10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended March 31, 2017
¨	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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	(I.R.S. Employer
Incorporation or Organization)	Identification No.)
PO Box 25201
Albuquerque, NM	87125
(Address of Principal Executive Offices)	(Zip Code)

(505) 255-4852

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ No ¨

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

Large accelerated filer   ¨	Accelerated filer   ¨
Non-accelerated filer    ¨	Smaller reporting company  þ
(Do not check if smaller reporting company)	Emerging growth company  ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 271,936,273 shares of common stock par value $0.002, of the issuer were issued and outstanding as of March 26, 2018. 

1

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, 2017 and June 30, 2016, (Unaudited)	3
	Consolidated Statements of Operations for the Three Months and Nine Months Ended March 31, 2017 and 2016, (Unaudited)	4
	Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2017 and 2016, (Unaudited)	5
	Notes to the Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24
Item 4.	Controls and Procedures	24

PART II OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	27
SIGNATURES		27
CERTIFICATIONS

2

PART I
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SANTA FE GOLD CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited)
		March 31,			June 30,
		2017			2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	616,619		$	2,815
Deposit on contract		500,000			—
Prepaid expenses and other current assets		4,597			4,475
Total Current Assets		1,121,216			7,290
EQUIPMENT:
Mine equipment, net of accumulated depreciation of $1,539		10,001			—
Total Assets	$	1,131,217		$	7,290
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	3,201,495		$	3,710,931
Accrued liabilities		6,110,212			6,793,984
Derivative instrument liabilities		—			306,488
Senior subordinated convertible notes payable, net of unamortized discount of          $0 and $161,814, respectively		—			3,392,435
Notes payable, current portion		2,363,885			2,363,885
Completion guarantee payable		3,359,873			3,359,873
Total Current Liabilities		15,035,465			19,927,596
STOCKHOLDERS' DEFICIT:
Common stock, $.002 par value, 300,000,000 shares authorized; 283,584,042 and             221,799,662 shares issued and outstanding, respectively		567,168			443,599
Additional paid-in capital		82,873,092			80,033,944
Accumulated deficit		(97,344,508	)		(100,397,849	)
Total Stockholders' Deficit		(13,904,248	)		(19,920,306	)
Total Liabilities and Stockholders' Deficit	$	1,131,217		$	7,290

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

3

SANTA FE GOLD CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
		Three Months Ended						Nine Months Ended
		March 31,						March 31,
		2017			2016			2017			2016
SALES, net	$	—		$	—		$	—		$	6,250
OPERATING COSTS AND EXPENSES:
Exploration and other mine related costs		8,097			267,520			65,494			570,271
General and administrative		352,584			204,890			1,154,123			756,292
Depreciation and amortization		577			258,833			1,539			1,134,112
Reorganization costs		—			427,612			—			1,183,205
Total Operating Costs and Expenses		361,258			1,158,855			1,221,156			3,643,880
LOSS FROM OPERATIONS		(361,2258	)		(1,158,855	)		(1,221,156	)		(3,637,630	)
OTHER INCOME (EXPENSE):
(Loss) gain on trust debt extinguishment		(8,068	)		—			464,763			—
Gain on debt extinguishment		4,402,069			797,683			4,416,668			797,683
Gain on 363 asset sale		—			15,309			—			15,309
Foreign currency translation (loss)		(172,735	)		(180,669	)		(71,181	)		(17,897	)
(Loss) gain on derivative instrument liabilities		27,263			27,453			(26,974	)		1,189,222
Financing costs - commodity supply agreements		(367,018	)		(799,839	)		281,522			(367,357	)
Finance charges		—			—			—			(74,458	)
Interest expense		(239,204	)		(600,538	)		(790,301	)		(2,165,117	)
Total Other Income (Expense)		3,642,307			(740,601	)		4,274,497			(622,615	)
GAIN (LOSS) BEFORE PROVISION FOR INCOME  TAXES		3,281,049			(1,899,456	)		3,053,341			(4,260,245	)
PROVISION FOR INCOME TAXES		—			—			—			—
NET INCOME (LOSS)	$	3,281,049		$	(1,899,456	)	$	3,053,341		$	(4,260,245	)
Basic and Diluted Per Share data      Net Income (Loss) - basic	$	0.01		$	(0.01	)	$	0.01		$	(0.02	)
Net Income  (Loss) -  diluted	$	(0.00)		$	(0.01	)	$	(0.00)		$	(0.02	)
Weighted Average Common Shares Outstanding:     Basic		269,430,230			189,842,914			260,007,683			178,838,786
Diluted		314,370,791			189,842,914			317,788,623			178,838,786

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,
		2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	3,053,341		$	(4,260,245	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		1,539			1,134,112
Stock issued for services		475,007			66,400
Amortization of discount on notes payable		161,814			236,788
Financing costs - commodity supply agreements		(281,522	)		367,357
Non-cash financing costs		29			74,458
Loss (gain) on derivative instrument liabilities		26,974			(1,189,222	)
Gain on debt extinguishment		(4,416,668	)		(797,683)
Gain on trust debt extinguishment		(464,763	)		—
Gain on 363 asset sale		—			(15,309	)
Foreign currency translation loss		71,181			17,897
Net change in operating assets and liabilities:
Accounts receivable		—			34,833
Prepaid expenses and other current assets		(500,122	)		150,497
Accounts payable and accrued liabilities		629,098			2,170,769
Net Cash Used in Operating Activities		(1,244,092	)		(2,009,348	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		(11,540	)		—
Cash Used Investing Activities		(11,540	)		—
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from DIP funding		—			2,520,958
Proceeds from common stock purchases		1,077,110			—
Proceeds from exercise of warrants		1,077,109			—
Payments on DIP funding		—			(283,363	)
Payments on convertible debt		(284,783	)		—
Net Cash Provided by Financing Activities		1,869,436			2,237,595
NET INCREASE IN CASH AND CASH EQUIVALENTS		613,804			228,247
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		2,815			69,305
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	616,619		$	297,552
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	—		$	—
Cash paid for income taxes	$	—		$	—
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Common stock returned and cancelled	$	45,828		$	—
Derivative liabilities reclassified to equity	$	333,462		$	—
Common stock issued for convertible notes and accrued interest conversion	$	—		$	146,848
Liabilities released in the 363 asset sale	$	—		$	16,416,537
Discount on note payable	$	—		$	98,091
Resolution of derivative liability upon conversion	$	—		$	90,081

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, 2017

(UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION AND GOING CONCERN

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 accompanying unaudited financial statements and related notes present the Company’s consolidated financial position as of March 31, 2017 and June 30, 2016, the consolidated results of operations for the three and nine months ended March 31, 2017 and 2016, consolidated cash flows for the nine months ended March 31, 2017 and 2016. The unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended March 31, 2017, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2017. The accounting policies followed by the Company are set forth in Note 2 to the Company’s financial statements included in Form 10-K for the fiscal year ended June 30, 2016. These interim financial statements and notes thereto should be read in conjunction with the consolidated financial statements presented in the Company’s 2016 Annual Report on Form 10-K filed on November 14, 2017.

Nature of Operations

Santa Fe Gold Corporation (the “Company”, “our” or “we”) is a U.S. mining company incorporated in Delaware in August 1991. Our general business strategy is to acquire, explore, develop and mine mineral properties. The Company elected on August 26, 2015, to file for Chapter 11 Bankruptcy protection, Case # 15-11761 (MFW) and that case was dismissed on June 15, 2016. The Summit Silver-Gold Project, the Lordsburg Copper Project, Black Canyon Mica Project, Planet MIO Project, all claims and other assets were lost in the process. As the Company emerged from the bankruptcy we had a management team of two with no assets. The Company is in the process of raising equity funds to acquire new mining claims, a potential processing plant or arrangements with a processing plant in an acceptable geographic location to potential new mining claims.  

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 recorded a profit of $3,053,341for the nine months ended March 31, 2017, and has a total accumulated deficit of $97,344,508 and a working capital deficit at March 31, 2017 of $13,914,249. The Company currently has no source of generating revenue.

On August 26, 2015 Santa Fe filed for Chapter 11 Bankruptcy protection, Case # 15-11761 (MFW) in Delaware. With the dismissal of our bankruptcy case in June 15,2016, all assets of the Company were sold. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern. 

To continue as a going concern, the Company is dependent on continued capital financing for project development, repayment of various debt facilities and payment of current operating expenses until the Company has acquired new mining claims and an acceptable source to process the mineralized ore to generate revenue. We have no commitment from any party to provide additional working capital and there is no assurance that any funding will be available as required, or if available, that its terms will be favorable or acceptable to the Company.

On March 31, 2017, the Company was in default on payments of approximately $7.33 million under a gold stream agreement (the “GoldStream Agreement”) with Sandstorm Gold Ltd. (“Sandstorm”).

6

Deposit on Contract

The Company made an initial deposit of $500,000 on the Bullard’s Peak Corporation and Black Hawk Consolidated Mines Company purchase to their attorney on March 30, 2017, and subsequently the payment was returned prior to the April 10, 2017, payment towards the Bullards transaction that went into escrow. On April 10, 2017, the Company delivered $500,000 to be held in escrow pending, and to be applied as part of the purchase price due under an agreement with Bullard’s Peak Corporation and Black Hawk Consolidated Mines Company to acquire 100% of the issued and outstanding capital stock for a cash purchase price in the aggregate amount of $3,000,000, to be paid with installments stated in the Bullard’s Peak agreement. The final payment under the agreement was made on January 2, 2018.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 and Santa Fe Acquisitions Company, a New Mexico Limited Liability Company. All significant inter-company accounts and transactions have been eliminated in consolidation

On July 19, 2016 a new company was formed: Santa Fe Acquisition LLC (“SFA”) with Tom Laws, our CEO, as the signer, for the sole purpose of acquiring assets for Santa Fe Gold (“SFG”). On September 25, 2017, with an effective date of July 23, 2016, the CEO assigned ownership of SFA to Santa Fe Gold whereby SFG became to sole member of SFA resulting in SFA becoming a wholly owned subsidiary of SFG.  All major purchases were made through the SFA Company for the benefit of SFG, with the funding provided by SFG.

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, 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, accounts payable and accrued liabilities approximated their related fair values as of March 31, 2017, and June 30, 2016, 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.

7

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. 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 as a one day derivative loss, 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, using the effective interest method.

When required to arrive at the fair value of derivatives associated with the convertible note and warrants, either the Black-Scholes option pricing model or a Monte Carlo model is utilized that values the Convertible Note and Warrant based on average discounted cash flow factoring in the various potential outcomes by a Chartered Financial Analyst (‘CFA”). In determining the fair value of the derivatives the CFA assumed that the Company’s business would be conducted as a going concern.

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.

Net Income (Loss) Per Share

Basic earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share are 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 months and nine months ended March 31, 2016, the impact of outstanding stock equivalents has not been included as they would be anti-dilutive.

A reconciliation of the weighted average shares outstanding used in the basic and diluted earnings per share (“EPS”) computation is as follows:  

For the three months ended March 31, 2017	Net Income (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
Basic EPS
Income available to common stockholders		$3,281,049		269,430,230		$ 0.01
Diluted EPS
Loss on derivatives		72,137
Interest expense on convertible notes		46,102
Gain on foreign currency translation		(144,769)
Gain on debt extinguishment		(4,068,881)
Dilutive shares from options and warrants		—		44,940,561
Income available to common stockholders plus assumed exercise of options and warrants		$(814,362)		314,370,791		<0.00>

8

For the nine months ended March 31, 2017	Net Income (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
Basic EPS
Income available to common stockholders		$3,053,341		260,007,683		$ 0.01
Diluted EPS
Gain on derivatives		(153,538)
Interest expense on convertible notes		184,408
Gain on foreign currency translation		(59,631)
Gain on debt extinguishment		(4,068,881)
Dilutive effect of convertible notes		—		57,780,940
Income available to common stockholders plus assumed exercise of options and warrants		$(1,044,301)		317,788,623		<0.00>

The number of stock options excluded from the calculation of diluted earnings per share for the three months and nine months ended March 31, 2017 was 475,000 and excluded warrants was 5,023,434, because their inclusion would have been anti-dilutive.

Stock-Based Compensation

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

The Company accounts for share based compensation 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 compensation cost is recognized over the expected vesting period. Share based payments to nonemployees are valued at the earlier or a commitment date or completion of services.

Accounting Standards to be Adopted in Future Periods

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows.

NOTE 3 – ACCRUED LIABILITIES

Accrued liabilities consist of the following at March 31, 2017 and June 30, 2016:

		March 31,		June 30,
		2017		2016
Interest	$	2,159,961	$	2,589,993
Vacation		15,771		15,771
Deferred and accrued payroll burden		230,488		239,262
Franchise taxes		8,695		8,695
Merger costs, net		269,986		269,986
Other		18,136		19,578
Audit		20,000		20,000
Commodity supply agreement		3,133,652		3,415,175
Property taxes		253,523		215,524
	$	6,110,212	$	6,793,984

9

NOTE 4 – DERIVATIVE INSTRUMENT LIABILITIES

The fair market value of the derivative instruments liabilities were determined utilizing the Black-Scholes option pricing model for warrants and certain convertible notes and to arrive at the fair value of derivatives associated with certain other convertible notes, a Monte Carlo model was utilized that values the Convertible Notes based on average discounted cash flow factoring in the various potential outcomes. In determining the fair value of the derivatives it was assumed that the Company’s business would be conducted as a going concern at March 31, 2017.

Utilizing the two methods, the aggregate fair value of the derivative instruments liability was determined to be $844,463 as of March 31, 2017. The following assumptions were utilized in the Black-Scholes option pricing model: (1) risk free interest rate of 0.81% to 1.25%, (2) remaining contractual life of 0.33 to 2.02 years, (3) expected stock price volatility of 124.9% to 414.4%, and (4) expected dividend yield of zero. The following assumptions were utilized in the Monte Carlo model: (1) features in the note that were analyzed and incorporated into the model included the conversion feature with the reset provisions, (2) redemption provisions and the default provisions, (3) there are four primary events that can occur; payments are made in cash; payments are made with stock; the Holder converts the note; or the Company defaults on the note,(4) stock price of $0.0009 to $0.176 was utilized, (5)  notes convert with variable conversion prices based on the lesser range from of $0.0425  or $0.125 or a fixed rate of 60% or 65% of  either the low 20 or 25 trading days, depending on the lender and (6) annual volatility for each valuation period was based on the historic volatility of the Company of 99%-537%, annualized over the term remaining for each valuation..

On March 8, 2017, the convertible notes were all settled and on the final date of settlement, the warrants no longer qualified as derivatives and were reclassified to equity at their fair value on that date and aggregated $333,467.

Based upon the change in fair value, the Company has recorded a non-cash loss on derivative instruments for the nine months ended March 31, 2017, of $26,974.  

The table below shows the loss on the derivative instruments liability for the nine months ended March 31, 2017.

		Derivative		Derivative		Valuation Change
		Liability as of		Liability as of		for the Nine Months Ended
		June 30, 2016		March 31, 2017		March 31, 2017
Purchase Agreement Warrants and Convertible Debt	$	306,488	$	-	$	306,488
Warrant derivatives reclassified to equity						(333,462)
Loss on Derivatives					$	26,974

NOTE 5 – COMPLETION GUARANTEE PAYABLE

At June 30, 2012, the Company calculated the completion guarantee payable provided by Amendment 1 noted on the Company’s June 30, 2016 10-K. Based upon the provisions of the Agreement and the related completion guarantee test, incremental financing charges totaling $504,049 were recognized in Other Expenses and accrued at June 30, 2012. These accrued charges, combined with the remaining uncredited liability totaled $3,359,873 at March 31, 2017 and June 30, 2016, respectively, and are reported as completion guarantee payable and is due and in default due to the bankruptcy.

