Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2018 | Aug. 10, 2020 | |
Details | ||
Registrant CIK | 0000851726 | |
Fiscal Year End | --06-30 | |
Registrant Name | SANTA FE GOLD CORPORATION | |
SEC Form | 10-Q | |
Period End date | Sep. 30, 2018 | |
Tax Identification Number (TIN) | 84-1094315 | |
Number of common stock shares outstanding | 422,670,880 | |
Filer Category | Non-accelerated Filer | |
Current with reporting | Yes | |
Interactive Data Current | Yes | |
Shell Company | false | |
Small Business | true | |
Emerging Growth Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-12974 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 3544 Rio Grande Blvd. NW | |
Entity Address, City or Town | Albuquerque | |
Entity Address, State or Province | NM | |
Entity Address, Postal Zip Code | 87107 | |
Entity Address, Address Description | Address of Principal Executive Offices | |
City Area Code | 505 | |
Local Phone Number | 255-4852 | |
Phone Fax Number Description | Registrant’s telephone number, including area code | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 331,332 | $ 18,897 |
Prepaid expenses and other current assets | 17,533 | 11,680 |
Total current assets | 348,865 | 30,577 |
Total Assets | 3,083,981 | 2,765,693 |
OTHER ASSETS: | ||
Deposit on mineral property | 2,500,000 | 2,500,000 |
Deposit on mineral leases | 210,116 | 210,116 |
Deposit in joint venture | 25,000 | 25,000 |
Current liabilities: | ||
Accounts payable | 3,094,904 | 3,061,976 |
Accrued liabilities | 6,828,198 | 6,906,930 |
Subscribed capital | 2,989,991 | 2,772,191 |
Notes payable | 2,326,407 | 2,326,407 |
Completion guarantee payable | 3,359,873 | 3,359,873 |
Total Current Liabilities | 18,599,373 | 18,427,377 |
STOCKHOLDERS' DEFICIT: | ||
Common shares | 600,000 | 600,000 |
Additional paid-in capital | 84,455,690 | 84,113,690 |
Accumulated deficit | (101,867,082) | (102,013,374) |
Total Stockholders' Deficit | (16,811,392) | (17,299,684) |
Total Liabilities and Stockholders' Deficit | 3,083,981 | 2,765,693 |
LONG TERM LIABILTY: | ||
Shares subject to mandatory redemption by related party | 1,296,000 | 1,638,000 |
Liabilities | $ 19,895,373 | $ 20,065,377 |
Consolidated Balance Sheets - P
Consolidated Balance Sheets - Parenthetical - $ / shares | Sep. 30, 2018 | Jun. 30, 2018 |
Details | ||
Common Stock, Par or Stated Value Per Share | $ 0.002 | $ 0.002 |
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 |
Common Stock, Shares, Issued | 300,000,000 | 300,000,000 |
Common Stock, Shares, Outstanding | 300,000,000 | 300,000,000 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Details | ||
REVENUES | $ 0 | $ 0 |
OPERATING EXPENSES: | ||
Exploration and other mine related costs | 6,076 | 31,981 |
General and administrative expenses | 294,326 | 461,956 |
Total Operating Expenses | 300,402 | 493,937 |
LOSS FROM OPERATIONS | (300,402) | (493,937) |
Other Nonoperating Income (Expense) | ||
Recovery (misappropriation) of funds | 378,060 | (5,754) |
Financing costs- commodity supply agreements | 234,417 | (151,518) |
Interest on mandatory redemption shares by related party | 0 | (37,800) |
Interest expense | (165,783) | (176,661) |
Total Other Income (Expense) | 446,694 | (371,733) |
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | 146,292 | (865,670) |
PROVISION FOR INCOME TAXES | 0 | 0 |
NET INCOME (LOSS) | $ 146,292 | $ (865,670) |
Basic and Diluted Per Share Data: | ||
Net Income (Loss) - Basic | $ 0 | $ 0 |
Net Income (Loss) - Diluted | $ 0 | $ 0 |
Diluted weighted-average common shares outstanding | ||
Basic weighted-average common shares outstanding | 300,000,000 | 293,511,979 |
Diluted weighted-average common shares outstanding | 300,100,000 | 293,511,979 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Net Cash Provided by (Used in) Operating Activities | ||
Net income (loss) | $ 146,292 | $ (865,670) |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities | ||
Stock-based compensation | 17,800 | 0 |
Non-cash interest on mandatory redemption shares by related party | 0 | 37,800 |
Financing costs - commodity supply agreements | (234,417) | 151,518 |
Net change in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (5,853) | (2,158) |
Increase (Decrease) in Accounts Payable and Accrued Liabilities | 188,613 | (1,058) |
Net Cash Provided by (Used in) Operating Activities, Continuing Operations | 112,435 | (679,568) |
Net Cash Provided by (Used in) Investing Activities | ||
Payment on mineral property acquisition | 0 | (1,500,000) |
Deposit in joint venture | 0 | (25,000) |
Net Cash Provided by (Used in) Investing Activities | 0 | (1,525,000) |
Net Cash Provided by (Used in) Financing Activities | ||
Proceeds from common stock purchases | 200,000 | 895,933 |
Proceeds from exercise of warrants | 0 | 895,933 |
Proceeds from stock subscriptions not issued | 0 | 753,360 |
Net Cash Provided by (Used in) Financing Activities | 200,000 | 2,545,226 |
Cash and Cash Equivalents, Period Increase (Decrease) | 312,435 | 340,658 |
Cash and Cash Equivalents, at Carrying Value, Beginning Balance | 18,897 | 392,375 |
Cash and Cash Equivalents, at Carrying Value, Ending Balance | 331,332 | 733,033 |
Supplemental Cash Flow Information | ||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | 0 | 0 |
Income Taxes Paid, Net | 0 | 0 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock returned and cancelled | $ 0 | $ 36,000 |
NOTE 1 - COMPANY AND NATURE OF
NOTE 1 - COMPANY AND NATURE OF OPERATIONS | 3 Months Ended |
Sep. 30, 2018 | |
Notes | |
NOTE 1 - COMPANY AND NATURE OF OPERATIONS | NOTE 1 COMPANY AND NATURE OF OPERATIONS Santa Fe Gold Corporation, a Delaware corporation (the "Santa Fe, "Company", our or we) is a U.S. copper, silver and gold exploration and mining company. The accompanying unaudited financial statements and related notes present the Companys consolidated financial position as of September 30, 2018 and June 30, 2018 (Audited), the consolidated results of operations for the three months ended September 30, 2018 and 2017, consolidated cash flows for the three months ended September 30, 2018 and 2017. 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 months ended September 30, 2018, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2019. The accounting policies followed by the Company are set forth in Note 2 to the Companys financial statements included in Form 10-K for the fiscal year ended June 30, 2019. These interim financial statements and notes thereto should be read in conjunction with the consolidated financial statements presented in the Companys 2019 Annual Report on Form 10-K filed on July 15, 2020. Nature of Operations Santa Fe Gold Corporation 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. Upon the Company emerging from the bankruptcy with a management team of two and no assets, we developed a business plan to raise 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. On August 18, 2017, the Company signed the Bullards Peak Agreement and delivered $100,000 towards the purchase price. The Agreement is to purchase Bullards Peak Corporation and Black Hawk Consolidated Mines Company and acquire 100% of the issued and outstanding capital stock for a cash purchase price in the aggregate amount of $3,000,000, to be paid with installments stated in the Bullards Peak Agreement. |
NOTE 2 - SUMMARY OF SIGNIFICANT
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Sep. 30, 2018 | |
