Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Santa Fe Gold Corporation - Exhibit 4.1

THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, MORTGAGED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER APPLICABLE SECURITIES LAWS. 

SANTA FE GOLD CORPORATION 

10% CONVERTIBLE SENIOR SUBORDINATED PROMISSORY NOTE 

	$ _________ 	Albuquerque, New Mexico 	October ___, 2007 

          FOR
VALUE RECEIVED, the undersigned, Santa Fe Gold Corporation, a Delaware
corporation (the “Company”), with its principal offices located at 1128
Pennsylvania NE, Suite 200, Albuquerque, New Mexico 87110 promises to pay to the
order of __________________________________________________ (the
“Holder”) or its assigns, at _____________________________________, the
amount of _____________________________DOLLARS ($___________) (the “Original
Principal Amount”) in legal and lawful money of the United States of
America, together with interest (calculated on the basis of a 360-day year) on
the Unpaid Principal Balance (as herein defined) from the date of this note (the
“Note”) until maturity at the rate of ten percent (10%) per annum. All
past due principal and interest will bear interest at the Maximum Rate (as
herein defined). 

                    1.      Definitions.
As used in this Note, the following terms, unless the context otherwise
requires, have the following meanings: 

                                        (a)      “Act”
means the Securities Act of 1933, as amended. 

                                        (b)      “Common
Stock” means the shares of common stock, $.002 par value, of the
Company. 

                                        (c)     
“Company” includes any corporation which shall succeed to or assume the
obligations of the Company under this Note. 

                                        (d)     
“Event of Default” means one or more of the following events: 

                                                       (1)      Default
in the payment of the Unpaid Principal Balance of, or accrued interest on, this
Note when due and payable, if such default is not cured by the Company within
thirty (30) days after Holder has given the Company written notice of such
default; or 

                                                       (2)      The
institution by the Company of proceedings to be adjudicated as bankrupt or
insolvent, or the consent by it to institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or release under the United States Bankruptcy Code, as
amended, or any other applicable federal or state law, or the consent by it to
the filing of any such petition or the appointment of a receiver, liquidator,
assignee, trustee or other similar official of the Company, or of any
substantial part of its property, or the making by it of an assignment for the
benefit of creditors, or the taking of corporate action by the Company in
furtherance of any such actions; or

                                                       (3)     
If, within sixty (60) days after the commencement of an action against
the Company (and service of process in connection therewith on the Company)
seeking any bankruptcy, insolvency, reorganization, liquidation, dissolution or
similar relief under any present or future statute, law or regulation, such
action shall not have been resolved in favor of the Company or all orders or
proceedings thereunder affecting the operations or the business of the Company
stayed, or if the stay of any such order or proceeding shall thereafter be set
aside, or if, within sixty (60) days after the appointment without the consent
or acquiescence of the Company of any trustee, receiver or liquidator of the
Company or of all or any substantial part of the properties of the Company, such
appointment shall not have been vacated; or 

                                                       (4)      Any
declared default of the Company under any Senior Indebtedness that gives the
holder thereof the right to accelerate such Senior Indebtedness and such Senior
Indebtedness is in fact accelerated by the holder. 

                                        (e)
“Holder” means any person who shall at the time be the holder of this
Note. 

                                        (f)
“Maximum Rate” means fourteen percent (14%) per annum. 

                                        (h)
“Senior Indebtedness” means the principal of and unpaid accrued interest on
all current and future debt of the Company, (i) that is evidenced by one or more
outstanding convertible notes, and that may be issued in connection with
additional investment rights issued in private placements completed on March 21,
2006, and September 6, 2006, respectively, as described in the Company’s
Registration Statement on Form SB-2, SEC Registration No. 333-141558 and (ii)
that may be incurred by the Company for working capital and capital expenditures
for development of its mining projects.

                                        (i)
“Unpaid Principal Balance” means the Original Principal Amount less (i) any
principal amount of this Note converted by Holder into Common Stock and (ii) any
principal amount of this Note prepaid or redeemed by the Company. 

                    2.      Interest.
Interest only on the Unpaid Principal Balance is payable in arrears commencing
on _________ __, 20091 and thereafter continuing regularly on the
15th day of each calendar quarter until _________ __,
2012,2 at which time the entire Unpaid Principal Balance, together
with all accrued and unpaid interest, shall be immediately due and payable in
full. Interest will be computed upon the Unpaid Principal Balance of this Note
at the rate stated above to the last day of the month immediately prior to the
date of each payment, except for the payment at maturity which will be computed
upon the Unpaid Principal Balance of this Note at the rate stated above to the
date of payment. 

