Sutter Gold Mining Inc.
TSX VENTURE : SGM

Sutter Gold Mining Inc.

January 02, 2007 17:32 ET

Sutter Gold Intersects Strong Gold Mineralization in Keystone Drilling

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 2, 2007) - Sutter Gold Mining Inc. (TSX VENTURE:SGM) today announced the latest assay results from its surface and underground diamond drilling programs at the project site located in the historic Mother Lode District east of Sacramento, California. Holes 178 through 181, and Hole KDH-21 have continued to discover gold mineralization in both the Lincoln and Keystone areas of the project.

Surface Drilling Program

Strong gold mineralization was encountered in the Keystone 5 Vein and in several separate vein structures lying sub-parallel to it nearby. Hole KDH-21 encountered a 7-foot void (old mine workings) within the wide vein of quartz in the K5 Vein, which was immediately followed by 5.9 meters grading 9.6 g/t (19.2 ft @ 0.28 oz/t) from 309.5 to 315.4 meters (1015.3 to 1034.5 ft). This includes 1.9 meters grading 24.5 g/t (6.2 ft @ 0.71 oz/t), which shows coarse visible gold in the drill core. Additionally, significant gold mineralization was encountered in the Keystone 22, 23, 25, and 26 Veins nearby. Hole KDH-21 is the first of nine planned surface core holes to further define a portion of the historic Inferred Mineral Resource within the K5 Vein (455,000 tons @ 7.2 g/t; 500,000 tons @ 0.21 oz/t) with the goal of upgrading it to the Indicated Mineral Resource category. Four of the nine proposed surface core holes have been completed to date. Approximately 1,200 meters (3,900 ft) of the planned 2,750 meter (9,000 ft) surface drill program has been completed. Assays for Hole KDH-22 are expected soon.

Underground Drilling Program

Core drilling from underground drill stations continues to demonstrate continuity of the vein structures and mineralization between the Comet and Lincoln Zones. Holes 178, 180, and 181 have encountered potentially-mineable widths and grades of gold mineralization along a 140 meter (450 ft) strike length of the Comet 50 Vein structure. Holes 178 through 181 are part of a nine-hole fan array drilled from the 2710 East cross-cut, at the lowest level of the workings, to test southward extensions of a known shoot in the 50 Vein. Holes 182 through 185 were collared in the same drill station to further define extensions for the 50 Vein mineralization. Assay results for Holes 182 through 185 will be released soon, once the assay results are received and evaluated by the Company's consulting geologist.

The thirty-fifth and final core hole of the underground drill program was completed today. Assays have now been received for nineteen of the thirty-five underground holes representing 1,400 meters (4,600 ft) of the total 2,750 meters (9,000 ft). The drilling continues to validate Sutter Gold's structural and ore control models and to demonstrate continuity of the Comet veins southward into the Lincoln area.

Results and Analysis

Results from SGM's most recent diamond drill holes are shown in Table 1 below.



Drill Holes 178 - 181, and KDH-21 Assay Summary

Visible
Interval width(i) Au Interval width(i) Au Au in
Hole# (m) (m) (g/ton) (ft) (ft) (oz/ton) Vein Core
---------------------------------------------------------------------------
DDH-178 E 41,825.0; N 70,602.0; bear 279 deg, +35 deg, 104m (341 ft)
71.0- 232.8-
72.9m 1.9m 6.6 g/t 239.0 ft 6.2 ft 0.19 oz/t 50 Vn
---------------------------------------------------------------------------
DDH-179 E 41,843.0; N 70,599.4; bear 286 deg, +79 deg, 104m (342 ft)
Hole did not reach 50 Vein target
---------------------------------------------------------------------------
DDH-180 E 41,832.5; N 70,590.2; bear 231 deg, +24 deg, 62m (203 ft)
47.3- 155.0-
50.0m 2.7m 3.5 g/t 164.0 ft 9.0 ft 0.10 oz/t 50 Vn
including,
49.1- 161.0-
50.0m 0.9m 4.5 g/t 164.0 ft 3.0 ft 0.13 oz/t
---------------------------------------------------------------------------
DDH-181 E 41,837.0; N 70,589.0; bear 207 deg, +25 deg, 78m (257 ft)
63.7- 209.0-
65.5m 1.8m 5.9 g/t 215.0 ft 6.0 ft 0.17 oz/t 50 Vn
---------------------------------------------------------------------------
KDH-21 E 41,525.2; N 70,932.3; bear 97 deg, -47 deg, 107m (350 ft)
105.2- 345.0-
106.1m 0.9m 2.4 g/t 348.0 ft 3.0 ft 0.07 oz/t K22 Vn
275.0- 902.0-
275.9m 0.9m 5.2 g/t 905.0 ft 3.0 ft 0.15 oz/t K23 Vn
K5 &
309.5- 1015.3- K25
315.4m 5.9m 9.6 g/t 1034.5 ft 19.2 ft 0.28 oz/t Vns
including,
309.5- 24.5 1015.3-
311.4m 1.9m g/t 1021.5 ft 6.2 ft 0.71 oz/t K5 Vn Au
and
313.6- 1028.5-
315.4m 1.8m 1.8 g/t 1034.5 ft 6.0 ft 0.05 oz/t K25 Vn
322.8- 1058.8-
324.8m 2.0m 5.9 g/t 1065.4 ft 6.6 ft 0.17 oz/t K26 Vn
---------------------------------------------------------------------------
(i) True vein widths for KDH - 21 are approximately 85% of the reported
intervals, and approximately 80 to 100% for intercepts in Holes 178
through 181.


"Results so far from the surface drilling program are exceeding our expectations. Our first surface drill hole encountered widths and grades of gold mineralization in the Keystone 5 Vein at or above the expected range. These holes will probably define resources in several vein structures in addition to our Keystone 5 Vein. The 2006 drill program continues to produce results that support the expansion of the Indicated Mineral Resource base for the project as well as providing essential geologic data for mine plan development. The 2006 drill program is producing the results we had hoped for, providing geologic and grade continuity information to support expansion of the Indicated and Inferred Mineral Resources for the targeted veins. The successful identification of strong gold mineralization outside of the present Indicated Resources validates Sutter Gold's models for continuity and lateral extensions of the gold bearing veins. Thus, we are confident that ounces can be moved from the Inferred Resources category (2,697,400 tons @ 0.193 oz/ton containing 521,000 ounces Inferred and 492,900 tons @ 0.352 oz/ton containing 173,000 ounces Indicated, March, 2006, 43-101 Resource Report) into the Indicated Resources category, which was the primary goal of the Company's $ 1.2 million (Cdn) diamond drill program," stated Mr. Hal Herron, President. "The proposed drilling program only involves some 10% of the Company's 3.2 miles of property position along the Mother Lode trend, leaving some 90% of the property open for further exploration along strike and at depth. The anticipated results should allow us to move forward with an independent engineering report to support project financing."

All core samples from the drilling program are sawn in half, with one half of the core being prepped and analyzed using screened metallics fire assay methods by American Assay Laboratory in Reno, NV. The remaining half core is stored in a secured facility at the Sutter Gold site for future inspection and assay verification. Standards and blanks are inserted into all sample shipments and a minimum of 10 percent of samples are resubmitted for duplicate analysis.

The Sutter Gold 2006 core drilling program is planned and supervised by Mr. Mark Payne, P.Geo. Calif. 7067, the Qualified Person for the Sutter Gold Project, as defined by NI 43-101, and has reviewed this release.

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 www.suttergoldmining.com.

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