NOTE 6 – CONVERTIBLE NOTES PAYABLE

Senior Subordinated Convertible Notes

On October 30, 2007, the Company completed the placement of 10% Senior Subordinated Convertible Notes of $450,000. The notes were placed with three accredited investors for $150,000 each and bear interest at 10% per annum. The notes had term of 60 months at which time all remaining principal and interest was due. Interest accrued for 18 months from the date of closing. Interest on the outstanding principal balance was payable in quarterly installments, commencing on the first day of the 19th month following the transaction 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. All issued warrants have expired. 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 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.

10

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 date. 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 and have expired.

As of June 30, 2016, the outstanding principal balance was $450,000 and accrued interest on the senior subordinated convertible notes was $144,500 and was in default. In December 2016 the court administered trust paid and aggregate $23,000 to the note holders and was applied against the accrued interest on the notes.

In March 2017 the three accredited investors reached an agreement with the Company for an aggregate cash settlement of $13,500 on all the outstanding principles and accrued interest as payment in full. The settlement amount was paid by according to the terms of the settlement in April 2017. At the time of the agreement to settle the three accredited investors had an aggregate balance of principle and accrued interest owed them of $603,688 and the Company recorded a gain on extinguishment of debt of $590,188 on the settlement.

Convertible Secured Notes

In October and November 2012, the Company received advances totaling A$3,900,000 (A$ - Australia dollars), 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.

On October 31, 2015,  the note became convertible and the CFA computed 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 embedded conversion option was $98,091. During the year ended June 30, 2016, amortization of loan discount was recognized as interest expense of $48,251 and during the nine months ended March 31, 2017, amortization of loan discount recognized as interest expense was $49,840 and the unamortized discount balance was $0 at March 31, 2017. On March 31, 2017 and June 30, 2016, the total outstanding principal balance on the IGS Secured Convertible Note totaled $0 and $2,903,316, respectively, and accrued interest was $0 and $642,624, respectively. In December 2016 the court administered trust paid $174,507 to the note holder and was applied against the accrued interest on the note. IGS never submitted a conversion notice and in March 2017 reached an agreement with the Company for a cash settlement of $88,282 on the outstanding principle and accrued interest as payment in full. The settlement amount was paid by wire transfer in April 2017.

At the time of the agreed settlement the outstanding principle and accrued interest aggregated $3,563,662 and the Company recorded a gain on extinguishment of debt of $3,475,380 on the settlement.

Convertible Unsecured Notes

On October 22, 2014, the Company signed a $500,000 Convertible Note with an accredited 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 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. During the fiscal year ended June 30, 2015, the investor converted note principle of $68,900 into 1,800,000 shares of restricted common stock. During the fiscal year ended June 30, 2016, the investor converted the balance of the note principle and added interest charges of $24,433 into 916,078 shares of restricted common stock.

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. During the fiscal year ended June 30, 2016, amortization of loan discount was recognized as interest expense of $20,185.

11

On February 25, 2015, a second consideration tranche of $50,000 was delivered under this Convertible Note under the same terms and conditions, net of and OID charge of $5,556. 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. During the fiscal year ended June 30, 2016, amortization of loan discount was recognized as interest expense of $60,973. During the fiscal year ended June 30, 2016, the investor converted principle and added interest charges aggregating $62,223 into 27,522,855 shares of restricted common stock.

During the nine months ended March 31, 2016, the Company recorded $90,081 as resolution of derivative liability upon note conversions back into Additional Paid-in Capital.

On June 24, 2015, a third Consideration tranche of $50,000 was delivered under this Convertible Note under the same terms and conditions, net of and OID charge of $5,556. 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. During the fiscal years ended June 30, 2016, $6,666 was added to the note principle and note discount and amortization of the loan discount was recognized as interest expense of $5,541 for the fiscal year ended June 30, 2016. No note conversions were made on the note during the fiscal years ended June 30, 2016 and 2015. During fiscal year ended June 30, 2016, $31,111 in default charges was added to the note balance. At March 31, 2017 and June 30, 2016 the note balance was $0 and $93,333 respectively, and amortization of the loan discount was recognized as interest expense of $56,088 for the nine months ended March 31, 2017, and the unamortized loan discount balance as of March 31, 2017 and June 30, 2016, was $0 and $56,088, respectively.

The conversion price with this investor is the lesser of $0.0425 or 65% of the lowest trade price in the 25 trading days previous to the conversion date. The note was not converted and was retired for $90,000 in installments, the final installment made on January 25, 2017, and the Company recorded a gain on extinguishment of debt of $3,333.

On January 20, 2015 the Company signed a $250,000 Convertible Note with an accredited Investor and received on January 20, 2015, a consideration of net proceeds $50,000, net of an 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 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.

On June 9, 2015, a second Consideration tranche of $50,000 was delivered under this Convertible Note under the same terms and conditions, net of an original issue discount (“OID) of $5,556. 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. During the fiscal year ended June 30, 2016, amortization of loan discounts on the two notes was recognized as interest expense of $66,388. During the fiscal year ended June 30, 2016, the investor converted the note principle and added interest charges of $60,192 under the first consideration into 18,007,333 shares of restricted common stock. During the fiscal year ended June 30, 2016, penalties and default charges of $43,347 were added to the two note balances. At March 31, 2017 and June 30, 2016, the note balances were $-0- and $107,599, respectively and the unamortized loan discounts were $0 and $55,445, respectively. During the nine months ended March 31, 2017, amortization of the loan discount recognized as interest expense was $55,445.    

The conversion price with this investor is the lesser of $0.125 or 60% of the lowest trade price in the 25 trading days previous to the conversion date. At June 30, 2016, the two note tranches had aggregated outstanding principal $107,599 and had a conversion price of $$0.0003. During the three months ended September 30, 2016, the note was not converted and was retired for $93,000 in installments, the final installment made on September 6, 2016. The transaction resulted in recognition of a gain on extinguishment of debt of $14,599.

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The components of the unsecured convertible notes payable are as follows:

March 31, 2017:		Principal		Unamortized
		Amount		Discount		Net
Current portion	$	-	$	-	$	-

June 30, 2016:		Principal		Unamortized
		Amount		Discount			Net
Current portion	$	3,554,249	$	(161,814	)	$	3,392,435

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 a $200,000 loan to the Company and a $20,000 merger advance. 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 not close under this Agreement and this amount is outstanding at March 31, 2017 and is in default. Accrued interest on note at March31, 2017 and June 30, 2016 was $55,228 and $47,402, respectively. In December 2016 the court administered trust paid $9,897 to the note holder and was applied against the accrued interest on the note.

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 at March 31, 2017 and June 30, 2016 and had an accrued interest of $59,024 and $59,238, respectively. In December 2016 the court administered trust paid $17,412 to the note holder and was applied against the accrued interest on the note. The Company has been unable to make its monthly payments since November 2013, currently is due and in default and the equipment has been returned to the vendor for sale and remains unsold at March 31, 2017.

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 at March 31, 2017 and June 30, 2016. This amount is net of a break fee of $300,000 due to the Company from Tyhee. Accrued interest on note at March 31, 2017 and June 30, 2016, was $1,207,841 and $990,657, respectively is due and in default. In December 2016 the court administered trust paid $91,788 to the note holder and was applied against the accrued interest on the note.

The following summarizes notes payable:

		March 31,		June 30,
		2017		2016
Working capital advances, interest at 1% per month, due January 15, 2015	$	200,000	$	200,000
Merger advance		20,000		20,000
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
Notes payable - current	$	2,363,885	$	2,363,885

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NOTE 8 – FAIR VALUE MEASUREMENTS

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in generally accepted accounting principles (“GAAP”), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.  The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

 Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.  A slight change in unobservable inputs such as volatility can significantly have a significant impact on the fair value measurement of the derivatives liabilities.

 The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash and accounts payable approximate their fair values because of the short maturity of these instruments.

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, 2017 and June 30, 2016 are as follows:

March 31, 2017
	Level 1	Level 2		Level 3		Total
Assets:
None	—	—		—		—
Liabilities:
Derivative instruments	—	—	$	—	$	—

June 30, 2016
	Level 1	Level 2		Level 3		Total
Assets:
None	—	—		—		—
Liabilities:
Derivative instruments	—	—	$	306,488	$	306,488

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NOTE 9 – CONTINGENCIES AND COMMITMENTS

Chapter 11 Bankruptcy

On August 26, 2015, the Company filed for Chapter 11 Bankruptcy protection in Delaware in order to secure the existing assets from creditor actions. Case No. 15-11761 (MFW).  Santa Fe’s CEO filed in his Affidavit in Support of the first day motion (full affidavit can be researched in the Delaware court filings. Case# 15-11761 MFW on August 26, 2015) that we have only one remaining option (plan) to have an orderly sale of all assets to satisfying qualified debt without any plan for the thereafter and he began working with Canaccord Genuity Inc. (“Canaccord”) as our investment banker to assist with these efforts. The “asset sale” took place in February 2016 and left Santa Fe Gold and Subsidiaries without any assets but with all debt.

After the dismissal of the bankruptcy case, the Company will have no assets, but is still liable for all commitments and debts outstanding.  SFG Barbados, Lordsburg Mining Company and AZCO will be dormant and all the commitments and debts will stay with the respective companies and all debt is currently in default and due. The court set up a Trust fund that will be funded by the activities of the Summit mine for five (5) years and the trust funds will be distributed by an independent trustee to all credit holders on record.

The table below summarizes the carrying value of the assets sold and the liabilities disposed in the 363 Asset Sale as of asset transfer on February 26, 2016:

	February 26, 2016
Assets Sold
Restricted cash	$236,628
Prepaid expenses and other current  assets	39,584
Property, plant and equipment, net	4,992,154
Mine development properties, net	10,532,965
Mineral properties, net	599,897
	$16,401,228
Liabilities Disposed
Notes payable	$9,993,280
Accrued interest	5,815,622
Accrued DIP fees	32,203
Asset retirement obligation	245,494
Accrued CSA fees	329,938
Total	$16,416,537
Net gain on the 363 Asset Sale	$15,309

Upon receiving the Certification of Counsel Regarding Satisfaction of Conditions in Debtors’ Motion to dismiss Chapter 11 Cases, on June 15, 2016, the Company received the Court Order Dismissing the Chapter 11 Case under the Bankruptcy Code.

In December 2016 the court administered trust paid $464,763 to credit holders of the Company, and is recorded as a gain on trust debt extinguishment and payments were applied as follows:

Accounts payable	$138,879
Accrued compensation	8,775
Accrued liabilities	1,443
Note holders – accrued interest	315,666
Total	$464,763

Office and Real Property Leases

On August 1, 2015, the Company moved the office to a single room located in Albuquerque, NM, at the home of the CFO for a monthly rent of $500 until the Company is required to lease increased office space due to additional personnel requirements.

Rental expense totaled $4,500 for the nine months ended March 31, 2017 and 2016, respectively.

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Title to Mineral Properties

Although the Company has taken steps, consistent with industry standards, to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

NOTE 10 - STOCKHOLDERS' DEFICIT

Stock Returned and Cancelled

On August 1, 2016, a shareholder returned 6,956,750 common shares to the Company for no value received by the shareholder and the shares were recorded at Par Value of $13,914.

On December 14, 2016, employees, a director and a consultant returned 15,956,748 shares to the Company in order to be able to raise more funds to acquire additional assets by the Company for no value received by the shareholders and the shares were recorded at Par Value of $31,914.

Issuance of Stock

During the nine months ended March 31, 2017, the Company issued the following common stock:

(i)	Issued an aggregate of 9,365,360 shares of restricted common stock for consulting services at a value of $475,007 on the date of issuance;
(ii)	Sold an aggregate of 37,665,909 shares of restricted common stock to accredited investors for cash proceeds of $1,077,110 and issued 700 shares of restricted common stock for reimbursement of bank transfer fees at value of $28; and
(iii)	Issued an aggregate of 37,665,909 shares of restricted common stock for the exercise of warrants to accredited investors for cash proceeds of $1,077,109.

The issuance of the restricted common shares during the nine months ended March 31, 2017, were exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a) (2) thereof because such issuance did not involve a public offering.

Issuance of Warrants and Expiration

During the nine months ending March 31, 2017, the Company issued 37,665,909 warrants and 1,100,000 warrants expired.

Stock Options and the Amended and Restated Equity Incentive Plan

During nine months ending March 31, 2017, no options were granted and 2,940,000 options were cancelled or expired.

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 ending March 31, 2017, are as follows:

	Stock Options		Stock Warrants
		Weighted		Weighted
		Average		Exercise
	Shares	Price	Shares	Price
Outstanding at June 30, 2016	8,375,000	$0.02	10,443,434	$0.35
Granted	—	—	37,665,509	$0.03
Canceled	(2,900,000)	$0.02	—	—
Expired	(40,000)	$0.36	(1,100,000)	$0.94
Exercised	—	—	(37,665,909)	$0.03
Outstanding at March 31, 2017	5,435,000	$0.02	9,343,434	$0.28

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Stock options and warrants outstanding and exercisable at March 31, 2017 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
$0.001	5,000,000	5,000,000	1.55	$	0.001	$	0.15	4,320,000	4,320,000	1.87	$	0.15
$0.07	100,000	100,000	2.76	$	0.07	$	0.38	523,434	523,434	0.46	$	0.38
$0.08	100,000	100,000	1.76	$	0.08	$	0.40	4,500,000	4,500,000	0.33	$	0.40
$0.32	100,000	100,000	0.39	$	0.32		—	—	—	—		—
$0.36	135,000	135,000	0.75	$	0.36		—	—	—	—		—
	5,435,000	5,435,000						9,343,434	9,343,434
	Outstanding Options		1.53	$	0.02		Outstanding Warrants			1.05	$	0.28
	Exercisable Options		1.53	$	0.02		Exercisable Warrants			1.05	$	0.28

As of March 31, 2017, the aggregate intrinsic value of all stock options and warrants vested and expected to vest was $1,007,520 and the aggregate intrinsic value of currently exercisable stock options and warrants was $1,007,520. 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 $0.176 closing stock price of the common stock on March 31, 2017

The total intrinsic value associated with options exercised during the nine months ended March 31, 2017, 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.

NOTE 11 – RELATED PARTY TRANSACTIONS   

At March 31, 2017 and at June 30, 2016, the Company owed to related parties an aggregated amount of $269,787 respectively.

On August 1, 2015, the Company leased a home office space from the Company CFO for $500 a month for the corporate administrative office in Albuquerque, NM until such time growth requires a larger corporate administrative office.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

NOTE 12 – SUMMARY OF GAIN ON DEBT EXTINGUISHMENT

Below is a summary of gain on debt extinguishment recognized for the nine months ended March 31, 2017:

		Payment	Gain on Debt
	Debt Settled	Amount	Extinguished
Accounts Payable	$      343,902	$          10,734	$         333,168
IGS note principle	2,962,947	88,282	2,874,665
IGS accrued interest	600,715	—	600,715
Convertible notes	450,000	13,500	436,500
Convertible note accrued interest	153,688	—	153,688
Vista convertible note	80,155	65,556	14,599
JMJ convertible note	93,333	90,000	3,333
	$    4,684,740	$        268,072	$      4,416,668

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NOTE 13 – LEGAL PROCEEDINGS

All legal proceedings stayed with the filing of Chapter 11 bankruptcy. At the time of the bankruptcy filing several litigations were filed in several courts. Santa Fe believes that the following suits will be stayed pursuant to the Bankruptcy Code. After dismissal of the Chapter 11 filings, we have not been notified of any of the below cases if they will continue or not.

