Sutter Gold Plans Drilling to Expand Resources at Its Lincoln Mine Project and Provides a Development Update

Sutter Gold Mining Inc. (TSX VENTURE:SGM) ("Sutter or the "Company") is pleased
to announce that its Board of Directors have approved an exploration drilling
program of 10,255 feet (3,126 meters) at the Company's Lincoln Mine Project
located at Sutter Creek, California. The objective of the drilling campaign is
to meaningfully expand mineable resources from filling gaps in the current
resource model and testing lateral and higher-up extensions of known mineralized
zones and structures which could extend the initial mine life significantly
beyond the five years indicated in the Project Preliminary Economic Assessment.
Plans are to drill approximately thirty well-placed, large-diameter (HQ-size)
surface-collared angle core holes covering a strike length of 3,000 feet. 


The current development plan is to mine two distinct segments of the known gold
mineralization, the northern Comet segment and the southern Lincoln segment,
both of which are open at their northern and upper known limits as defined by
previous core drilling and sublevel exploration workings. Some of the best gold
grades of the Lincoln segment are situated at its northern edge, which past
drilling has not closed off. About one-third of the proposed drill holes will
probe that parcel of the property with the objective of extending the high-grade
zone to the north.


The more northerly Comet segment, defined as that part of the property from
portal of the existing mine decline to approximately 100 feet south of the 9
crosscut (1750N - geologic grid, 71,100N - mine grid), has been only sparsely
drilled at the northern 1,000 feet of this segment. Past drill holes in this
northern zone, all collared at the surface, were inclined to the west so that
drill-holes were angled parallel with the major vein system, at a time when it
was believed that the gold-bearing vein structural trend was east-dipping. It
was not until the decline reached the mineralized Lincoln-Comet vein system in
1989, the main "42 Vein System", that it became apparent that this ore-bearing
structure dipped to the west. All planned drill-holes will be inclined to the
east to optimally intersect the west-dipping mineralization.


Drill holes will be relatively shallow, averaging slightly less than 350 feet
(105 meters) in length. The drilling program is expected to extend indicated
gold resources beyond their present limits and to significantly increase the
resource base that can be mined from the current mine plan configuration in this
central 4000-feet-long portion of the 3.6-mile-long (5.8 kilometer) property
held by the Company. Exploration on the remainder of Sutter's properties will be
conducted in the future after results obtained from this program are fully
evaluated.


Steve Zahony, VP Exploration, commented, "The approved initial drilling program
will be the first core drilling on the property since 2007 and is targeted at
obvious regions in the resource model and upward extensions of known
mineralization that were inadequately tested early on, before the actual dip of
the veins was known, and at the gap in the resource model and mine plan between
the Lincoln and Comet portions of the deposit where data are lacking. While this
exploration will take place in the area of the current mine plan we also have
some big picture thinking to do on exploring targets on the main Mother Lode
structure to the Melones Fault to the east, especially within the Company's
current land package. Regional structures to the west are also being considered
as exploration targets. The application of modern, systematic exploration offers
the potential of making new discoveries that would be significantly enhanced
with an operating mine in the immediate vicinity."


To view Figure 1, please visit the following link:
http://media3.marketwire.com/docs/sgm1013fig1.pdf.


Development Update for the Lincoln Mine Project 

Surface construction of the site infrastructure has begun with the removal of
the existing temporary multifunction building and relocation of all tools and
supplies. The contract for tree removal has been issued to Amador Mechanical
Inc., a local contractor that has an excellent history with the company on
specialized projects, including the recent building demolition. Doug Veerkamp
General Engineering Inc., has been selected via bid process for the site
grading, including the construction of the Waste Rock Pile, Tailings Processing
Area, Entrance Facilities and the road to the Surface Fill Unit.


Previously disclosed September engineering and design milestones have been
achieved (see press release of August 18, 2011). Sutter has submitted the
application to Amador County for the grading permit necessary to begin the
construction of the Tailings Processing Area, Surface Fill Unit access road and
Entrance Facilities. The application for building permits for the Staff
Services/Shop Building and Mill Facility have been submitted to Amador County.
Construction contract documentation remains in progress for the buildings, with
a separation of foundation and building contracts due to the approach of the
winter rain season and the resulting critical timing for completion of the
foundations. 


Sutter's 2011 year-end milestones include the following:



--  Completion of Entrance Facilities, including the parking and lay-down
    areas 
--  Completion of Staff Services/Shop building foundation 
--  Initiation of Staff Services/Shop Building erection. 
--  Completion of Mill Building foundation 
--  Initiation of mill equipment installation 
--  Completion and award of underground development contract. 
--  Initiation of underground development



To date, Sutter has received confirmation letters of interest for the
underground development from several of the six pre-qualified underground mining
contractors. Closure of invitation to the bidding process will occur October 20,
2011.


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 evaluation and 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.


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 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:

James Crombie, 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.
Sutter Gold Mining (TSXV:SGM)
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