Sutter Gold Mining Inc. announced that underground development is well underway at its Lincoln Mine Project in the heart of California's Mother Lode gold belt. The project is on track for gold production in the fourth quarter of this year, ramping up to full production in the first half of 2013. The Company received all necessary Mine Safety and Health Administration and California Occupation Safety and Health Administration ("CalOSHA") approvals to begin underground development in June 2012. Mine portal construction began in July on the 1,300 level and in
August at the 1,200 level. Mark A. Suden Mining Construction began drilling and blasting in September
2012. As of October 9, 2012, the 1,300 level development was more than 30% complete at 101 feet from portal to face. The 1,200 level drift development was 25% complete at 91 feet from portal to face. Development at the 1,100 level began the same week, with the establishment of a working face at the 1,100 cut out in the Stringbean Alley decline. Development of the 900-level is set to begin late in October 2012 whereas the 1,000 level development is scheduled to begin in March of 2013.

The company also announced that Mr. Stephen Zahony (age 70), Vice President of Exploration and Geology, will retire from the company on October 15, 2012. Mr. Zahony has agreed to remain available as a consultant to Sutter.