Santa Fe Gold 10Q/A 2017 Q3 Quarterly report (amended)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

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 þNoo

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 þNoo

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

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 o Noþ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 357,518,450 shares of common stock par value $0.002, of the issuer were issued and outstanding as of May 6, 2019.

SANTA FE GOLD CORPORATION

INDEX TO FORM 10-Q

PART I

FINANCIAL INFORMATION

		Page
`Item 1.`	Financial Statements	4
	Consolidated Balance Sheets as of March 31, 2017 (As Restated) (Unaudited) and June 30, 2016,	4
	Consolidated Statements of Operations for the Three Months and Nine Months Ended March 31, 2017 (As Restated)(Unaudited) and 2016 (Unaudited)	5
	Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2017 (As Restated)(Unaudited) and 2016 (Unaudited)	6
	Notes to the Unaudited Consolidated Financial Statements (As Restated)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29
Item 4.	Controls and Procedures	29

PART II OTHER INFORMATION
`Item 1.`	Legal Proceedings	30
Item 1A	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
SIGNATURES		32
CERTIFICATIONS

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A for the quarter ended March 31, 2017, amends the Form 10-Q that was originally filed with the U.S. Securities Exchange Commission on March 26, 2018 (the “Original Filing”). The sole purpose of this Amendment No. 1 is to correct the balance sheet as of March 31, 2017, and the consolidated statements of operations and cash flows for the nine months ended March 31, 2017, for the reclassification of misappropriated funds by a related party. Based on the Company’s reassessment of the transactions, the effect of the reclassifications resulted in a decrease in total assets and a decrease in net income and an increase in stockholders’ deficit. The following financial statements and disclosures were impacted from the reclassification:

Restatement of the consolidated balance sheet as of March 31, 2017, and the related consolidated statements of operations and cash flows for the periods then ended.

UpdatedNOTE 1 -BASIS OF PRESENTATION AND GOING CONCERN

UpdatedNOTE 13- SUBSEQUENT EVENTS

PART I
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SANTA FE GOLD CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited)
		March 31,
		2017			June 30,
		(As Restated)			2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	399,582		$	2,815
Prepaid expenses and other current assets		4,597			4,475
Total Current Assets		404,179			7,290

Total Assets	$	404,179		$	7,290

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	3,222,949		$	3,710,931
Accrued liabilities		6,179,204			6,793,984
Derivative instrument liabilities		—			306,488
Senior subordinated convertible notes payable, net of unamortized discount of $- and $161,814, respectively		—			3,392,435
Notes payable, current portion		2,376,407			2,363,885
Completion guarantee payable		3,359,873			3,359,873
Total Current Liabilities		15,138,433			19,927,596

STOCKHOLDERS' DEFICIT:
Common stock, $.002 par value, 300,000,000 shares authorized; 283,587,054 and 221,799,662 shares issued and outstanding, respectively		567,175			443,599
Additional paid-in capital		82,886,940			80,033,944
Accumulated deficit		(98,188,369	)		(100,397,849	)
Total Stockholders' Deficit		(14,734,254	)		(19,920,306	)
Total Liabilities and Stockholders' Deficit	$	404,179		$	7,290

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

SANTA FE GOLD CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
		Three Months Ended						Nine Months Ended
		March 31,						March 31,
		2017						2017
		(As Restated)			2016			(As Restated)			2016

SALES, net	$	—		$	—		$	—		$	6,250

OPERATING COSTS AND EXPENSES:
Exploration and other mine related costs		8,097			267,520			48,071			570,271
General and administrative		353,304			204,890			1,177,882			756,292
Depreciation and amortization		—			258,833			—			1,134,112
Reorganization costs		—			427,612			—			1,183,205
Total Operating Costs and Expenses		361,401			1,158,855			1,225,953			3,643,880

LOSS FROM OPERATIONS		(361,401	)		(1,158,855	)		(1,225,953	)		(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
Misappropriated funds		(740,169	)		—			(769,132	)		—
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		(258,541	)		(600,538	)		(860,233	)		(2,165,117	)
Total Other Income (Expense)		2,882,801			(740,601	)		3,435,433			(622,615	)

GAIN (LOSS) BEFORE PROVISION FOR INCOME TAXES		2,521,400			(1,899,456	)		2,209,480			(4,260,245	)
PROVISION FOR INCOME TAXES		—			—			—			—

NET INCOME (LOSS)	$	2,521,400		$	(1,899,456	)	$	2,209,480		$	(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		269,632,372			189,842,914			260,311,769			178,838,786
Diluted		318,834,375			189,842,914			320,473,677			178,838,786

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

SANTA FE GOLD CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
		Nine Months Ended
		March 31,
		2017
		(As Restated)			2016

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	2,209,480		$	(4,260,245	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		—			1,134,112
Stock issued for services		488,604			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		288			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		(122	)		150,497
Accounts payable and accrued liabilities		732,066			2,170,769
Net Cash Used in Operating Activities		(1,472,668	)		(2,009,348	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from DIP funding		—			2,520,958
Proceeds from common stock purchases		1,077,109			—
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		1,869,435			2,237,595

NET INCREASE IN CASH AND CASH EQUIVALENTS		396,767			228,247
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		2,815			69,305
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	399,582		$	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.

