Sutter Gold Mining Inc.
Investors
Sutter Gold
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Mine Development


Sutter has advanced underground development at the 1300 and 1200 level declines to the point completion for the first phase of work. The Company advanced drifts on the 1100 and 900 level. The Company drove a connection between portions of the 1030 sublevel to establish secondary escape from the 900N production area. In addition, Sutter completed raise development from the 1100 level to the 1200 level to establish a secondary escape way. Maintaining the secondary escape remains the critical for the underground mining.

Some previously un-modeled mineralized vein material was encountered on the 900N drive and stockpiled underground. Assay results for this material will be used to determine if the material will be delivered to the mill.

Mill Facility


Progress at the mill facility has been exciting to see. The crushing circuit has been successfully tested, with approximately over 1,000 tons crushed and delivered to the fine ore bin. The rod mill has been used to process approximately 1,000 tons of load grade ore. Mill circuit testing wrapped up in March 2014 after the Company identified a number of issues which need to be addressed to meet or exceed design basis throughput and recovery of gold.

Other Infrastructure


Testing of domestic water supply and sewer lines has been completed. Final fire riser connection and Amador County Fire Protection District inspection have been completed for both the Mill and Shop/Staff Services buildings. The mill must pass noise monitoring conditions within the Amador County Conditional Use Permit prior to receiving final Certificate of Occupancy. The Sand Bunker and Tailings Thickener are complete. The Company has installed a "dry" hydrant at the Sand Barn as required by the Fire Protection District.

Permitting


The Company has secured the major permits and approvals required to construct and operate the Lincoln Project. These include but are not limited to a CUP issued by Amador County, an environmental review of the Project by the County pursuant to the California Environmental Quality Act and Waste Discharge Requirements issued by the California Regional Water Quality Control Board. Collectively these permits, approvals and associated documents provide the road map to project construction and operation. The Company is actively following this road map and systematically complying with the conditions of approval and mitigation requirements in the existing permits.

In addition, the Company is in the process of identifying and obtaining minor permit revisions and amendments in project permits and approvals to allow for operational flexibility in some areas. By means of example, in the fall of 2014 Sutter obtained approval from the Regional Water Quality Control Board to dispose of whole or classified tailings with up to 10% Portland cement. This allows for operational flexibility that did not exist previously as backfill was limited to classified tailings with 5% Portland cement.

Update


In March 2014 the Company placed the project in care and maintenance until more funding can be secured to complete mill upgrades and mine development necessary to commence production at targeted rates.

Lincoln Project Total Mineral Resource Estimate (in Imperial Measure)


In 2015, Sutter commissioned an updated NI 43-101 compliant Amended Technical Report which was completed on the Lincoln Project and the Keystone resource by Mine Development Associates (MDA). Completed in July 2015 MDA's Technical Report, including an updated PEA for the Lincoln-Comet ore zones, is based on the evaluation of indicated and inferred mineral resources, is preliminary in nature, includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves, and that there is no certainty that the preliminary economic assessment (PEA) will be realized.

  Ton Uncut Grade
oz/ton
Gold
(oz)
Indicated Mineral Resources      
Lincoln-Comet area 152,000 0.401 61,000
Keystone area - - -
Total Indicated Resources: 152,000 0.401 61,000
Total Inferred Mineral Resources: 905,000 0.249 225,000
*Source: NI-43-101 Technical Report, prepared by Mine Development Associates, July 23, 2015

Property History and Milestones


Sutter Gold controls a 3.6-mile segment within the most productive 10 miles of the historic Mother Lode Gold Belt, including eight historic mines. Collectively, these mines produced over 3.4 million ounces of gold, representing about 27% of the historic production from the 120-mile long Mother Lode Gold Belt. Seven of eight historic mines on the property had documented un-mined resources in place at the time of their closure. The geology is favorable with gold-quartz vein mineralization of orogenic or mesothermal type, hosted within a regional scale deformation corridor cutting late Jurassic meta-sediments and lesser mafic to intermediate meta-volcanics of the Mariposa Formation.

The Lincoln Project has been the subject of considerable modern exploration activity, mainly focused on the Lincoln and Comet zones, which are adjacent along strike. A total of 101,385 feet of drilling has been completed in 230 diamond drill holes, and modern underground development consisting of a 2,850 foot declined ramp with 1,575 feet of horizontal cross-cuts, 1,275 feet of horizontal ore development and 250 feet of vertical raise development prior to the underground development work in 2012-2014 described previously (see Mine Development).