Boart Longyear Company v. Lordsburg Mining Company, Case No. D-2-2-CV-2015- 06048, County of Bernalillo, NM;

Boart Longyear Company v. Lordsburg Mining Company, Case No. D-721-CV-2015- 00058, County of Sierra, NM;

Boart Longyear Company v. Lordsburg Mining Company, Case No. D-608-CV- 201500165

County of Quintero, NM. Series of collection cases by Boart Longyear Company, who obtained Utah judgment for equipment delivered to Lordsburg Mining Company

Santa Fe Gold Corporation v. Tyhee Gold Corp., Brian K. Briggs, SRK Consulting (US), Inc., and Bret Swanson, Case No: 14CV032866, District Court, Denver County, Colorado

Santa Fe is seeking damages for breach of the Confidentiality Agreement as well as for conversion of Santa Fe’s confidential information. Tyhee Gold Corp. has filed a counter-claim for tortuous interference with prospective contractual relationships with Koza Gold. At this time, there can be no determination of the outcome.

Wagner Equipment Co. v. Lordsburg Mining Company, Case No. D-2014-02372, County of Bernalillo, NM 28

Collection case by Wagner equipment, who obtained judgment for equipment delivered to Lordsburg Mining Company.

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. Lone Mountain Ranch LLC sued Ortiz Mines Inc against any mining activities on the property, and Santa Fe Gold was only a co-defender.  With the bankruptcy, we, SFG, were dismissed.

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.” The claims were against Lordsburg Mining company, were stayed during the proceedings and all claims remained.  At this time, there can be no determination of the outcome.

The court set up a Trust fund that will be funded by the activities of the Summit mine for five (5) years and the trust funds will be distributed by an independent trustee to all credit holders on record.  Currently all debts at the time of the bankruptcy are currently due and in default. None of the claims have been reopened since June 2016.

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.

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 March 31, 2017, we were not a party to any material litigation, claim or suit whose outcome could have a material effect on our financial statements.

18

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.

NOTE 14 – SUBSEQUENT EVENTS

Recent Issuances of Unregistered Securities

In the period from April 2017 through February 8, 2018, the Company sold an aggregate of 6,398,753 units. Each unit consisted of one common share and one common stock warrant. The warrants had a term of 5 years and an exercise price of $0.06. All warrants were immediately exercised resulting in the issuance of an additional 6,398,753 common shares. The Company received aggregate proceeds of $383,925 from these sales and warrant exercises. In connection with this offering, the Company incurred placement fees consisting of a cash fee of 10% of the full combined dollar amount of units placed in the offering plus warrants exercisable for 10% of the shares and warrants included in the units placed with an exercise price of $0.06. To date, no placement agent fee warrants have been issued. The Company incurred a cash fee amounting to $38,393 in connection with this raise.

From the capital raised from above, between July 26, 2017 and February 8, 2018, the Company has raised $4,001,738 for equity purchases from a private overseas investment company and a number of associated investors. The stock and warrant shares have not been issued at this time and the stock certificates and warrant shares (approximately 50,021,733 shares) will be issued at the same time at a varying price per share. In connection with this offering, the Company has incurred placement fees consisting of a cash fee of 10% of the full combined dollar amount of units placed in the offering plus warrants exercisable for 10% of the shares and warrants included in the units placed. To date, no placement agent fee warrants have been issued. The Company has incurred a cash fee amounting to $400,474 in connection with this raise.

Other Events

On April 10, 2017 we reached a non-disclosure agreement with our prior CEO, Mr. Jordaan, about his outstanding back wages and amounts due for legal services rendered to the Company prior assuming the position of CEO. Mr. Jordaan resigned as CEO and from the board effective May 6, 2016.  

Between April 10, 2017 and December 28, 2017 Santa Fe Gold transferred $2.5 million to acquire properties for Santa Fe Gold and the staking of all the claims currently owned by Santa Fe Gold. The announcement was made on September 17, 2017 that we acquired 100% of Bullard’s Peak Corporation and Black Hawk Consolidated Mines Company, which includes formerly optioned AG1 Silver Mine and all lands surrounding the project to include potential Porphyry Silver Discovery and all rights to same. These transactions are summarized below:

- On April 10, 2017, the Company delivered $500,000 to be held in escrow pending, and to be applied as part of the purchase price due under an agreement with Bullard’s Peak Corporation and Black Hawk Consolidated Mines Company to acquire 100% of the issued and outstanding capital stock for a cash purchase price in the aggregate amount of $3,000,000, to be paid over time as stated in the Bullard’s Peak agreement.

- On August 18, 2017, the Company signed the Bullard’s Peak Agreement and delivered an additional $100,000 towards the purchase price.

- On August 30, 2017, the Company delivered an additional $900,000 to Bullard’s Peak towards the purchase price under terms of the Agreement.

- On September 08, 2017, the Company delivered $500,000 to Bullard’s Peak towards the purchase price under terms of the Agreement.

- On September 14, 2017, the Company acquired 100% of Bullard’s Peak Corporation and Black Hawk Consolidated Mines Company, pending two more payment to be delivered at the end October and November 2017.

- On October 13, 2017, the Company delivered $500,000 to Bullard’s Peak towards the purchase price under terms of the Agreement.

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- On January 2, 2018 we made the final payment of $500,000 to purchase the Bullard’s Peak Corporation.

On July 26, 2017 the board changed the price for 5,000,000 options from $.001 (Board meeting May 5, 2016) to $.002.

On February 2, 2017,  an agreement was reached with an investor for the return on 20,000,000 shares and the issuance of 2,000,000 shares on a new certificate. On July 28, 2017, the investor physically returned 20,000,000 shares to the transfer agent and they were cancelled and were deducted from the outstanding shares. The investor was issued 2,000,000 shares on a new certificate. The 18,000,000 shares are to be re-issued at a later time and the obligation will be accounted for as a derivative liability at the fair value of the shares and marked to market at each balance sheet date.

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

Forward-Looking Statements

This Form 10-Q contains certain “forward-looking” statements as such term is defined by the Securities and Exchange Commission in its rules, regulations and releases, which represent the Company’s expectations or beliefs, including but not limited to, statements concerning the Company’s strategy, operations, economic performance, financial condition, resource drilling strategies, investments, and future operational plans. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intent,” “could,” “estimate,” “might,” “plan,” “predict” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements. This Form 10-Q contains forward-looking statements, many assuming that the Company secures adequate financing and is able to continue as a going concern, including statements regarding, among other things: our ability to continue as a going concern;

•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; 

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•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 because 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 ending March 31, 2017 and 2016, but with the knowledge that Santa Fe Gold with all its subsidiaries filed for Bankruptcy - Chapter 11 in August 2015.

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. As a result of these circumstances, management concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern as it is currently structured.

The future of the Company is discussed in the 10-K filings for the fiscal year ended June 30, 2016.

Santa Fe Gold Corporation (“Santa Fe”, "the Company”, “our” or “we”) is a U.S. mining company, incorporated in 1991 in the state of Delaware. Our general business strategy is to acquire explore, develop and to create shareholder value. Santa Fe Gold Corporation (SFG) selected on August 26, 2015 to file for Chapter 11 Bankruptcy protection, Case # 15-11761 (MFW) and the case was dismissed on June 15, 2016.  The Summit Silver-Gold Project, the Lordsburg Copper Project, Black Canyon Mica Project, Planet MIO Project, all claims and other assets were lost in the process. As we emerged from the bankruptcy, we were a management team of two with no assets.

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The results of operations in the past reflected a continued under-capitalization of our projects which required additional funding to be able to achieve full project performance and sustained potential profitability. We currently are dependent on additional financing to resume any mining operations and to continue our exploration efforts in the future if warranted. After the dismissal of the Chapter 11 filings, we had no funds or assets to continue our operation.  We solicited some of our shareholders and presented our vision for Santa Fe Gold and these shareholders subsequently purchased stock for cash so we could proceed with our vision.

Operating Results for the Three Months Ended March 31, 2017 and 2016

Sales, net

During the three months ended March 31, 2017 and 2016, the Company had no revenue in the periods of measurement. There were no operations during the periods of measurement and from August 26, 2015 to June 15, 2016, we were in Chapter 11 status.

Operating Costs and Expenses

Our operating cost incurred in three months ended March 31, 2017, decreased $797,597 from $1,158,855 in the three months ended March 31, 2016, to $361,258 for the current period of measurement. The decrease in operating costs in the current period of measurement is attributable a decrease in depreciation of $258,256 as all assets included in the bankruptcy filing were sold on February 26, 2016. Reorganizational costs for the three months ended March 31, 2017, decreased $427,612 as no subsequent reorganizational costs were incurred after the dismissal of the bankruptcy case on June 15, 2016. Exploration and mine related costs decreased $259,423 as a result mine inventory of $173,426 written off and deceases BLM claim fees of $8,318 and property taxes of $30,789. The decreases were offset by an increase in general and administrative of $147,656 and is mainly a result increased consulting fees of $246,951, and offset by decreases in wages of $59,310, medical and dental of $10,254 and insurance of $34,548.

Other Income (Expense)

Other income (expense) for three months ended March 31, 2017, was $3,642,307 as compared to $(740,601) for three months ended March 31, 2016, an increase in other income of $4,382,908. The net increase in other income for the current period measurement is mainly comprised of the following components: increased gains on debt extinguishment of $3,604,386; a decrease in financing costs – commodity supply agreements of $432,821and a decrease in interest expense of $361,334 which is as a result of debt eliminated in the bankruptcy sale that occurred on February 26, 2016. an

For the three months ended March 31, 2017, the gain on derivative financial instruments totaled $27,263 as compared a gain of $27,453 for the comparable period ended. The changes in derivative financial instruments are non-cash items and arise from adjustments to record the derivative financial instruments at fair values. 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, fluctuation 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, fluctuation in the stock prices will result in volatility to the earnings (losses) in future periods as we continue to reflect the derivative financial instruments at fair values. When required to arrive at the fair value of derivatives associated with the convertible note and associated warrants, a Monte Carlo model is utilized that values the Convertible Note and Warrant based on average discounted cash flow factoring in the various potential outcomes by a Chartered Financial Analyst (‘CFA”). In determining the fair value of the derivatives the CFA assumed that the Company’s business would be conducted as a going concern.

For the three months ended March 31, 2017, interest expense decreased $432,821 in the current period of measurement.

The decrease in interest is mainly a result of a decrease in interest bearing debt associated with the Waterton loan of $7,755,685

which was eliminated in the asset sale to Waterton on February 26, 2016.

For the three months ended March 31, 2017, financing costs – commodity supply agreements had a decreased loss of $432,821 from the comparable period of measurement, which had a loss of $799,839. The financing costs for commodity supply agreements relate directly to production for the period and the subsequent delivery of refined precious metals to Sandstorm and Waterton in the prior period of measurement. The current period of measurement only includes Sandstorm as the Waterton financing costs – commodity supply agreement liability, was eliminated in the asset sale to Waterton on February 26, 2016.  The financing costs are adjusted period-to-period based upon the total number of undelivered gold and silver ounces outstanding at the end of each period. The decreased in the current period of measurement is driven by an increase in precious metals prices.

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Operating Results for the Nine Months Ended March 31, 2017 and 2016

Sales, net

During the nine months ended March 31, 2017 and 2016, the Company had no revenue in the current period of measurement and $6,250 in the prior period of measurement. There were no operations during the periods of measurement and from August 26, 2015 to June 15, 2016, we were in Chapter 11 status.

Operating Costs and Expenses

Our operating cost incurred in nine months ended March 31, 2017, decreased $2,422,724 from $3,643,880 in the nine months ended March 31, 2016  to $1,221,159 for the current period of measurement. The decrease in operating costs in the current period of measurement is attributable a decrease in depreciation of $1,132,573 as all assets included in the bankruptcy filing were sold on February 26, 2016. Reorganizational costs for the nine months ended March 31, 2017, decreased $1,183,205 as no subsequent reorganizational costs were incurred after the dismissal of the bankruptcy case on June 15, 2016. Exploration and mine related costs decreased $504,777 mainly as a result of deceases in property taxes of $205,404 as all properties included in the bankruptcy filing were sold on February 26, 2016, royalties of $25,550,  miscellaneous of $52,234,  BLM fees of $24,994 and the write off mine inventory of $173,426 in the prior reporting period. The decreases were offset by an increase in general and administrative of $397,802 and is a result increases in consulting fees of $849,544, audit fees of $65,000 and offset by decreases in miscellaneous operating costs of $165,134, wages of $220,514, medical and dental of $24,236, travel costs of $39,550, and insurance of $55,718.

Other Income (Expense)

Other income (expense) for nine months ended March 31, 2017, was $4,274,497 as compared to $(622,615) for nine months ended March 31, 2016, an increase in other income of $4,897,112. The net increase in other income for the current period measurement is mainly comprised of the following components: increased gains on trust debt extinguishment of $464,763, gain on debt extinguishment of $3,618,985, a gain on financing costs – commodity supply agreements of $648,879 and decreased interest expense of $1,374,816, which is as a result of debt eliminated in the bankruptcy sale that occurred on February 26, 2016. These income increases were offset by a decrease in derivative instruments liabilities gain of $1,216,196 and an increase loss on foreign currency translation of $53,284.

For the nine months ended March 31, 2017, the loss on derivative financial instruments totaled $(26,974) as compared a gain of $1,189,222 for the comparable period ended. The changes in derivative financial instruments are non-cash items and arise from adjustments to record the derivative financial instruments at fair values. 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, fluctuation 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, fluctuation in the stock prices will result in volatility to the earnings (losses) in future periods as we continue to reflect the derivative financial instruments at fair values. When required to arrive at the fair value of derivatives associated with the convertible note and associated warrants, a Monte Carlo model is utilized that values the Convertible Note and Warrant based on average discounted cash flow factoring in the various potential outcomes by a Chartered Financial Analyst (‘CFA”). In determining the fair value of the derivatives the CFA assumed that the Company’s business would be conducted as a going concern.

For the nine months ended March 31, 2017 interest expense decreased $1,374,816 in the current period of measurement.

The decrease in interest is mainly a result of a decrease in interest bearing debt associated with the Waterton loan of $7,755,685

which was eliminated in the asset sale to Waterton on February 26, 2016.

For the nine months ended March 31, 2017, financing costs – commodity supply agreements had an increased gain of $648,879 from the comparable period of measurement, which had a loss of $367,357. The financing costs for commodity supply agreements relate directly to production for the period and the subsequent delivery of refined precious metals to Sandstorm and Waterton in the prior period of measurement. The current period of measurement only includes Sandstorm as the Waterton financing costs – commodity supply agreement liability, was eliminated in the asset sale to Waterton on February 26, 2016.  The financing costs are adjusted period-to-period based upon the total number of undelivered gold and silver ounces outstanding at the end of each period. The increase gain in the current period of measurement is driven by an increase in precious metals prices.

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Liquidity and Capital Resources; Plan of Operation

The Company and our Chapter 11 Subsidiaries received bankruptcy court confirmation of the dismissal on June 15, 2016, and subsequently emerged from bankruptcy. The only funds available for the future administrative costs were prepaid insurance funds from which we received a refund on June 08, 2016 of $44,926 and on August 22, 2016 received $4,135.  The Company upon emergence resorted to selling equity for cash so as to proceed on reviving the Company. Currently we have no continuing commitment from any party to provide necessary additional working capital, or if one becomes available, there is no certainty that its terms will be favorable or acceptable to the Company to continue its current business plan.

On July 19, 2016, a new company was formed: Santa Fe Acquisition LLC (“SFA”) with Tom Laws, our CEO, as the signer, for the sole purpose of acquiring assets for Santa Fe Gold (“SFG”). On September 25, 2017, with an effective date of July 23, 2016, the CEO assigned ownership of SFA to Santa Fe Gold whereby SFG became to sole member of SFA resulting in SFA becoming a wholly owned subsidiary of SFG.  All major purchases were made through the SFA Company for the benefit of SFG, with the funding provided by SFG.     