SANTA FE GOLD CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 and 2016

(As Restated)

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION AND GOING CONCERN

Santa Fe Gold Corporation, a Delaware corporation (the "Santa Fe" or "Company") is mainly a U.S. silver, gold and cobalt 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, and 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.

Restatement Effect on Financial Statements

The following table illustrates the impact of the restatement of funds advanced to a related party and the restated unaudited consolidated balance sheet, the unaudited statement of operations and unaudited statement of cash flows for the period ended March 31, 2017. Additional information is disclosed in NOTE 14, SUBSEQUENT EVENTS, Entry into a Material Definitive Agreement.

Effects on the previously issued financial statements are as follows:

(A)Reclassification of expenditures for mine equipment, net of depreciation to misappropriated funds expense.

(B)Increased net loss for the period due to reclassification of misappropriated funds to expense.

(C)Reclassification of expenditures for operating expenses and depreciation expense to misappropriated funds expense.

(D)Accrued interest and penalties on judgements, accrued interest added to note principle and interest rate change on note payable.

(E)Restatement of cash funds regarding related party transactions and misappropriated funds.

(F)Share issuance correction for consulting.

	As Previously Reported			Adjustment			As Restated
*Consolidated Balance Sheet at March 31, 2017:*
Cash and cash equivalents C	$	616,619		$	(217,037	)	$	399,582
Deposit on contract E	$	500,000		$	(500,000	)	$	—
Total Current Assets	$	1,121,216		$	(717,037	)	$	404,179

Mine Equipment, net A	$	10,001		$	(10,001	)	$	—
Total Assets	$	1,131,217		$	(627,038	)	$	404,179

Accounts payable D	$	3,201,495		$	21,454		$	3,222,949
Accrued liabilities D	$	6,110,212		$	68,992		$	6,179,204
Notes payable, current portion D	$	2,363,885		$	12,522		$	2,376,407
Total Current Liabilities	$	15,035,465		$	102,968		$	15,138,433

Common stock F	$	567,168		$	7		$	567,175
Additional paid in capital F	$	82,873,092		$	13,848		$	82,886,940
Accumulated deficit B, F	$	(97,344,508	)	$	(843,861	)	$	(98,188,369	)
Stockholders’ deficit	$	(13,904,248	)	$	(830,006	)	$	(14,734,254	)
Total Liabilities and Stockholders’ Deficit	$	1,131,217		$	(727,038	)	$	404,179

*Consolidated Statements of Operations for three months* *ended March 31, 2017:*
General and administrative C, F	$	352,584		$	720		$	353,304
Depreciation and amortization A	$	577		$	(577	)	$	—
Total Operating Expenses	$	361,258		$	143		$	361,401

Misappropriated funds C	$	—		$	(740,169	)	$	(740,169	)
Interest expense D	$	(239,204	)	$	(19,337	)	$	(258,541	)
Total Other Income (Expense)	$	3,642,307		$	(759,506	)	$	2,882,801
Net Income	$	3,281,049		$	(759,649	)	$	2,521,400

*Consolidated Statements of Operations for nine months* *ended March 31, 2017:*
Exploration and other mine related costs C	$	65,494		$	(17,423	)	$	48,071
General and administration C, F	$	1,154,123		$	23,759		$	1,177,882
Depreciation and amortization A	$	1,539		$	(1,539	)	$	—
Total Operating Expenses	$	1,221,156		$	4,797		$	1,225,953

Misappropriated funds C	$	—		$	(769,132	)	$	(769,132	)
Interest expense D	$	(790,301	)	$	(69,932	)	$	(860,233	)
Total Other Income (Expense)	$	4,274,497		$	(839,064	)	$	3,435,433
Net Income	$	3,053,341		$	(843,861	)	$	2,209,480

*Consolidated Statement of Cash Flows for nine months* *ended March 31, 2017:*
Net income	$	3,053,341		$	(843,861		)	$	2,209,480
Depreciation and amortization A	$	1,539		$	(1,539		)	$	—
Stock issued for services F	$	475,007			13,597			$	488,604
Non-cash financing costs	$	29		$	259			$	288
Prepaid expenses and other current assets E	$	(500,122	)	$	500,000			$	(122	)
Accounts payable and accrued expenses D	$	629,098		$	102,968			$	732,066
Net Cash Used in Operating Activities	$	(1,244,092	)	$	(228,576		)	$	(1,472,668	)

Purchase of equipment A	$	(11,540	)	$	11,540			$	—
Net Cash Used in Investing Activities	$	(11,540	)	$	11,540			$	—


Proceeds from common stock purchases	$	1,077,110		$	(1		)	$	1,077,109
Net Cash Provided by Financing Activities	$	1,869,436		$	(1	)		$	1,869,435
Net Cash and cash equivalents, end of period	$	616,619		$	(217,037		)	$	399,582

Basis of Presentation and Going Concern

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

The Company has incurred a net income of $2,209,480 for the nine months endedMarch 31, 2017, and has a total accumulated deficit of $98,188,369 and a working capital deficit at March 31, 2017, of $14,734,254. 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 “Gold Stream Agreement”) with Sandstorm Gold Ltd. (“Sandstorm”).

