Sutter Gold Mining Inc.

Sutter Gold Mining Inc.

April 02, 2007 16:05 ET

Sutter Gold Announces Joint Venture Partner for Exploration and Development of Its Mexico Gold Concession

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 2, 2007) - Sutter Gold Mining Inc. (TSX VENTURE:SGM) today announced that it has signed a Letter of Intent (LOI) with PREMIER GOLD MINES LIMITED (TSX:PG) to jointly explore Sutter's Santa Teresa mineral concession located in the historic and high grade El Alamo Mineral District of Baja California Norte, Mexico. The Sutter concession is located in the heart of the gold district which was the subject of the El Alamo Gold Rush of 1888. It is located some 100 kilometers southeast of Ensenada, Mexico and about 250 kilometers from San Diego, California, USA.

The proposed joint venture (JV) with Premier provides the funding for immediate exploration of the project. The Santa Teresa Concession compliments both Premier and Sutter business plans to explore high-grade gold properties as it:

- Is located within a proven (approximately 220,000 ounces of past production) gold district;

- District has historic mined grades of between 1.00 and 2.00 ounces per ton (opt);

- District was only mined within a 120 meters of the surface, but remains open at depth; and

- Has geologic characteristics similar to the prolific Mother Lode Gold District of California.

The Santa Teresa Concession (STC) is located adjacent to and on strike from the past-producing Princessa Mine (the district's largest gold producer) whose ore body was known to extend close to the STC boundary. The El Alamo District's production halted at its peak owing to adverse technological and political circumstances early in the 20th century, thus presenting a unique opportunity to the JV today. The mineralization in the district is characterized by common visible gold hosted within narrow and near vertical quartz veins associated with a "basin and range" tectonic history.

"The combination of Premier's experience in the Red Lake District of NW Ontario and Sutter's experience in the Mother Lode District of California makes this JV well-suited to exploring the high grade gold potential of the El Alamo District," Hal Herron, President and CEO of Sutter, stated; "We are very excided to partner with a company that also sees the potential of high-grade gold resources. The opportunity to add the views of those with extensive experience in the Red Lake district to our own in depth understanding of the Mother Lode gold district of California is a significant synergistic development for exploration at El Alamo, and other high grade deposits in the surrounding area."

"In my opinion, the El Alamo District holds great potential for the development of a high grade gold resource. I am pleased to be associated with an industry respected and experienced exploration and development company like Premier. The experience of Messrs. Ewan Downie (CEO) and Steve McGibbon (COO) in conjunction with the Sutter geologic staff significantly enhances the ability of this JV to successfully develop this gold project. Mr. Downie was part of the exploration team that received the Prospector & Developers Association of Canada 2003 Bill Dennis Prospector of the Year Award as well as being named The Developer of the Year by the Northwestern Ontario Prospectors Association. Mr. McGibbon is a professional geologist that formerly served as Exploration Manager for Goldcorp Inc. at the Red Lake Mine when the "high grade zone" was discovered, which was the highest grade underground gold deposit discovered in Canada within the last 20 years. I am pleased that the experienced Premier management team shares Sutter's geologic enthusiasm with the potential of the Santa Teresa Concession."

Sutter and Premier's geologists envision the potential to discover high grade ore bodies hosting 3,000 to 6,000 ounces of gold per vertical meter, which could initially support the construction of a small to medium-sized gold mine. While this is an early stage project, initial exploration may yield very exciting results.

Premier will earn an initial 50% interest in the project by:

- Making a payment of 100,000 shares of Premier common shares to SGMI;

- Completing US$1.5 million in exploration and property acquisitions within two years, including US$1 million within one year of signing the JV agreement: and

- Reimbursing SGMI for all payments (approximately US$225,000) over a four-year period to the original vendor of the property.

In addition, SGMI has granted Premier the potential to earn an additional 15% interest in the JV (for a total of 65%) by making a further cash payment of $500,000 to SGMI and conducting an additional US$4.0 million in exploration on the property. SGMI will be the initial operators of the project, however, Premier can take over as operator once it secures a greater than 50% interest in the project.

About Premier Gold Mines

Premier Gold Mines Limited is a Canadian-based mineral exploration and development company with diverse property holdings that include several projects and deposits in Northwestern Ontario and a joint venture in Mexico. In the Red Lake gold mining camp, two of these are operated in joint venture with Goldcorp Inc. (TSX:G). A strategic project is also located on the main Musselwhite Gold Mine trend (Goldcorp-Kinross).

About 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 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 85,085 feet of drilling have 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 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 website at

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