Notes | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Going Concern The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due. The Company has recorded net income of $146,292 for the three months ended September 30, 2018, and has a total accumulated deficit of $101,867,082 and a working capital deficit at September 30, 2018 of $18,250,508. 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 Companys 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. At September 30, 2018, the Company was in defaults on payments of approximately $7.38 million under a gold stream agreement (the Gold Stream Agreement) with Sandstorm Gold Ltd. (Sandstorm), other notes payable principle aggregating approximating $2.33 million, accrued liabilities of approximately $2.81 million and accounts payable approximating $3.03 million. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries AZCO Mica, Inc., a Delaware corporation, The Lordsburg Mining Company, a New Mexico corporation, and Santa Fe Gold Barbados Corporation, a Barbados corporation and Santa Fe Acquisitions Company, a New Mexico Limited Liability Company. All significant inter-company accounts and transactions have been eliminated in consolidation. On July 19, 2016 a new company was formed, Santa Fe Acquisition LLC (SFA) with Tom Laws, our CEO, as the signer, for the sole purpose of acquiring assets for Santa Fe Gold (SFG). On September 25, 2017, with an effective date of July 23, 2016, the CEO assigned ownership of SFA to Santa Fe Gold whereby SFG became to sole member of SFA resulting in SFA becoming a wholly owned subsidiary of SFG. All major purchases were made through the SFA Company for the benefit of SFG, with the funding provided by SFG. Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates under different assumptions or conditions. Significant estimates are used when accounting for the Company's carrying value of mineral properties, fixed assets, depreciation and amortization, accruals, derivative instrument liabilities, taxes and contingencies, and stock-based compensation which are discussed in the respective notes to the consolidated financial statements. Fair Value Measurements The carrying values of cash and cash equivalents, accounts payable and accrued liabilities approximated their related fair values as of September 30, 2018, and June 30, 2018, 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. 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. The Company has no financial derivative instruments in the current reporting periods. 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 ended September 302017, 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 September 30, 2018: Net Income (Numerator) Weighted Average Common Shares (Denominator) Per Share Amount For the three months ended September 30, 2018 Basic EPS Income available to common stockholders $ 146,292 300,000,000 $ 0.00 Diluted EPS Dilutive shares from options and warrants 100,000 Income available to common stockholders plus assumed conversions $ 146,292 300,100,000 $ 0.00 The number of stock options excluded from the calculation of diluted earnings per share for the three months ended September 30, 2018 was 100,000 and excluded warrants was 4,320,000, because their inclusion would have been anti-dilutive. Stock-Based Compensation In connection with terms of employment with the Companys 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. The Company had stock-based compensation of $17,800 in the three months ending September 30, 2018, and none for the three months ended September 30, 2017. 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) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. In February 2016, the FASB issued ASU 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 ASU The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company has not adopted Topic 842 as of the filing of this 10-Q and at this time In November 2016, the FASB has issued ASU No. 2016-18 , Statement of Cash Flows (Topic 230) In May 2017, FASB issued ASU 2017-09, CompensationStock 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. The new standard was adopted by the Company in the quarter ended September 30, 2018, and the Company does not expect the adoption of ASU 2017-09 to have a material effect on its business or on its financial position, results of operations or cash flows. In August 2018, ASU No. 2018-13 was issued to modify and enhance the disclosure requirements for fair value measurements. This update is effective in fiscal years, including interim periods, beginning after December 1, 2020, and early adoption is permitted. The Company is currently evaluating this guidance and the impact on its Consolidated Financial Statements. 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 - DEPOSIT ON MINERAL PRO
NOTE 3 - DEPOSIT ON MINERAL PROPERTY | 3 Months Ended |
Sep. 30, 2018 | |
Notes | |
NOTE 3 - DEPOSIT ON MINERAL PROPERTY | NOTE 3 MINERAL PROPERTIES Acquisition of Bullards Peak Corporation and Black Hawk Consolidated Mines Company On August 18, 2017, the Company signed the Bullards Peak Agreement and delivered $100,000 towards the purchase price. The Agreement is to purchase Bullards Peak Corporation and Black Hawk Consolidated Mines Company and acquire 100% of the issued and outstanding capital stock for an initial cash purchase price of $3,000,000, to be paid with installments stated in the Bullards Peak Agreement. Title to the claims and capital stock will be transferred upon receipt by seller of the full purchase price. Additional installments were made as follows through the end of the current reporting period towards the purchase price: - August 30, 2017, the Company delivered $900,000; - September 8, 2017, the Company delivered $500,000; - October 13, 2017, the Company delivered $500,000 and - January 2, 2018, the Company delivered $500,000. Acquisition British Columbia Properties 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$205,000 and US$210,116. 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 Companys position is that these two November 2017 agreements are not and were never binding and have requested sellers to refund the Can$205,000. 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). At the date of this report the agreements are being scheduled for arbitration by the Company attorney. |
NOTE 4 - ACCRUED LIABILITIES
NOTE 4 - ACCRUED LIABILITIES | 3 Months Ended |
Sep. 30, 2018 | |
Notes | |
NOTE 4 - ACCRUED LIABILITIES | NOTE 4 ACCRUED LIABILITIES Accrued liabilities consist of the following at September 30, 2018 and June 30, 2018: September 30, June 30, 2018 2018 Interest $ 3,197,460 $ 3,031,677 Vacation 15,770 15,770 Payroll 124,620 134,718 Franchise taxes 8,697 8,697 Merger costs, net 269,986 269,986 Other 19,579 19,579 Audit 18,557 18,557 Commodity supply agreement 2,920,006 3,154,423 Property taxes 253,523 253,523 $ 6,828,198 $ 6,906,930 |
NOTE 5 - COMPLETION GUARANTEE P
NOTE 5 - COMPLETION GUARANTEE PAYABLE | 3 Months Ended |
Sep. 30, 2018 | |
Notes | |
NOTE 5 - COMPLETION GUARANTEE PAYABLE | NOTE 5 COMPLETION GUARANTEE PAYABLE At June 30, 2012, the Company calculated the completion guarantee payable provided by Amendment 1 under the Gold Stream Agreement with Sandstorm. See NOTE 9- CONTINGENCIES AND COMMITMENTS, Commodity Supply Agreement. |
NOTE 6 - SHARES SUBJECT TO MAND
NOTE 6 - SHARES SUBJECT TO MANDATORY REDEMPTION BY RELATED PARTY | 3 Months Ended |
Sep. 30, 2018 | |
Notes | |
NOTE 6 - SHARES SUBJECT TO MANDATORY REDEMPTION BY RELATED PARTY | NOTE 6 - SHARES SUBJECT TO MANDATORY REDEMPTION BY RELATED PARTY On August 9, 2017, a related party returned a certificate for 20,000,000 shares of common stock and was issued a new certificate for 2,000,000 shares on the same date. The related party loaned the 18,000,000 shares to the Company to raise additional working capital until the Company increased the authorized common shares of the Company. The related party has set no specified return date after the increased share authorization and may make the election at their discretion. The value of the 18,000,000 shares is determined according to ASC 480, Distinguishing Liabilities from Equity. Upon return of the loaned shares to the related party, the obligation of associated theses shares will be eliminated and a corresponding entry made to Common Stock and Additional Paid in Capital. |