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 former 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 former 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.

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 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, 2017, 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		$2,521,400			269,632,372		$ 0.01
Diluted EPS
Loss on derivatives - notes		72,137
Interest expense on convertible notes		59,926
Loss on foreign currency translation		172,735
Gain on debt extinguishment		(4,068,901	)
Dilutive shares from options and warrants		—			49,202,003
Income available to common stockholders plus assumed exercise of options and warrants		$(1,242,703)			318,834,375		$ (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		$2,209,480			260,311,769		$ 0.01
Diluted EPS
Gain on derivatives - notes		(174,153	)
Interest expense on convertible notes		163,848
Loss on foreign currency translation		26,974
Gain on debt extinguishment		(4,068,901	)
Dilutive effect of convertible notes		—			58,522,606
Income available to common stockholders plus assumed exercise of options and warrants		$(1,842,752)			318,834,375		$ (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 235,000 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

In May 2014, the FASB issued ASC updated No. 2014-09,Revenue from Contracts with Customers (Topic 606(ASU 2014-09). Under the amendments in this update, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in this update are effective for fiscal years and interim periods within those years beginning after December 15, 2017. The new standard is required to be applied either retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of applying the update recognized at the date of initial application. The Company is still evaluating the impact of the standard and has not determined the impact, if any. The new standard will not have an impact on our consolidated financial statements until revenue is achieved.

In August 2014, the FASB issued ASU 2014-15,Presentation of Financial Statements—Going Concern (Subtopic 205-40):Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which is effective for financial statements issued for interim and annual periods beginning on or after December 15, 2016. This update contains amendments that clarify the principles for management’s assessment of an entity’s ability to continue as a going concern. The Company has adopted ASU 2014-15 and has determined that the adoption of this standard will have no material impact on the Company’s reported financial position or results of operations.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU is effective for annual periods beginning after December 15, 2018 and interim periods within fiscal years beginning after December 15, 2019. ASU No 2016-15 addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The adoption of this standard will not have a material impact on the Company’s financial position or results of operations.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. As a result of the adoption, stock-based compensation excess tax benefits or tax deficiencies will be reflected in the consolidated statement of operations within the provision for income taxes rather than in the consolidated balance sheet within additional paid-in capital. The amount of the impact to the provision for income taxes will depend on the difference between the market value of share-based awards at vesting or settlement and the grant date fair value. The amendment is effective for annual periods beginning after December 15, 2016, including interim periods within those fiscal years. The Company has adopted ASU No. 2016-09 as of December 31, 2016, and has assessed the impact, if any, of this pronouncement should have no material impact to its consolidated financial statements.

In November 2016, the FASB has issued ASU No. 2016-18, Statement of Cash Flows (Topic 230), which provides guidance on how restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This amendment is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact of this pronouncement to its Consolidated Statements of Cash Flows.

In May 2017, FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which amends the scope of modification accounting surrounding share-based payment arrangements as issued in ASU 2016-09 by providing guidance on the various types of changes which would trigger modification accounting for share-based payment awards. ASU 2017-09 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, which would be the Company's fiscal year ending March 31, 2019. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. While the Company does not expect the adoption of ASU 2017-09 to have a material effect on its business, the Company is still evaluating any potential impact that adoption of ASU 2017-09 may have on its financial position, results of operations or cash flows.

In February 2016, the FASB issued ASU2016-02, “Leases (Topic 842),” which requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with a term of more than one year. Accounting by lessors will remain similar to existing U.S. GAAP. Subsequent accounting standards updates have been issued, which amend and/or clarify the application of ASU2016-02. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 and early adoption is permitted. The Company has not adopted Topic 842 as of the filing of this 10-Q and at this time the Company has no material leases.

Other 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	$	2,205,821	$	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		41,268		19,578
Audit		20,000		20,000
Commodity supply agreement		3,133,652		3,415,175
Property taxes		253,523		215,524

	$	6,179,204	$	6,793,984

NOTE 4 – DERIVATIVE INSTRUMENT LIABILITIES

The fair market value of the derivative instrument 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 instrument liabilities 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.

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 principal and accrued interest as payment in full. The settlement amount was paid according to the terms of the settlement in March 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 principal and accrued interest as payment in full. The settlement amount was paid by wire transfer in March 2017.

