Sutter Gold Mining Inc. provides updates on the completion of current work programs announced December 23, 2013 with respect to development in the underground and mill at the Lincoln Project in Sutter Creek, California. All objectives of the previously announced underground development program have been completed. Additional development completed allows for the initiation of production mining from stope panels between the 900 and 1,000 levels and between the 1,030 and 1,100 levels.

This included establishing new secondary egress raises to allow for commencement of production from the initial stope panels, the establishment of ore passes to service the initial stope panel on the 1,030 level and stope preparation for mining on the 1030 level. In addition, work was been completed on detailed mine plan for the initial 12 to 18 months of production from the Comet deposit. The Company is now in the process of costing and optimizing the detailed mine plane in relation to both selective underhand cut and fill mining as well as mechanized cut and fill and/or long hole open stoping methods.

This work has put the mine in a position to be able to initiate production mining as further development continues. Approximately 1,000 tons of stockpiled material from development has been processed through the mill. Several bottlenecks in the plant were identified and corrected however weakness in the design and installation of the plant thickener resulted in its failure and precluded achievement of the planned processing of the full 3,500 tons of stockpiles.

The inability to dewater tailings necessitated the suspension of milling operations at the end of February. Limited operation of the mill is planned for the purpose of collecting the samples required for mass and metallurgical balances, fines management and tailings characterization for backfill design. Following a review of the processing operations by the Company the following items will be required to be addressed in order for the mill to achieve sustained operations: Replacement of the thickener and determination of appropriate approach to dewatering whole tailings; Determination of appropriate process sampling equipment and instrumentation, purchase and installation; Relocation of the existing jaw crusher to allow for service and sustained operations and installation of a secondary cone crusher to provide a consistent and appropriate feed to the rod mill; Construction of a gold room capable of producing dore on-site, completion of the gravity circuit, new furnace and associated items; Improved ventilation system for the lab and new ventilation for the gold room; and Design and installation of a backfill plant.