NOTE 7 - NOTES PAYABLE
NOTE 7 - NOTES PAYABLE | 3 Months Ended |
Sep. 30, 2018 | |
Notes | |
NOTE 7 - NOTES PAYABLE | NOTE 7 NOTES PAYABLE Pursuant to Share Exchange Agreement (the "Share Exchange Agreement") with Canarc Resource Corp., a British Columbia, Canada corporation whose common shares are listed on the TSX Exchange under the symbol CCM ("Canarc") on July 15, 2014, the Company and Carnac entered into an interim financing facility pursuant to which Canarc advanced a $200,000 loan to the Company and a $20,000 merger advance. The loan bears interest an initial compounded rate of 1% a month and was 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 the accrued compounded interest at that date was added to the principle and the interest rate was increased to 14% per annum on the outstanding balance per the Share Exchange Agreement. The principal and accrued interest outstanding at September 30, 2018, is in past due and in default. The principle balance and merger advance outstanding at September 30, 2018 and June 30, 2018 was $182,522, respectively. Accrued interest on note at September 30, 2018 and June 30, 2018 was $97,397 and $91,662, respectively. Interest expense for the three months ended September 30, 2018 and 2017 was $5,735 and $7,500, respectively. 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/advanced 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 approximately $107,974 per the terms of the agreement and the Company recorded a gain on debt extinguishment of approximately $120,496 in the quarter ended December 31, 2018. 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 September 30, 2018 and June 30, 2018 and had an accrued interest of $93,420 and $87,687, 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 and this amount was recorded as a gain on trust debt forgiveness. 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 September 30, 2018. Interest expense for the three months ended September 30, 2018 and 2017 was $5,733, respectively. 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, Tyhees failure to fund the total $3 million under the Bridge loan Agreement and Tyhees 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 June 30, 2017 and 2016. This amount is net of a break fee of $300,000 due to the Company from Tyhee. Accrued interest on note at September 30, 2018 and June 30, 2018, was $1,842,079 and $1,736,513 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 and recorded as a gain on trust debt forgiveness. Interest expense for the three months ended September 30, 2018 and 2017 was $105,566 and $114,679, respectively. The following summarizes notes payable: September 30, June 30, 2018 2018 Working capital advances, interest at 1% per month, due January 15, 2015 $ 162,522 $ 162,522 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 notes 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 $ 2,326,407 $ 2,326,407 |
NOTE 8 - FAIR VALUE MEASUREMENT
NOTE 8 - FAIR VALUE MEASUREMENTS | 3 Months Ended |
Sep. 30, 2018 | |
Notes | |
NOTE 8 - FAIR VALUE MEASUREMENTS | NOTE 8 FAIR VALUE MEASUREMENTS The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (Paragraph 820-10-35-37) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Lev e 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 Companys financial assets and liabilities, such as cash and accounts payable approximate their fair values because of the short maturity of these instruments. The Companys financial instruments consist of derivative instruments which are measured at fair value on a recurring basis. The derivatives are measured on their respective origination dates, at the end of each reporting period and at other points in time when necessary, such as modifications, using Level 3 inputs in accordance with GAAP. The Company does not report any financial assets or liabilities that it measures using Level 1 or 2 inputs. The fair value measurement of financial instruments and other assets as of September 30, 2018 and June 30, 2018 are as follows: September 30, 2018 Level 1 Level 2 Level 3 Total Assets: None $ $ $ $ Liabilities: Share redemption to related party $ $ 1,296,000 $ $ 1,296,000 June 30, 2018 Level 1 Level 2 Level 3 Total Assets: None $ $ $ $ Liabilities: Share redemption to related party $ $ 1,638,000 $ $ 1,638,000 |
NOTE 9 - CONTINGENCIES AND COMM
NOTE 9 - CONTINGENCIES AND COMMITMENTS | 3 Months Ended |
Sep. 30, 2018 | |
Notes | |
NOTE 9 - CONTINGENCIES AND COMMITMENTS | NOTE 9 CONTINGENCIES AND COMMITMENTS Commodity Supply Agreement In December 2009, the Company entered into a definitive gold stream agreement (the Gold Stream Agreement) with Sandstorm to deliver a portion of the life-of-mine gold production (excluding all silver production) from the Companys Summit silver-gold mine. Under the agreement the Company received advances of $4,000,000 as an upfront deposit, plus continue to receive future ongoing payments equal to the lesser of: $400 per ounce or the prevailing market price, (the Fixed Price) for each ounce of gold delivered pursuant to the agreement for the life of the mine. The Company purchases and delivers refined gold in order to satisfy the requirements of the Gold Stream Agreement and receives the Fixed Price per ounce in cash from Sandstorm. The difference between the prevailing market price and the Fixed Price per ounce for gold delivered is credited against the upfront deposit of $4,000,000 until the obligation is reduced to zero. Future ongoing payments for gold deliveries will continue at the Fixed Price per ounce with no additional credits or advances to be received from Sandstorm. In certain circumstances, including failure to meet minimum production rates, interruption in production due to permitting issues and customary events of default, the agreement may be terminated. In such event, the Company may be required to return to Sandstorm any remaining uncredited balance of the original $4,000,000 upfront deposit. See NOTE 5 - COMPLETION GUARANTY PAYABLE Under the Gold Stream Agreement, the Company has a recorded obligation at September 30, 2018 and June 30, 2018, of 3,709 ounces of undelivered gold valued at approximately $2.9 and $3.15 million, respectively, in accrued liabilities net of the Fixed Price of $400 per ounce to be received upon delivery. The Summit silver-gold mine property referred to in this Gold Stream Agreement was sold in the 363 Asset Sale as of the asset transfer on February 26, 2016. Share Obligation to Related Party On August 9, 2017, a related party returned a certificate for 20,000,000 shares of common stock and was issued a new certificate for 2,000,000 shares on the same date. The related party loaned the 18,000,000 shares to the Company to raise additional working capital until the Company increased the authorized common shares of the Company. The related party has set no specified return date after the increased share authorization and may make the election at their discretion. See NOTE 6 SHARE OBLIGATION TO RELATED PARTY 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 $1,500 for the three months ended September 30, 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 Companys title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects. |
NOTE 10- STOCKHOLDERS' DEFICIT
NOTE 10- STOCKHOLDERS' DEFICIT | 3 Months Ended |
Sep. 30, 2018 | |
Notes | |