At the time of the agreed settlement the outstanding principal 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 principal 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 principal and added interest charges aggregating $24,433 into 916,078 shares of restricted common stock and the note was retired. The original consideration contained 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 discount balance 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 the principal balance and added interest charges aggregating $62,223 into 27,522,855 shares of restricted common stock and the note was retired.

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 principal 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. At December 31, 2016, the third note tranche had a conversion price of $0.01625. In January 2017 the note was not converted and was retired for $90,000 in installments, with the final the final installment made on January 25, 2017. A gain on debt extinguishment of $3,333 was recorded on the debt retirement.

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 principal 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 two note balances were $-0- and $107,599, respectively and the unamortized loan discounts were $0 and $55,886, respectively. During the nine months ended March 31, 2017, amortization of the loan discount recognized as interest expense was $55,886.

The conversion price with this investor on the two notes 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 nine months ended March 31, 2017, the notes were not converted and were 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

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 under the Agreement, the accrued interest at the time of the loan becoming due, was added to the outstanding principal balance at December 31, 2016, and interest recalculated from the due date at an increased interest rate of 14% per annum to March 31, 2017. At March 31, 2017 and June 30, 2016, the principal balance was $212,522 and $200,000, respectively and accrued interest on note is $55,805 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 $1,207,840 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	$	212,522	$	200,0000

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	$	2,376,407	$	2,363,885

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

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 hisAffidavit 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.

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 9,138,725 shares of restricted common stock for consulting services at a value of $476,592 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 $1,077,109 and issued 3,712 shares of restricted common stock for reimbursement of bank transfer fees at value of $288; 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.

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. This amount was paid to our former chief executive officer, Mr. Jordan, for his firms’ legal fees incurred prior to becoming CEO of the Company. Mr. Jordaan resigned as CEO and from the board effective May 6, 2016.

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.

During the nine months ended March 31, 2017, the Company transferred operating funds to the Company’s Chief Executive Officers’ certified public accounting practice operating account for disbursements on behalf of the Company. Subsequently, it was determined these disbursements made during the nine-month period were misappropriated in the amount of $769,132. Of this amount in the current period was a $500,000 deposit that was to be made on the Alhambra Acquisition that was subsequently determined never made the sellers. See NOTE 14, SUBSEQUENT EVENTS,Entry into a Material Definitive Agreement.

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

We contacted 19 creditors and note holders of the Santa Fe Gold and made an offer in compromise: “the Company respectfully hereby offers a cash payment to you, in consideration of your discharge and release ofany and all outstanding (non-trust) claims, in the amount of three (3%) per cent of the present principal balance otherwise owed.” Six of the creditors did not accept our offer and thirteen did. All payments were made in accordance with the settlement terms in March 2017. The combined creditors balance was $343,902 and was settled for $10,734. The outstanding notes settled were the: IGS note and Interest that aggregated $3,580,432 and was settled for $88,282 and three note holders each had a note for $150,000 with accrued interest aggregating $625,875 and was settled for $13,500. In total $112,516 was disbursed for debt aggregating $4,511,252 and the Company recorded $4,398,736 as gain on debt extinguishment. In separate transactions the Company settled two other convertible notes with aggregate outstanding balance of $173,488 for total cash payments of $155,556 and recorded an aggregate gain on the debt extinguishments of $17,932 on the two transactions.

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

NOTE 13 – LEGAL PROCEEDINGS

All legal proceedings were stayed with the filing of Chapter 11 bankruptcy.

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; andBoart Longyear Company v. Lordsburg Mining Company, Case No. D-608-CV- 201500165, County of Quintero, NM. There are a series of collection cases by Boart Longyear Company, a company that obtained Utah judgments for equipment delivered to Lordsburg Mining Company in the aggregate amounts of $158,480 and has an interest rate of 5.25% per annum. The Company accrued back interest on judgement during the quarter ended December 31, 2016, of $13,837 recorded $21,454 in legal fees awarded in the judgementand accrued interest of $2,074 for the quarter ended March 31, 2017.

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 is a collection case by Wagner equipment, who obtained judgment for equipment delivered to Lordsburg Mining Company in the amount of$115,789 and has a rate of interest of 8.75% per annum. The Company accrued back interest on judgement during the quarter ended December 31, 2016, of $25,371 and accrued interest of $4,004 for the quarter ended March 31, 2017.

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

NOTE 14 – SUBSEQUENT EVENTS

Recent Issuances of Unregistered Securities

In the period from April 2017 through April 26, 2019, the Company sold an aggregate of 28,969,782 units. Each unit consisted of one restricted common share and one common stock warrant. The warrants had a term of 5 years and an exercise price ranging from $0.001 to $0.10. All warrants were immediately exercised resulting in the issuance of an additional 28,969,782 restricted common shares. The Company received aggregate proceeds of $4,681,177 from these sales and warrant exercises. During the period August 2018 through April 26, 2019, six current accredited shareholders purchased and aggregate of 8,500,000 restricted common shares for $612,000. During the period December 2018 and April 2019, our chairman purchased 5,000,000 restricted common shares for $400,000. The issuance of the restricted common shares, were exempt from registration requirements of the Security Act of 1933, as amended, pursuant to Section 4(a)2, thereof because such issuance did not involve a public offering. In connection with the placements, the Company incurred cash placement fees of $516,970.