In March 2011, a NI 43-101 compliant Preliminary Economic Assessment Technical Report, was completed on the Lincoln Project by Mine Development Associates. This report lead to the decision to proceed with development of the mine site. This report is no longer current and should not be relied upon as it is no longer compliant with NI 43-101 guidelines.

Historic Mines on SGMC Property


The History of the Lincoln Project


Sutter's Lincoln Mine project is located in Amador County, California, near the historic gold rush towns of Sutter Creek and Amador City. The project covers an approximate 3.6 mile strike length through the heart of the Mother Lode, and contains over 711 acres of mineral rights. The current project found its beginnings in the 1980s, however, the history of gold mining on the project's property dates back to the 1850s.

The Mother Lode is well known for the 1848 gold rush which was sparked by James Marshall's discovery of a large gold nugget in the American River at John Sutter's saw mill in Coloma. Hundreds of thousands of fortune seekers flooded the northern California foothills, working the streams and rivers for gold. As these placer deposits became scarcer and more difficult to extract, miners began to look for new ways to improve their incomes. By 1850, the miners learned that the gold nuggets in the rivers were formerly embedded in the mountains, and could be found in quartz veins that ran underground through the Sierra Nevada foothills. Thus placer miners soon became hard rock miners, locating quartz outcroppings and following them deep into the earth to extract gold from the quartz.

The section of the Mother Lode between Plymouth and Jackson, which includes Sutter's Lincoln Mine project, is particularly rich with an estimated historic production of 7,851,000 ounces of gold. The mining industry was alive and active in Amador County until 1942, when government order L-208 closed all the mines with the purpose of supporting the war efforts. While the mines were closed, ground water filled the workings, and many of the mines' equipment and ground support fell into disrepair. Post WWII, most mining companies found it unprofitable to resume mining, given the cost of pumping water out the flooded workings, repairing the mines to a functional state, the increasing cost of operating, and working under a government-fixed price of gold that limited potential revenues. The last mine in production in Amador County was the Central Eureka, which finally closed its doors in 1958.

In the 1980s, mineral exploration companies began investigating, drilling, and sampling former mining claims to determine if economically profitable gold deposits still remained in the Mother Lode. This led to the development of the Lincoln Mine Project, named for its location at the historic Lincoln Mine site. Between 1989 and 1991 exploration work included the 2,850 ft long Stringbean Alley decline and 3,100 ft of crosscuts, drifts, and raises.

Throughout the 1990s and 2000s, the Project has continually progressed in permitting and design. The Environmental Impact Review was completed and a Conditional Use Permit obtained in 1998, and Waste Discharge Requirement permits were secured in 1999 and 2007.

A mine tour was established at the Lincoln Mine Project site in 1999, as a means of utilizing the mine site and generating income during the lead-time to construction and production. This allowed the public a rare opportunity to see the inside of the historic Mother Lode from the safe environment of a modern, hard rock gold mine. The mine tour is no longer operational.

HISTORIC MINES


Lincoln Mine


The Lincoln Mine, which was originally called the Union Mine, was established in 1851. It boasted one of the first stamp mills in the area, and showed a promising future early into exploration. In 1859 Leland Stanford became a major shareholder in the mine, and at the persuasion of local resident and mine superintendent R. C. Downs, invested additional funds after the mine experienced a production slump in the late 1850s.

By 1861 things were looking up at the Lincoln Mine and Stanford made Downs a partner by quit claiming a portion of his shares to Downs. Stanford's investments paid off, with the Lincoln Mine locating a rich vein and estimated to have produced over 100,000 ounces of gold. In 1872 Stanford and the other shareholders sold their shares to a group of foreign investors. By the time Stanford took his mining fortune out of the Lincoln Mine he had already been a lawyer, merchant, governor of California and a builder of the transcontinental railroad. Subsequently, he was elected to represent California in the US Senate and founder of Stanford University.

In 1906 the Lincoln Consolidated Mining Company acquired the Mahoney and Wildman Mines. The Wildman and Mahoney were estimated to have produced about 72,500 ounces of gold, creating a combined total of over 172,500 ounces from the three mines by 1900. Costs of exploration and the shareholders' unwillingness to invest more funds led to the end of production in 1912, although the mine was later bought and explored by other mining companies. At closure the Lincoln, Mahoney, and Wildman shafts had reached depths of 2,000ft, 1,200ft, and 1,400ft respectively.

Keystone Mine


On January 24, 2000, Sutter Gold Mining entered into a lease agreement to acquire 50 acres of land adjacent to the Lincoln Project's northern boundary. This property is the site of the historic Keystone mine, which was well known as one of the most profitable of the Mother Lode mines. The Keystone was formed from several smaller claims that dated back to 1851. A high rate of ownership turnover and several unsuccessful attempts to operate the mine between the years of 1851-1865 resulted in a grim outlook for the property. Finally, in December of 1865 James McDonald, Andrew B. McCreary and others purchased the property.