NOTE 10- STOCKHOLDERS' DEFICIT | NOTE 10- STOCKHOLDERS' DEFICIT Subscribed Capital During the three months ended September 30, 2018, the Company accepted stock subscription payments of $200,000 for an aggregate of 2,500,000 shares of restricted common stock in excess of authorized capital. The Company also approved the issuance of 200,000 shares of restricted stock for consulting fees with a value of $17,800 on the date of grant. The Company received authorization by the shareholders to increase Companys authorized capital to 550,000,000 common shares on January 11, 2019 and the subscribed and granted shares were issued. Issuance of Warrants and Expiration During the three months ended September 30, 2018, the Company issued no new warrants and no warrants expired. Stock Options and the Amended and Restated Equity Incentive Plan During three months ended September 30, 2018, no options were granted and no options expired. Stock option and warrant activity, both within the 2007 EIP Amended, the Restated Equity Incentive Plan and outside of these plans, for the three months ended September 30, 2018, are as follows: Stock Options Stock Warrants Weighted Weighted Average Exercise Shares Price Shares Price Outstanding at June 30, 2018 200,000 $0.075 4,420,000 $0.15 Granted Canceled Expired Exercised Outstanding at September 30, 2018 200,000 $0.075 4,320,000 $0.15 Stock options and warrants outstanding and exercisable at September 30, 2018 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 $0.07 100,000 100,000 1.26 $ 0.07 $ 0.15 4,320,000 4,320,000 .48 $ 0.15 $0.08 100,000 100,000 .26 $ 0.08 200,000 200,000 4,320,000 4,320,000 Outstanding Options .76 $ 0.075 Outstanding Warrants .48 $ 0.15 Exercisable Options .76 $ 0.075 Exercisable Warrants .48 $ 0.15 As of September 30, 2018, the aggregate intrinsic value of all stock options and warrants vested was $200. 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 $0.072 closing stock price of the common stock on September 30, 2018. The total intrinsic value associated with options exercised during the three months ended September 30, 2018, 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 TRANSAC
NOTE 11 - RELATED PARTY TRANSACTIONS | 3 Months Ended |
Sep. 30, 2018 | |
Notes | |
NOTE 11 - RELATED PARTY TRANSACTIONS | NOTE 11 RELATED PARTY TRANSACTIONS On August 1, 2015, the Company leased a home office space from the Companys CFO for $500 a month for the corporate administrative office in Albuquerque, NM until such time growth requires a larger corporate administrative office. The board authorized on June 16, 2016, the hiring of Nataliia Mueller, wife of the Companys CFO, with an annual wage of $48,500 as an assistant to the CFO. In order to expedite purchases of equipment and associated expenses in Silver City on behalf of the Company, SFG deposited funds into Mr. Laws certified public accounting practice account until a new bank account was opened at Wells Fargo. Company expenses and purchases of equipment were done in that account. During the fiscal year 2017 an aggregate of $926,000 was deposited to Mr. Laws account or was paid out of the corporate account at Mr. Laws direction. At the end of the 2017 fiscal year Mr. Laws submitted expenditures on behalf of the Company totaling $1,009,099. Subsequent to the 2017 fiscal year ended, the board directors of the Company appointed a special committee which determined the funds expended by Mr. Laws were misappropriated in the amount of $971,099 and a deposit of $38,000 was valid and refunded to the Company in a subsequent period. Of this amount, the $500,000 deposit that was to be made on the Alhambra Acquisition was subsequently determined never made the sellers. See NOTE 13 - Subsequent Events Misappropriated Funds and Entry into a Material Definitive Agreement. As disclosed in the Companys 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 initially that Mr. Laws owes the Company $1,197,198, excluding penalty, accrued interest and additional associated costs. At the time of filing this Form 10-Q total costs associated with Mr. Laws is $1,651,263, including the additional incurred associated costs, of which $485,966 has been recovered by the Company from Mr. Laws. The Company does not anticipate collecting a material amount due from Mr. Laws and will be determined by the bankruptcy court. The Company is in process of restating the previously issued consolidated financial statements for, and financial information relating to, the fiscal year ended June 30, 2017. 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 $971,099 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. As of the filing of this report, Mr. Laws has pleaded guilty to various charges brought against him by government officials, which include the Company allegations. Mr. Laws is currently awaiting sentencing on the pleaded to charges. The Company attorneys have filed all required documents for future monetary settlements to be determined by the court. An individual consultant, who is instrumentally helpful to the Company in raising funds and is compensated on consulting basis, as disclosed in NOTE 13 SUBSEQUENT EVENTS, Recent Issuances of Unregistered Securities 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 - LEGAL PROCEEDINGS
NOTE 12 - LEGAL PROCEEDINGS | 3 Months Ended |
Sep. 30, 2018 | |
Notes | |
NOTE 12 - LEGAL PROCEEDINGS | NOTE 12 LEGAL PROCEEDINGS All legal proceedings were stayed with the filing of Chapter 11 bankruptcy. Boart Long year Company v. Lordsburg Mining Company Boart Longyear Company v. Lordsburg Mining Company Boart Longyear Company v. Lordsburg Mining Company Wagner Equipment Co. v. Lordsburg Mining Company The bankruptcy court set up a Trust fund that will be funded by the activities of the Summit mine for five (5) years for five years from reopening of the mine 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. The Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) have each initiated investigation into the Company and certain other individuals, resulting from the Laws transactions and related misappropriation of funds described herein. The SEC has obtained a formal order to investigate the Company. The DOJ investigation is still preliminary. These types of investigations are expensive, time-consuming for management, and unpredictable often resulting in other aspects of the Companys operations becoming subject to regulatory scrutiny. These investigations are ongoing and no prediction can be made regarding the timing or outcome of such matters including remedial action pursued against the Company and others, including its officers and directors. We are subject from time to time to litigation, claims and suits arising in the ordinary course of business. Other than the above-described litigation, as of September 30, 2018, we were not a party to any material litigation, claim or suit whose outcome could have a material effect on our financial statements. Because litigation outcomes are inherently unpredictable, the Companys evaluation of legal proceedings often involves a series of complex assessments by management about future events and can rely heavily on estimates and assumptions. If the assessments indicate that loss contingencies that could be material to any one of its financial statements are not probable, but are reasonably possible, or are probable, but cannot be estimated, then the Company discloses the nature of the loss contingencies, together with an estimate of the range of possible loss or a statement that such loss is not reasonably estimable. While the consequences of certain unresolved proceedings are not presently determinable, and an estimate of the probable and reasonably possible loss or range of loss in excess of amounts accrued for such proceedings cannot be reasonably made, an adverse outcome from such proceedings could have a material adverse effect on its financial statements in any given reporting period. However, in the opinion of Management, after consulting with legal counsel, the ultimate liability related to the current outstanding litigation is not expected to have a material adverse effect on its financial statements. |
NOTE 13 - SUBSEQUENT EVENTS
NOTE 13 - SUBSEQUENT EVENTS | 3 Months Ended |
Sep. 30, 2018 | |
Notes | |
