I recommend the approach demonstrated by the code below. The approach uploads files to a temporary folder, moving each file to the final folder when it is successfully transferred. It also cleans temporary folder (structure) afterwords.

// holds list of path which failed to transfer
List<string> _failed = new List<string>();

// holds list of temporary created folders
List<string> _createdFolders = new List<string>();

string sourcePath = @"c:\temp\extracted\*.txt";
string tempFolder = "/home/tester0/upload/temp";
string finalFolder = "/home/tester0/upload/final";

public void Run()
{
    using (Sftp client = new Sftp())
    {
        // connect and login
        client.Connect("server");
        client.Login("user", "pass");

        // register batch events
        client.BatchTransferProgress += new SftpBatchTransferProgressEventHandler(client_BatchTransferProgress);
        client.BatchTransferProblemDetected += new SftpBatchTransferProblemDetectedEventHandler(client_BatchTransferProblemDetected);

        // create temporary folder for files to upload
        if (!client.DirectoryExists(tempFolder))
        {
            client.CreateDirectory(tempFolder);
            _createdFolders.Add(tempFolder);
        }

        // create final folder for files to upload
        if (!client.DirectoryExists(finalFolder))
            client.CreateDirectory(finalFolder);

        // upload files in XCopy mode overwriting all existing files
        client.PutFiles(sourcePath, tempFolder, SftpBatchTransferOptions.XCopy, SftpActionOnExistingFiles.OverwriteAll);

        // remove temporary folder structure (from the end)
        for (int i = _createdFolders.Count-1; i >= 0; i--)
        {
            client.RemoveDirectory(_createdFolders[i]);
        }
    }

    // report failed files
    if (_failed.Count > 0)
    {
        Console.WriteLine("Following file(s) failed to transfer:");
        foreach (string path in _failed)
        {
            Console.WriteLine(path);
        }
    }
}

void client_BatchTransferProgress(object sender, SftpBatchTransferProgressEventArgs e)
{
    // get Sftp client object
    Sftp client = (Sftp)sender;

    // prepare final path
    string finalPath = finalFolder + e.RemotePath.Substring(tempFolder.Length);

    switch (e.Operation)
    {
        case SftpBatchTransferOperation.DirectoryCreated:
            // batch operation created folder, store it for the clean up
            _createdFolders.Add(e.RemotePath);
            break;

        case SftpBatchTransferOperation.DirectoryProcessingStarted:
            // create final folder
            if (!client.DirectoryExists(finalPath))
                client.CreateDirectory(finalPath);
            break;

        case SftpBatchTransferOperation.FileTransferred:
            // delete the file if it already exists in target destination
            if (client.FileExists(finalPath))
                client.DeleteFile(finalPath);

            // move/rename successfully transferred file
            client.Rename(e.RemotePath, finalPath);
            break;
    }
}

void client_BatchTransferProblemDetected(object sender, SftpBatchTransferProblemDetectedEventArgs e)
{
    // ignore FileExists problem (use default behaviour)
    if (e.ProblemType == SftpBatchTransferProblemType.FileExists)
        return;

    // store path of the failed transfer
    _failed.Add(e.LocalPath);
    e.Action = SftpBatchTransferAction.Skip;
}