                              No
provision of this Note shall require the payment or permit the collection of
interest in excess of the maximum lawful rate which the Company may stipulate
and agree to pay as determined by a court of competent jurisdiction. If it is so
determined that any excess interest is provided for in this Note, the Company
shall not be obligated to pay the amount of interest to the extent that it is in
excess of the amount permitted by law, and any excess interest paid shall be
credited as a payment on the Unpaid Principal Balance of this Note or, if
applicable, refunded to the Company. 

                    3.      Event
of Default. Upon the occurrence of an Event of Default, Holder may, as
long as such condition exists, declare the entire Unpaid Principal Balance and
unpaid accrued interest thereon immediately due and payable by giving notice in
writing to the Company. 

___________________________________
1 The first
day of the nineteenth (19th) month following the issuance of the
Note. 
2 The last business day of the 60th month
following the issuance of the Note. 

-2-

                    4.      Subordination.
The indebtedness evidenced by this Note is hereby expressly subordinated, to the
extent and in the manner hereinafter set forth, in right of payment to the prior
payment in full of all the Company’s Senior Indebtedness. 

                              If
there should occur any receivership, insolvency, assignment for the benefit of
creditors, bankruptcy, reorganization or arrangements with creditors (whether or
not pursuant to bankruptcy or other insolvency laws), sale of all or
substantially all of the assets, dissolution, liquidation or any other
marshalling of the assets and liabilities of the Company, or if this Note shall
be declared due and payable upon the occurrence of an event of default with
respect to any Senior Indebtedness, then (i) no amount shall be paid by the
Company in respect of the Unpaid Principal Balance of, or accrued and unpaid
interest on, this Note at the time outstanding, unless and until the principal
of and interest on the Senior Indebtedness then outstanding shall be paid in
full, and (ii) no claim or proof of claim shall be filed with the Company by or
on behalf of the Holder of this Note that shall assert any right to receive any
payments in respect of the Unpaid Principal Balance and accrued and unpaid
interest thereon (including declaring an Event of Default, acceleration,
instituting any legal action or otherwise enforcing its rights with respect to
the indebtedness evidenced by this Note), except subject to the payment in full
of the principal of and interest on all of the Senior Indebtedness then
outstanding. If there occurs an event of default that has been declared in
writing with respect to any Senior Indebtedness, or in the instrument under
which any Senior Indebtedness is outstanding, permitting the holder of such
Senior Indebtedness to accelerate the maturity thereof, then, unless and until
such event of default shall have been cured or waived or shall have ceased to
exist, or all Senior Indebtedness shall have been paid in full, no payment shall
be made in respect of the Unpaid Principal Balance and accrued and unpaid
interest thereon. 

                              Subject
to the rights, if any, of the holders of Senior Indebtedness under this
Section 4 to receive cash, securities or other properties otherwise
payable or deliverable to the Holder, nothing contained in this Section 4
shall impair, as between the Company and the Holder, the obligation of the
Company, subject to the terms and conditions hereof, to pay to the Holder the
Unpaid Principal Balance and unpaid accrued interest thereon as and when the
same become due and payable, or shall prevent the Holder of this Note, upon
default hereunder, from exercising all rights, powers and remedies otherwise
provided herein or by applicable law. 

                              Subject
to the payment in full of all Senior Indebtedness and until this Note shall be
paid in full, the Holder shall be subrogated to the rights of the holders of
Senior Indebtedness (to the extent of payments or distributions previously made
to such holders of Senior Indebtedness) pursuant to the provisions of this
Section 4 to receive payment or distributions of assets of the Company
applicable to the Senior Indebtedness. No such payments or distributions
applicable to the Senior Indebtedness shall, as between the Company and its
creditors, other than the holders of Senior Indebtedness and the Holder, be
deemed to be a payment by the Company to or on account of this Note; and for the
purposes of such subrogation, no payments or distributions to the holders of
Senior Indebtedness to which the Holder would be entitled except for the
provisions of this Section 4 shall, as between the Company and its
creditors, other than the holders of Senior Indebtedness and the Holder, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness. 

                              By
its acceptance of this Note, the Holder agrees to execute and deliver such
documents as may be reasonably requested from time to time by the Company or the
lender of any Senior Indebtedness in order to implement the foregoing provisions
of this Section 4. 