NOTE 13 - SUBSEQUENT EVENTS | NOTE 13 SUBSEQUENT EVENTS Recent Issuances of Unregistered Securities During the period October 1, 2018 through August 11, 2020, ten current accredited shareholders purchased and aggregate of 50,209,243 restricted common shares for $3,151,980. In addition, our chairman purchased 11,642,858 restricted common shares for $775,000. 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 no consulting fees. During the period October 1, 2018 through August 11, 2020, 3,836,018 restricted shares of common stock for consulting services at an aggregated market value of $351,794 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. In the period from March 2020 through August 11, 2020, the Company issued warrants to existing accredited investors aggregating 4,500,000, and 2,250,000 warrants to the chairman of the board that were attached to restricted stock purchases. The warrants were vested at issuance, have a three-year life and an exercise price of $0.05 and $0.07 per share 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. On April 10, 2020 , the Company converted $100,000 of accrued salary for the Company CFO into 2,000,000 shares of restricted common stock at a market value of $117,000 on the date on grant and recorded a loss on debt conversion of $17,000. Warrants issued in conjunction with the conversion were 1,000,000 vested three-year warrants and have an exercise price of $0.050 per share. On June 30, 2020 , the Company converted a note payable with the Company CFO consisting of principal and interest of $42,037 and $6,178, respectively, into 964,299 shares of restricted common stock at $0.05 per share. The market value on the date of conversion was $67,501 and on the date of conversion the Company recorded a loss on debt conversion of $19,286. In conjunction with the conversion 482,149 vested three-year warrants were granted and have an exercise price of $0.05 per share. Alhambra Acquisition Pursuant to a stock purchase agreement dated August 2017, the Company will acquire all the capital stock of Bullards 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 Bullards 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 Companys 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 Companys breach, and seller shall have no further obligations to the Company, including but not limited to, any obligation to transfer the capital stock of Bullards 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, a late fee payment on February 1, 2019 of $50,000, a $100,000 on February 28, 2019, and the final payment of $100,365 was paid on April 2, 2019, for the total acquisition cost of $3,115,365. In February 2018, the Company filed for a permit to start operations at the Bullards Peak property. The permit was awarded on March 7, 2018. As of the filing of this report, no operations have commenced. 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$205,000. 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 Companys position is that these two November 2017 agreements are not and were never binding and have requested sellers to refund the Can$205,000. 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. The Company position subsequently is to void the transaction based upon the questionable claim activity and due to the uncertainty of the outcome has provided an impairment of the amount at June 30, 2019, in the amount of US$210,116. Billali Mine and the Jim Crow Imperial Mine Mineral Interest In January 2019 the Company has acquired rights to two properties in western New Mexico, consisting of eight (8) patented claims and two unpatented claims, all located in the Steeple Rock Mining District, Grant County, New Mexico and a related water rights lease agreement. The Company 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, with aggregate consideration for both definitive agreements payable as follows per Amendment Three that is effective as of May 1, 2020: * * * * * The Agreement has a 5% net smelter return (NSR) royalty on the nine patented Lode Claims with a royalty limit up to $650,000, and a 3% NSR thereafter. 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 approximately $107,974 per the terms of the agreement and the Company recorded a gain on debt extinguishment of approximately $120,496 in the quarter ended December 31, 2018. Miscellaneous During the period October 2018 and June 30, 2020, the CFO of the Company and an outside party, loaned the Company an aggregate of $381,787, evidenced by demand unsecured notes payable at an annual rate of interest of 6% and have no stated due dates. As of the date of filing this report, $80,000 has been repaid to the outside party and the CFO has converted his outstanding note balance and accrued interest into restricted common stock. On December 18, 2019, Mr. Daniel Gorski, our consultant geologist, was appointed to our board of directors. 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 and Entry into a Material Definitive Agreement As disclosed in the Companys 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 initially that Mr. Laws owes the Company $1,197,198, excluding penalty, accrued interest and additional associated costs. At the time of filing this Form 10-Q total costs associated with Mr. Laws is $1,651,263 of which $485,966 has been recovered by the Company. The Company does not anticipate collecting a material amount due from Mr. Laws and will be determined by the bankruptcy court The Company is in process of restating the previously issued consolidated financial statements for, and financial information relating to, the fiscal year ended June 30, 2017. 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 $971,099 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. As of the filing of this report, Mr. Laws has pleaded guilty to various charges brought against him by government officials, which include the Company allegations. Mr. Laws is currently awaiting sentencing on the pleaded to charges. The Company attorneys have filed all required documents for future monetary settlements to be determined by the court. Extinguishment of Debt Based upon a legal opinion from our British Columbia legal consul, the Company at June 30, 2019, wrote off of two financing facilities under British Columbia law where the statute of limitations had run out pursuant to the Limitations Act Merger Agreement, loan balance $ 1,745,092 Merger Agreement, loan accrued interest 2,155,335 Merger Agreement accrued fees 269,986 Goldstream loan balance 3,742,505 Completion Guaranty accrued interest 1,234,749 Completion Guaranty Payable 3,359,873 Forbearance Agreement 112,625 Total Debt Extinguishment $ 12,620,165 |
NOTE 2 - SUMMARY OF SIGNIFICA_2
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Presentation and Going Concern (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Policies | |
Basis of Presentation and Going Concern | Basis of Presentation and Going Concern The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due. The Company has recorded net income of $146,292 for the three months ended September 30, 2018, and has a total accumulated deficit of $101,867,082 and a working capital deficit at September 30, 2018 of $18,250,508. 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 Companys 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. At September 30, 2018, the Company was in defaults on payments of approximately $7.38 million under a gold stream agreement (the Gold Stream Agreement) with Sandstorm Gold Ltd. (Sandstorm), other notes payable principle aggregating approximating $2.33 million, accrued liabilities of approximately $2.81 million and accounts payable approximating $3.03 million. |
NOTE 2 - SUMMARY OF SIGNIFICA_3
