Sutter Gold Announces Positive Production Decision for the Lincoln Mine Gold Project and Agrees to A US$ 20 Million Prepaid Gold

Sutter Gold Mining Inc. (TSX VENTURE:SGM) ("Sutter" or the "Company") is pleased
to announce its Board of Directors has made a positive production decision to
commence construction and development for mining and milling activities at the
Lincoln Project. This decision follows the completion of a Canadian National
Instrument 43-101 compliant independent technical report "Preliminary Economic
Assessment Lincoln Mine Gold Project Technical Report" ("PEA") filed on SEDAR on
June 16, 2011, for the Lincoln Mine project (the "Project") located near Sutter
Creek, California, USA.


Full and complete disclosure of the PEA is available on the Company's website at
www.suttergoldmining.com and at www.SEDAR.com. The PEA, authored by Mine
Development Associates of Reno, Nevada, USA, indicated positive economics for
the development, mining and milling of the Lincoln-Comet portion of the
Company's California mineral resource. The PEA utilized a base price of gold at
$1,100 per ounce. Details of the total Company resource estimate can be found in
the National Instrument 43-101 report "Mineral Resource Estimate, Sutter Gold
Project, Amador County, California", filed on SEDAR on February 11, 2008. A
feasibility study has not been completed and there is no certainty the proposed
operation will be economically viable.


Project Finance Secured

After evaluation of multiple financing proposals from various lenders and
recommendation of the Board's Special Committee, the Board has chosen to proceed
with an agreement with RMB Australia Holdings ("RMBAH") wherein RMBAH will
provide a secured prepaid gold facility to Sutter in the amount of US$20
million. 




Financing Terms Highlights                        

--  The lender will be RMB Australia Holdings Limited ("RMBAH"); 
--  The Project finance facility will be a secured prepaid gold facility in
    the amount of US$20 million; 
--  Proceeds will be used to repay the existing RMBAH facility in the
    approximate amount of US$6.5 million and provide approximately 70% of
    the budgeted funding required for the development and construction of
    the Lincoln Project; 
--  The facility amount will be drawn down monthly by Sutter during the
    construction and development period; 
--  Sutter will deliver 50% of monthly gold production subject to a minimum
    900 ounces per month beginning at the end of the 13th month from the
    first draw down, coinciding with the first full month of production in
    accordance with the Project development schedule; 
--  Sutter will receive from RMBAH a Delivery Price of approximately US$950
    per ounce delivered with the final Delivery Price to be determined based
    on spot gold prices at the time of closing; 
--  Total gold production deliverable to RMBAH is limited to 53,027 ounces; 
--  Sutter has the option of pre delivering against the facility at its
    discretion. 



Sutter's Chief Financial Officer Bob Hutmacher, commented, "The RMBAH prepaid
gold facility is the most attractive of the project finance proposals the
Company received. Under the facility, Sutter will commit a maximum of 50% of the
minable resources presented in the PEA to repay its existing debt and provide
for the bulk of the Lincoln Project's development cost, leaving the considerable
resource upside inherent on the Company's controlled position on the Mother Lode
to Sutter's shareholders and providing the option to pre deliver against the
facility at the Company's discretion. The prepaid gold facility represents an
upfront payment of $377 per ounce and an expected delivery price to be received
of approximately $950 per ounce, for total consideration of approximately $1,327
per ounce, meaningfully better than similar recent gold stream financings that
have occurred in the market. Importantly, the expected $950 delivery price
assures an attractive cash margin on committed ounces in relation to the total
operating cost estimated in the PEA. Uncommitted gold production will be sold at
spot gold prices. The ability to use the facility funding upfront will allow
Sutter to significantly minimize the Project development risk prior to securing
the remaining funding required to achieve commercial production." 


Completion of Financing

The closing of the prepaid gold facility is expected to occur on or about July
1, 2011 and remains subject to the approval of the TSX Venture Exchange. 


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 the Mother Lode Gold Belt of 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 in Amador County. 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.