During the period April 2017 and April 26, 2019, the Company issued 10,694,494 restricted shares of common stock for consulting services at an aggregated market value of $1,060,169 on the date of issuance. The issuance of the restricted common shares, were exempt from registration requirements of the Security Act of 1933, as amended, pursuant to Section 4(a)2, thereof because such issuance did not involve a public offering.

On May 8, 2018, the Company converted $23,824 of accrued salary for the Company CFO into 476,484 shares of restricted common stock at a market value of $47,648 on the date on conversion and recorded a loss on debt conversion of $23,824.

On March 20, 2019, the Company granted our Chairman of the Board of Directors and our Chief Financial Officer each 15,000,000 cashless five-year options at a strike price of $0.05, the market price on the date of the grant, for their efforts on reviving the Company.

Other Events

In April 2017, we paidour former chief executive officer, Mr. Jordan, $269,787 for his firms’ legal fees incurred prior to becoming CEO of the Company. Mr. Jordaan resigned as CEO and from the board effective May 6, 2016.

In July 2017 the board changed the price for 5,000,000 options from $.001 to $.002.

In July 2017, an investor returned 18,000,000 shares to the Company and were returned to the transfer agent and cancelled. The shares were accounted for as a derivative liability at the fair value of the shares and marked to market at each balance sheet date. The investor was reissued 18,000,000 shares in January 2019.

Alhambra Acquisition

Pursuant to a stock purchase agreement dated August 2017, the Company will acquire all the capital stock of Bullard’s Peak Corporation (which owns five patented claims and 82 unpatented claims in the Black Hawk district of New Mexico) from Black Hawk Consolidated Mines Company for a purchase price of $3,000,000, and the capital stock of Bullard’s Peak Corporation and the mining claims collateralize the full purchase price payment. The Company granted the seller a 2% net smelter return in perpetuity. The net smelter return is the greater of (i) all monies the Company receives for or from any and all ore removed from the property comprising the mining claims whether for exploration, mining operations or any other reason, and (ii) the fair market value of removed ore from the property comprising the mining claims. Title to the claims will be transferred upon receipt by seller of the full purchase price. In August 2018, the Company was informed that the seller terminated the stock purchase

agreement. Pursuant to an amendment to the stock purchase agreement in October 2018, the Company paid the seller $100,000 and the seller rescinded the August 2018 election to terminate the stock purchase agreement and waived all then existing events of default and any additional interest, late fees, and other damage claims due to the Company’s prior breaches of the stock purchase agreement. On October 31, 2018, the Company paid the seller an additional $100,000. The balance of the purchase price of $350,365 (which includes $50,365 of expenses that the Company agreed to reimburse seller) is required to be paid: (i) $100,000 on or before November 30, 2018 and (ii) $250,365 on or before December 31, 2018. If any payment is not timely paid, all rights of the Company under the stock purchase agreement shall become automatically null and void and seller shall retain all monies paid as liquidated damages for the Company’s breach, and seller shall have no further obligations to the Company, including but not limited to, any obligation to transfer the capital stock of Bullard’s Peak Corporation to the Company pursuant to the terms of the stock purchase agreement. We paid $100,000 in November 2018 with respect to the Alhambra Silver Mine acquisition and owed a balance of approximately $250,000 on December 31, 2018, to complete the acquisition. Lack of funding on December 31, 2018 resulted in us entering into a third amendment pursuant to which we paid $65,000 on January 2, 2019, $100,000 on February 28, 2019, and the final payment of $100,365 was paid on April 2, 2019.

British Columbia Properties

On November 30, 2017, the Company entered into substantially identical agreements with Fortune Graphite, Inc. and Worldwide Graphite Producers, Ltd. to acquire a total of four placer claims for aggregate consideration of Can$400,000 and the issuance of 10,000,000 shares of Company common stock. Title to these claims remained in trust with the sellers until payment in full. To date, the Company has paid to the sellers’ consideration of Can$260,000. The Company disclosed in a Form 8-K filing on November 20, 2018 that it had been notified that it was in default with respect to these two November 2017 agreements and that the sellers threatened legal action. The Company has engaged British Columbia counsel to review the two November 2017 agreements and has concluded that there were false representations made by the sellers and that certain conditions precedent of sellers were not satisfied. As a result, the Company’s position is that these two November 2017 agreements are not and were never binding and have requested sellers to refund the Can$260,000. The Company so informed sellers on March 4, 2019. The Company continues to evaluate its rights and remedies in connection with this matter. As a result, the Company does not own any rights to the four placer claims located in the Vernon mining district of British Columbia, Canada (which property is more fully set forth in the Form 8-K filing dated November 20, 2018).