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Principles of Consolidation (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Policies | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries AZCO Mica, Inc., a Delaware corporation, The Lordsburg Mining Company, a New Mexico corporation, and Santa Fe Gold Barbados Corporation, a Barbados corporation and Santa Fe Acquisitions Company, a New Mexico Limited Liability Company. All significant inter-company accounts and transactions have been eliminated in consolidation. On July 19, 2016 a new company was formed, Santa Fe Acquisition LLC (SFA) with Tom Laws, our CEO, as the signer, for the sole purpose of acquiring assets for Santa Fe Gold (SFG). On September 25, 2017, with an effective date of July 23, 2016, the CEO assigned ownership of SFA to Santa Fe Gold whereby SFG became to sole member of SFA resulting in SFA becoming a wholly owned subsidiary of SFG. All major purchases were made through the SFA Company for the benefit of SFG, with the funding provided by SFG. |
NOTE 2 - SUMMARY OF SIGNIFICA_4
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Estimates (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Policies | |
Estimates | Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates under different assumptions or conditions. Significant estimates are used when accounting for the Company's carrying value of mineral properties, fixed assets, depreciation and amortization, accruals, derivative instrument liabilities, taxes and contingencies, and stock-based compensation which are discussed in the respective notes to the consolidated financial statements. |
NOTE 2 - SUMMARY OF SIGNIFICA_5
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Fair Value Measurements (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Policies | |
Fair Value Measurements | Fair Value Measurements The carrying values of cash and cash equivalents, accounts payable and accrued liabilities approximated their related fair values as of September 30, 2018, and June 30, 2018, 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. |
NOTE 2 - SUMMARY OF SIGNIFICA_6
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Cash and Cash Equivalents (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash balances. |
NOTE 2 - SUMMARY OF SIGNIFICA_7
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Derivative Financial Instruments (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Policies | |
Derivative Financial Instruments | Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company reviews the terms of convertible debt, equity instruments and other financing arrangements to determine whether there are embedded derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding options or warrants that may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity. The Company may also issue options or warrants to non-employees in connection with consulting or other services. Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. To the extent that the initial fair values of the freestanding and/or bifurcated derivative instrument liabilities exceed the total proceeds received, an immediate charge to income is recognized as a one-day derivative loss, in order to initially record the derivative instrument liabilities at their fair value. The discount from the face value of the convertible debt or equity instruments resulting from allocating some or all of the proceeds to the derivative instruments, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to income, using the effective interest method. 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. The Company has no financial derivative instruments in the current reporting periods. |
NOTE 2 - SUMMARY OF SIGNIFICA_8
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Net Income (Loss) Per Share (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Policies | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share are calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During the periods when they are anti-dilutive, common stock equivalents, if any, are not considered in the computation. For the three months ended September 302017, 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 September 30, 2018: Net Income (Numerator) Weighted Average Common Shares (Denominator) Per Share Amount For the three months ended September 30, 2018 Basic EPS Income available to common stockholders $ 146,292 300,000,000 $ 0.00 Diluted EPS Dilutive shares from options and warrants 100,000 Income available to common stockholders plus assumed conversions $ 146,292 300,100,000 $ 0.00 The number of stock options excluded from the calculation of diluted earnings per share for the three months ended September 30, 2018 was 100,000 and excluded warrants was 4,320,000, because their inclusion would have been anti-dilutive. |
NOTE 2 - SUMMARY OF SIGNIFICA_9
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Stock-Based Compensation (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Policies | |
Stock-Based Compensation | Stock-Based Compensation In connection with terms of employment with the Companys 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. The Company had stock-based compensation of $17,800 in the three months ending September 30, 2018, and none for the three months ended September 30, 2017. |
NOTE 2 - SUMMARY OF SIGNIFIC_10
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Accounting Standards to be Adopted in Future Periods (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Policies | |
Accounting Standards to be Adopted in Future Periods | 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) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. In February 2016, the FASB issued ASU 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 ASU The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company has not adopted Topic 842 as of the filing of this 10-Q and at this time In November 2016, the FASB has issued ASU No. 2016-18 , Statement of Cash Flows (Topic 230) In May 2017, FASB issued ASU 2017-09, CompensationStock 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. The new standard was adopted by the Company in the quarter ended September 30, 2018, and the Company does not expect the adoption of ASU 2017-09 to have a material effect on its business or on its financial position, results of operations or cash flows. In August 2018, ASU No. 2018-13 was issued to modify and enhance the disclosure requirements for fair value measurements. This update is effective in fiscal years, including interim periods, beginning after December 1, 2020, and early adoption is permitted. The Company is currently evaluating this guidance and the impact on its Consolidated Financial Statements. 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 2 - SUMMARY OF SIGNIFIC_11
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Net Income (Loss) Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Tables/Schedules | |
Schedule of Earnings Per Share, Basic and Diluted | Net Income (Numerator) Weighted Average Common Shares (Denominator) Per Share Amount For the three months ended September 30, 2018 Basic EPS Income available to common stockholders $ 146,292 300,000,000 $ 0.00 Diluted EPS Dilutive shares from options and warrants 100,000 Income available to common stockholders plus assumed conversions $ 146,292 300,100,000 $ 0.00 |
NOTE 4 - ACCRUED LIABILITIES_ S
NOTE 4 - ACCRUED LIABILITIES: Schedule of Accrued Liabilities (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Tables/Schedules | |
Schedule of Accrued Liabilities | September 30, June 30, 2018 2018 Interest $ 3,197,460 $ 3,031,677 Vacation 15,770 15,770 Payroll 124,620 134,718 Franchise taxes 8,697 8,697 Merger costs, net 269,986 269,986 Other 19,579 19,579 Audit 18,557 18,557 Commodity supply agreement 2,920,006 3,154,423 Property taxes 253,523 253,523 $ 6,828,198 $ 6,906,930 |
NOTE 7 - NOTES PAYABLE_ Schedul
NOTE 7 - NOTES PAYABLE: Schedule of Debt (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Tables/Schedules | |
Schedule of Debt | The following summarizes notes payable: September 30, June 30, 2018 2018 Working capital advances, interest at 1% per month, due January 15, 2015 $ 162,522 $ 162,522 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 notes 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 $ 2,326,407 $ 2,326,407 |