During the nine months ending March 31, 2017, the Company proceeded to implement its initial plan to emerge from the bankruptcy proceedings. The Company raised $2,171,719 from the sale of common stock and the exercise of attached warrants. The funds were used as working capital to implement the Company business plan. As part of the plan, the Company negotiated the payoff of seven convertible notes and accrued interest with an aggregate balance of $4,358,282 for $274,782 in cash payments and recorded a gain on extinguishment of debt of $4,083,500. The Company also negotiated settlements with various vendor creditors with an aggregated balance of $343,902 for cash settlement payments of $10,734 and recorded a gain on extinguishment of debt of $333,168.

Between September 14, 2016 and December 31, 2016, we secured claims 44 claims and paid $8,328 for BLM filing fees, these claims have a 5% royalty attached. We will continue to seek additional claims with other existing mines for which we may have to pay royalties or establish a partnership if an agreement is reached.

On December 9, 2016, the Company retained International Monetary ("IM") as its Investment Banking & Strategic Advisory firm to provide capital resources, structure financing, proprietary investor relations services, advice on maximizing growth and valuation, M&A advisory and counsel to the Company's management on other strategic decisions. IM is to receive 6 installment payments of $6,000 and 2% of the Company’s common stock on a fully diluted basis amounting to 5,665,360 shares issued at the time of signing the contract at a market value of $286,667. In addition, IM is entitled to additional common shares amounting to 2% of the Company’s common stock on a fully diluted basis six month from the date of the agreement.

On April 10, 2017, the Company delivered $500,000 to be held in escrow pending, and to be applied as part of the purchase price due under an agreement with Bullard’s Peak Corporation and Black Hawk Consolidated Mines Company to acquire 100% of the issued and outstanding capital stock for a cash purchase price in the aggregate amount of $3,000,000, to be paid with installments stated in the Bullard’s Peak agreement. The final payment was made on January 2, 2018.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for small companies.

ITEM 4 – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

During the three months ended March 31, 2017, our management, with the participation of the Chief Executive Officer and interim Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended. Our Chief Executive Officer and Interim Chief Financial Officer have concluded that, as of March 31,2017, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the required time periods and are designed to ensure that information required to be disclosed in our reports is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. This was due to the following material weakness:

Due to the Company’s continuing financial condition, the Company had limited personnel which resulted in a lack of segregation of duties and a lack of formal reviews at multiple levels.

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Inherent Limitations over Internal Controls

The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company’s internal control over financial reporting includes those policies and procedures that:

(i)	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;
(ii)	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and
(iii)	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Management, including the Company’s Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, during the quarter ended March 31, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II     

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

All legal proceedings stayed with the filing of Chapter 11 bankruptcy. At the time of the bankruptcy filing several litigations were filed in several courts. Santa Fe believes that the following suits will be stayed pursuant to the Bankruptcy Code. After dismissal of the Chapter 11 filings, we have not been notified of any of the below cases if they will continue or not.

Boart Long year Company v. Lordsburg Mining Company, Case No. D-2-2-CV-2015- 06048

County of Bernalillo, NM;

Boart Longyear Company v. Lordsburg Mining Company, Case No. D-721-CV-2015- 00058

County of Sierra, NM;

Boart Longyear Company v. Lordsburg Mining Company, Case No. D-608-CV- 201500165

County of Quintero, NM. Series of collection cases by Boart Longyear Company, who obtained Utah judgment for equipment delivered to Lordsburg Mining Company

Santa Fe Gold Corporation v. Tyhee Gold Corp., Brian K. Briggs, SRK Consulting (US), Inc., and Bret Swanson, Case No: 14CV032866, District Court, Denver County, Colorado

Santa Fe is seeking damages for breach of the Confidentiality Agreement as well as for conversion of Santa Fe’s confidential information. Tyhee Gold Corp. has filed a counter-claim for tortuous interference with prospective contractual relationships with Koza Gold. At this time, there can be no determination of the outcome.

Wagner Equipment Co. v. Lordsburg Mining Company, Case No. D-2014-02372

County of Bernalillo, NM 28 Collection case by Wagner equipment, who obtained judgment for equipment delivered to Lordsburg Mining Company.

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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. Lone Mountain Ranch LLC sued Ortiz Mines Inc against any mining activities on the property, and Santa Fe Gold was only a co-defender.  With the bankruptcy, we, SFG, were dismissed.

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.” The claims were against Lordsburg Mining company, were stayed during the proceedings and all claims remained. At this time, there can be no determination of the outcome.  

The court set up a Trust fund that will be funded by the activities of the Summit mine for five (5) years and the trust funds will be distributed by an independent trustee to all credit holders on record.  Currently all debts at the time of the bankruptcy are currently due and in default. None of the claims have been reopened since June 2016.

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.

We are subject from time to time to litigation, claims and suits arising in the ordinary course of business. Other than the above-described litigation, as of June 30, 2016, we were not a party to any material litigation, claim or suit whose outcome could have a material effect on our financial statements.

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 for 2015, although we may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with on Form 10-K for our year fiscal ended June 30, 2016, 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, Santa Fe Gold and all its subsidiaries, filed for bankruptcy protection under Chapter 11 in the state

of Delaware, Case # 15-11761-MFW on August 26, 2015 and on June 15, 2016, the case was dismissed on June 15, 2016 , and the related risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2016 to the SEC on November 14, 2017.

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

Sold an aggregate of 18,703,659 shares of restricted common stock to accredited investors for cash proceeds of $852,620 and issued 700 shares of restricted common stock for reimbursement of bank transfer fees at value of $28; and

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issued an aggregate of 18,703,659 shares of restricted common stock for the exercise of warrants to accredited investors for cash proceeds of $852,619 .

The issuance of the restricted common shares during the three months ended March 31, 2017, were exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a) (2) thereof because such issuance did not involve a public offering. The cash proceeds were utilized for working capital by the Company.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

With the filing of bankruptcy protection on August 26, 2015, all securities are in default and all but Waterton remain after the dismissal of the proceedings on June 15, 2016.

ITEM 4. MINE SAFETY DISCLOSURES  

None required.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS  

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

Exhibit	Description
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-l 4(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: March 26, 2018	/s/ Tom Laws
	Tom Laws
	Chief Executive Officer, President, and Director
	/s/ Frank G. Mueller
	Frank G. Mueller
	Chief Financial Officer, Director and Principal Accounting Officer

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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, Tom Laws, 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: March 26, 2018	/s/ Tom Laws
	Tom Laws
	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: March 26, 2018	/s/ Frank G. Mueller
	Frank G. Mueller
	Chief Financial Officer, Director and 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 nine-month period ended March 31, 2017, 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: March 26, 2018	/s/ Tom Laws
	Tom Laws
	Chief Executive Officer, President, Director
	/s/ Frank G. Mueller
	Frank G. Mueller
	Chief Financial Officer, Director and Principal Accounting      Officer

1

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Document and Entity Information - shares	9 Months Ended
	Mar. 31, 2017	Mar. 26, 2018
Text Block [Abstract]
Registrant Name	SANTA FE GOLD CORPORATION
Registrant CIK	0000851726
SEC Form	10-Q
Period End date	Mar. 31, 2017
Fiscal Year End	--06-30
Trading Symbol	SFEG
Tax Identification Number (TIN)	841094315
Number of common stock shares outstanding		271,936,273
Filer Category	Smaller Reporting Company
Current with reporting	Yes
Voluntary filer	No
Well-known Seasoned Issuer	No
Amendment Flag	false
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Contained File Information, File Number	001-12974
Entity Incorporation, State Country Name	Delaware
Entity Address, Address Line One	PO Box 25201
Entity Address, City or Town	Albuquerque
Entity Address, State or Province	NM
Entity Address, Postal Zip Code	87125

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2017	Jun. 30, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 616,619	$ 2,815
Deposit on contract	500,000	0
Prepaid expenses and other current assets	4,597	4,475
Total Current Assets	1,121,216	7,290
EQUIPMENT:
Mine equipment, net of accumulated depreciation of $1,539	10,001	0
Total Assets	1,131,217	7,290
CURRENT LIABILITIES:
Accounts payable	3,201,495	3,710,931
Accrued liabilities	6,110,212	6,793,984
Derivative instrument liabilities	0	306,488
Senior subordinated convertible notes payable, net of unamortized discount of $0 and $161,814, respectively	0	3,392,435
Notes payable, current portion	2,363,885	2,363,885
Completion guarantee payable	3,359,873	3,359,873
Total Current Liabilities	15,035,465	19,927,596
STOCKHOLDERS' DEFICIT:
Common stock, $.002 par value, 300,000,000 shares authorized; 283,584,042 and 221,799,662 shares issued and outstanding, respectively	567,168	443,599
Additional paid in capital	82,873,092	80,033,944
Accumulated deficit	(97,344,508)	(100,397,849)
Total Stockholders' Deficit	(13,904,248)	(19,920,306)
Total Liabilities and Stockholders' Deficit	$ 1,131,217	$ 7,290

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Mar. 31, 2017	Jun. 30, 2016
Text Block [Abstract]
Mine equipment, Accumulated depreciation	$ 1,539	$ 1,539
Debt Instrument, Unamortized Discount, Current	$ 0	$ 161,814
Common Stock, Par or Stated Value Per Share	$ 0.002	$ 0.002
Common Stock, Shares Authorized	300,000,000	300,000,000
Common Stock, Shares, Issued	283,584,042	221,799,662
Common Stock, Shares, Outstanding	283,584,042	221,799,662

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
SALES, net	$ 0	$ 0	$ 0	$ 6,250
OPERATING EXPENSES:
Exploration and other mine related costs	8,097	267,520	65,494	570,271
General and administrative	352,584	204,890	1,154,123	756,292
Depreciation and amortization	577	258,833	1,539	1,134,112
Reorganizational costs	0	427,612	0	1,183,205
Total Operating Costs and Expenses	361,258	1,158,855	1,221,156	3,643,880
LOSS FROM OPERATIONS	(361,258)	(1,158,855)	(1,221,156)	(3,637,630)
OTHER INCOME (EXPENSE):
(Loss) gain on trust debt extinguishment	(8,068)	0	464,763	0
Gain on debt extinguishment	4,402,069	797,683	4,416,668	797,683
Gain on asset sale	0	15,309	0	15,309
Foreign currency translation (loss)	(172,735)	(180,669)	(71,181)	(17,897)
(Loss) gain on derivative instruments liabilities	27,263	27,453	(26,974)	1,189,222
Financing costs - commodity supply agreements	(367,018)	(799,839)	281,522	(367,357)
Finance charges	0	0	0	(74,458)
Interest expense	(239,204)	(600,538)	(790,301)	(2,165,117)
Total Other Income (Expense)	3,642,307	(740,601)	4,274,497	(622,615)
GAIN (LOSS) BEFORE PROVISION FOR INCOME TAXES	3,281,049	(1,899,456)	3,053,341	(4,260,245)
PROVISION FOR INCOME TAXES	0	0	0	0
NET INCOME (LOSS)	$ 3,281,049	$ (1,899,456)	$ 3,053,341	$ (4,260,245)
Basic and Diluted Per Share data
Net Income (Loss) - basic	$ 0.01	$ (0.01)	$ 0.01	$ (0.02)
Net Income (Loss) - diluted	$ (0.00)	$ (0.01)	$ (0.00)	$ (0.02)
Weighted Average Common Shares Outstanding:
Basic	269,430,230	189,842,914	260,007,683	178,838,786
Diluted	314,370,791	189,842,914	317,788,623	178,838,786

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 3,053,341	$ (4,260,245)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,539	1,134,112
Stock issued for services	475,007	66,400
Amortization of discount on notes payable	161,814	236,788
Financing costs - commodity supply agreements	(281,522)	367,357
Non-cash financing costs	29	74,458
Loss (gain) on derivative instrument liabilities	26,974	(1,189,222)
Gain on debt extinguishment	(4,416,668)	(797,683)
(Gain) on trust debt extinguishment	(464,763)	0
Gain on asset sale	0	(15,309)
Foreign currency translation loss	71,181	17,897
Net change in operating assets and liabilities:
Accounts receivable	0	34,833
Prepaid expenses and other current assets	(500,122)	150,497
Accounts payable and accrued liabilities	629,098	2,170,769
Net Cash Used in Operating Activities	(1,244,092)	(2,009,348)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment	(11,540)	0
Cash Used Investing Activities	(11,540)	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from DIP funding	0	2,520,958
Proceeds from common stock purchases	1,077,110	0
Proceeds from exercise of warrants	1,077,109	0
Payments on DIP funding	0	(283,363)
Payments on convertible debt	(284,783)	0
Net Cash Provided by Financing Activities	1,869,436	2,237,595
NET INCREASE IN CASH AND CASH EQUIVALENTS	613,804	228,247
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	2,815	69,305
CASH AND CASH EQUIVALENTS, END OF PERIOD	616,619	297,552
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	0	0
Cash paid for income taxes	0	0
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock returned and cancelled	45,828	0
Derivative liabilities reclassified to equity	333,462	0
Common stock issued for convertible notes and accrued interest conversion	0	146,848
Liabilities released in the asset sale	0	16,416,537
Discount on note payable	0	98,091
Resolution of derivative liability upon conversion	$ 0	$ 90,081

XML

NOTE 1 - BASIS OF PRESENTATION AND GOING CONCERN

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

NOTE 1 - BASIS OF PRESENTATION AND GOING CONCERN

NOTE 1 - Basis of Presentation and GOING CONCERN

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 accompanying unaudited financial statements and related notes present the Company’s consolidated financial position as of March 31, 2017 and June 30, 2016, the consolidated results of operations for the three and nine months ended March 31, 2017 and 2016, consolidated cash flows for the nine months ended March 31, 2017 and 2016. The unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended March 31, 2017, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2017. The accounting policies followed by the Company are set forth in Note 2 to the Company’s financial statements included in Form 10-K for the fiscal year ended June 30, 2016. These interim financial statements and notes thereto should be read in conjunction with the consolidated financial statements presented in the Company’s 2016 Annual Report on Form 10-K filed on November 14, 2017.

Nature of Operations

Santa Fe Gold Corporation (the “Company”, “our” or “we”) is a U.S. mining company incorporated in Delaware in August 1991. Our general business strategy is to acquire, explore, develop and mine mineral properties. The Company elected on August 26, 2015, to file for Chapter 11 Bankruptcy protection, Case # 15-11761 (MFW) and that case was dismissed on June 15, 2016. The Summit Silver-Gold Project, the Lordsburg Copper Project, Black Canyon Mica Project, Planet MIO Project, all claims and other assets were lost in the process. As the Company emerged from the bankruptcy we had a management team of two with no assets. The Company is in the process of raising equity funds to acquire new mining claims, a potential processing plant or arrangements with a processing plant in an acceptable geographic location to potential new mining claims.

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 recorded a profit of $3,053,341 for the nine months ended March 31, 2017, and has a total accumulated deficit of $97,344,508 and a working capital deficit at March 31, 2017 of $13,914,249. The Company currently has no source of generating revenue.

On August 26, 2015 Santa Fe filed for Chapter 11 Bankruptcy protection, Case # 15-11761 (MFW) in Delaware. With the dismissal of our bankruptcy case in June 15, 2016, all assets of the Company were sold. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern.

To continue as a going concern, the Company is dependent on continued capital financing for project development, repayment of various debt facilities and payment of current operating expenses until the Company has acquired new mining claims and an acceptable source to process the mineralized ore to generate revenue. We have no commitment from any party to provide additional working capital and there is no assurance that any funding will be available as required, or if available, that its terms will be favorable or acceptable to the Company.

On March 31, 2017, the Company was in default on payments of approximately $7.33 million under a gold stream agreement (the “GoldStream Agreement”) with Sandstorm Gold Ltd. (“Sandstorm”).

