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Wednesday, 10/20/2021 3:56:42 PM

Wednesday, October 20, 2021 3:56:42 PM

Post# of 2446
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October 20, 2021

Re: Shareholder Update

Dear Shareholders:

Audit Completion.

Santa Fe Gold Corporation (the “Company,” “Santa Fe,” “we,” “us” or “our”) is currently in the process of completing our audit for the Company’s fiscal year ended June 30, 2021 and finalizing resulting audited financial statements and the related notes thereto (comparing fiscal years ended June 30, 2021 and 2020).

Status of or Registration Statement Filed on Form 10-12g.

There are two basic issues outstanding with the Security and Exchange Commission (“the SEC”) that we need to address / reach agreement on, in order to be able to have our Form 10 Registration Statement become effective (with no outstanding comments). The first is completion of the aforementioned audit, which is nearly completed; and updating the various references to year end numbers in the Form 10. The other requires us to provide additional support for the $12.5 million write-off of certain debt we took in our fiscal year ended June 30, 2019. This had not been an issue, but we believe that because of the magnitude of the write-off, the SEC Staff is taking a more conservative approach than they might have taken had it been a smaller amount. We are in the process of providing addition verification to satisfy their requirements, specifically to meet the dictates of the language in the Financial Accounting Standards Board that addresses write-offs of liabilities. We and our auditors both secured detailed legal opinions from Canadian counsel that conclude that the write off is justified because 1) the contracts that gave rise to the liabilities were both under British Columbian Law and had Canada in them as a choice of laws and venue for any legal actions arising under them, 2) under British Columbian Law, the statute of limitations had run on both liabilities and 3) the language under the applicable statute of limitations is clear in that it is an absolute bar against bringing any collection actions to recover the liabilities. The SEC Staff has certain requirements that they need met in a legal opinion in order to accept it and our attorney in British Columbia has indicated that he was comfortable rewriting the opinion letter to contain the SEC’s requested language. In our discussion with the SEC, they suggested that the quickest way for their approval of the liability write off would be providing them a with a judicial ruling. We have acted upon their recommendation and our attorney in Canada has put us in contact with a litigation firm in British Columbia. They are currently researching the correct procedure to pursue the judicial ruling under British Columbian law, and we will proceed once this is determined by the firm and they have provided us with a proposal so that we have a clear picture of the costs, timing and any other issues that may have an impact on our desired outcome. Upon receipt we will make the decision as to which course of action to take. As of now we are weighing both options.

Until this is resolved with the SEC, we will not be filing our next Form 10. Currently there is no timeline until the Canadian issue is resolved. In the meantime, the current Form 10 draft is updated as necessary to be ready for filing immediately once this issue is resolved.

This is a critical project for the Company and is at top of our goals. Until a filed Form 10 is accepted by the SEC, the Company cannot proceed to the next steps to reinstate trading. At this time, we cannot reasonably project a time line when trading may resume.

Respectfully,
Steve Antol
Chief Financial Officer
928.515.1942

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