Sutter Gold Mining Inc.
TSX VENTURE : SGM

Sutter Gold Mining Inc.

May 29, 2006 12:25 ET

Sutter Gold Raises Over $3 Million in Private Placement

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 29, 2006) - Sutter Gold Mining Inc. (TSX VENTURE:SGM) today announced that it has completed a private placement of units for aggregate gross proceeds of $3,015,500.

The private placement consisted of 12,062,000 units offered at $0.25 per unit. Each unit comprises one common share and one 24-month warrant. The warrants may be exercised to purchase one common share at a price of $0.35 per share. IBK Capital Corp. of Toronto, Ontario acted as the placement agent for the Company.

The private placement offering is subject to TSX Venture Exchange approval and a four-month hold period from the date of issuance.

The funds will be used for further exploration of the Sutter Gold Mine in California and for general working capital. Hal Herron, CEO commented: "This financing is very timely and will allow the Company to aggressively move this fully permitted gold project forward. These are exciting times, especially after 15 years of exploration and a rigorous permitting process. We are now well funded and have a strong and capable management team. Now we move forward to complete our drilling program in order to initiate a bankable feasibility study. I welcome our new shareholders and appreciate their support and recognition of the value in the Sutter Gold mine."

About the Sutter Gold Mine

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 that contains the Lincoln and Comet zones. The Lincoln and Comet zones were "blind" discoveries that did not outcrop at surface and 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 are referred to as the Lincoln project. A total of 85,085 feet of drilling has been accomplished in 190 diamond drill holes, and modern underground development consists of a 2,850-foot declined ramp with 2,400 feet of crosscuts and 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 website at www.suttergoldmining.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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