Yesterday, August 26, 2015, Santa Fe Gold Corporation and its subsidiaries filed for Chapter 11 Bankruptcy in the Bankruptcy Court for the District of Delaware. The precious metals mining company’s bankruptcy filing comes after the decline of precious metal prices, which resulted in Santa Fe Gold facing cash shortage issues and being unable to explore and develop its mineral resources, thus making the company unmarketable. Following two failed merger attempts since 2013, Santa Fe Gold has ceased operations at its four properties located throughout the southwest United States and claims it has no available cash, no prospects for generating cash, and is facing the threat of litigation related to unpaid royalties and defaults.
The company now hopes to sell all of its assets through a deal with senior lender Waterton Global Value, LP. The proposed deal would provide Santa Fe Gold with fresh liquidity in the form of $1.58 million in bankruptcy financing and would allow Waterton to serve as a lead bidder in an auction for the assets of the company. Santa Fe Gold says the transaction with Waterton, which is already owed at least $12.8 million, is its “best, most feasible, and most value-maximizing financing option available at this time.”