                    5.      Voluntary
Conversion; Conversion Procedure. Holder has the unrestricted right, at
Holder’s option, to convert, in whole or in part, the Unpaid Principal Balance
of this Note, together with all accrued and unpaid interest thereon, into fully
paid and nonassessable shares of Common Stock. Subject to the timing
restrictions related to a redemption notice given by the Company described in
Section 9 hereof, the right to convert may be exercised by Holder at any
time after the date hereof up to and including the maturity date of this Note.
The number of shares of Common Stock into which this 

-3-

Note may or will be converted (the “Conversion Shares”)
shall be determined by dividing the amount of the Unpaid Principal Balance of
this Note and the accrued and unpaid interest sought to be converted by the
Conversion Price in effect at the time of such conversion. The initial
Conversion Price shall be equal to $1.25. No fractional shares of Common Stock
shall be issued on conversion of this Note. 

                              In
order to voluntarily convert, in whole or in part, the Unpaid Principal Balance
of this Note and any accrued and unpaid interest, Holder shall surrender this
Note, duly endorsed, at the office of the Company and shall give written notice
to the Company of the election to convert this Note and the amount sought to be
converted and shall state therein the name or names in which the certificate or
certificates for Conversion Shares are to be issued. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of surrender of this Note, and the person or persons entitled to receive the
Conversion Shares issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such Conversion Shares as of such
date. 

                              The
Company shall, as soon as practicable, at its expense, issue and deliver to
Holder a certificate or certificates for the number of Conversion Shares to
which Holder shall be entitled as aforesaid.

                              Upon
conversion of this Note, the Company shall be forever released from all its
obligations and liabilities under this Note, to the extent converted. 

                    6.      Automatic
Conversion. Without any action by Holder, the Unpaid Principal Balance
of this Note, together with all accrued and unpaid interest thereon, shall be
automatically converted into shares of Common Stock, at the then applicable
conversion price if the reported weighted average closing sales price of the
Common Stock on any stock exchange, NASDAQ national market system or NASDAQ OTC
exceeds $2.50 per share for 10 consecutive trading days. 

                              The
Company shall, as soon as practicable, at its expense, issue and deliver to
Holder a certificate or certificates for the number of Conversion Shares to
which Holder shall be entitled as aforesaid.

                              Upon
conversion of this Note, the Company shall be forever released from all its
obligations and liabilities under this Note, to the extent converted. 

                    7.      Conversion
Price Adjustments.

                    In
the event the Company should at any time or from time to time after the date
hereof fix a record date for the split or subdivision of the outstanding shares
of Common Stock or the determination of holders of Common Stock to receive
dividends or other distributions payable in additional shares of Common Stock or
other securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (“Common Stock
Equivalents”) without payment of any consideration by such holder for the
additional shares of Common Stock or the Common Stock Equivalents (including the
additional shares of Common Stock issuable upon conversion on exercise thereof),
then, as of such record date (or the date of such dividend, distribution, split
or subdivision if no record date is fixed), the Conversion Price of this Note
shall be appropriately decreased so that the number of Conversion Shares
issuable upon conversion of this Note shall be increased in proportion to such
increase or potential increase of outstanding shares of Common Stock. 

                         If
the number of shares of Common Stock outstanding at any time after the date
hereof is decreased by a combination of the outstanding shares of Common Stock,
then, following the record date of such combination, the Conversion Price for
this Note shall be appropriately increased so that the number of shares of
Common Stock issuable on conversion hereof shall be decreased in proportion to
such decrease in outstanding shares of Common Stock. 

-4-

               8.      Reservation
of Conversion Shares. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock solely for
the purpose of effecting the conversion of this Note such number of shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of this Note; and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of this Note, in
addition to such other remedies as shall be available to the Holder of this
Note, the Company will use its best efforts to take such corporate action as
may, in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purposes. 

               9.      Redemption.

                                        (a)
Redemption. After _________ __, 2010,3 subject to the Holder’s
right to convert the Note into shares of Common Stock pursuant to Section 5,
upon 30 days prior written notice, the Company may redeem the outstanding
principal amount of this Note. Such redemption shall be at a cash price equal to
the redemption prices, expressed as a percentage of the Unpaid Principal Balance
of this Note, and accrued interest on, this Note: 

	12 months ending September 	Redemption Price 
	 	 
	2010 	   102% 
	 	 
	2011 	   101%

                                        Before
any redemption of this Note under the foregoing, the Company shall notify Holder
not less than thirty (30) days nor more than sixty (60) days prior to the date
fixed by the Company for redemption. The notice shall specify: (i) the Unpaid
Principal Balance to be redeemed; (ii) the date fixed for redemption and the
interest accrual through such date; (iii) the premium, if any; (iv) that
on the date fixed for redemption, the Unpaid Principal Balance to be redeemed
and the accrued interest thereon will become due and payable, and that interest
thereon will not accrue after that date; (v) the applicable Conversion Price on
the date of the notice; and (vi) the location and address of the office of the
Company where this Note is required to be presented for redemption.