New Mexico Mine Claims

The Company acquired the Malone Mine claims, Playa Hidalgo Placer claims and the Pinos Altos claims for an aggregate of $500. In August of each calendar year, the Company is required to renew these claims at a price of $155 per claim.

Purchase agreement for New Mexico Mining Properties

The Company has entered into a purchase agreement with a mining operator in January 2019 to purchase two properties in western New Mexico, the Billali Mine and the Jim Crow Imperial Mine. The purchase price for all rights and interests to be conveyed is $2,500,000 for the Billali Mine and $7,500,000 for the Jim Crow Imperial Mine, each documented as separate definitive agreements with aggregate consideration for both definitive agreements payable under the following terms:

a.$25,000 upon signing, January 4, 2019 ($25,000 was paid as a deposit in 2018);

b.commencing on April 1, 2019 and on the 1^st day of each month thereafter for a period of twenty (20) months, Buyer will pay to Seller the sum of Fifty Thousand Dollars ($50,000) per month;

c.commencing on January 1, 2021 and on the 1st day of each month thereafter for a period of fifty (50) months, Buyer will pay to Seller the sum of One Hundred Seventy-Five Thousand Dollars ($175,000) per month; and

d.each payment made hereunder will be allocated Twenty-Five per cent (25%) to the Billali and Seventy-Five percent (75%) to the Jim Crow, Imperial.

Title and all rights and interest in the properties will be conveyed under the agreements upon completion of the payments of the purchase prices of the properties.

Canarc Agreement

A forbearance agreement by and among Santa Fe and Canarc Resource Corp. (“Canarc”) was entered into and effective as of February 12, 2018. Canarc loaned Santa Fe $220,000 in 2014. The funding requirements were not attained and the loan became due on January 15, 2015. The Company agreed with Canarc to make four installment payments as follows: (i) $25,000 on February 14, 2018; (ii) $25,000 on June 30, 2018; (iii) $85,000 on October 1, 2018; and (iv) $85,000 on December 31, 2018. All payments were made on a timely basis. With the final payment completed, Canarc forgave $12,522 of principal and accrued interest on the note payable of $107,974 per the terms of the agreement and the Company recorded a gain on debt extinguishment of $120,496 in the quarter ended December 31, 2018.

Miscellaneous

In December 2017 the Company signed a financial advisory agreement to assist the Company on moving forward for a monthly fee of $10,000 a month beginning in February 2018 and fees paid to date aggregate $135,000. The agreement also included a five-year warrant for 100,000 shares of common stock at an exercise price of $0.15 per share.

In February 2018, the Company filed for a permit to start operations at the Bullard’s Peak property. The permit was awarded on March 7, 2018.

In March 2018, the board and the option recipients determined to rescind all options awarded to each of Erich Hofer, Frank Mueller and Tom Laws, on a retroactive basis, and accordingly, all options were removed from the financial reporting.

In April 2018, the board appointed Brian Adair Chairman of the Audit Committee.

In April 2018, the Company entered into an engagement with a financial advisory group for an initial four-month term and renewable under mutual agreement. The fees were $2,000 monthly and 50,000 shares of restricted common stock to be issued one month after the agreement date. The Company paid an aggregate of $18,229 under the agreement and cancelled the contract and the shares as of this filing have not been issued.

During the period October 2018 and February 2019, the CFO of the Company and a third outside party, loaned the Company an aggregate of $284,268, evidenced by demand unsecured notes payable at an annual rate of interest of 6% and have no stated due dates.

Change of Auditors

On July 13, 2018, the Company elected to change auditors and MaloneBailey, LLP was replaced with TAAD, LLP.

Engagement of Mining Consultant

The Company has entered into an at-will consulting agreement with Daniel E. Gorski in November 2018 to provide consulting services to the Company with respect to its proposed mining operations, at the rate of $5,000 per month in cash and $5,000 per month in Company common stock. Mr. Gorski is owed an additional $30,000 from work performed for the Company during the period March 2018 through August 2018 prior to his engagement.

Items Voted upon at the Company Shareholders Meeting

The Company held a shareholder meeting on January 11, 2019, in Albuquerque, New Mexico, and a majority of our shareholders voted to (i) amend our certificate of incorporation to increase the authorized shares of common stock that we have authority to issue from 300,000,000 shares to 550,000,000 shares and (ii) remove Thomas Laws as a director.

Resignation of Board members

Longtime Board member Erich Hofer resigned effective December 28, 2018, and Tom Laws resigned effective January 9, 2019 (just prior to the shareholder meeting on January 11, 2019 in which the shareholders voted to remove him as a director).