NOTE 8 - FAIR VALUE MEASUREME_2
NOTE 8 - FAIR VALUE MEASUREMENTS: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Tables/Schedules | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | September 30, 2018 Level 1 Level 2 Level 3 Total Assets: None $ $ $ $ Liabilities: Share redemption to related party $ $ 1,296,000 $ $ 1,296,000 June 30, 2018 Level 1 Level 2 Level 3 Total Assets: None $ $ $ $ Liabilities: Share redemption to related party $ $ 1,638,000 $ $ 1,638,000 |
NOTE 10- STOCKHOLDERS' DEFICIT_
NOTE 10- STOCKHOLDERS' DEFICIT: Share-based Payment Arrangement, Option, Activity (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Tables/Schedules | |
Share-based Payment Arrangement, Option, Activity | Stock Options Stock Warrants Weighted Weighted Average Exercise Shares Price Shares Price Outstanding at June 30, 2018 200,000 $0.075 4,420,000 $0.15 Granted Canceled Expired Exercised Outstanding at September 30, 2018 200,000 $0.075 4,320,000 $0.15 Stock options and warrants outstanding and exercisable at September 30, 2018 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 $0.07 100,000 100,000 1.26 $ 0.07 $ 0.15 4,320,000 4,320,000 .48 $ 0.15 $0.08 100,000 100,000 .26 $ 0.08 200,000 200,000 4,320,000 4,320,000 Outstanding Options .76 $ 0.075 Outstanding Warrants .48 $ 0.15 Exercisable Options .76 $ 0.075 Exercisable Warrants .48 $ 0.15 |
NOTE 2 - SUMMARY OF SIGNIFIC_12
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Presentation and Going Concern (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | |
Details | |||
Net income (loss) | $ 146,292 | $ (865,670) | |
Accumulated deficit | 101,867,082 | $ 102,013,374 | |
Working Capital Deficit | $ 18,250,508 |
NOTE 2 - SUMMARY OF SIGNIFIC_13
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Net Income (Loss) Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Net income (loss) | $ 146,292 | $ (865,670) |
Basic weighted-average common shares outstanding | 300,000,000 | 293,511,979 |
Diluted weighted-average common shares outstanding | 300,100,000 | 293,511,979 |
Basic Earnings Per Share | ||
Net income (loss) | $ 146,292 | |
Basic weighted-average common shares outstanding | 300,000,000 | |
Diluted Earnings Per Share | ||
Dilutive shares from options and warrants | $ 100,000 | |
Income available to common stockholders plus assumed conversions | $ 146,292 | |
Diluted weighted-average common shares outstanding | 300,100,000 |
NOTE 2 - SUMMARY OF SIGNIFIC_14
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Net Income (Loss) Per Share (Details) | 3 Months Ended |
Sep. 30, 2018shares | |
Share-based Payment Arrangement | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 100,000 |
Warrant | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,320,000 |
NOTE 2 - SUMMARY OF SIGNIFIC_15
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Details | ||
Stock-based compensation | $ 17,800 | $ 0 |
NOTE 3 - DEPOSIT ON MINERAL P_2
NOTE 3 - DEPOSIT ON MINERAL PROPERTY (Details) - USD ($) | 3 Months Ended | |||||
Sep. 30, 2018 | Jan. 02, 2018 | Oct. 13, 2017 | Sep. 08, 2017 | Aug. 30, 2017 | Aug. 18, 2017 | |
Operating Lease, Payments | $ 210,116 | |||||
Bullard's Peak Corporation and Black Hawk Consolidated Mines Company | ||||||
Installment Payment per terms of the Agreement | $ 500,000 | $ 500,000 | $ 500,000 | $ 900,000 | $ 100,000 | |
Total Purchase Price | $ 3,000,000 |
NOTE 4 - ACCRUED LIABILITIES__2
NOTE 4 - ACCRUED LIABILITIES: Schedule of Accrued Liabilities (Details) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Details | ||
Interest | $ 3,197,460 | $ 3,031,677 |
Vacation | 15,770 | 15,770 |
Payroll | 124,620 | 134,718 |
Franchise taxes | 8,697 | 8,697 |
Merger costs, net | 269,986 | 269,986 |
Other | 19,579 | 19,579 |
Audit | 18,557 | 18,557 |
Commodity supply agreement | 2,920,006 | 3,154,423 |
Property taxes | 253,523 | 253,523 |
Accrued liabilities | $ 6,828,198 | $ 6,906,930 |
NOTE 5 - COMPLETION GUARANTEE_2
NOTE 5 - COMPLETION GUARANTEE PAYABLE (Details) - USD ($) | 3 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2012 | |
Details | ||||
Accrued Interest On Obligation | $ 1,102,455 | $ 1,058,357 | $ 504,049 | |
Completion guarantee payable | 3,359,873 | $ 3,359,873 | $ 3,359,873 | |
Interest Expense, Related Party | $ 44,098 | $ 44,098 |
NOTE 6 - SHARES SUBJECT TO MA_2
NOTE 6 - SHARES SUBJECT TO MANDATORY REDEMPTION BY RELATED PARTY (Details) - USD ($) | Aug. 09, 2017 | Sep. 30, 2018 | Jun. 30, 2018 |
Details | |||
Common Stock Returned | 20,000,000 | ||
Stock Issued During Period, Shares, New Issues | 2,000,000 | ||
Additional Paid in Capital, Common Stock | $ 1,762,200 | $ 1,296,000 | $ 1,638,000 |
NOTE 7 - NOTES PAYABLE (Details
NOTE 7 - NOTES PAYABLE (Details) - USD ($) | Jul. 15, 2014 | Jun. 01, 2012 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2014 |
Notes payable | $ 2,326,407 | $ 2,326,407 | |||||
Merger costs, net | 269,986 | 269,986 | |||||
Equipment | |||||||
Debt Instrument, Face Amount | $ 593,657 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.75% | ||||||
Interest Payable, Current | 93,420 | 87,687 | |||||
Interest Expense, Debt | 5,733 | $ 5,733 | |||||
Debt Instrument, Term | 48 months | ||||||
Notes payable | 398,793 | 398,793 | |||||
Gain on trust debt forgiveness | $ 17,412 | ||||||
Canarc Resource Corp. | |||||||
Debt Instrument, Face Amount | $ 200,000 | 182,522 | 182,522 | ||||
Proceeds from Other Short-term Debt | $ 20,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | ||||||
Interest Payable, Current | 97,397 | 91,662 | |||||
Interest Expense, Debt | 5,735 | 7,500 | |||||
Tyhee | |||||||
Debt Instrument, Face Amount | $ 1,745,092 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 24.00% | ||||||
Interest Payable, Current | 1,842,079 | 1,736,513 | |||||
Interest Expense, Debt | 105,566 | $ 114,679 | |||||
Gain on trust debt forgiveness | $ 91,788 | ||||||
Merger costs, net | 269,986 | $ 269,986 | $ 269,986 | ||||
Break fee | $ 300,000 |
NOTE 7 - NOTES PAYABLE_ Sched_2
NOTE 7 - NOTES PAYABLE: Schedule of Debt (Details) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Notes payable | $ 2,326,407 | $ 2,326,407 |
Notes Payable 1 | ||
Notes payable | 162,522 | 162,522 |
Notes Payable 2 | ||
Notes payable | 20,000 | 20,000 |
Notes Payable 3 | ||
Notes payable | 398,793 | 398,793 |
Notes Payable 4 | ||
Notes payable | $ 1,745,092 | $ 1,745,092 |
NOTE 8 - FAIR VALUE MEASUREME_3
NOTE 8 - FAIR VALUE MEASUREMENTS: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Shares subject to mandatory redemption by related party | $ 1,296,000 | $ 1,638,000 |
Fair Value, Inputs, Level 2 | ||
Shares subject to mandatory redemption by related party | $ 1,296,000 | $ 1,638,000 |
NOTE 9 - CONTINGENCIES AND CO_2
NOTE 9 - CONTINGENCIES AND COMMITMENTS (Details) - USD ($) | Aug. 09, 2017 | Aug. 01, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2009 |
Common Stock Returned | 20,000,000 | ||||
Stock Issued During Period, Shares, New Issues | 2,000,000 | ||||
Operating Leases, Rent Expense | $ 1,500 | $ 1,500 | |||
Office Lease | |||||
Debt Instrument, Periodic Payment | $ 500 | ||||
Sandstorm | |||||
Customer Deposits, Current | $ 4,000,000 | ||||
Loans And Leases Receivable Gross Consumer Installment, Other | $ 400 | ||||
Completion Guaranty Payable Terms | Gold production subject to the agreement includes 50% of the first 10,000 ounces of gold produced, and 22% of the gold thereafter. |
NOTE 10- STOCKHOLDERS' DEFICIT
NOTE 10- STOCKHOLDERS' DEFICIT (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Details | ||
Proceeds from common stock purchases | $ 200,000 | $ 895,933 |
Common Stock Shares Subscriptions, shares | 2,500,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value | $ 200 | |
Share Price | $ 0.072 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 0 |
