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January 18, 2012

Sutter Gold Begins 2012 Exploration Drilling Program on the Lincoln Project, California

(Near Surface Extensions Between Comet and Lincoln Segments)


Vancouver, British Columbia (January 18, 2012) - Sutter Gold Mining Inc. (SGM:TSX-V) (SGMNF:OTCQX) ("Sutter or the "Company") is pleased to announce the commencement of the first phase of an exploration drilling program at its Lincoln Project at Sutter Creek, California. Drilling will focus on near-surface extensions of gold mineralization and the under-explored region between the Comet and Lincoln segments of the gold resource. The goal of the drilling program is to expand gold resources and to explore regions where drilling density is sparse.

"Our exploration team is focused on supporting the efforts to bring into production the first commercial-scale gold mine in the Mother Lode in more than 50 years," said Leanne Baker, President & CEO of Sutter. "We are drilling in areas where resource additions could become part of the current gold resource envelope that we intend to mine in the first five years of our current development plan. In the past six weeks, Sutter has completed most of the site work required to construct the new mill and other facilities over the winter / spring period."

Ruen Drilling Inc. of Clark Fork, ID, contractor for the current drilling campaign, moved on site late last week and initiated drilling on January 16. Due to ongoing earthmoving and construction activity at the north portion of the Lincoln segment of the mine property, drilling will start at the south end and progress northward, as shown in the schematic below. Thirty angle core holes have been planned, drilled from sixteen sites.

Click to Enlarge

The drilling program is divided into two segments to accommodate construction activities. The initial phase will explore the southern Lincoln segment and will include much of the unexplored interval between the Lincoln and the Comet gold zones. Seventeen angle core holes are planned for this segment, drilled from ten permitted and completed drill pads. Total planned footage for this southern tier of holes is 5,900 feet with drill-hole lengths varying from 200 to 500 feet for an average length of approximately 350 feet. This segment of the drilling program is anticipated to be completed in sixty work days, averaging 100 feet per day including rig moves from site to site.
The second phase of drilling will concentrate on the north end or Comet segment of gold mineralization. Past core holes in this segment of the property were inclined to the southwest in anticipation of gold bearing structures dipping northeasterly, the predominant dip or inclination of the Mother Lode vein system.

Stephen Zahony, Vice President of Exploration, said, "Underground exploration of the Lincoln-Comet vein system by a previous company in 1989-1990 found, to its surprise, that the vein system was southwest dipping. Previous exploratory core drilling from the surface, with holes extending from northeast to southwest, would have missed the main southwest-dipping gold mineralized fissure system. With one exception, all of Sutter's planned drill holes in the northern tier will be inclined to the northeast." The one exception will explore the black slate section towards the west in a region where the slate was not explored by historic underground workings. Historic exploration and production on the Mother Lode concentrated on the thick black slate section of the Mariposa Formation, ignoring the greenstone or meta-volcanic portion of the formation where Sutter Gold Mining Company's resources are located.

Upon the completion of the seventeen holes planned for the Lincoln segment, the drilling program will continue into the northern Comet section. In the underground exposure of the main 42-Vein system in its northwesterly heading, it appears to have crossed over the decline and may exist on the west side of the decline. This is suggested by the old Wabash Mine workings which worked a vein there. The northernmost drill holes of the second phase of drilling will concentrate on exploring this region of the Lincoln-Comet property.

Development Update for the Lincoln Mine Project

With favorable weather in December and receipt of the grading permit, the Company completed road-building from the mine to the mill pad and sand plant sites higher on the hill, as well as to the waste rock pile area. In preparation for the rainy season the mine site has been winterized and disturbed areas have been hydro-seeded, roads have been rocked and bermed. The waste rock pile area is temporarily lined and storm water management features are installed.

The Company has completed pre-qualification of potential underground mine contractors, this process left four final companies eligible to continue in the bidding process. The final mine level designs were completed in December. Mill equipment purchases are being evaluated and prepared for delivery in January and February. The majority of the planned rolling stock purchases arrived in December.

The material in this news release has been reviewed by Matthew Collins, COO, a Qualified Person as defined in NI 43-101.

About Sutter

Sutter is a growth-oriented exploration and development company preparing to become a North American gold producer. The Company has two projects: the Lincoln Project located in Amador County, California and the Santa Theresa Project located in the Northern Baja region of Mexico. Currently, the Company's primary focus is the evaluation and development of the Lincoln Project, beginning with the shallow portion of the Lincoln-Comet ore zone of the Lincoln Project, located on the California Mother Lode Gold Belt. The Lincoln-Comet and Keystone zones have a NI 43-101 compliant Indicated Resource estimate (completed in February 2008) of 612,400 tonnes (673,600 tons) grading 11.3 g/t Au (0.33 oz/ton) containing 223,000 ounces of gold and Inferred Resources of 2,161,700 tonnes (2,377,900 tons) grading 6.6 g/t Au (0.19 oz/ton) containing 458,900 ounces of gold.

Sutter currently controls approximately 3.6 miles of the Mother Lode of Amador County, with 90% of the property still unexplored. Potential exists both at depth and along strike of the known mineralized zones on both the footwall and hanging wall. The 120-mile long Mother Lode Gold Belt produced over 13 million ounces of gold historically with 7.9 million ounces originating from the 10-mile long segment between Jackson and Plymouth where the Lincoln Project is strategically located. Properties under the Company's control include seven historic mines with significant historic gold production totaling over 3.5 million ounces or 27% of the historic gold production from the Mother Lode. Historic mines located north and south of the Lincoln Project in the Jackson to Plymouth segment of the Mother Lode success fully mined gold to depths of 4,500 and 6,300 feet, respectively.

In Mexico, Sutter holds the rights to the geologically similar, high-grade El Alamo district of northern Baja, where historic mining to the water table produced mined grades of 30 to 60 g/t gold. Initial exploration with its joint-venture partner, Premier Gold, has demonstrated the extension of high-grade veins.

ON BEHALF OF THE BOARD OF DIRECTORS:
Dr. Leanne M. Baker, President, CEO & Director
Sutter Gold Mining Inc.

For further information, please contact:

Robert Hutmacher, Chief Financial Officer at 303 238 1438 ext. 22
Email: bhutmacher@suttergoldmining.com
Website: www.suttergoldmining.com

Forward-Looking Statements
This news release contains "forward-looking information" under Canadian securities law. Any information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words such as "expect", "anticipate", "believe", "plans", "estimate", "scheduling", "projected" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information. Forward-looking information relates to, among other things: the price of silver and gold; the accuracy of mineral resource and mineral reserve estimates; the ability of the Company to finance its operations and capital expenditures; future financial and operating performance including estimates of the Company's revenues and capital expenditures and estimated production.

Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, risks relating to: fluctuating commodity prices; calculation of resources, reserves and mineralization and precious and base metal recovery; interpretations and assumptions of mineral resource and mineral reserve estimates; exploration and development programs; feasibility and engineering reports; permits and licenses; title to properties; recent market events and conditions; economic factors affecting the Company; timing, estimated amount, capital and operating expenditures and economic returns of future production; operations and political conditions; environmental risks; and risks and hazards of mining operations. This list is not exhaustive of the factors that may affect any of the Company's forward-looking information. Forward-looking information about the future is inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company's forward-looking information is based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management's assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking information.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 
 

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