                                        (b)
Right to Convert. A redemption notice given by the Company pursuant to this
Section 9 shall not restrict Holder’s conversion rights under this Note either
before or after the redemption date; provided, however, Holder may not exercise
its conversion rights during the period that is three (3) business days before
the date fixed for redemption. 

               10.      Certain
Notices. In case at any time the Company shall propose to: 

                                        (a)
declare any cash dividend upon its Common Stock; 

                                        (b)
declare any dividend upon its Common Stock payable in stock or make any
special dividend or other distribution to the holders of its Common Stock; 

                                        (c)
reorganize, or reclassify the capital stock of the Company, or consolidate,
merge or otherwise combine with, or sell all or substantially all of its assets
to, another corporation or entity; or 

                                        (d)
voluntarily or involuntarily dissolve, liquidate or wind up the affairs of
the Company;

then, in any one or more of said cases, the Company shall give
to Holder, by certified mail, (i) at least twenty (20) days’ prior written
notice of the date on which the books of the Company shall close or a 

__________________________________
3 36 months
after following the issuance of the Note. 

-5-

record shall be taken for such dividend or distribution or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, and (ii) in the case of such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, or winding up, at least
twenty (20) days’ prior written notice of the date when the same shall take
place. Any notice required by clause (i) shall also specify, in the case of any
such dividend or distribution, the date on which the holders of Common Stock
shall be entitled thereto, and any notice required by clause (ii) shall also
specify the date on which the holders of Common Stock shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding up, as the case may be. 

               11.      Assignment.
The rights and obligations of the Company and the Holder of this Note shall be
binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties. 

               12.      Governing
Law. This Note is being executed and delivered, and is intended to be
performed, in the State of New Mexico. The substantive laws of the State of
Delaware and all applicable federal laws shall govern the validity,
construction, enforcement and interpretation of this Note. 

               13.      Attorney’s
Fees. If this Note, or any part of this Note, is placed in the hands of
an attorney for collection or is collected through bankruptcy or other judicial
proceedings (including any proceedings, state or federal, for the relief of
debtors), the Company agrees to pay to Holder reasonable attorneys’ fees and all
other costs and expenses incurred in connection with any such collection, suit
or proceeding, in addition to the principal and interest then due hereon. 

               14.     
Waiver. Except as otherwise provided in this Note, the Company and each
guarantor, surety, and endorser of this Note, jointly and severally, expressly
waive all notices, demands for payment, presentations for payment, notices of
acceleration and of intention to accelerate the maturity, protest and notice of
protest, as to this Note, and as to each, every and all installments of this
Note, and each agrees that their liability under this Note shall not be affected
by any renewal or extension in the time of payment hereof, or by any
indulgences, or by any release or change in any security for the payment of this
Note, and hereby consents to any and all renewals, extensions, indulgences,
releases, or changes, regardless of the number of such renewals, extensions,
indulgences, releases or changes. 

                              No
waiver by Holder or its assigns of any of its rights and remedies hereunder or
under any other document relating to or securing this Note or otherwise shall be
considered a waiver of any other subsequent right or remedy of Holder or its
assigns; no delay or omission in the exercise or enforceability by Holder or its
assigns of any rights or remedies shall ever be construed as a waiver of any
right or remedy of Holder or its assigns; and no exercise or enforcement of any
such rights or remedies shall ever be held to exhaust any right or remedy of
Holder or its assigns. 

               15.      Treatment
of Note. To the extent permitted by generally accepted accounting
principles, the Company will treat, account and report the Note as debt and not
equity for accounting purposes and with respect to any returns filed with
federal, state or local tax authorities. 

               16.      Notices.
Any notice, request or other communication required or permitted hereunder shall
be in writing and shall be deemed to have been duly given if personally
delivered or if mailed by registered or certified mail, postage prepaid, at the
respective addresses of the parties as set forth herein. Any party hereto may by
notice so given change its address for future notice hereunder. Notice shall
conclusively be deemed to have been given when personally delivered or when
deposited in the mail in the manner set forth above and shall be deemed to have
been received when delivered. 

