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MAKING HISTORY . . . AGAINMAKING HISTORY . . . AGAIN
Building a New Gold Mine Building a New Gold Mine in California’s Mother Lode
May 2012
TSX-V:SGMOTCQX:SGMNF
Disclaimer
The following presentation may include certain “forward‐looking statements” within the meaning of applicable Canadian Securities Laws and the United States Private the meaning of applicable Canadian Securities Laws and the United States Private Litigation Reform Act of 1995. All statements, other than statements of historical fact, included in the presentation , including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of the Company are forward‐looking statements. Words such as “expect”, “ anticipate”, “estimate”, “may”, “will”, “should”, “intend”, “believe” and other similar expressions are forward‐looking statements. Forward‐looking statements are not guarantees of future events and are subject to risks uncertainties statements are not guarantees of future events and are subject to risks uncertainties assumptions and other factors. Actual results and future events could differ materially from those anticipated in such forward‐looking statements. There an be no assurance that such forward‐looking statements will prove to be accurate.
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Why Sutter Gold?
One of the few precious metals juniors that will transition to gold production in 2012
Fast‐tracking the first phase of the high‐grade Lincoln Mine Project in Amador County, California – the first commercial gold mine in the Mother Lode in more than 50 years
Development philosophy that is consistent with historic small‐scale mines in the California Mother Lode, but adapted to current environmental standards and community requirements
Most major permitting in place for the Lincoln‐Comet and Keystone resources
New exploration program is targeting extension of known gold zones that could supplement current mining resource base and extend mine lifesupplement current mining resource base and extend mine life
Longer term, exploration potential exists at depth and in additional gold zones on adjacent property owned or leased by Sutter
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Experienced Management Team
Leanne Baker President & Chief Executive Officer
Bob Hutmacher Chief Financial Officer
Matt Collins Chief Operating Officer ‐ QP
David Cochrane VP Environmental Health & Safety
Steve Zahony VP Exploration and Geology ‐ QP
Art Campo Chief Mine Geologist
Amanda Miller Controller
Edward McGoldrick General Manager
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SUTTER AT a Glance
OTCQX TSX‐V
Sutter 5 Year Stock Price
52 wk high $0.52 $0.51
52 wk low $0.11 $0.11
Avg daily volume (2012) 45,300 50,000g y ( ) 3
Capital Structure (March 31, 2012)
Cash Position $3.8 million
RMB Gold Facility Draws $14.1 million
Shares Outstanding 117.5 million
Options 5.8 millionChart courtesy of Michael Fowler analyst for Loewon, Ondaatje, McCutcheon
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Fully Diluted 123.6 milliony y , j ,
Investment Highlights
Opportunity: Fast‐track the first phase of the Lincoln Mine Project while gold price fundamentals
remain strongremain strong
Share price starting to reflect our initial exploration success and recent progress on permitting and development
Upside potential from current exploration drill program with built‐in capacity to Upside potential from current exploration drill program, with built in capacity to expand mining and milling rates
Ingredients for Success: Mining‐friendly Amador County, excellent infrastructure
Construction underway on new mill building, underground work begins in June 2012
Management team incorporates strong cadre of narrow‐vein mine experience and permitting expertise in California
Strong financial backing of 49% shareholder, with initial tranche of project financing through US$20M Prepaid Gold Facility
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Lincoln mine projectadjacent to historic hwy. 49
Sutter controls a significant portion of the “California Mother Lode” vein system
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Lincoln mine Projectexcellent infrastructure
Located between the towns of Sutter Creek (the historic Lincoln Mine) and Creek (the historic Lincoln Mine) and Amador City (the historic Keystone Mine)
Accessible by Highways 49 and 104
45 miles southeast of Sacramento in Amador County
Power, communication, and transportation infrastructure established
LOCATED IN THE PROLIFIC CALIFORNIA
MOTHER LODE GOLD BELT
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Lincoln mine project HISTORY
•John Sutter explored for timber in mid 1840’s and briefly for gold in 1848 along the banks of what is now Sutter Creek1848
•First gold discovery came in June 1851 by the Amador Quartz Mining Company. Leland Stanford gained control of the mine in the late 1850’s, and renamed it the Lincoln
1851
•From the 1850’s to 1950’s, gold production from the eight historic mines on SGM’s current holdings exceeded 3.375 million ounces1851‐1958
•First modern exploration effort occurred from 1983‐1990. Stringbean Alley decline and other underground workings were developed in 1989‐901983‐90
