 and June 30, 2014 the outstanding principal balance on the senior subordinated convertible notes, was $450,000 and along with any unamortized discount is classified as current. The notes are currently due.

Holders of $300,000 original principal amount of the 10% Senior Subordinated Convertible Notes have indicated their desire to convert all outstanding principal and interest into shares of the Company’s common stock.

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 were 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). It was agreed that the convertible note would 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 total advances totaling only $1,250,000 in connection with the secured convertible note. IGS and the Company agreed to have all outstanding amounts under the note s 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.

On March 31, 2015, the total outstanding principal balance on the IGS Secured Convertible Note totaled $2,998,710 and accrued interest was $436,642.

Convertible Unsecured Note

On October 22, 2014 the Company signed a $500,000 Convertible Note with an Investor and received a Consideration of net proceeds $75,000, net an original issue discount (“OID) of $8,333. The Consideration on the Note has a Maturity date of two years from the Effective Date and has a 10% OID component attached to it. The Company may repay the Consideration at any time on or before 120 days from the Effect Date and the there would be no interest due on the Consideration. If the Company does not repay a Consideration on or before 120 days from its Effective Date, a one- time interest charge of 12% shall be applied to the principal sum. If the Company does not pay a Consideration prior to the 120 -day period, the Company may not make further payments on this Note prior to Maturity Date without written approval from the Investor. The Investor may pay additional Consideration to the Company in such amounts and at such dates as the Investor may choose in its sole discretion.

The original consideration contains an embedded conversion option and is separated from the Note and accounted for as a derivative instrument at fair value and discount to the Note and is expensed over the life of the Note under the effective interest method.. The initial carrying value of the of the embedded conversion option exceeded the net proceeds received and created a derivative loss of $68,969 in the period ending December 31, 2014.

On February 25, 2015 a second Consideration tranche was delivered under this Convertible Note under the same terms and conditions. The tranche consideration contains an embedded conversion option and is separated from the Note and accounted for as a derivative instrument at fair value and discount to the Note and is expensed over the life of the Note under the effective interest method. The initial carrying value of the of the embedded conversion option exceeded the net proceeds received and created a derivative loss of $54,427 in the current period.

The conversion price is the lesser of $0.0425 or 65% of the lowest trade price in the 25 trading days previous to the conversion.

On January 15, 2015 the Company signed a $250,000 Convertible Note with an Investor and received a Consideration of net proceeds $50,000, net an original issue discount (“OID) of $5,556. The Consideration on the Note has a Maturity date of two years from payment of each Consideration and has a 10% OID component attached to it. A one- time interest charge of 12% is applied to the principal sum on the on the date of the Consideration. The Note principal and interest shall be paid at Maturity date or sooner as provided within the Note and conversion provisions. The Investor may pay additional Consideration to the Company in such amounts and at such dates as the Investor may choose in its sole discretion. The initial carrying value of the of the embedded conversion option exceeded the net proceeds received and created a derivative loss of $151,671 in the current period.

The conversion price is the lesser of $0.125 or 60% of the lowest trade price in the 25 trading days previous to the conversion.

The components of the all convertible notes payable at March 31, 2015 are as follows:

March 31, 2015:		Principal		Unamortized
		Amount		Discount			Net
Current portion,	$	450,000	$	-		$	450,000
Senior current portion		2,998,710		-			2,998,710
Total current		3,448,710		-			3,448,710
Convertible notes, long term portion		211,111		(206,101	)		5,010
Total convertible loans	$	3,659,821	$	206,101	)	$	3,453,720

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
Total convertible loans	$	4,123,527	$	(17,937	)	$	4,105,590

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DERIVATIVE INSTRUMENT LIABILITIES (Narrative) (Details) (USD $)	1 Months Ended			3 Months Ended		9 Months Ended
	Jan. 31, 2015	Dec. 31, 2014	Oct. 31, 2014	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014	Jun. 30, 2014
Derivative instrument liabilities				$ 1,247,780		$ 1,247,780		$ 292,124
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.86%	0.671%	0.391%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	2 years 6 months	2 years	2 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	176.55%	188.108%	170.017%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%	0.00%	0.00%			0.00%
Loss (gain) on derivative instruments				$ 866,827	$ (134,138)	$ 780,656	$ (279,513)
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate						0.20%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term						0 years 9 months
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate						185.45%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate						0.71%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term						2 years 5 months 16 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate						233.48%

XML

Schedule of Notes Payable (Details) (USD $)	9 Months Ended	2 Months Ended	6 Months Ended	10 Months Ended	1 Months Ended						4 Months Ended
	Mar. 31, 2015	Aug. 31, 2012	Dec. 31, 2013	Jun. 30, 2013	Jul. 31, 2013	Feb. 28, 2013	Jan. 31, 2013	Dec. 31, 2012	Nov. 30, 2012	Oct. 31, 2012	Jun. 30, 2013	Jun. 30, 2014	May 31, 2012	Jun. 30, 2012	Dec. 31, 2014	Jul. 15, 2014
Total Outstanding Notes Payable	$ 9,388,488											$ 9,200,666
Less: Current portion	(9,388,488)											(9,200,666)
Notes payable, net of current portion and discount	0											0
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months	9,388,488
Installment sales contract 1 [Member]
Debt Instrument, Interest Rate, Stated Percentage	5.75%												5.75%
Debt Instrument, Number of Monthly Installments	36
Debt Instrument, Periodic Payment	1,406
Total Outstanding Notes Payable	4,177											16,354
Installment sales contract 2 [Member]
Debt Instrument, Interest Rate, Stated Percentage	5.75%													5.75%
Debt Instrument, Number of Monthly Installments	48
Debt Instrument, Periodic Payment	13,874
Total Outstanding Notes Payable	398,793											398,793
Unsecured bridge loan note payable [Member]
Debt Instrument, Interest Rate, Stated Percentage	2.00%
Total Outstanding Notes Payable	1,745,092											1,745,092
Senior Secured Gold Stream Credit Agreement [Member]
Debt Instrument, Interest Rate, Stated Percentage	9.00%
Debt Instrument, Periodic Payment		425,000	445,450	870,455
Total Outstanding Notes Payable	7,040,427											7,040,427			7,042,427
Senior Secured Gold Stream Credit Agreement - Amendment 1 [Member]
Debt Instrument, Periodic Payment					445,450	3,852,275	0	0	500,000	1,082,955	870,455
Carnac [Member]
Debt Instrument, Interest Rate, Stated Percentage	1.00%															1.00%
Total Outstanding Notes Payable	$ 200,000											$ 0				$ 220,000

XML

DERIVATIVE INSTRUMENT LIABILITIES (Tables)

9 Months Ended

Mar. 31, 2015

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

		Derivative		Derivative		(Loss)for
		Liability as of		Liability as of		Nine months ended
		June 30, 2014		March 31, 2015		March 31, 2015
Warrants	$	292,124	$	1,247,780	$	(955,656	)
Amount allocated to note discount at inception						175,000
					$	(780,656	)