Misappropriation of Funds andEntry into a Material Definitive Agreement

As disclosed in the Company’s Form 8-K filed on October 1, 2018, a director and former chief executive officer of the Company, Mr. Thomas H. Laws, entered into a secured promissory note and security agreement in the principal amount of $930,000 in favor of the Company on September 19, 2018, bearing interest at the annual rate of 4% and maturing September 30, 2018 (“Secured Promissory Note”). The Company requested the former chief executive to execute the Secured Promissory Note and security agreement as a result of the matters discussed below, prior to the completion of the special committee investigation. The security interests include certain real estate and a Cessna model 182G airplane. The Secured Promissory Note also contains late fee and default provisions under the deeds of trust, Security Agreement and other agreements.

The board of directors formed a special committee on September 26, 2018 to investigate and analyze certain financial transactions in the aggregate amount of approximately $1 million that occurred primarily between July 2016 and March 2018 involving Mr. Laws. The special committee investigation determined that Mr. Laws owes the Company $1,335,046, excluding penalty and accrued interest, of which $379,660 has been received by the Company.

The Company will restate the previously issued consolidated financial statements for, and financial information relating to, the fiscal year ended June 30, 2017, the most recent financial statements of the Company filed with the Securities and Exchange Commission. Subsequent review of these transactions for the fiscal year ended June 30, 2017, resulted in a restatement of assets and operating costs in the amount of $937,420 and charged to the former chief executive officer.

Mr. Laws was terminated as the at-will chief executive officer of the Company on September 24, 2018. Currently no interim chief executive officer has been named to replace Mr. Laws.

In November 2018, Santa Fe filed a complaint in Luna County District Court, State of New Mexico, requesting a $930,000 money judgment against Mr. and Mrs. Laws, in addition to foreclosing on the mortgage Mr. and Ms. Laws granted to Santa Fe on real property to secure the promissory note located in Luna County, New Mexico.

In November 2018, Santa Fe filed a similar complaint in Grant County District Court, State of New Mexico, as Mr. and Mrs. Laws and XYZ Ranch Estates, LLC granted Santa Fe a deed of trust and a mortgage, respectively, on several pieces of real property in Grant County, New Mexico. Mr. Laws also granted Santa Fe a security agreement on an airplane located in Grant County, New Mexico. The complaint in Grant County requested a money judgment in the amount of $930,000 against Mr. and Mrs. Laws, in addition to a request to foreclose on the assets pledged to us located in Grant County, New Mexico.

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;

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

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

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

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

•significant risk and hazards associated with mining operations;

•we will require additional financing in the future to develop a mine at any other projects;

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

•our anticipated needs for working capital;

•our ability to secure financing;

•claims and legal proceedings against us;

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

•our exposure to material costs, liabilities and obligations 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.

Santa Fe Gold Corporation (“Santa Fe”, "the Company”, “our” or “we”) is a mining company, incorporated in 1991 in the state of Delaware. Our general business strategy is to acquire and potentially develop mineral properties. Santa Fe 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.

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.

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 $797,454 from $1,158,855 in the three months ended March 31, 2016, to $361,401 for the current period of measurement. The decrease in operating costs in the current period of measurement is attributable decreases in exploration and other mine related costs of $259,423, depreciation and amortization of $258,833 and reorganizational costs of $427,612. These decreases were offset by an increase in general and administrative of $148,414.

The decrease in exploration and mine related costs was a result mine inventory of $173,426 written off and deceases BLM claim fees of $8,318 and property taxes of $30,789 from the prior reporting period. Depreciation and amortization decreased as all assets were included in the bankruptcy filing were sold on February 26, 2016. Reorganizational costs for the three months ended March 31, 2017, decreased as no subsequent reorganizational costs were incurred after the dismissal of the bankruptcy case on June 15, 2016.The decreases were offset by an increase in general and administrative which is mainly a result of increased consulting fees of $258,963, 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 $2,882,801as compared to $(740,601) for three months ended March 31, 2016, an increase in other income of $3,623,402. 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 $432,821, and a decrease in interest expense of $341,997 which is as a result of debt eliminated in the bankruptcy sale that occurred on February 26, 2016. These increases in other income were offset by a misappropriation of funds in the current period of measurement aggregating $740,169.

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 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 $341,997 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 decrease in the current period of measurement is driven by a decrease in precious metals prices.

See financial statement NOTE 14, SUBSEQUENT EVENTS,Misappropriation of Funds andEntry into a Material Definitive Agreement,for additional detailed disclosures.

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 $2,417,927 from $3,643,880 in the nine months ended March 31, 2016 to $1,225,953 for the current period of measurement. The decrease in operating costs in the current period of measurement is attributable a decrease in depreciation of $1,134,112 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 $522,200 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 $421,590 and is a result increases in consulting fees of $861,556, 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 $3,435,433 as compared to $(622,615) for nine months ended March 31, 2016, an increase in other income of $4,058,048. 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 $1,304,884, 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. These increases in other income were offset by a misappropriation of funds in the current period of measurement aggregating $769,132.

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 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 $1,304,884 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 a decrease in precious metals prices.

See financial statement NOTE 14, SUBSEQUENT EVENTS,Misappropriation of Funds andEntry into a Material Definitive Agreement,for additional detailed disclosures.

