Santa Fe Gold Announces: Dismissal of Class Action Complaint, Tyhee's failure to pay Merger Agreement Break-Fee and Notice of Tyhee Bridge Loan Default

ALBUQUERQUE, New Mexico, March 31, 2014 /PRNewswire/ -- Santa Fe Gold Corp. (OTCQB: SFEG) today announced that the purported class action filed by Tony Cavanaugh, on behalf of himself and all others similarly situated, in the Second Judicial District Court of the State of New Mexico, County of Bernalillo, against the Company, the five current members of its Board of Directors, and Tyhee Gold Corp. and Tyhee Merger Sub, Inc. has been dismissed without prejudice. 

Santa Fe also announced that Tyhee has failed to promptly pay to Santa Fe a "break fee" of $300,000, which Tyhee is obligated, pursuant to the terms of the merger agreement, to pay as promptly as reasonably practical to Santa Fe, because Santa Fe terminated the merger agreement as a result of Tyhee's failure to consummate a "qualified financing" of $20 million.  In return, Tyhee has provided Santa Fe with purported notice claiming a default under its bridge loan agreement. Tyhee has only advanced approximately $1.75 million of principal and accrued interest under the $3.0 million facility.  Given the terms of the bridge loan and merger agreements, Santa Fe believes that Tyhee's default notice is wrongful. As such, Santa Fe has provided Tyhee notice of its intention to vigorously pursue enforcement of all its legal claims against Tyhee.

The foregoing description of the Merger Agreement and Bridge Loan Agreement does not purport to be complete, and is qualified in its entirety by reference to (a) the Merger Agreement, which is included as Exhibit 2.1 to Santa Fe's Current Report on Form 8-K, dated January 27, 2014, which has been filed with the SEC and is available at www.sec.gov. and (b) the Bridge Loan Agreement, a copy of which was filed, as Exhibit 2.1 to Santa Fe's Current Report on Form 8-K, with the SEC on February 19, 2014 and is available at www.sec.gov.


About Santa Fe Gold

Santa Fe Gold is a U.S.-based mining and exploration enterprise focused on acquiring and developing gold, silver, copper and industrial mineral properties. Santa Fe controls: (i) the Summit mine and Lordsburg mill in southwestern New Mexico; (ii) a substantial land position near the Lordsburg mill, comprising the core of the Lordsburg Mining District; (iii) the Mogollon gold-silver project, within trucking distance of the Lordsburg mill; (iv) the Ortiz gold property in north-central New Mexico; (v) the Black Canyon mica deposit near Phoenix, Arizona; and (vi) a deposit of micaceous iron oxide (MIO) in Western Arizona. Santa Fe Gold intends to build a portfolio of high-quality, diversified mineral assets with an emphasis on precious metals.

To learn more about Santa Fe Gold, visit www.santafegoldcorp.com.


FORWARD-LOOKING AND CAUTIONARY STATEMENTS – SAFE HARBOR

This press release contains forward-looking statements. Those statements constitute forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as "expects," "projects," "plans," "will," "may," "anticipates," believes," "should," "intend," "estimates," and other words of similar meaning. These statements are subject to risks and uncertainties that cannot be predicted or quantified, and our actual results may differ materially from those expressed or implied by such forward-looking statements. For Santa Fe, these statements are subject to the following risks and uncertainties: uncertainty of the outcomes of litigation and risks associated with the inherent uncertainty of future litigation results, adverse outcomes in litigation may result in significant monetary damages or injunctive relief that could adversely affect our ability to conduct our business. All forward-looking statements included in this release are made as of the date of this press release, and Santa Fe assumes no obligation to update any such forward-looking statements.



CONTACT:

Santa Fe Gold Corp.
Pierce Carson, President and Chief Executive Officer
(505) 255-4852