               17.      No
Shareholder Rights. Nothing contained in this Note shall be construed
as conferring upon the Holder or any other person the right to vote or to
consent or to receive notice as a shareholder in 

-6-

respect of meetings of shareholders for the election of
directors of the Company or any other matters or any rights whatsoever as a
shareholder of the Company; and no dividends or interest shall be payable or
accrued in respect of this Note or the interest represented hereby or the
Conversion Shares obtainable hereunder until, and only to the extent that, this
Note shall have been converted.

               18.      Headings.
All headings used herein are used for convenience only and shall not be
used to construe or interpret this Note. 

SANTA FE GOLD CORPORATION

By:  ___________________________________________________________
       
W. Pierce Carson, President & Chief Executive Officer 

-7-Filed by Automated Filing Services Inc. (604) 609-0244 - Santa Fe Gold Corporation - Exhibit 4.2

          NEITHER
THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES OR BLUE SKY LAWS.

SANTA FE GOLD CORPORATION

WARRANT 

	Warrant No. [    ]	Dated: October __, 2007 

          Santa
Fe Gold Corporation, a Delaware corporation (the “Company”), hereby
certifies that, for value received, [Name of Holder] or its registered assigns
(the “Holder”), is entitled to purchase from the Company up to a total of
[ ]1 shares of common stock, $0.002 par value per share (the
“Common Stock”), of the Company (each such share, a “Warrant
Share” and all such shares, the “Warrant Shares”) at an exercise
price equal to $1.25 per share (as adjusted from time to time as provided in
Section 9, the “Exercise Price”), at any time and from time to
time from and after the date hereof and through and including the date that is
five years from the date of issuance hereof (the “Expiration Date”), and
subject to the following terms and conditions. This Warrant (“Warrant”)
is one of a series of similar Warrants issued pursuant to those certain
Subscription Agreements by and among the Company and the Purchasers identified
therein (the “Subscription Agreement”) relating to the sale by the
Company of 10% Senior Subordinated Convertible Notes (the “Notes”) and
the Warrants.

          1.     
Registration of Warrant. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary. 

          2.     
Registration of Transfers. The Company shall register the transfer of any
portion of this Warrant in the Warrant Register, upon surrender of this Warrant,
with the Form of Assignment attached hereto duly completed and signed, to the
Transfer Agent or to the Company at its address specified herein. Upon any such
registration or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a “New
Warrant”), evidencing the portion of this Warrant so transferred shall be
issued to the transferee and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of the New Warrant by the transferee thereof shall be
deemed the acceptance by such transferee of all of the rights and obligations of
a holder of a Warrant. 

          3.      Exercise
and Duration of Warrants. 

                    (a)      This
Warrant shall be exercisable by the registered Holder at any time and from time
to time on or after the date hereof to and including the Expiration Date. At
6:30 P.M., New York 

________________________________________
1
Warrants to purchase 60,000 shares of Common Stock for each $150,000 of Original
Principal Amount of 10% Senior Subordinated Convertible Notes purchased. 

City time on the Expiration Date, the portion of this Warrant
not exercised prior thereto shall be and become void and of no value.

                    (b)      A
Holder may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached hereto (the “Exercise Notice”),
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares as to which this Warrant is being exercised.
The date such items are delivered to the Company (as determined in accordance
with the notice provisions hereof) is an “Exercise Date.” The Holder
shall not be required to deliver the original Warrant in order to effect an
exercise hereunder. Execution and delivery of the Exercise Notice shall have the
same effect as cancellation of the original Warrant and issuance of a New
Warrant evidencing the right to purchase the remaining number of Warrant Shares.

          4.      Delivery
of Warrant Shares.

                    (a)     
Upon exercise of this Warrant, the Company shall promptly (but in no event later
than three Trading Days after the Exercise Date) issue or cause to be issued and
cause to be delivered to or upon the written order of the Holder and in such
name or names as the Holder may designate, a certificate for the Warrant Shares
issuable upon such exercise, free of restrictive legends unless a registration
statement covering the resale of the Warrant Shares and naming the Holder as a
selling stockholder thereunder is not then effective and the Warrant Shares are
not freely transferable without volume restrictions pursuant to Rule 144 under
the Securities Act. The Holder, or any Person so designated by the Holder to
receive Warrant Shares, shall be deemed to have become holder of record of such
Warrant Shares as of the Exercise Date. The Company shall, upon request of the
Holder, use its best efforts to deliver Warrant Shares hereunder electronically
through the Depository Trust Corporation or another established clearing
corporation performing similar functions. 