Deposit on Contract

The Company made an initial deposit of $500,000 on the Bullard’s Peak Corporation and Black Hawk Consolidated Mines Company purchase to their attorney on March 30, 2017, and subsequently the payment was returned prior to the April 10, 2017, payment towards the Bullards transaction that went into escrow. On April 10, 2017, the Company delivered $500,000 to be held in escrow pending, and to be applied as part of the purchase price due under an agreement with Bullard’s Peak Corporation and Black Hawk Consolidated Mines Company to acquire 100% of the issued and outstanding capital stock for a cash purchase price in the aggregate amount of $3,000,000, to be paid with installments stated in the Bullard’s Peak agreement. The final payment under the agreement was made on January 2, 2018.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 and Santa Fe Acquisitions Company, a New Mexico Limited Liability Company. All significant inter-company accounts and transactions have been eliminated in consolidation

On July 19, 2016 a new company was formed: Santa Fe Acquisition LLC (“SFA”) with Tom Laws, our CEO, as the signer, for the sole purpose of acquiring assets for Santa Fe Gold (“SFG”). On September 25, 2017, with an effective date of July 23, 2016, the CEO assigned ownership of SFA to Santa Fe Gold whereby SFG became to sole member of SFA resulting in SFA becoming a wholly owned subsidiary of SFG.  All major purchases were made through the SFA Company for the benefit of SFG, with the funding provided by SFG.

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, 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, accounts payable and accrued liabilities approximated their related fair values as of March 31, 2017, and June 30, 2016, 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.

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. 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 as a one day derivative loss, 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, using the effective interest method.

When required to arrive at the fair value of derivatives associated with the convertible note and warrants, either the Black-Scholes option pricing model or a Monte Carlo model is utilized that values the Convertible Note and Warrant based on average discounted cash flow factoring in the various potential outcomes by a Chartered Financial Analyst (‘CFA”). In determining the fair value of the derivatives the CFA assumed that the Company’s business would be conducted as a going concern.

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.

Net Income (Loss) Per Share

Basic earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share are 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 months and nine months ended March 31, 2016, the impact of outstanding stock equivalents has not been included as they would be anti-dilutive.

A reconciliation of the weighted average shares outstanding used in the basic and diluted earnings per share (“EPS”) computation is as follows:  

For the three months ended March 31, 2017	Net Income (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
Basic EPS
Income available to common stockholders		$3,281,049		269,430,230		$ 0.01
Diluted EPS
Loss on derivatives		72,137
Interest expense on convertible notes		46,102
Gain on foreign currency translation		(144,769)
Gain on debt extinguishment		(4,068,881)
Dilutive shares from options and warrants		—		44,940,561
Income available to common stockholders plus assumed exercise of options and warrants		$(814,362)		314,370,791		$ (0.00)

For the nine months ended March 31, 2017	Net Income (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
Basic EPS
Income available to common stockholders		$3,053,341		260,007,683		$ 0.01
Diluted EPS
Gain on derivatives		(153,538)
Interest expense on convertible notes		184,408
Gain on foreign currency translation		(59,631)
Gain on debt extinguishment		(4,068,881)
Dilutive effect of convertible notes		—		57,780,940
Income available to common stockholders plus assumed exercise of options and warrants		$(1,044,301)		317,788,623		$(0.00)

Stock-Based Compensation

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

The Company accounts for share based compensation 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 compensation cost is recognized over the expected vesting period. Share based payments to nonemployees are valued at the earlier or a commitment date or completion of services.

Accounting Standards to be Adopted in Future Periods

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows.

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NOTE 3 - ACCRUED LIABILITIES

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

NOTE 3 - ACCRUED LIABILITIES

Note 3 – ACCRUED LIABILITIES

Accrued liabilities consist of the following at March 31, 2017 and June 30, 2016:

		March 31,		June 30,
		2017		2016
Interest	$	2,159,961	$	2,589,993
Vacation		15,771		15,771
Deferred and accrued payroll burden		230,488		239,262
Franchise taxes		8,695		8,695
Merger costs, net		269,986		269,986
Other		18,136		19,578
Audit		20,000		20,000
Commodity supply agreement		3,133,652		3,415,175
Property taxes		253,523		215,524
	$	6,110,212	$	6,793,984

XML

NOTE 4 - DERIVATIVE INSTRUMENT LIABILITIES

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

NOTE 4 - DERIVATIVE INSTRUMENT LIABILITIES

NOTE 4 – DERIVATIVE INSTRUMENT LIABILITIES

The fair market value of the derivative instruments liabilities were determined utilizing the Black-Scholes option pricing model for warrants and certain convertible notes and to arrive at the fair value of derivatives associated with certain other convertible notes, a Monte Carlo model was utilized that values the Convertible Notes based on average discounted cash flow factoring in the various potential outcomes. In determining the fair value of the derivatives it was assumed that the Company’s business would be conducted as a going concern at March 31, 2017. 

Utilizing the two methods, the aggregate fair value of the derivative instruments liability was determined to be $844,463 as of March 31, 2017. The following assumptions were utilized in the Black-Scholes option pricing model: (1) risk free interest rate of 0.81% to 1.25%, (2) remaining contractual life of 0.33 to 2.02 years, (3) expected stock price volatility of 124.9% to 414.4%, and (4) expected dividend yield of zero. The following assumptions were utilized in the Monte Carlo model: (1) features in the note that were analyzed and incorporated into the model included the conversion feature with the reset provisions, (2) redemption provisions and the default provisions, (3) there are four primary events that can occur; payments are made in cash; payments are made with stock; the Holder converts the note; or the Company defaults on the note,(4) stock price of $0.0009 to $0.176 was utilized, (5) notes convert with variable conversion prices based on the lesser range from of $0.0425 or $0.125 or a fixed rate of 60% or 65% of either the low 20 or 25 trading days, depending on the lender and (6) annual volatility for each valuation period was based on the historic volatility of the Company of 99%-537%, annualized over the term remaining for each valuation..

On March 8, 2017, the convertible notes were all settled and on the final date of settlement, the warrants no longer qualified as derivatives and were reclassified to equity at their fair value on that date and aggregated $333,467.

Based upon the change in fair value, the Company has recorded a non-cash loss on derivative instruments for the nine months ended March 31, 2017, of $26,974.  

The table below shows the loss on the derivative instruments liability for the nine months ended March 31, 2017.

		Derivative		Derivative		Valuation Change
		Liability as of		Liability as of		for the Nine Months Ended
		June 30, 2016		March 31, 2017		March 31, 2017
Purchase Agreement Warrants and Convertible Debt	$	306,488	$	-	$	306,488
Warrant derivatives reclassified to equity						(333,462)
Loss on Derivatives					$	26,974

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NOTE 5 - COMPLETION GUARANTEE PAYABLE

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

NOTE 5 - COMPLETION GUARANTEE PAYABLE

Note 5 – COMPLETION GUARANTEE PAYABLE

At June 30, 2012, the Company calculated the completion guarantee payable provided by Amendment 1 noted on the Company’s June 30, 2016 10-K. Based upon the provisions of the Agreement and the related completion guarantee test, incremental financing charges totaling $504,049 were recognized in Other Expenses and accrued at June 30, 2012. These accrued charges, combined with the remaining uncredited liability totaled $3,359,873 at March 31, 2017 and June 30, 2016, respectively, and are reported as completion guarantee payable and is due and in default due to the bankruptcy.

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NOTE 6 - CONVERTIBLE NOTES PAYABLE

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

NOTE 6 - CONVERTIBLE NOTES PAYABLE

Note 6 – CONVERTIBLE NOTES PAYABLE

Senior Subordinated Convertible Notes

On October 30, 2007, the Company completed the placement of 10% Senior Subordinated Convertible Notes of $450,000. The notes were placed with three accredited investors for $150,000 each and bear interest at 10% per annum. The notes had term of 60 months at which time all remaining principal and interest was due. Interest accrued for 18 months from the date of closing. Interest on the outstanding principal balance was payable in quarterly installments, commencing on the first day of the 19th month following the transaction 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. All issued warrants have expired. 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 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 date. 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 and have expired.

As of June 30, 2016, the outstanding principal balance was $450,000 and accrued interest on the senior subordinated convertible notes was $144,500 and was in default. In December 2016 the court administered trust paid and aggregate $23,000 to the note holders and was applied against the accrued interest on the notes.

In March 2017 the three accredited investors reached an agreement with the Company for an aggregate cash settlement of $13,500 on all the outstanding principles and accrued interest as payment in full. The settlement amount was paid by according to the terms of the settlement in April 2017. At the time of the agreement to settle the three accredited investors had an aggregate balance of principle and accrued interest owed them of $603,688 and the Company recorded a gain on extinguishment of debt of $590,188 on the settlement.

Convertible Secured Notes

In October and November 2012, the Company received advances totaling A$3,900,000 (A$ - Australia dollars), 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.

On October 31, 2015, the note became convertible and the CFA computed 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 embedded conversion option was $98,091. During the year ended June 30, 2016, amortization of loan discount was recognized as interest expense of $48,251 and during the nine months ended March 31, 2017, amortization of loan discount recognized as interest expense was $49,840 and the unamortized discount balance was $0 at March 31, 2017. On March 31, 2017 and June 30, 2016, the total outstanding principal balance on the IGS Secured Convertible Note totaled $0 and $2,903,316, respectively, and accrued interest was $0 and $642,624, respectively. In December 2016 the court administered trust paid $174,507 to the note holder and was applied against the accrued interest on the note. IGS never submitted a conversion notice and in March 2017 reached an agreement with the Company for a cash settlement of $88,282 on the outstanding principle and accrued interest as payment in full. The settlement amount was paid by wire transfer in April 2017.

At the time of the agreed settlement the outstanding principle and accrued interest aggregated $3,563,662 and the Company recorded a gain on extinguishment of debt of $3,475,380 on the settlement.

Convertible Unsecured Notes

On October 22, 2014, the Company signed a $500,000 Convertible Note with an accredited 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 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. During the fiscal year ended June 30, 2015, the investor converted note principle of $68,900 into 1,800,000 shares of restricted common stock. During the fiscal year ended June 30, 2016, the investor converted the balance of the note principle and added interest charges of $24,433 into 916,078 shares of restricted common stock.

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. During the fiscal year ended June 30, 2016, amortization of loan discount was recognized as interest expense of $20,185.

On February 25, 2015, a second consideration tranche of $50,000 was delivered under this Convertible Note under the same terms and conditions, net of and OID charge of $5,556. 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. During the fiscal year ended June 30, 2016, amortization of loan discount was recognized as interest expense of $60,973. During the fiscal year ended June 30, 2016, the investor converted principle and added interest charges aggregating $62,223 into 27,522,855 shares of restricted common stock.

During the nine months ended March 31, 2016, the Company recorded $90,081 as resolution of derivative liability upon note conversions back into Additional Paid-in Capital.

On June 24, 2015, a third Consideration tranche of $50,000 was delivered under this Convertible Note under the same terms and conditions, net of and OID charge of $5,556. 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. During the fiscal years ended June 30, 2016, $6,666 was added to the note principle and note discount and amortization of the loan discount was recognized as interest expense of $5,541 for the fiscal year ended June 30, 2016. No note conversions were made on the note during the fiscal years ended June 30, 2016 and 2015. During fiscal year ended June 30, 2016, $31,111 in default charges was added to the note balance. At March 31, 2017 and June 30, 2016 the note balance was $0 and $93,333 respectively, and amortization of the loan discount was recognized as interest expense of $56,088 for the nine months ended March 31, 2017, and the unamortized loan discount balance as of March 31, 2017 and June 30, 2016, was $0 and $56,088, respectively.

The conversion price with this investor is the lesser of $0.0425 or 65% of the lowest trade price in the 25 trading days previous to the conversion date. The note was not converted and was retired for $90,000 in installments, the final installment made on January 25, 2017, and the Company recorded a gain on extinguishment of debt of $3,333.

On January 20, 2015 the Company signed a $250,000 Convertible Note with an accredited Investor and received on January 20, 2015, a consideration of net proceeds $50,000, net of an 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 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.

On June 9, 2015, a second Consideration tranche of $50,000 was delivered under this Convertible Note under the same terms and conditions, net of an original issue discount (“OID) of $5,556. 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. During the fiscal year ended June 30, 2016, amortization of loan discounts on the two notes was recognized as interest expense of $66,388. During the fiscal year ended June 30, 2016, the investor converted the note principle and added interest charges of $60,192 under the first consideration into 18,007,333 shares of restricted common stock. During the fiscal year ended June 30, 2016, penalties and default charges of $43,347 were added to the two note balances. At March 31, 2017 and June 30, 2016, the note balances were $-0- and $107,599, respectively and the unamortized loan discounts were $0 and $55,445, respectively. During the nine months ended March 31, 2017, amortization of the loan discount recognized as interest expense was $55,445.

The conversion price with this investor is the lesser of $0.125 or 60% of the lowest trade price in the 25 trading days previous to the conversion date. At June 30, 2016, the two note tranches had aggregated outstanding principal $107,599 and had a conversion price of $$0.0003. During the three months ended September 30, 2016, the note was not converted and was retired for $93,000 in installments, the final installment made on September 6, 2016. The transaction resulted in recognition of a gain on extinguishment of debt of $14,599.

The components of the unsecured convertible notes payable are as follows:

March 31, 2017:		Principal		Unamortized
		Amount		Discount		Net
Current portion	$	-	$	-	$	-

June 30, 2016:		Principal		Unamortized
		Amount		Discount			Net
Current portion	$	3,554,249	$	(161,814	)	$	3,392,435

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NOTE 7 - NOTES PAYABLE

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

NOTE 7 - NOTES PAYABLE

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 a $200,000 loan to the Company and a $20,000 merger advance. 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 not close under this Agreement and this amount is outstanding at March 31, 2017 and is in default. Accrued interest on note at March31, 2017 and June 30, 2016 was $55,228 and $47,402, respectively. In December 2016 the court administered trust paid $9,897 to the note holder and was applied against the accrued interest on the note.

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 at March 31, 2017 and June 30, 2016 and had an accrued interest of $59,024 and $59,238, respectively. In December 2016 the court administered trust paid $17,412 to the note holder and was applied against the accrued interest on the note. The Company has been unable to make its monthly payments since November 2013, currently is due and in default and the equipment has been returned to the vendor for sale and remains unsold at March 31, 2017.

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 at March 31, 2017 and June 30, 2016. This amount is net of a break fee of $300,000 due to the Company from Tyhee. Accrued interest on note at March 31, 2017 and June 30, 2016, was $1,207,841 and $990,657, respectively is due and in default. In December 2016 the court administered trust paid $91,788 to the note holder and was applied against the accrued interest on the note.

The following summarizes notes payable:

		March 31,		June 30,
		2017		2016
Working capital advances, interest at 1% per month, due January 15, 2015	$	200,000	$	200,000
Merger advance		20,000		20,000
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
Notes payable - current	$	2,363,885	$	2,363,885

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NOTE 8 - FAIR VALUE MEASUREMENTS

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

NOTE 8 - FAIR VALUE MEASUREMENTS

NOTE 8 – FAIR VALUE MEASUREMENTS

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in generally accepted accounting principles (“GAAP”), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.  The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

 Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. A slight change in unobservable inputs such as volatility can significantly have a significant impact on the fair value measurement of the derivatives liabilities.

 The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash and accounts payable approximate their fair values because of the short maturity of these instruments.

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, 2017 and June 30, 2016 are as follows:

March 31, 2017
	Level 1	Level 2		Level 3		Total
Assets:
None	—	—		—		—
Liabilities:
Derivative instruments	—	—	$	—	$	—

June 30, 2016
	Level 1	Level 2		Level 3		Total
Assets:
None	—	—		—		—
Liabilities:
Derivative instruments	—	—	$	306,488	$	306,488

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NOTE 9 - CONTINGENCIES AND COMMITMENTS

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

NOTE 9 - CONTINGENCIES AND COMMITMENTS

NOTE 9 – CONTINGENCIES AND COMMITMENTS

Chapter 11 Bankruptcy

On August 26, 2015, the Company filed for Chapter 11 Bankruptcy protection in Delaware in order to secure the existing assets from creditor actions. Case No. 15-11761 (MFW). Santa Fe’s CEO filed in his Affidavit in Support of the first day motion (full affidavit can be researched in the Delaware court filings. Case# 15-11761 MFW on August 26, 2015) that we have only one remaining option (plan) to have an orderly sale of all assets to satisfying qualified debt without any plan for the thereafter and he began working with Canaccord Genuity Inc. (“Canaccord”) as our investment banker to assist with these efforts. The “asset sale” took place in February 2016 and left Santa Fe Gold and Subsidiaries without any assets but with all debt.