In early 1866, at the suggestion of the miners working the Keystone tunnels, an easterly crosscut was driven that broke into a vein that was an obvious treasure-trove. From that point on, the Keystone continued to consistently produce around 2,000 ounces, or $40,000 worth of gold a month until it came to be recognized as one of the most profitable gold producers in the world. The mine sold in 1909, and operations continued until the mine closed in 1919. The Keystone Mining Company gained control of the South Spring Hill Mine in 1920, and in 1933 the Keystone reopened and operated until 1942, when it was closed by the war production board order. At closure, the depth of the Keystone had reached 2,600 feet, and the mine had produced 850,000 ounces of gold for a total of $24,000,000.

Eureka Mine


On January 21, 2005, Sutter Gold Mining Inc. entered into a lease agreement to acquire 132 acres of mineral rights immediately adjacent to the Company's properties in California, called the Eureka Property. The property is the site of two historic, highly successful mines known as the Old Eureka and the Central Eureka.

The Central Eureka originally opened as the Summit Mine in 1855, and operated continuously until 1875. The mine went idle from 1875-1895, but in 1893 was purchased by the Central Eureka Mining Company for $6,000. With the exception of one year, the mine went on to operate continuously and profitably from 1895 through 1942, when the Federal Government's War Production Board Order L-208 suspended all gold mining operations. The mine re-opened in 1946 and was in operation until 1958. At this time, the Central Eureka's main shaft had reached a depth of 4,500 feet, and along with its holdings at the Old Eureka, had produced 1.8 million ounces of gold.

The Old Eureka opened in 1852, and in 1859 its primary owner, a man named Alvinza Hayward, consolidated the property with an adjoining claim. By 1867 the mine was operating a 56 stamp mill, and in 1869 the Amador Mining Company purchased the mine for $750,000. One investor and director on the AMC board was a man named Edward H. Green, who was the husband of one of the richest and most publicized women in the country, Hetty Green. The Greens lived for a while in Jackson, but in 1881 after a relatively unsuccessful production period at the mine, Hetty banished her husband and closed the project. The mine then became idle for a period of 35 years, from 1881-1916, and only briefly resumed operations between 1916 and 1920. In 1924 the Central Eureka Mining Company purchased the holdings of the Old Eureka, and in 1930 major ore production shifted from the workings of the Central Eureka to those of the Old Eureka. Mining operations were suspended in 1942 by the federal government's wartime edict, but the project was able to resume operations again from 1946 until it's closing in 1958. At its close, the Old Eureka mine had reached a depth of 4,500 feet.

Bunker Hill Mine


The Bunker Hill Mine, originally called the Ranchoree or Rancheria Mine, was started in 1853. The Bunker Hill Quartz Mining Company was organized and began serious work in 1863. The mine produced well even when in low grade ore, and by 1880 had a 40-stamp mill and a chlorination plant in place. The mine was worked intermittently up to the 1890s, but became idle long enough that the main shaft caved in and the chlorination plant fell into disrepair. In 1893 operations resumed as the mine was reopened, brought back into working order, and renamed the South Mayflower. The Bunker Hill Consolidated Mining Company organized in 1899 and worked the mine continuously until selling the property in 1922. Little milling or prospecting was done by the new mine owners, with the last of the work being done in 1925. Several known ore bodies had been documented, but remained unmined at the time of closure. The Bunker Hill mine was worked to a depth of 3400ft, with a total estimated total production of 250,000 ounces of gold.

Original Amador


The Original Amador Mine opened in 1852, reportedly in one of the first identified locations for gold-bearing quartz veins in Amador County. It was one of the smaller producers of the region with the majority of the ore being low grade, but operations were profitable nonetheless. By 1872 a 40 stamp mill was in place, and the mine was worked intermittently until 1898. The Original Amador Consolidated Mines Company then operated the mine continuously until 1917, when the California Debris Commission placed the Original Amador, as well as the neighboring Keystone mine, under bond. Due to this financial impact, the Original Amador closed in 1918, after having a greater production in 1917 than any previous year. The mine reopened again in 1934 and continued working until 1937, with the mill being used from 1937 to 1942 to treat ore from the Keystone mine. Total production from the Original Amador is estimated to be in excess of 175,000 ounces of gold, with workings having reached a depth of 1200 ft and comprising over 8 miles of drifts, crosscuts, and raises.