                    (b)      This
Warrant is exercisable, either in its entirety or, from time to time, for a
portion of the number of Warrant Shares. Upon surrender of this Warrant
following one or more partial exercises, the Company shall issue or cause to be
issued, at its expense, a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares. 

                    (c)      In
addition to any other rights available to a Holder, if the Company fails to
deliver to the Holder a certificate representing Warrant Shares by the third
Trading Day after the date on which delivery of such certificate is required by
this Warrant, and if after such third Trading Day the Holder purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares that the Holder
anticipated receiving from the Company (a “Buy-In”), then the Company
shall, within three Trading Days after the Holder’s request and in the Holder’s
discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased (the “Buy-In Price”), at which point the
Company’s obligation to deliver such certificate (and to issue such Common
Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the
Holder a certificate or certificates representing such Common Stock and pay cash
to the Holder in an amount equal to the excess (if any) of the Buy-In Price over
the product of (A) such number of shares of Common Stock, times (B) the Closing
Price on the date of the event giving rise to the Company’s obligation to
deliver such certificate. 

                    (d)      The
Company’s obligations to issue and deliver Warrant Shares in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any 

2 

obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of Warrant Shares. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to
timely deliver certificates representing shares of Common Stock upon exercise of
the Warrant as required pursuant to the terms hereof. 

          5.     
Charges, Taxes and Expenses. Issuance and delivery of certificates for
shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than that of the
Holder or an Affiliate thereof. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this Warrant
or receiving Warrant Shares upon exercise hereof. 

          6.      Replacement
of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for and
upon cancellation hereof, or in lieu of and substitution for this Warrant, a New
Warrant, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. Applicants for a New Warrant under such circumstances
shall also comply with such other reasonable regulations and procedures and pay
such other reasonable third-party costs as the Company may prescribe. 

          7.     
Reservation of Warrant Shares. The Company covenants that it will at all
times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this entire Warrant, free from preemptive rights or any
other contingent purchase rights of persons other than the Holder (taking into
account the adjustments and restrictions of Section 8). The Company
covenants that all Warrant Shares so issuable and deliverable shall, upon
issuance and the payment of the applicable Exercise Price in accordance with the
terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable. The Company will take all such action as may be necessary to
assure that such shares of Common Stock may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of any
securities exchange or automated quotation system upon which the Common Stock
may be listed. 

          8.     
Certain Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 8. 

                    (a)      Stock
Dividends and Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, or (iii) combines outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such 

3 

dividend or distribution, and any adjustment pursuant to clause
(ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination. 

                    (b)     
Pro Rata Distributions. If the Company, at any time while this Warrant is
outstanding, distributes to holders of Common Stock (i) evidences of its
indebtedness, (ii) any security (other than a distribution of Common Stock
covered by the preceding paragraph), (iii) rights or warrants to subscribe for
or purchase any security, or (iv) any other asset (in each case, “Distributed
Property”), then in each such case the Exercise Price in effect immediately
prior to the record date fixed for determination of stockholders entitled to
receive such distribution shall be adjusted (effective on such record date) to
equal the product of such Exercise Price times a fraction of which the
denominator shall be the average of the Closing Prices for the five Trading Days
immediately prior to (but not including) such record date and of which the
numerator shall be such average less the then fair market value of the
Distributed Property distributed in respect of one outstanding share of Common
Stock, as determined by the Company's independent certified public accountants
that regularly examine the financial statements of the Company, (an
“Appraiser”). In such event, the Holder, after receipt of the
determination by the Appraiser, shall have the right to select an additional
appraiser (which shall be a nationally recognized accounting firm), in which
case such fair market value shall be deemed to equal the average of the values
determined by each of the Appraiser and such appraiser. As an alternative to the
foregoing adjustment to the Exercise Price, at the request of the Holder
delivered before the 90th day after such record date, the Company will deliver
to such Holder, within five Trading Days after such request (or, if later, on
the effective date of such distribution), the Distributed Property that such
Holder would have been entitled to receive in respect of the Warrant Shares for
which this Warrant could have been exercised immediately prior to such record
date. If such Distributed Property is not delivered to a Holder pursuant to the
preceding sentence, then upon expiration of or any exercise of the Warrant that
occurs after such record date, such Holder shall remain entitled to receive, in
addition to the Warrant Shares otherwise issuable upon such exercise (if
applicable), such Distributed Property. 

