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July 30, 2008

Sutter Gold Provides Update Relating to Private Placement

VANCOUVER, BRITISH COLUMBIA, July 30, 2008. Sutter Gold Mining Inc. (TSX VENTURE: SGM) ("SGMI") is pleased to provide an update relating to its non-brokered private placement of a minimum of 18,181,819 units and up to a maximum of 36,363,636 units at $0.11 per unit to raise aggregate gross proceeds of a minimum of $2 million and up to a maximum of $4 million. Each unit of the private placement will consist of one common share and one-half of one common share purchase warrant. Each whole warrant will entitle the holder thereof to purchase one additional common share in the capital of SGMI for a period of 24 months following the closing of the private placement at a price of $0.15 per share. All securities issued under the private placement will be subject to a four-month hold period.

RMB Resources Ltd. ("RMB"), as trustee for the Telluride Trust, entered into an agreement with U.S. Energy Corp. ("USE"), announced on June 13, 2008, pursuant to which USE has agreed to sell an aggregate of 39,062,720 common shares of SGMI (representing approximately 49.9% of the outstanding common shares of SGMI as at the date thereof) to RMB (the "Acquisition"). The private placement is expected to close following the completion of the Acquisition. RMB will subscribe for such number of units under the private placement in order to allow it to maintain its proportionate ownership interest (49.9%) in SGMI. USE is also expected to subscribe for up to $500,000 of units under the private placement.

The participation of USE in the private placement is considered to be a "related party transaction" under securities legislation. However, neither the fair market value of the units nor the consideration to be received by SGMI for the units exceeds 25% of the market capitalization of SGMI.

Proceeds from the private placement will be used to fund further exploration and analysis of the Sutter Gold Mine in California and for general working capital.

The closing of this private placement is subject to the TSX Venture Exchange's final approval.

About Sutter Gold

The Sutter Gold project contains a 3.2 mile segment of the Mother Lode belt from which 10 historic mines produced 2.3 million ounces of gold. The historic mines bracket a one-mile-long portion of the Mother Lode belt with no historic gold production and which contains the Lincoln and Comet zones. The Lincoln and Comet zones were blind discoveries that did not outcrop at surface and which represent the first significant new gold discoveries made along the Mother Lode belt in the last 50 years. The Sutter Gold project has been the subject of considerable modern exploration activity, most of it centering on the Lincoln and Comet zones, which are adjacent to each other and together referred to as the Lincoln project. A total of 101,385 feet of drilling have been accomplished in 230 diamond drill holes, and modern underground development consists of a 2,850-foot declined ramp with 2,400 feet of crosscuts plus five raises. The historic gold production was documented in a detailed report completed by Mark Payne, the consulting geologist to Sutter Gold and a qualified person as defined by National Instrument 43-101. Further information is available at the Company's Lincoln Project and the El Alamo joint venture's Mexico gold concession at www.suttergoldmining.com.

For additional information, please contact:
Hal Herron, CEO, 307.851.2742, herron3@yahoo.com

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.
 
 

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