After the dismissal of the bankruptcy case, the Company will have no assets, but is still liable for all commitments and debts outstanding. SFG Barbados, Lordsburg Mining Company and AZCO will be dormant and all the commitments and debts will stay with the respective companies and all debt is currently in default and due. The court set up a Trust fund that will be funded by the activities of the Summit mine for five (5) years and the trust funds will be distributed by an independent trustee to all credit holders on record.

The table below summarizes the carrying value of the assets sold and the liabilities disposed in the 363 Asset Sale as of asset transfer on February 26, 2016:

	February 26, 2016
Assets Sold
Restricted cash	$ 236,628
Prepaid expenses and other current  assets	39,584
Property, plant and equipment, net	4,992,154
Mine development properties, net	10,532,965
Mineral properties, net	599,897
	$ 16,401,228
Liabilities Disposed
Notes payable	$ 9,993,280
Accrued interest	5,815,622
Accrued DIP fees	32,203
Asset retirement obligation	245,494
Accrued CSA fees	329,938
Total	$ 16,416,537
Net gain on the 363 Asset Sale	$ 15,309

Upon receiving the Certification of Counsel Regarding Satisfaction of Conditions in Debtors’ Motion to dismiss Chapter 11 Cases, on June 15, 2016, the Company received the Court Order Dismissing the Chapter 11 Case under the Bankruptcy Code.

In December 2016 the court administered trust paid $464,763 to credit holders of the Company, and is recorded as a gain on trust debt extinguishment and payments were applied as follows:

Accounts payable	$138,879
Accrued compensation	8,775
Accrued liabilities	1,443
Note holders – accrued interest	315,666
Total	$464,763

Office and Real Property Leases

On August 1, 2015, the Company moved the office to a single room located in Albuquerque, NM, at the home of the CFO for a monthly rent of $500 until the Company is required to lease increased office space due to additional personnel requirements.

Rental expense totaled $4,500 for the nine months ended March 31, 2017 and 2016, respectively.

Title to Mineral Properties

Although the Company has taken steps, consistent with industry standards, to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

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NOTE 10 - STOCKHOLDERS' EQUITY

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

NOTE 10 - STOCKHOLDERS' EQUITY

NOTE 10 - STOCKHOLDERS' DEFICIT

Stock Returned and Cancelled

On August 1, 2016, a shareholder returned 6,956,750 common shares to the Company for no value received by the shareholder and the shares were recorded at Par Value of $13,914.

On December 14, 2016, employees, a director and a consultant returned 15,956,748 shares to the Company in order to be able to raise more funds to acquire additional assets by the Company for no value received by the shareholders and the shares were recorded at Par Value of $31,914.

Issuance of Stock

During the nine months ended March 31, 2017, the Company issued the following common stock:

(i)	Issued an aggregate of 9,365,360 shares of restricted common stock for consulting services at a value of $475,007 on the date of issuance;
(ii)	Sold an aggregate of 37,665,909 shares of restricted common stock to accredited investors for cash proceeds of $1,077,110 and issued 700 shares of restricted common stock for reimbursement of bank transfer fees at value of $28; and
(iii)	Issued an aggregate of 37,665,909 shares of restricted common stock for the exercise of warrants to accredited investors for cash proceeds of $1,077,109.

The issuance of the restricted common shares during the nine months ended March 31, 2017, were exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a) (2) thereof because such issuance did not involve a public offering.

Issuance of Warrants and Expiration

During the nine months ending March 31, 2017, the Company issued 37,665,909 warrants and 1,100,000 warrants expired.

Stock Options and the Amended and Restated Equity Incentive Plan

During nine months ending March 31, 2017, no options were granted and 2,940,000 options were cancelled or expired.

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 ending March 31, 2017, are as follows:

	Stock Options		Stock Warrants
		Weighted		Weighted
		Average		Exercise
	Shares	Price	Shares	Price
Outstanding at June 30, 2016	8,375,000	$0.02	10,443,434	$0.35
Granted	—	—	37,665,509	$0.03
Canceled	(2,900,000)	$0.02	—	—
Expired	(40,000)	$0.36	(1,100,000)	$0.94
Exercised	—	—	(37,665,909)	$0.03
Outstanding at March 31, 2017	5,435,000	$0.02	9,343,434	$0.28

Stock options and warrants outstanding and exercisable at March 31, 2017 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
$0.001	5,000,000	5,000,000	1.55	$	0.001	$	0.15	4,320,000	4,320,000	1.87	$	0.15
$0.07	100,000	100,000	2.76	$	0.07	$	0.38	523,434	523,434	0.46	$	0.38
$0.08	100,000	100,000	1.76	$	0.08	$	0.40	4,500,000	4,500,000	0.33	$	0.40
$0.32	100,000	100,000	0.39	$	0.32		—	—	—	—		—
$0.36	135,000	135,000	0.75	$	0.36		—	—	—	—		—
	5,435,000	5,435,000						9,343,434	9,343,434
	Outstanding Options		1.53	$	0.02		Outstanding Warrants			1.05	$	0.28
	Exercisable Options		1.53	$	0.02		Exercisable Warrants			1.05	$	0.28

As of March 31, 2017, the aggregate intrinsic value of all stock options and warrants vested and expected to vest was $1,007,520 and the aggregate intrinsic value of currently exercisable stock options and warrants was $1,007,520. 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 $0.176 closing stock price of the common stock on March 31, 2017

The total intrinsic value associated with options exercised during the nine months ended March 31, 2017, 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.

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NOTE 11 - RELATED PARTY TRANSACTIONS

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

NOTE 11 - RELATED PARTY TRANSACTIONS

NOTE 11 – RELATED PARTY TRANSACTIONS

At March 31, 2017 and at June 30, 2016, the Company owed to related parties an aggregated amount of $269,787 respectively.

On August 1, 2015, the Company leased a home office space from the Company CFO for $500 a month for the corporate administrative office in Albuquerque, NM until such time growth requires a larger corporate administrative office.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

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NOTE 12 - SUMMARY OF GAIN ON DEBT EXTINGUISHMENT

9 Months Ended

Mar. 31, 2017

Notes to Financial Statements

NOTE 12 – SUMMARY OF GAIN ON DEBT EXTINGUISHMENT

Note 12 – Summary of Gain on debt extinguishment

Below is a summary of gain on debt extinguishment recognized for the nine months ended March 31, 2017:

		Payment	Gain on Debt
	Debt Settled	Amount	Extinguished
Accounts Payable	$      343,902	$          10,734	$         333,168
IGS note principle	2,962,947	88,282	2,874,665
IGS accrued interest	600,715	—	600,715
Convertible notes	450,000	13,500	436,500
Convertible note accrued interest	153,688	—	153,688
Vista convertible note	80,155	65,556	14,599
JMJ convertible note	93,333	90,000	3,333
	$    4,684,740	$        268,072	$       4,416,668

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NOTE 13 - LEGAL PROCEEDINGS

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

NOTE 13 - LEGAL PROCEEDINGS

Note 13 – LEGAL PROCEEDINGS

All legal proceedings stayed with the filing of Chapter 11 bankruptcy. At the time of the bankruptcy filing several litigations were filed in several courts. Santa Fe believes that the following suits will be stayed pursuant to the Bankruptcy Code. After dismissal of the Chapter 11 filings, we have not been notified of any of the below cases if they will continue or not.

Boart Longyear Company v. Lordsburg Mining Company, Case No. D-2-2-CV-2015- 06048, County of Bernalillo, NM;

Boart Longyear Company v. Lordsburg Mining Company, Case No. D-721-CV-2015- 00058, County of Sierra, NM;

Boart Longyear Company v. Lordsburg Mining Company, Case No. D-608-CV- 201500165

County of Quintero, NM. Series of collection cases by Boart Longyear Company, who obtained Utah judgment for equipment delivered to Lordsburg Mining Company

Santa Fe Gold Corporation v. Tyhee Gold Corp., Brian K. Briggs, SRK Consulting (US), Inc., and Bret Swanson, Case No: 14CV032866, District Court, Denver County, Colorado

Santa Fe is seeking damages for breach of the Confidentiality Agreement as well as for conversion of Santa Fe’s confidential information. Tyhee Gold Corp. has filed a counter-claim for tortuous interference with prospective contractual relationships with Koza Gold. At this time, there can be no determination of the outcome.

Wagner Equipment Co. v. Lordsburg Mining Company, Case No. D-2014-02372, County of Bernalillo, NM 28

Collection case by Wagner equipment, who obtained judgment for equipment delivered to Lordsburg Mining Company.

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. Lone Mountain Ranch LLC sued Ortiz Mines Inc against any mining activities on the property, and Santa Fe Gold was only a co-defender. With the bankruptcy, we, SFG, were dismissed.

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.” The claims were against Lordsburg Mining company, were stayed during the proceedings and all claims remained. At this time, there can be no determination of the outcome.

The court set up a Trust fund that will be funded by the activities of the Summit mine for five (5) years and the trust funds will be distributed by an independent trustee to all credit holders on record. Currently all debts at the time of the bankruptcy are currently due and in default. None of the claims have been reopened since June 2016.

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.

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 March 31, 2017, we were not a party to any material litigation, claim or suit whose outcome could have a material effect on our financial statements.

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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NOTE 14 - SUBSEQUENT EVENTS

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

NOTE 14 - SUBSEQUENT EVENTS

NOTE 14 – SUBSEQUENT EVENTS

Recent Issuances of Unregistered Securities

In the period from April 2017 through February 8, 2018, the Company sold an aggregate of 6,398,753 units. Each unit consisted of one common share and one common stock warrant. The warrants had a term of 5 years and an exercise price of $0.06. All warrants were immediately exercised resulting in the issuance of an additional 6,398,753 common shares. The Company received aggregate proceeds of $383,925 from these sales and warrant exercises. In connection with this offering, the Company incurred placement fees consisting of a cash fee of 10% of the full combined dollar amount of units placed in the offering plus warrants exercisable for 10% of the shares and warrants included in the units placed with an exercise price of $0.06. To date, no placement agent fee warrants have been issued. The Company incurred a cash fee amounting to $38,393 in connection with this raise.

From the capital raised from above, between July 26, 2017 and February 8, 2018, the Company has raised $4,001,738 for equity purchases from a private overseas investment company and a number of associated investors. The stock and warrant shares have not been issued at this time and the stock certificates and warrant shares (approximately 50,021,733 shares) will be issued at the same time at a varying price per share. In connection with this offering, the Company has incurred placement fees consisting of a cash fee of 10% of the full combined dollar amount of units placed in the offering plus warrants exercisable for 10% of the shares and warrants included in the units placed. To date, no placement agent fee warrants have been issued. The Company has incurred a cash fee amounting to $400,474 in connection with this raise.

Other Events

On April 10, 2017 we reached a non-disclosure agreement with our prior CEO, Mr. Jordaan, about his outstanding back wages and amounts due for legal services rendered to the Company prior assuming the position of CEO. Mr. Jordaan resigned as CEO and from the board effective May 6, 2016.

Between April 10, 2017 and December 28, 2017 Santa Fe Gold transferred $2.5 million to acquire properties for Santa Fe Gold and the staking of all the claims currently owned by Santa Fe Gold. The announcement was made on September 17, 2017 that we acquired 100% of Bullard’s Peak Corporation and Black Hawk Consolidated Mines Company, which includes formerly optioned AG1 Silver Mine and all lands surrounding the project to include potential Porphyry Silver Discovery and all rights to same. These transactions are summarized below:

- On April 10, 2017, the Company delivered $500,000 to be held in escrow pending, and to be applied as part of the purchase price due under an agreement with Bullard’s Peak Corporation and Black Hawk Consolidated Mines Company to acquire 100% of the issued and outstanding capital stock for a cash purchase price in the aggregate amount of $3,000,000, to be paid over time as stated in the Bullard’s Peak agreement.

- On August 18, 2017, the Company signed the Bullard’s Peak Agreement and delivered an additional $100,000 towards the purchase price.

- On August 30, 2017, the Company delivered an additional $900,000 to Bullard’s Peak towards the purchase price under terms of the Agreement.

- On September 08, 2017, the Company delivered $500,000 to Bullard’s Peak towards the purchase price under terms of the Agreement.

- On September 14, 2017, the Company acquired 100% of Bullard’s Peak Corporation and Black Hawk Consolidated Mines Company, pending two more payment to be delivered at the end October and November 2017.

- On October 13, 2017, the Company delivered $500,000 to Bullard’s Peak towards the purchase price under terms of the Agreement.

- On January 2, 2018 we made the final payment of $500,000 to purchase the Bullard’s Peak Corporation.

On July 26, 2017 the board changed the price for 5,000,000 options from $.001 (Board meeting May 5, 2016) to $.002.

On February 2, 2017, an agreement was reached with an investor for the return on 20,000,000 shares and the issuance of 2,000,000 shares on a new certificate. On July 28, 2017, the investor physically returned 20,000,000 shares to the transfer agent and they were cancelled and were deducted from the outstanding shares. The investor was issued 2,000,000 shares on a new certificate. The 18,000,000 shares are to be re-issued at a later time and the obligation will be accounted for as a derivative liability at the fair value of the shares and marked to market at each balance sheet date.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Mar. 31, 2017

Policy Text Block [Abstract]

Principles of Consolidation

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 and Santa Fe Acquisitions Company, a New Mexico Limited Liability Company. All significant inter-company accounts and transactions have been eliminated in consolidation

On July 19, 2016 a new company was formed: Santa Fe Acquisition LLC (“SFA”) with Tom Laws, our CEO, as the signer, for the sole purpose of acquiring assets for Santa Fe Gold (“SFG”). On September 25, 2017, with an effective date of July 23, 2016, the CEO assigned ownership of SFA to Santa Fe Gold whereby SFG became to sole member of SFA resulting in SFA becoming a wholly owned subsidiary of SFG.  All major purchases were made through the SFA Company for the benefit of SFG, with the funding provided by SFG.

Reclassifications

Reclassifications

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

Estimates

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, and stock-based compensation which are discussed in the respective notes to the consolidated financial statements.

Fair Value Measurements

Fair Value Measurements

The carrying values of cash and cash equivalents, accounts payable and accrued liabilities approximated their related fair values as of March 31, 2017, and June 30, 2016, 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

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.

Derivative Financial Instruments

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. 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 as a one day derivative loss, 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, using the effective interest method.

When required to arrive at the fair value of derivatives associated with the convertible note and warrants, either the Black-Scholes option pricing model or a Monte Carlo model is utilized that values the Convertible Note and Warrant based on average discounted cash flow factoring in the various potential outcomes by a Chartered Financial Analyst (‘CFA”). In determining the fair value of the derivatives the CFA assumed that the Company’s business would be conducted as a going concern.

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.

Net Income (Loss) Per Share

Net Income (Loss) Per Share

Basic earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share are 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 months and nine months ended March 31, 2016, the impact of outstanding stock equivalents has not been included as they would be anti-dilutive.