Liquidity and Capital Resources; Plan of Operation

We have historically incurred net losses from operations and we expect losses in the future periods. Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the formation of a new business which seeks to obtain funds to finance its operations in a highly competitive environment. There can be no assurance that we will successfully implement any of our plans in a timely or effective manner or that we will ever be profitable. In addition, there can be no assurances that we will choose to continue to develop any of our current properties because we intend to consider and, as appropriate, to divest ourselves of properties that may no longer be a strategic fit to our business strategy.

After the dismissal of the bankruptcy case in June 2016 and the sale of the Company’s significant assets, the Company emerged with nominal assets but remained liable for all commitments and debts that then were outstanding. Santa Fe Gold Barbados, The Lordsburg Mining Company and AZCO are subsidiaries of the Company with nominal assets and all of their commitments and debts remain. The bankruptcy court set up a trust fund funded by the activities of the Summit mine (main asset sold in bankruptcy proceedings) for five years and the trust funds will be distributed by an independent trustee to certain unsecured creditors. Santa Fe failed to provide a plan of reorganization with the filing of protection under the bankruptcy Codes. The significant transactions that occurred upon emergence from bankruptcy were as follows:

·The approximately $20 million of indebtedness outstanding on account of the Company’s senior notes and unsecured claims were reinstated; and

·The courts established a trust in April 2016 for the benefit of certain creditors. A profit interest was attached to the Summit mine with the benefit for certain creditors holding unsecured claims filed by each creditor.

Accordingly, there can be no assurance that the Company liabilities remaining after the emergence from bankruptcy will not materially impact the Company. The Company has no continuing commitment from any party to provide working capital, and

there is no certainty that the Company will be able to raise sufficient capital to fund any or all existing liabilities as well as to fund its current business plan. The failure to raise needed capital may result in the curtailment or cessation of our business.

We have had no revenues since the dismissal of the bankruptcy case, don’t expect revenues this current fiscal year, and we are not currently profitable. We do not have sufficient capital to fund operations through calendar year 2019, and will need to raise additional funding to implement our business strategy. Even if we succeed in developing any of our properties, we expect to incur operating losses for the foreseeable future and may never become profitable. We also expect to continue to incur significant operating and capital expenditures and anticipate that our expenses will increase substantially in the foreseeable future. As the Company has no commitment for debt or equity financing, the Company will be reliant upon best efforts fund raising activities to provide sufficient working capital to fund current and future needs. There can be no assurance that the Company will be successful in its best efforts capital raising efforts, and the failure to raise needed capital may result in the curtailment or cessation of our business.

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 $2,154,218 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, we paid off seven (7) convertible notes with a combined principle and accrued interest balance aggregating $4,340,838 for cash payments totaling $257,338 and recorded a gain on extinguishment of debt of $4,083,500. The Company also during the period entered into agreements with thirteen (13) creditors owed $343,902, which amount was settled for cash payments totaling $10,734 and the Company recorded a gain on extinguishment of debt of $333,168.

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 $300,264. 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 December 14, 2016, the trust established by the bankruptcy court to protect the creditors, paid $464,763 to the recorded creditors and Santa Fe Gold recorded this as gain on trust debt extinguishment. In the reporting period ending March 31, 2017, the Company corrected a recording error overstatement of $8,068.

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 Chief Financial Officer 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.

In a subsequent period of discovery, it was determined that Company’s financial transactions transacted through the Laws CPA firm checking account were fraudulent and the funds were misappropriated and reporting periods in which these transactions occurred are being amended.

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 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 were stayed with the filing of Chapter 11 bankruptcy.

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; andBoart Longyear Company v. Lordsburg Mining Company, Case No. D-608-CV- 201500165, County of Quintero, NM. There are a series of collection cases by Boart Longyear Company, a company that obtained Utah judgments for equipment delivered to Lordsburg Mining Company in the aggregate amounts of $158,480 and has an interest rate of 5.25% per annum. The Company accrued back interest on judgement during the quarter ended December 31, 2016, of $13,837 and recorded $21,454 in legal fees awarded in the judgement amount.

Wagner Equipment Co. v. Lordsburg Mining Company, Case No. D-2014-02372, County of Bernalillo, NM 28 is a collection case by Wagner equipment, who obtained judgment for equipment delivered to Lordsburg Mining Company in the amount of $115,789 and has a rate of interest of 8.75% per annum. The Company accrued back interest on judgement during the quarter ended December 31, 2016, of $25,371.

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.

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 $852,619 and issued 3,712 shares of restricted common stock for reimbursement of bank transfer fees at value of $288; and

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.

On January 25, 2017, the board issued 200,000 shares of restricted common stock for consulting services at a value of $10,420 on the date of issuance.

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: May 7, 2019	/s/ Frank G. Mueller
	Frank G. Mueller
	Chief Financial Officer, Director and Principal Accounting Officer

Santa Fe Gold (SFEG) 10-Q/A2017 Q3 Quarterly report (amended)