Santa Fe Gold CORP

On September 11, 2009 the company signed a gold sale agreement with Sandstorm Resources for $4.0 million upfront, of which $500,000 is paid and $3.5 million depends on conditions including receiving all permits to build and operate Summit. Sandstorm gets 50% of the first 10,000 ounces of gold and 22% afterward (possibly cut to 15% if performance targets are met), paying the lesser of $400 per ounce or market price. If conditions aren't met by January 11, 2010 and Sandstorm terminates, the $500,000 becomes a loan; the deposit may also have to be returned in some termination events.

asset acquisition disposition

Effective June 30, 2009 the company and Sulane Holdings, holder of the $13.5 million debentures, amended the deal: $974,360 of accrued interest converted into 974,360 shares at $1.00, and interest for the September and December 2009 quarters will also be paid in shares at $1.00. Sulane may elect share payment for later interest, and waived any default. This conserves cash but increases the share count.

capital raising announcement

On December 21, 2007 the company agreed to a $13,500,000 7% senior secured convertible debenture with one investor, paid out on a schedule tied to 2008 construction needs for the Summit project. It is secured by the Summit real and personal property, converts at $1.00, and carries warrants at $1.00 for every $2.00 of principal (exercisable July 1, 2010 to December 31, 2014); there is a $270,000 management fee. This is far larger than earlier financings and brings both Summit funding and dilution risk.

capital raising announcement

Azco said its quarterly results for December 31, 2006 and March 31, 2007 should no longer be relied on, after SEC comments led it to fix how it accounted for the November 2006 Muzz settlement. A $638,537 derivative liability tied to the Muzz warrants was moved to equity instead of counting toward the gain, so the gain on settling the lease is smaller. The earlier reported gain was $3,521,817, and the company says revenue, cash flow and total stockholders' deficit were unaffected. This revises the gain flagged in earlier filings.

financial restatement

On February 26, 2007 Azco amended the 2006 convertible note deal with its five investors. The deadline to file a resale registration statement moved from November 5, 2006 to April 30, 2007 and the effectiveness deadline from February 4, 2007 to July 31, 2007, and the investors gave up all liquidated damages for the missed deadlines. Azco issued 1,750,000 new warrants at $1.25 for five years and will ask shareholders to raise authorized shares from 100 million to 200 million. Notes total $3,781,662, convertible at $1.00. This continues the registration thread and adds dilution.

capital raising announcement

On November 3, 2006 Azco sold its Glendale, Arizona land and buildings (about five acres, a 5,000 sq. ft. office and an 18,000 sq. ft. mill building) to Muzz Investments, keeping its mica processing equipment. In return Muzz cancelled the 2002 financing lease, which Azco had defaulted on after 12 payments, and Azco issued 2,550,000 restricted shares and provided for exercise of Muzz's 2,550,000 warrants. This removes about $6.26 million of liabilities and is expected to produce a gain of about $4.46 million in the December 2006 quarter, but adds 2,550,000 new shares (plus the warrant exercise) for Muzz.

asset acquisition disposition

In September 2006 Azco renegotiated the March convertible notes held by five investors: maturity moved from August 31, 2007 to January 1, 2008, the first installment moved to February 1, 2007, and the conversion and warrant prices fell from $1.58 to $1.00. The investors also bought another $1,000,000 of notes, bringing total outstanding principal, interest and damages to $3,754,357, with 500,000 new warrants at $1.00. The lower prices mean more potential dilution for existing shareholders.

capital raising announcement

On May 4, 2006 Azco bought all of The Lordsburg Mining Company from Imagin Minerals for $1,300,000 from general funds. This gives it the Summit project mining claims in New Mexico (subject to royalties and a net proceeds interest), two state permits, and idle milling equipment it plans to move to a mill site. Financial statements were promised by July 15, 2006.

asset acquisition disposition

Azco raised $2,500,000 (about $2,270,000 net) in March 2006 from four institutional investors through 7% senior secured convertible notes, with warrants and rights to buy more notes. The notes convert at $1.58 per share, the warrants cover 791,139 shares at $1.58, and Azco can repay in cash or shares. Azco must register the shares for resale and pay 1% a month in damages if it is late, so existing shareholders face possible dilution.

capital raising announcement

Mr. Raftery resigned as Azco's auditor because he had not received final approval from the Public Accounting Oversight Board to audit public companies, so he could not issue the audit report for the year ended June 30, 2003. Azco hired Semple & Cooper, LLP of Phoenix effective February 14, 2004, its third auditor arrangement in about five months.

auditor change

PricewaterhouseCoopers resigned as Azco's auditor on September 5, 2003. Its reports for fiscal 2001 and 2002 included a paragraph expressing substantial doubt about Azco's ability to continue as a going concern, and the filing reports no disagreements with the auditor.

auditor change

Azco Mining (the filer, which appears under the Santa Fe Gold name) sold all its shares in its Mexican company Cobre del Mayo to Frontera Cobre del Mayo, Inc. on April 10, 2003. It received $200,000 at closing and is due $50,000 three months later, plus deferred payments tied to construction start ($250,000, or $500,000 if COMEX copper is above $1.00/lb) and commercial production ($500,000, or $1,000,000 above $1.00/lb). It also gets a $0.02/lb royalty in quarters when copper averages at least $1.20/lb, until deferred payments and royalty total $4,750,000; the later payments depend on the Piedras Verdes copper project going ahead.

asset acquisition disposition