A reconciliation of the weighted average shares outstanding used in the basic and diluted earnings per share (“EPS”) computation is as follows:  

For the three months ended March 31, 2017	Net Income (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
Basic EPS
Income available to common stockholders		$3,281,049		269,430,230		$ 0.01
Diluted EPS
Loss on derivatives		72,137
Interest expense on convertible notes		46,102
Gain on foreign currency translation		(144,769)
Gain on debt extinguishment		(4,068,881)
Dilutive shares from options and warrants		—		44,940,561
Income available to common stockholders plus assumed exercise of options and warrants		$(814,362)		314,370,791		$ (0.00)

For the nine months ended March 31, 2017	Net Income (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
Basic EPS
Income available to common stockholders		$3,053,341		260,007,683		$ 0.01
Diluted EPS
Gain on derivatives		(153,538)
Interest expense on convertible notes		184,408
Gain on foreign currency translation		(59,631)
Gain on debt extinguishment		(4,068,881)
Dilutive effect of convertible notes		—		57,780,940
Income available to common stockholders plus assumed exercise of options and warrants		$(1,044,301)		317,788,623		$(0.00)

The number of stock options excluded from the calculation of diluted earnings per share for the three months and nine months ended March 31, 2017 was 475,000 and excluded warrants was 5,023,434, because their inclusion would have been anti-dilutive.

Stock-Based Compensation

Stock-Based Compensation

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

The Company accounts for share based compensation 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 compensation cost is recognized over the expected vesting period. Share based payments to nonemployees are valued at the earlier or a commitment date or completion of services.

Accounting Standards to be Adopted in Future Periods

Accounting Standards to be Adopted in Future Periods

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Table)

9 Months Ended

Mar. 31, 2017

Disclosure Text Block [Abstract]

Net Income (Loss) Per Share

A reconciliation of the weighted average shares outstanding used in the basic and diluted earnings per share (“EPS”) computation is as follows:  

For the three months ended March 31, 2017	Net Income (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
Basic EPS
Income available to common stockholders		$3,281,049		269,430,230		$ 0.01
Diluted EPS
Dilutive shares from options and warrants		—		48,358,393
Income available to common stockholders plus assumed exercise of options and warrants		$3,281,049		317,788,623		$ 0.00

For the nine months ended March 31, 2017	Net Income (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
Basic EPS
Income available to common stockholders		$3,053,341		260,007,683		$ 0.01
Diluted EPS
Dilutive shares from options and warrants		—		54,363,108
Income available to common stockholders plus assumed exercise of options and warrants		$3,053,341		314,370,791		$0.0

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NOTE 3 - ACCRUED LIABILITIES (Tables)

9 Months Ended

Mar. 31, 2017

Table Text Block Supplement [Abstract]

Schedule Of Accrued Liabilities

Accrued liabilities consist of the following at March 31, 2017 and June 30, 2016:

		March 31,		June 30,
		2017		2016
Interest	$	2,159,961	$	2,589,993
Vacation		15,771		15,771
Deferred and accrued payroll burden		230,488		239,262
Franchise taxes		8,695		8,695
Merger costs, net		269,986		269,986
Other		18,136		19,578
Audit		20,000		20,000
Commodity supply agreement		3,133,652		3,415,175
Property taxes		253,523		215,524
	$	6,110,212	$	6,793,984

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NOTE 4 - DERIVATIVE INSTRUMENT LIABILITIES (Tables)

9 Months Ended

Mar. 31, 2017

Table Text Block Supplement [Abstract]

Schedule Of Derivative Liabilities

The table below shows the loss on the derivative instruments liability for the nine months ended March 31, 2017.

		Derivative		Derivative		Valuation Change
		Liability as of		Liability as of		for the Nine Months Ended
		June 30, 2016		March 31, 2017		March 31, 2017
Purchase Agreement Warrants and Convertible Debt	$	306,488	$	-	$	306,488
Warrant derivatives reclassified to equity						(333,462)
Loss on Derivatives					$	26,974

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NOTE 6 - CONVERTIBLE NOTES PAYABLE (Tables)

9 Months Ended

Mar. 31, 2017

Table Text Block Supplement [Abstract]

Schedule Of Convertible Notes Payable

The components of the unsecured convertible notes payable are as follows:

March 31, 2017:		Principal		Unamortized
		Amount		Discount		Net
Current portion	$	-	$	-	$	-

June 30, 2016:		Principal		Unamortized
		Amount		Discount			Net
Current portion	$	3,554,249	$	(161,814	)	$	3,392,435

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NOTE 7 - NOTES PAYABLE (Tables)

9 Months Ended

Mar. 31, 2017

Table Text Block Supplement [Abstract]

Schedule Of Debt

The following summarizes notes payable:

		March 31,		June 30,
		2017		2016
Working capital advances, interest at 1% per month, due January 15, 2015	$	200,000	$	200,000
Merger advance		20,000		20,000
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
Notes payable - current	$	2,363,885	$	2,363,885

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NOTE 8 - FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Mar. 31, 2017

Table Text Block Supplement [Abstract]

Schedule Of Fair Value Assets And Liabilities

The fair value measurement of financial instruments and other assets as of March 31, 2017 and June 30, 2016 are as follows:

March 31, 2017
	Level 1	Level 2		Level 3		Total
Assets:
None	—	—		—		—
Liabilities:
Derivative instruments	—	—	$	—	$	—

June 30, 2016
	Level 1	Level 2		Level 3		Total
Assets:
None	—	—		—		—
Liabilities:
Derivative instruments	—	—	$	306,488	$	306,488

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NOTE 9 - CONTINGENCIES AND COMMITMENTS (Tables)

9 Months Ended

Mar. 31, 2017

Table Text Block Supplement [Abstract]

Schedule of Carrying value of assets and liabilities

The table below summarizes the carrying value of the assets sold and the liabilities disposed in the 363 Asset Sale as of asset transfer on February 26, 2016:

	February 26, 2016
Assets Sold
Restricted cash	$ 236,628
Prepaid expenses and other current  assets	39,584
Property, plant and equipment, net	4,992,154
Mine development properties, net	10,532,965
Mineral properties, net	599,897
	$ 16,401,228
Liabilities Disposed
Notes payable	$ 9,993,280
Accrued interest	5,815,622
Accrued DIP fees	32,203
Asset retirement obligation	245,494
Accrued CSA fees	329,938
Total	$ 16,416,537
Net gain on the 363 Asset Sale	$ 15,309

Schedule of payment of debt extinguishment

Accounts payable	$138,879
Accrued compensation	8,775
Accrued liabilities	1,443
Note holders – accrued interest	315,666
Total	$464,763

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NOTE 10 - STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Mar. 31, 2017

Equity [Abstract]

Schedule Of Stock Options

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 ending March 31, 2017, are as follows:

	Stock Options		Stock Warrants
		Weighted		Weighted
		Average		Exercise
	Shares	Price	Shares	Price
Outstanding at June 30, 2016	8,375,000	$0.02	10,443,434	$0.35
Granted	—	—	37,665,509	$0.03
Canceled	(2,900,000)	$0.02	—	—
Expired	(40,000)	$0.36	(1,100,000)	$0.94
Exercised	—	—	(37,665,909)	$0.03
Outstanding at March 31, 2017	5,435,000	$0.02	9,343,434	$0.28

Stock options and warrants outstanding and exercisable at March 31, 2017 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
$0.001	5,000,000	5,000,000	1.55	$	0.001	$	0.15	4,320,000	4,320,000	1.87	$	0.15
$0.07	100,000	100,000	2.76	$	0.07	$	0.38	523,434	523,434	0.46	$	0.38
$0.08	100,000	100,000	1.76	$	0.08	$	0.40	4,500,000	4,500,000	0.33	$	0.40
$0.32	100,000	100,000	0.39	$	0.32		—	—	—	—		—
$0.36	135,000	135,000	0.75	$	0.36		—	—	—	—		—
	5,435,000	5,435,000						9,343,434	9,343,434
	Outstanding Options		1.53	$	0.02		Outstanding Warrants			1.05	$	0.28
	Exercisable Options		1.53	$	0.02		Exercisable Warrants			1.05	$	0.28

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NOTE 12 - SUMMARY OF GAIN ON DEBT EXTINGUISHMENT (Table)

9 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Summary of gain on debt extinguishment

Below is a summary of gain on debt extinguishment recognized for the nine months ended March 31, 2017:

		Payment	Gain on Debt
	Debt Settled	Amount	Extinguished
Accounts Payable	$      343,902	$          10,734	$         333,168
IGS note principle	2,962,947	88,282	2,874,665
IGS accrued interest	600,715	—	600,715
Convertible notes	450,000	13,500	436,500
Convertible note accrued interest	153,688	—	153,688
Vista convertible note	80,155	65,556	14,599
JMJ convertible note	93,333	90,000	3,333
	$    4,684,740	$        268,072	$       4,416,668

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NOTE 1 - BASIS OF PRESENTATION AND GOING CONCERN (Details) - USD ($)	9 Months Ended
	Mar. 31, 2017	Jun. 30, 2016
Disclosure Text Block [Abstract]
Net loss	$ (3,053,341)
Accumulated deficit	(97,344,508)	$ (100,397,849)
Working capital deficit	(13,914,249)
Debt Default, Short-term Debt, Amount	7,330,000
Deposit on contract	$ 500,000	$ 0

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES : Reconciliation of the weighted average shares outstanding (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Net Income
Income available to common stockholders	$ 3,281,049		$ 3,053,341
Loss on derivatives	72,137		(153,538)
Interest expense on convertible notes	46,102		184,408
Gain on foreign currency translation	(144,769)		(59,631)
Gain on debt extinguishment	(4,068,881)		(4,068,881)
Dilutive shares from options and warrants	0		0
Income available to common stockholders plus assumed exercise of options and warrants	$ (814,362)		$ (1,044,301)
Weighted Average Common Shares
Income available to common stockholders	269,430,230	189,842,914	260,007,683	178,838,786
Dilutive shares from options and warrants	44,940,561		57,780,940
Diluted	314,370,791	189,842,914	317,788,623	178,838,786
Basic and Diluted Per Share Data
Income available to common stockholders	$ 0.01	$ (0.01)	$ 0.01	$ (0.02)
Income available to common stockholders plus assumed exercise of options and warrants	$ (0.00)	$ (0.01)	$ (0.00)	$ (0.02)

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares	3 Months Ended	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2017
Disclosure Text Block [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	475,000	5,023,434

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NOTE 3 - ACCRUED LIABILITIES: Schedule Of Accrued Liabilities (Details) - USD ($)	Mar. 31, 2017	Jun. 30, 2016
Text Block [Abstract]
Interest	$ 2,159,961	$ 2,589,993
Vacation	15,771	15,771
Deferred and accrued payroll burden	230,488	239,262
Franchise taxes	8,695	8,695
Merger costs, net	269,986	269,986
Other	18,136	19,578
Audit	20,000	20,000
Commodity supply agreements	3,133,652	3,415,175
Property taxes	253,523	215,524
Accrued liabilities	$ 6,110,212	$ 6,793,984

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NOTE 4 - DERIVATIVE INSTRUMENT LIABILITIES (Details) - USD ($)		3 Months Ended		9 Months Ended
	Mar. 08, 2017	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2016
Derivative instrument liabilities		$ 0		$ 0		$ 306,488
Derivative liabilities reclassified to equity				333,462	$ 0
Loss (gain) on derivative instrument liabilities		$ (27,263)	$ (27,453)	$ 26,974	$ (1,189,222)
Warrants
Fair Value, Option, Methodology and Assumptions				Black Scholes option pricing model
Fair Value Assumptions, Expected Dividend Rate				0.00%
Warrants | Minimum
Fair Value Assumptions, Risk Free Interest Rate				0.81%
Fair Value Assumptions, Expected Term				3 months 29 days
Fair Value Assumptions, Expected Volatility Rate				124.90%
Warrants | Maximum
Fair Value Assumptions, Risk Free Interest Rate				1.25%
Fair Value Assumptions, Expected Term				2 years 7 days
Fair Value Assumptions, Expected Volatility Rate				414.40%
Convertible Note
Fair Value, Option, Methodology and Assumptions				Monte Carlo model
Derivative liabilities reclassified to equity	$ 333,467
Convertible Note | Minimum
Fair Value Assumptions, Expected Volatility Rate				99.00%
Share Price		$ 0.0009		$ 0.0009
Debt Instrument, Convertible, Conversion Price		0.0425		$ 0.0425
Convertible Note | Maximum
Fair Value Assumptions, Expected Volatility Rate				537.00%
Share Price		0.1760		$ 0.1760
Debt Instrument, Convertible, Conversion Price		$ 0.125		$ 0.125

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NOTE 4 - DERIVATIVE INSTRUMENT LIABILITIES: Schedule Of Derivative Liabilities (Details) - USD ($)	9 Months Ended
	Mar. 31, 2017	Jun. 30, 2016
Text Block [Abstract]
Derivative instrument liabilities	$ 0	$ 306,488
Increase (Decrease) in Derivative Assets and Liabilities	(333,462)
Loss on Derivatives	$ 26,974

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NOTE 5 - COMPLETION GUARANTEE PAYABLE (Details) - USD ($)	Mar. 31, 2017	Jun. 30, 2016	Jun. 30, 2012
Completion guarantee payable
Total accrued liabilities	$ 3,359,873	$ 3,359,873	$ 504,049

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NOTE 6 - CONVERTIBLE NOTES PAYABLE (Details) - USD ($)		1 Months Ended					2 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 15, 2013	Mar. 31, 2017	Dec. 31, 2016	Jan. 20, 2015	Oct. 22, 2014	Oct. 30, 2007	Nov. 30, 2012	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 24, 2015	Jun. 09, 2015	Feb. 25, 2015	Oct. 31, 2012
Class of Warrant or Right, Outstanding		9,343,434						9,343,434		9,343,434		10,443,434
Interest Payable, Current		$ 55,228						$ 55,228		$ 55,228		$ 47,402
Extinguishment of Debt, Amount										90,000
Gain (loss) on derivative instrument liabilities								27,263	$ 27,453	(26,974)	$ 1,189,222
Amortization of discount on notes payable										161,814	236,788
Interest Expense, Debt								46,102		184,408
Initial carrying value of embedded conversion option										333,462	0
Gain on extinguishment of debt								4,402,069	$ 797,683	4,416,668	$ 797,683
Senior Subordinated convertible note 1
Debt Instrument, Face Amount		450,000				$ 450,000		450,000		$ 450,000		450,000
Debt Instrument, Interest Rate, Stated Percentage						10.00%
Debt Instrument, Term										60 months
Dollar amount of stock subscribed for equivalent to one warrant						$ 2.50
Class of Warrant or Right, Outstanding	562,500					180,000
Exercise Price of Warrants						$ 1.25
Convertible Preferred Stock, Terms of Conversion						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 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.
Share Price						$ 1.50
Debt Instrument, Convertible, Conversion Price	$ 0.40
Debt Instrument, automatic conversion price	$ 0.80
Long-term Debt, Gross												45
Interest Payable, Current												144,500
Gain on extinguishment of debt										$ 590,188
Court administered trust paid			$ 23,000
Settlement of debt		603,688
Convertible secured note 1
Long-term Debt, Gross		0						0		0		2,903,316
Interest Payable, Current		0						0		0		642,624
Proceeds from notes payable							$ 3,985,000
Extinguishment of Debt, Amount												88,282
Debt Instrument, Unamortized Discount		0						0		0
Amortization of discount on notes payable										49,840		48,251
Initial carrying value of embedded conversion option												98,091
Court administered trust paid			$ 174,507
Settlement of debt										3,563,662
Convertible unsecured note 1
Debt Instrument, Face Amount					$ 500,000
Debt Instrument, Interest Rate, Stated Percentage					12.00%
Proceeds from notes payable					$ 75,000
Debt Instrument, Unamortized Discount					$ 8,333
Stock Issued During Period, Value, Conversion of Convertible Securities													$ 68,900
Stock Issued During Period, Shares, Conversion of Convertible Securities													1,800,000
Amortization of discount on notes payable													$ 20,185
Convertible unsecured note 1 | Common Stock
Stock Issued During Period, Value, Conversion of Convertible Securities												$ 62,223
Stock Issued During Period, Shares, Conversion of Convertible Securities												27,522,855
Amortization of discount on notes payable												$ 60,973
Convertible unsecured note 2
Debt Instrument, Face Amount																$ 50,000
Debt Instrument, Unamortized Discount																$ 5,556
Stock Issued During Period, Value, Conversion of Convertible Securities												$ 24,433
Stock Issued During Period, Shares, Conversion of Convertible Securities												916,078
Amortization of discount on notes payable												$ 20,185
Additional Paid-in Capital		90,081						90,081		90,081
Convertible unsecured note 4
Debt Instrument, Face Amount				$ 250,000
Debt Instrument, Interest Rate, Stated Percentage				12.00%
Proceeds from notes payable				$ 50,000
Debt Instrument, Unamortized Discount				$ 5,556
Convertible unsecured note 3
Debt Instrument, Face Amount														$ 50,000
Long-term Debt, Gross		0						0		0		93,333
Debt Instrument, Unamortized Discount		0						0		0		56,088		5,556
Amortization of discount on notes payable										56,088		5,541
Debt Instrument, Debt Default, Amount														$ 31,111
Interest Expense, Debt										$ 6,666
Debt Instrument, Convertible, Terms of Conversion Feature										The conversion price with this investor is the lesser of $0.0425 or 65% of the lowest trade price in the 25 trading days previous to the conversion date.
Gain on extinguishment of debt										$ 3,333
Convertible unsecured note 5
Debt Instrument, Face Amount															$ 50,000
Long-term Debt, Gross		0						0		0		107,599
Extinguishment of Debt, Amount										93,000
Debt Instrument, Unamortized Discount		$ 0						$ 0		0		55,445			$ 5,556
Stock Issued During Period, Value, Conversion of Convertible Securities												$ 60,192
Stock Issued During Period, Shares, Conversion of Convertible Securities												18,007,333
Amortization of discount on notes payable										55,445		$ 66,388
Debt Instrument, Convertible, Terms of Conversion Feature												The conversion price with this investor is the lesser of $0.125 or 60% of the lowest trade price in the 25 trading days previous to the conversion date.
Debt Instrument, Increase, Accrued Interest												$ 43,347
Gain on extinguishment of debt										$ 14,599
Australia dollars | Convertible secured note 1
Debt Instrument, Face Amount																	$ 3,900,000
Debt Instrument, Interest Rate, Stated Percentage																	6.00%

