Vancouver, British Columbia (February 22, 2013) - Sutter Gold Mining Inc. (SGM:TSX-V) (SGMNF: OTCQX) ("Sutter" or "the Company") is pleased to provide an update on progress at its new Lincoln Mine Project in Amador County, California.
"We made significant progress on several key fronts in 2012, and we are working toward becoming cash flow positive at our Lincoln Mine Project before the end of 2013," said Leanne Baker, President & CEO. "We have already started the process of closing out our various building permits, with the intention of commissioning the mill and moving into our new shop & staff services building in the near future. Our underground development is progressing, but has fallen behind our previous schedule. We are taking steps to complete the initial development required for ore production to the mill in the second quarter of 2013, now expecting ramp-up to full production in the fourth quarter of 2013."
Underground development at the 1300 and 1200 level declines has reached completion for the first phase of work. Drifts are advancing on the 1100 and 900 level. A connection between portions of the 1030 sublevel is being driven to establish secondary escape from the 900N production area. In addition, raise development is progressing from the 1100 level to the 1200 level to establish secondary escapeways and to provide primary ventilation from the planned main fans at the 1300 level portal. Completion of secondary escape remains the critical path for the underground mining.
Some previously un-modeled mineralized vein material has been encountered on the 900N drive and stockpiled underground. Samples have been sent out for analysis to determine if the material will be delivered to the new mill.
Progress at the mill facility has been exciting to see. The crushing circuit has been successfully tested, with approximately 400 tons crushed and delivered to the fine ore bin. The rod mill has passed its empty run tests and received its initial rod charge on February 20, 2013. Equipment specific guarding continues and the key mill personnel are finalizing plumbing and electrical details. The tailings thickener is nearing completion and remains the final critical path item for testing of the flotation circuit. SGM expects to begin full mill commissioning in March 2013, processing material stockpiled on the surface from previous bulk sampling campaigns.
Testing of domestic water supply and sewer lines has commenced. The Company will seek a Certificate of Occupancy for the Shop & Staff Services building in the coming weeks. Final fire riser connection and Amador County Fire Protection District inspection remain for both 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 and the building permits have been closed.
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Financial Advisor Engaged
Sutter Gold is also pleased to announce that it has entered into a letter agreement with a US based investment banking firm (US Firm) pursuant to which Sutter Gold has agreed to retain the US Firm as its financial advisor and structuring agent. The US Firm is a full-service investment bank focused on the natural resources sector and will assist the Company in raising additional capital in order to complete the Lincoln Mine Project, repay short-term debt and expand Sutter Gold's exploration program. Pursuant to the agreement, Sutter Gold has agreed to pay the US Firm an aggregate work fee of US$125,000. In addition, the US Firm can earn a success fee ranging between 1.5% and 9.5% of gross proceeds raised pursuant to a transaction and to issue the US Firm common share purchase warrants with an aggregate value of up to US$1,000,000, both of which are dependent on the identity of the investors participating in the transaction, the timing of the transaction and the aggregate capital raised pursuant to the transaction. The success fee will be paid from the proceeds of the transaction and the warrants will be issued on closing of the transaction. The agreement, including the payment of the fees and issuance of the warrants, is subject to TSX Venture Exchange approval.
Sutter is a near-term gold producer, building Phase One of the new Lincoln Mine Project in the historic California Mother Lode. Ramp-up to full production is planned in the first half of 2013. 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 4.6 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. 222
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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