Sutter Gold Mining Inc.

Sutter Gold Mining Inc.

April 04, 2012 08:00 ET

Sutter Gold Mining Provides Update on Construction Activities at the Lincoln Project, California

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 4, 2012) - Sutter Gold Mining Inc. (TSX VENTURE:SGM)(OTCQX:SGMNF) ("Sutter" or "the Company") is pleased to provide an update regarding the development of its Lincoln Mine Project in the heart of California's Mother Lode gold belt.

"We are making headway on a number of important fronts," said Leanne Baker, President & CEO of Sutter. "We are excavating the foundation for our new mill building and will begin pouring the foundations soon, we are acquiring and refurbishing equipment to be placed in the mill, we are taking the necessary steps to become compliant with Mine Safety and Health Administration (MSHA) requirements for our underground mine, and we continue to make key hires. Our remaining outstanding permits required for operation are advancing as well. We expect to be developing underground workings by June, and to bring the mill into operation in the fourth quarter of 2012. With initial gold production in the fourth quarter, we plan on ramping up to full production in early 2013."

Key Personnel

The Company is very pleased to announce that Arthur "Art" Campo has accepted the position of Chief Mine Geologist. He is an experienced underground mine geologist having worked at most of the significant underground operations of the Western United States. He brings more than 30 years of mine experience and Master of Science level education to the job. Mr. Campo was recently employed by Hecla Mining Company, managing the underground exploration of the Equity Mine in Creede, Colorado at the north end of the famous Amethyst vein system. Prior to that, he was employed at Hecla's Lucky Friday Mine in Coeur d'Alene, Idaho. Mr. Campo knows very well how to mine and especially likes small-scale vein systems where cut and fill with slusher methods are used. He adds to the high level of skill and talent at the Lincoln Mine Project where geologic interpretation of the narrow vein, orogenic deposit will be critical to the guidance of the underground development and mining.


Sutter staff will submit all applications and documentation to the Mine Safety and Health Administration ("MSHA") in April 2012 in order to establish the necessary MSHA compliant precursors prior to commencement of mining operations. The company has purchased 12 - Biomarine BioPak 240R SCBA (self contained breathing apparatus) units and significant additional gear for the creation of a mine rescue station and two rescue teams in lieu of acquiring outside rescue coverage. Training of the mine rescue team members will be done by the SCBA unit vendor in conjunction with Mark Suden Mining Construction personnel.

Mill Building

The excavation for the mill building is underway with Doug Veerkamp General Engineering, Inc. digging the hole for the mill foundation in several lifts. The benched excavation allows for ground support to be installed by Mark Suden Mining Construction as designed by Cotton, Shires and Associates. Although recent rain and poor, near surface ground conditions caused minor delays, the project remains on track for testing of the mill circuits in the fourth quarter of 2012.

Mill and Mine Equipment

The primary grinding equipment, a 6' x 12' Marcy rod mill, complete with motor, gears and gear box, arrived in March, 2012 at the company's shop space in Amador County, California for minor refurbishment. The mill gears and liners appear to be in excellent shape, as do the trunnion bearings and surfaces. The mill shell appears in very good condition, requiring only cosmetic sand blasting and repainting. Sutter's staff is inspecting the gear-box internals and evaluating the condition of the 200hp motor. The secondary grinding in the gravity recovery circuit, a 3' x 3' Marcy ball mill is undergoing rebuild. The motor, gearing, gears, shell and main liners are in very good condition. The discharge grates are in fair condition, requiring some welding and rebuilding of end lifters.

Two of the Company's four Ingersoll-Rand primary air compressors have been delivered to Cisco Air Systems of Sacramento for minor repair and rebuilding in anticipation of installation in the third quarter of 2012. The remaining compressors are scheduled for similar work later in the year.

Shop/Staff Services Building

Company staff continues to advance the Shop/Staff Services Building permit, with supplemental information provided to the Amador County Building Department in March. This building will provide offices, meeting rooms, shower and change room facilities, warehouse space and a maintenance shop to support the planned operations.

Pilot Scale Test Results

Positive test results are returning from products generated in November, 2011 during a pilot scale mill processing on low grade material excavated during 2008/2009 bulk sampling. Five pilot scale processing test runs were performed, processing approximately 3 tons of crushed material per run. Four separate pulp densities were operated at, with a fifth run at the approximate target grind size of p80-100mesh, adding copper sulphate to the frother, dithiophosphate and xanthate reagent suite. Grinding, rough gravity tabling and froth flotation were performed at approximately 2 tons per hour. Products generated included rougher table concentrate, flotation concentrate and tailings. Analysis of products was performed by ACZ Laboratories of Colorado, AG Wassenaar of Colorado, and Loring Laboratories of Alberta, Canada.

The addition of copper sulphate to the reagent suite appears to provide several benefits to the processing and products. Gold concentration ratios without using copper sulphate ranged from 3:1 to 20:1. The concentration ratio for the flotation product using copper sulphate in the reagent suite was 28:1, producing a 2.8 ounce per ton ("opt") Au concentrate from a 0.10 opt Au low grade feed. Sulfur, as sulfur trioxide, reports to the flotation product as 22% of the total by volume. Reduction of arsenic in the tailings to numbers significantly below California Class A mining waste levels also occurs when using copper sulphate in the reagent suite.

Analysis of the tailings products using a range of 0-20% cement admixture indicates acceptable cure times and strengths for underground backfilling, even at lower cement content. This confirms the stope cycle time used in the Preliminary Economic Assessment completed by Mine Development and Associates of Reno, Nevada in 2011 ( Tailings product strength appears also to benefit from the use of copper sulphate in the reagent suite, reaching higher compressive strength, earlier. Additional environmental testing is underway on the cemented tailings products.

The material in this news release has been reviewed by Matthew Collins, COO, a Qualified Person as defined by Canadian 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 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. Mineral resources that are not reserves have no demonstrated economic viability.

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 approximately 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.


Dr. Leanne M. Baker, President, CEO & Director

Sutter Gold Mining Inc.

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.

To view the photos of the first benches of excavation for the mill building showing ground support installation, please visit the following link:

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