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NOTE 6 - CONVERTIBLE NOTES PAYABLE: Schedule Of Convertible Notes Payable (Details) - Convertible Debt Securities - USD ($)	Mar. 31, 2017	Jun. 30, 2016
Long-term Debt, Gross	$ 0	$ 3,554,249
Debt Instrument, Unamortized Discount	0	(161,814)
Convertible Debt, Current	$ 0	$ 3,392,435

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NOTE 7 - NOTES PAYABLE (Details) - USD ($)			1 Months Ended		9 Months Ended	12 Months Ended
	Jul. 15, 2014	Jun. 01, 2012	Dec. 31, 2016	Jun. 30, 2014	Mar. 31, 2017	Jun. 30, 2016
Accrued interest					$ 55,228	$ 47,402
Notes payable, current portion					2,363,885	2,363,885
Merger costs, net					269,986	269,986
Canarc
Debt Instrument, Face Amount	$ 200,000				200,000	200,000
Proceeds from Other Short-term Debt	$ 20,000				20,000	20,000
Debt Instrument, Interest Rate, Stated Percentage	1.00%
Court administered trust paid			$ 9,897
Tyhee
Debt Instrument, Face Amount				$ 1,745,092	1,745,092	1,745,092
Accrued interest					1,207,841	990,657
Debt Instrument, Interest Rate, Stated Percentage				24.00%
Merger costs, net				$ 269,986
Break fee				$ 300,000
Equipment
Debt Instrument, Face Amount		$ 593,657
Accrued interest					$ 59,024	59,238
Debt Instrument, Interest Rate, Stated Percentage		5.75%			5.75%
Debt Instrument, Term		48 months			48 months
Notes payable, current portion					$ 398,793	$ 398,793
Court administered trust paid			$ 17,412

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NOTE 7 - NOTES PAYABLE: Schedule Of Debt (Details) - USD ($)			9 Months Ended	12 Months Ended
	Jul. 15, 2014	Jun. 01, 2012	Mar. 31, 2017	Jun. 30, 2016	Jun. 30, 2014
Notes payable, current portion			$ 2,363,885	$ 2,363,885
Canarc
Debt Instrument, Face Amount	$ 200,000		200,000	200,000
Proceeds from Other Short-term Debt	$ 20,000		20,000	20,000
Debt Instrument, Interest Rate, Stated Percentage	1.00%
Tyhee
Debt Instrument, Face Amount			$ 1,745,092	1,745,092	$ 1,745,092
Debt Instrument, Interest Rate, Stated Percentage					24.00%
Debt Instrument, Maturity Date			Aug. 17, 2014
Equipment
Debt Instrument, Face Amount		$ 593,657
Debt Instrument, Interest Rate, Stated Percentage		5.75%	5.75%
Debt Instrument, Term		48 months	48 months
Notes payable, current portion			$ 398,793	$ 398,793

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NOTE 8 - FAIR VALUE MEASUREMENTS: Schedule Of Fair Value Assets And Liabilities (Details) - USD ($)	Mar. 31, 2017	Jun. 30, 2016
Derivative instruments liabilities {1}
Fair value, assets	$ 0	$ 0
Fair value, liabilities	0	306,488
Level 1
Fair value, assets	0	0
Fair value, liabilities	0	0
Level 2
Fair value, assets	0	0
Fair value, liabilities	0	0
Level 3
Fair value, assets	0	0
Fair value, liabilities	$ 0	$ 306,488

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NOTE 9 - CONTINGENCIES AND COMMITMENTS : Carrying Value of the Assets Sold and Liabilities Disposed (Details) - USD ($)	1 Months Ended
	Feb. 26, 2017	Mar. 31, 2017	Jun. 30, 2016
Assets Sold
Prepaid expenses and other current assets		$ 4,597	$ 4,475
Mineral properties, net		10,001	0
Liabilities Disposed
Accrued interest		$ 55,228	$ 47,402
363 Asset Sale
Assets Sold
Restricted cash	$ 236,628
Prepaid expenses and other current assets	39,584
Property, plant and equipment, net	4,992,154
Mine development properties, net	10,532,965
Mineral properties, net	599,897
Total	16,401,228
Liabilities Disposed
Notes payable	9,993,280
Accrued interest	5,815,622
Accrued DIP fees	32,203
Asset retirement obligation	245,494
Accrued CSA fees	329,938
Total	16,416,537
Net gain on the Asset 363 Sale	$ 15,309

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NOTE 9 - CONTINGENCIES AND COMMITMENTS :Schedule of Payment of debt extinguishment (Details) - USD ($)	3 Months Ended		6 Months Ended	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Gain on trust debt extinguishment	$ (8,068)	$ 0	$ 464,763	$ 464,763	$ 0
Accounts payable
Gain on trust debt extinguishment				138,879
Accrued compensation
Gain on trust debt extinguishment				8,775
Accrued liabilities
Gain on trust debt extinguishment				1,443
Note holders - accrued interest
Gain on trust debt extinguishment				$ 315,666

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NOTE 9 - CONTINGENCIES AND COMMITMENTS (Details) - USD ($)	3 Months Ended		6 Months Ended	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Gain on trust debt extinguishment	$ (8,068)	$ 0	$ 464,763	$ 464,763	$ 0
Operating Leases, Rent Expense				4,500	$ 4,500
Office Lease
Debt Instrument, Periodic Payment				$ 500

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NOTE 10 - STOCKHOLDERS' EQUITY (Details) - USD ($)			9 Months Ended
	Dec. 14, 2016	Aug. 01, 2016	Mar. 31, 2017	Mar. 31, 2016
Common stock returned, Shares		6,956,750
Common stock returned, Amount		$ 13,914
Stock Issued During Period, Value, Issued for Services			$ 475,007	$ 66,400
Options granted
Options cancelled			(2,900,000)
Intrinsic value of options and warrants vested and expected to vest			$ 1,007,520
Intrinsic value of options and warrants exercisable			1,007,520
Intrinsic value of options and warrants exercised			$ 0
Exercisable Warrants
Share Price			$ 0.176
Common Stock | Investor
Stock Issued During Period, Shares, Issued for Services			700
Sale restricted common stock, Shares			37,665,909
Sale restricted common stock, Amount			$ 1,077,110
Break fee			$ 28
Restricted common stock issued for exercise of warrants, Shares			37,665,909
Restricted common stock issued for exercise of warrants, Amount			$ 1,077,109
Warrant
Warrants issued			37,665,909
Warrants expired			1,100,000
Consultant | Director [Member]
Common stock returned, Shares	15,956,748
Common stock returned, Amount	$ 31,914
Consultant
Stock Issued During Period, Shares, Issued for Services			9,365,360
Stock Issued During Period, Value, Issued for Services			$ 475,007

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NOTE 10 - STOCKHOLDERS' EQUITY: Schedule Of Stock Options (Details) - $ / shares	9 Months Ended
	Mar. 31, 2017	Jun. 30, 2016
Stock Options Outstanding	8,375,000	5,435,000
Stock Options Outstanding, weighted average exercise price	$ 0.02	$ 0.02
Stock Warrants, outstanding, beginning balance	10,443,434
Stock Warrant, outstanding, weighted average exercise price, beginning balance	$ 0.35
Stock Options granted
Stock options weighted average price granted
Stock Warrants, granted	37,665,509
Stock Warrants granted, weighted average price granted	$ 0.03
Options cancelled	(2,900,000)
Options cancelled weighted average price	$ 0.02
Warrants, canceled
Warrants canceled, weighted average price
Options expired	(40,000)
Options expired weighted average price	$ 0.36
Warrants, expired	(1,100,000)
Warrants expired, weighted average price	$ 0.94
Options exercised
Options exercised weighted average price
Warrants, exercised	(37,665,909)
Warrants, exercised, weighted average price	$ 0.03
Warrants, outstanding, ending balance	9,343,434
Warrant, outstanding, weighted average exercise price, ending balance	$ 0.28
Warrant
Stock Options Outstanding	9,343,434
Stock Options Outstanding, weighted average exercise price	$ 0.28
Exercisable	9,343,434
Outstanding, weighted average contractual remaining life (in Years)	1 year 18 days
Exercisable, weighted average contractual remaining life (in Years)	1 year 18 days
Exercisable, weighted average exercise price	$ 0.28
$0.15 | Warrant
Stock Options Outstanding	4,320,000
Stock Options Outstanding, weighted average exercise price	$ 0.15
Exercisable	4,320,000
Outstanding, weighted average contractual remaining life (in Years)	1 year 10 months 14 days
$0.38 | Warrant
Stock Options Outstanding	523,434
Stock Options Outstanding, weighted average exercise price	$ 0.38
Exercisable	523,434
Outstanding, weighted average contractual remaining life (in Years)	5 months 16 days
$0.40 | Warrant
Stock Options Outstanding	4,500,000
Stock Options Outstanding, weighted average exercise price	$ 0.4
Exercisable	4,500,000
Outstanding, weighted average contractual remaining life (in Years)	5 months 16 days
Employee Stock Option
Stock Options Outstanding	5,435,000
Stock Options Outstanding, weighted average exercise price	$ 0.02
Exercisable	5,435,000
Outstanding, weighted average contractual remaining life (in Years)	1 year 6 months 10 days
Exercisable, weighted average contractual remaining life (in Years)	1 year 6 months 10 days
Exercisable, weighted average exercise price	$ 0.02
Employee Stock Option | $0.00
Stock Options Outstanding	5,000,000
Stock Options Outstanding, weighted average exercise price	$ 0.001
Exercisable	5,000,000
Outstanding, weighted average contractual remaining life (in Years)	1 year 6 months 18 days
Employee Stock Option | $0.07
Stock Options Outstanding	100,000
Stock Options Outstanding, weighted average exercise price	$ 0.07
Exercisable	100,000
Outstanding, weighted average contractual remaining life (in Years)	2 years 9 months 3 days
Employee Stock Option | $0.08
Stock Options Outstanding	100,000
Stock Options Outstanding, weighted average exercise price	$ 0.08
Exercisable	100,000
Outstanding, weighted average contractual remaining life (in Years)	1 year 9 months 3 days
Employee Stock Option | $0.32
Stock Options Outstanding	100,000
Stock Options Outstanding, weighted average exercise price	$ 0.32
Exercisable	100,000
Outstanding, weighted average contractual remaining life (in Years)	4 months 20 days
Employee Stock Option | $0.36
Stock Options Outstanding	135,000
Stock Options Outstanding, weighted average exercise price	$ 0.36
Exercisable	135,000
Outstanding, weighted average contractual remaining life (in Years)	9 months

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NOTE 11 - RELATED PARTY TRANSACTIONS (Details)	9 Months Ended
	Mar. 31, 2017 USD ($)
Accounts Payable, Related Parties, Current	$ 269,787
Office Lease
Debt Instrument, Periodic Payment	$ 500

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NOTE 12 - SUMMARY OF GAIN ON DEBT EXTINGUISHMENT : Summary of gain on debt extinguishment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Debt Settled			$ 4,684,740
Payment Amount			268,072
Gain on Debt Extinguished	$ 4,402,069	$ 797,683	4,416,668	$ 797,683
Accounts payable
Debt Settled			343,902
Payment Amount			10,734
Gain on Debt Extinguished			333,168
IGS note principle
Debt Settled			2,962,947
Payment Amount			88,282
Gain on Debt Extinguished			2,874,665
IGS accrued interest
Debt Settled			600,715
Payment Amount			0
Gain on Debt Extinguished			600,715
Convertible notes
Debt Settled			450,000
Payment Amount			13,500
Gain on Debt Extinguished			436,500
Convertible note accrued interest
Debt Settled			153,688
Payment Amount			0
Gain on Debt Extinguished			153,688
Vista convertible note
Debt Settled			80,155
Payment Amount			65,556
Gain on Debt Extinguished			14,599
JMJ convertible note
Debt Settled			93,333
Payment Amount			90,000
Gain on Debt Extinguished			$ 3,333

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NOTE 14 - SUBSEQUENT EVENTS (Details) - USD ($)						1 Months Ended			6 Months Ended	9 Months Ended	10 Months Ended
	Jan. 02, 2018	Oct. 13, 2017	Sep. 08, 2017	Apr. 10, 2017	Feb. 02, 2017	Aug. 30, 2017	Aug. 18, 2017	Jul. 26, 2017	Feb. 08, 2018	Mar. 31, 2017	Feb. 08, 2018	Sep. 14, 2017
Stock Issued During Period Shares Stock Options Exercised
Subsequent Event
Placement fee rate									10.00%
Payments for Other Fees									$ 400,474
Stock Issued During Period, Value, New Issues									$ 4,001,738
Stock Issued During Period, Shares, New Issues									50,021,733
Change in option price								The board changed the price for 5,000,000 options from $.001 (Board meeting May 5, 2016) to $.002.
Subsequent Event | An investor
Stock Reissued					18,000,000
Stock returned					20,000,000
Subsequent Event | Bullards Peak
Payments to Acquire Businesses and Interest in Affiliates	$ 500,000	$ 500,000	$ 500,000	$ 500,000		$ 900,000	$ 100,000
Payments to Acquire Businesses, Gross				$ 3,000,000
Equity Method Investment, Ownership Percentage												100.00%
Warrant | Subsequent Event
Warrant terms											The warrants had a term of 5 years and an exercise price ranging of $0.06.
Stock Issued During Period Shares Stock Options Exercised											6,398,753
Stock Issued During Period, Value, Stock Options Exercised											$ 383,925
Placement fee rate											10.00%
Payments for Other Fees											$ 38,393