                    (c)     
Fundamental Transactions. If, at any time while this Warrant is
outstanding, (i) the Company effects any merger or consolidation of the Company
with or into another Person, (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions,
(iii) any tender offer or exchange offer (whether by the Company or another
Person) is completed pursuant to which holders of Common Stock are permitted to
tender or exchange their shares for other securities, cash or property, or (iv)
the Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (other than as a result of a
subdivision or combination of shares of Common Stock covered by Section 9(a)
above) (in any such case, a “Fundamental Transaction”), then the Holder
shall have the right thereafter to receive, upon exercise of this Warrant, the
same amount and kind of securities, cash or property as it would have been
entitled to receive upon the occurrence of such Fundamental Transaction if it
had been, immediately prior to such Fundamental Transaction, the holder of the
number of Warrant Shares then issuable upon exercise in full of this Warrant
(the “Alternate Consideration”). The aggregate Exercise Price for this
Warrant will not be affected by any such Fundamental Transaction, but the
Company shall apportion such aggregate Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock
are given any choice as to the securities, cash or property to be received in a
Fundamental Transaction, then the Holder shall be given the same choice as to
the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. In the event of a Fundamental
Transaction, the Company or the successor or purchasing Person, as the case may
be, shall execute with the Holder a written agreement providing that: 

4 

          (x)      this
Warrant shall thereafter entitle the Holder to purchase the Alternate
Consideration in accordance with this section 8(c),

          (y)     
in the case of any such successor or purchasing Person, upon such consolidation,
merger, statutory exchange, combination, sale or conveyance such successor or
purchasing Person shall be jointly and severally liable with the Company for the
performance of all of the Company's obligations under this Warrant and the
Purchase Agreement, and

          (z)     
if registration or qualification is required under the Exchange Act or
applicable state law for the public resale by the Holder of shares of stock and
other securities so issuable upon exercise of this Warrant, such registration or
qualification shall be completed prior to such reclassification, change,
consolidation, merger, statutory exchange, combination or sale.

If, in the case of any Fundamental Transaction, the Alternate
Consideration includes shares of stock, other securities, other property or
assets of a Person other than the Company or any such successor or purchasing
Person, as the case may be, in such Fundamental Transaction, then such written
agreement shall also be executed by such other Person and shall contain such
additional provisions to protect the interests of the Holder as the Board of
Directors of the Company shall reasonably consider necessary by reason of the
foregoing. At the Holder’s request, any successor to the Company or surviving
entity in such Fundamental Transaction shall issue to the Holder a new warrant
consistent with the foregoing provisions and evidencing the Holder’s right to
purchase the Alternate Consideration for the aggregate Exercise Price upon
exercise thereof. The terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this paragraph (c) and
insuring that the Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
If any Fundamental Transaction constitutes or results in a Change of Control,
then at the request of the Holder delivered before the 90th day after such
Fundamental Transaction, the Company (or any such successor or surviving entity)
will purchase the Warrant from the Holder for a purchase price, payable in cash
within five Trading Days after such request (or, if later, on the effective date
of the Fundamental Transaction), equal to the Black-Scholes value of the
remaining unexercised portion of this Warrant on the date of such request. 

                    (d)      Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price
pursuant to paragraphs (a) or (b) of this Section, the number of Warrant Shares
that may be purchased upon exercise of this Warrant shall be increased or
decreased proportionately, so that after such adjustment the aggregate Exercise
Price payable hereunder for the increased or decreased number of Warrant Shares
shall be the same as the aggregate Exercise Price in effect immediately prior to
such adjustment. 

                    (e)      Calculations.
All calculations under this Section 8 shall be made to the nearest cent
or the nearest 1/100th of a share, as applicable. The number of shares of Common
Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock. 

                    (f)      Notice
of Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 8, the Company at its expense will promptly compute such
adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment, including a statement of the adjusted
Exercise Price and adjusted number or type of Warrant Shares or other securities
issuable upon exercise of this Warrant (as applicable), describing the
transactions giving rise to such adjustments and showing in detail the facts
upon which such adjustment is based. Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
Company’s Transfer Agent. 

5 

                    (g)     
Notice of Corporate Events. If the Company (i) declares a dividend or any
other distribution of cash, securities or other property in respect of its
Common Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company or any Subsidiary,
(ii) authorizes or approves, enters into any agreement contemplating or solicits
stockholder approval for any Fundamental Transaction or (iii) authorizes the
voluntary dissolution, liquidation or winding up of the affairs of the Company,
then the Company shall deliver to the Holder a notice describing the material
terms and conditions of such transaction, at least 20 calendar days prior to the
applicable record or effective date on which a Person would need to hold Common
Stock in order to participate in or vote with respect to such transaction, and
the Company will take all steps reasonably necessary in order to insure that the
Holder is given the practical opportunity to exercise this Warrant prior to such
time so as to participate in or vote with respect to such transaction; provided,
however, that the failure to deliver such notice or any defect therein shall not
affect the validity of the corporate action required to be described in such
notice.