NOTE 10- STOCKHOLDERS' DEFICI_2
NOTE 10- STOCKHOLDERS' DEFICIT: Share-based Payment Arrangement, Option, Activity (Details) - $ / shares | 3 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2017 | |
Details | ||
Stock Options Outstanding | 200,000 | 200,000 |
Stock Options Outstanding, Weighted Average Exercise Price | $ 0.075 | $ 0.075 |
Stock Warrants, outstanding | 4,320,000 | 4,420,000 |
Stock Warrants, outstanding, weighted average price | $ 0.15 | $ 0.15 |
Stock Warrants, grants in period | 0 | |
Stock Warrants granted, weighted average price granted | $ 0 | |
Stock Options Canceled | 0 | |
Stock Options Canceled, Weighted Average Exercise Price | $ 0 | |
Options expired | 0 | |
Options expired, Weighted Average Exercise Price | $ 0 | |
Stock Warrants, expired | 0 | |
Stock Warrants expired, weighted average price | $ 0 | |
Stock Warrants, exercised | 0 | |
Stock Warrants exercised, weighted average price | $ 0 |
NOTE 11 - RELATED PARTY TRANS_2
NOTE 11 - RELATED PARTY TRANSACTIONS (Details) - USD ($) | Jun. 16, 2016 | Aug. 01, 2015 | Jun. 30, 2017 |
Chief Financial Officer | |||
Salary and Wage, NonOfficer, Excluding Cost of Good and Service Sold | $ 48,500 | ||
Chief Executive Officer | |||
Payments to Acquire Property, Plant, and Equipment | $ 926,000 | ||
Payments to Acquire Machinery and Equipment | $ 1,009,099 | ||
Funds Expended Description | funds expended by Mr. Laws were misappropriated in the amount of $971,099 and a deposit of $38,000 was valid and refunded to the Company in a subsequent period. Of this amount, the $500,000 deposit that was to be made on the Alhambra Acquisition was subsequently determined never made the sellers. | ||
Office Lease | |||
Debt Instrument, Periodic Payment | $ 500 |
NOTE 12 - LEGAL PROCEEDINGS (De
NOTE 12 - LEGAL PROCEEDINGS (Details) - USD ($) | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 |
Interest Expense | $ 165,783 | $ 176,661 | ||
Boart Long year Company | ||||
Debt Instrument, Face Amount | $ 158,480 | |||
Debt Instrument, Interest Rate During Period | 5.25% | |||
Interest Payable, Current | 22,116 | $ 20,018 | ||
Interest Expense | 2,097 | 2,097 | ||
Wagner Equipment | ||||
Debt Instrument, Face Amount | $ 115,789 | |||
Debt Instrument, Interest Rate During Period | 8.75% | |||
Interest Payable, Current | 5,733 | $ 5,733 | ||
Interest Expense | $ 70,490 | $ 64,757 |
NOTE 13 - SUBSEQUENT EVENTS (De
NOTE 13 - SUBSEQUENT EVENTS (Details) | 3 Months Ended |
Sep. 30, 2018 | |
Subsequent Event 1 | |
Subsequent Event, Description | During the period October 1, 2018 through August 11, 2020, ten current accredited shareholders purchased and aggregate of 50,209,243 restricted common shares for $3,151,980. In addition, our chairman purchased 11,642,858 restricted common shares for $775,000. 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 no consulting fees. |
Subsequent Event 2 | |
Subsequent Event, Description | During the period October 1, 2018 through August 11, 2020, 3,836,018 restricted shares of common stock for consulting services at an aggregated market value of $351,794 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. |
Subsequent Event 3 | |
Subsequent Event, Description | In the period from March 2020 through August 11, 2020, the Company issued warrants to existing accredited investors aggregating 4,500,000, and 2,250,000 warrants to the chairman of the board that were attached to restricted stock purchases. The warrants were vested at issuance, have a three-year life and an exercise price of $0.05 and $0.07 per share |
Subsequent Event 4 | |
Subsequent Event, Description | 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. |
Subsequent Event 5 | |
Subsequent Event, Description | On April 10, 2020 , the Company converted $100,000 of accrued salary for the Company CFO into 2,000,000 shares of restricted common stock at a market value of $117,000 on the date on grant and recorded a loss on debt conversion of $17,000. Warrants issued in conjunction with the conversion were 1,000,000 vested three-year warrants and have an exercise price of $0.050 per share. |
Subsequent Event 6 | |
Subsequent Event, Description | On June 30, 2020 , the Company converted a note payable with the Company CFO consisting of principal and interest of $42,037 and $6,178, respectively, into 964,299 shares of restricted common stock at $0.05 per share. The market value on the date of conversion was $67,501 and on the date of conversion the Company recorded a loss on debt conversion of $19,286. In conjunction with the conversion 482,149 vested three-year warrants were granted and have an exercise price of $0.05 per share. |
Subsequent Event 7 | |
Subsequent Event, Description | 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, a late fee payment on February 1, 2019 of $50,000, a $100,000 on February 28, 2019, and the final payment of $100,365 was paid on April 2, 2019, for the total acquisition cost of $3,115,365. |
Subsequent Event 8 | |
Subsequent Event, Description | 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. As of the filing of this report, no operations have commenced. |
Subsequent Event 9 | |
Subsequent Event, Description | 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$205,000. 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$205,000. 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. The Company position subsequently is to void the transaction based upon the questionable claim activity and due to the uncertainty of the outcome has provided an impairment of the amount at June 30, 2019, in the amount of US$210,116. |
Subsequent Event 10 | |
Subsequent Event, Description | In January 2019 the Company has acquired rights to two properties in western New Mexico, consisting of eight (8) patented claims and two unpatented claims, all located in the Steeple Rock Mining District, Grant County, New Mexico and a related water rights lease agreement. |
Subsequent Event 11 | |
Subsequent Event, Description | The Company 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 |
Subsequent Event 12 | |
Subsequent Event, Description | 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 approximately $107,974 per the terms of the agreement and the Company recorded a gain on debt extinguishment of approximately $120,496 in the quarter ended December 31, 2018. |
Subsequent Event 13 | |
Subsequent Event, Description | During the period October 2018 and June 30, 2020, the CFO of the Company and an outside party, loaned the Company an aggregate of $381,787, evidenced by demand unsecured notes payable at an annual rate of interest of 6% and have no stated due dates. As of the date of filing this report, $80,000 has been repaid to the outside party and the CFO has converted his outstanding note balance and accrued interest into restricted common stock. |
Subsequent Event 14 | |
Subsequent Event, Description | On December 18, 2019, Mr. Daniel Gorski, our consultant geologist, was appointed to our board of directors. |
Subsequent Event 15 | |
Subsequent Event, Description | 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. |
Subsequent Event 16 | |
Subsequent Event, Description | 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. |
Subsequent Event 17 | |
Subsequent Event, Description | 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). |
Subsequent Event 18 | |
Subsequent Event, Description | 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 |
Subsequent Event 19 | |
Subsequent Event, Description | Based upon a legal opinion from our British Columbia legal consul, the Company at June 30, 2019, wrote off of two financing facilities under British Columbia law where the statute of limitations had run out pursuant to the Limitations Act (British Columbia) and that no future claims can be commenced in the Providence of British Columbia and the Company has no outstanding legal obligation on the finance facilities |