          9.     
Payment of Exercise Price. The Holder shall pay the Exercise Price in
immediately available funds. 

          10.     
Fractional Shares. The Company shall not be required to issue or cause to
be issued fractional Warrant Shares on the exercise of this Warrant. If any
fraction of a Warrant Share would, except for the provisions of this Section, be
issuable upon exercise of this Warrant, the number of Warrant Shares to be
issued will be rounded up to the nearest whole share. 

          11.     
Notices. Any and all notices or other communications or deliveries
hereunder (including without limitation any Exercise Notice) shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading
Day following the date of mailing, if sent by nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices or communications shall be as
set forth in the Purchase Agreement. 

          12.      Warrant
Agent. The Company shall serve as warrant agent under this Warrant. Upon 30
days' notice to the Holder, the Company may appoint a new warrant agent. Any
corporation into which the Company or any new warrant agent may be merged or any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
stockholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder's last address as shown on
the Warrant Register. 

          13.     
Miscellaneous. 

                    (a)      Subject
to the restrictions on transfer set forth on the first page hereof, this Warrant
may be assigned by the Holder. This Warrant may not be assigned by the Company
except to a successor in the event of a Fundamental Transaction. This Warrant
shall be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns. Subject to the preceding sentence, nothing in
this Warrant shall be construed to give to any person other than the Company and
the 

6 

Holder any legal or equitable right, remedy or cause of action
under this Warrant. This Warrant may be amended only in writing signed by the
Company and the Holder and their successors and assigns. 

                    (b)      The
Company will not, by amendment of its governing documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder against impairment. Without limiting the generality of
the foregoing, the Company (i) will not increase the par value of any Warrant
Shares above the amount payable therefor on such exercise, (ii) will take all
such action as may be reasonably necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares on the exercise of this Warrant, and (iii) will not close its stockholder
books or records in any manner which interferes with the timely exercise of this
Warrant. 

                    (c)      GOVERNING
LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.

                    (d)     
The headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions hereof.

                    (e)     
In case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, 
SIGNATURE PAGE
FOLLOWS] 

7 

          IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above. 

SANTA FE GOLD CORPORATION 

 

By:
_______________________________________
Name:
_____________________________________
Title:
______________________________________

8 

FORM OF EXERCISE NOTICE 

(To be executed by the Holder to exercise the right to purchase
shares of Common Stock under the foregoing Warrant) 

To: Santa Fe Gold Corporation

The undersigned is the Holder of Warrant No. _______ (the
“Warrant”) issued by Santa Fe Gold Corporation, a Delaware corporation
(the “Company”). Capitalized terms used herein and not otherwise defined
have the respective meanings set forth in the Warrant. 

	1. 	
      The Warrant is currently exercisable to purchase a total
      of ______________ Warrant Shares.

	 	 
	2. 	
      The undersigned Holder hereby exercises its right to
      purchase _________________ Warrant Shares pursuant to the
  Warrant.

	 	 
	3. 	
      The Holder shall pay the sum of $____________ to the
      Company in accordance with the terms of the Warrant.

	 	 
	4. 	
      Pursuant to this exercise, the Company shall deliver to
      the holder _______________ Warrant Shares in accordance with the terms of
      the Warrant.

	 	 
	5. 	
      Following this exercise, the Warrant shall be exercisable
      to purchase a total of ______________ Warrant
Shares.

 

	Dated:  ___________________________, _______	Name of Holder: 
	  	  
	  	(Print)
  _____________________________________
	  	  
	  	By:
  _______________________________________
	  	Name:
  _____________________________________
	  	Title:
  ______________________________________
	  	  
		
      (Signature must conform in all respects to name of holder
      as specified on the face of the Warrant) 

FORM OF ASSIGNMENT 

          [To
be completed and signed only upon transfer of Warrant] 

          FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________ the right represented by the within Warrant to
purchase ____________ shares of Common Stock of Santa Fe Gold Corporation to
which the within Warrant relates and appoints ________________ attorney to
transfer said right on the books of Santa Fe Gold Corporation with full power of
substitution in the premises. 

 

Dated:____________________________ , _____

______________________________________
(Signature must conform
in all respects to name of holder as specified on the face of the Warrant) 

______________________________________
Address of Transferee

______________________________________

______________________________________

 

In the presence of: 

______________________________________

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