•Project permitted for 1,000 tpd operation in 1998‐991998‐99
•Preliminary Economic Assessment for 150 tpd day operation 2011
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y 5 p y pBoard of Directors approved Lincoln Mine Project development 2011
Mineral INVENTORYNI 43-101 compliant resource
Tons Uncut GradeOz/ton Contained OuncesO /to
Indicated:
Lincoln‐Comet 511,700 0.37 188,481
Keystone 161,900 0.21 34,563
Total Indicated 673,600 0.33 223,044
Total Inferred 2,377,900 0.19 458,914
Total Indicated and Inferred contained ounces 681,958
Source: NI 43-101 Technical Report, February 2008, Payne
The project benefits from the good metallurgy of the Mother Lode
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including historic district gold recoveries of +95%
Lincoln mine project pea
NI 43‐101 Preliminary Economic Assessment (PEA):d l h f h l d Focused only on the upper portion of the Lincoln‐Comet deposit
Utilizing existing mine infrastructure to minimize development costs and timing
Base Case IRR of 20.5% at $1,100/ounce gold
Sutter Gold Mining’s Plan: Use contract mining to reduce CAPEXg
Begin small (high grade) with built‐in capacity to expand
Target lower op‐costs despite contracting
RMB Gold Facility to provide $13.4 million toward CAPEXy p $ 3 4
Increase IRR to 70% at $1,700/ounce gold
Underground development will provide additional traditional exploration
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Lincoln mine project parameters
High‐Grade Scenario Five‐Year Plan
Indicated / Inferred Resource 210 300 t materialIndicated / Inferred Resource 210,300 t material0.573 opt (19.6 gpt)
Current Mining Plan 244,800 t material0.46 opt (15.8 gpt)
INSERT PHOTOS0.46 opt (15.8 gpt)
Cutoff Grade 0.22 opt (7.5 gpt)
Mine Operating Rate 150 tpd (7 days / week)
ll d ( d / k)
PHOTOS HERE
Mill Operating Rate 210 tpd (5 days / week)
Annual Gold Production 23,000 ounces
Gold Processing 70% from Gravity Circuit30% from Concentrate
Mining Cost / T $206.74
Milling Cost / T $42.10
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g
Cash Cost /Ounce $704 before royalties
current geologic Block model & workingsGrade Shell & Design at o.22 opt Au cut-off
• Colors Identify Gold Veins• Existing Workings in Brown
Existing PortalExisting Workings in Brown
• Current Mine Design Strings (Drifts/Tunnels) Blue Lines• Modeling and Design in Surpac™
TSXTSX--V:SGM OTCQX:SGMNFV:SGM OTCQX:SGMNFTSXTSX--V:SGM OTCQX:SGMNFV:SGM OTCQX:SGMNFView Looking North at -25° Dip
Capital requirements
Capital Requirements – Lincoln Mine Project
Item Estimated Cost USD$ 000’s
Mine Equipment 4,213q p
Mine Development 2,680
Process Plant 4,120
Waste Management 2 052Waste Management 2,052
Infrastructure 1,691
Engineering 463
Owners Cost 4,716
TOTAL $19,934
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Expenditures to Mar 31, 2012 $2,800
rmbAH prepaid gold facility
US$20 Million Prepaid Gold Facility l h d h l ld ( ) In July 2011, the Company signed an agreement with RMB Australia Holdings (RMBAH)
to implement a $20 million prepaid gold facility
The Company used the initial $6.6 million of the proceeds to repay a previous credit line supplied by RMBAH. The remaining $13.4 million is being drawn down to fund the line supplied by RMBAH. The remaining $13.4 million is being drawn down to fund the Lincoln Mine Project and other corporate expenses
As of March 31, 2012, the Company has drawn down $14.1 million of the facility
Repayment of the facility will work like this:p y y- When gold production begins, half of the monthly production will be sold at market
price, and half will be applied toward repayment of the facility
- Of the gold to be applied toward repayment, the Company will receive $942 per ounce
- As we draw down the $20 million facility, we are effectively receiving $377 per ounce for the 53,027 ounces included in the gold facility
- Our effective realized price for the gold in the prepaid facility is $1,319 per ounce
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Potential cash flow model
PEA B % Ab % Ab Sutter Gold Cash Flow Sensitivity PEA Base
Case10% Above Base Case
20% Above Base Case Mining
Plan2
Pretax Cash Flow($000's)1 12,217 17,135 26,243 49,096
Internal Rate of Return, (% p.a.) 20.5% 38.9% 50.2% 69.6%
Gold Selling Price ($/oz) 1 100 1 210 1 320 1 473Gold Selling Price ($/oz) 1,100 1,210 1,320 1,4731 Mineral resources that are not mineral reserves do not have demonstrated economic viability2 Potential average realization price based on current gold price
Base case includes all estimates and assumptions used in the PEA, including owner‐operated fleet and a gold price of $1,100 per ounce. The Sutter Plan includes contract mining, lower capital costs, market price for half the gold sold (at $1,700 in this example) and $942 for the gold applied toward repayment of the prepaid gold facility
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repayment of the prepaid gold facility.
Path to production
Site Preparation Completedin Winter 2011‐12
Mill Building Permit Received March 2012 g
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Critical path to gold in Q4 2012
Underground mine development to begin in June 2012f d d b d d Contract for underground mining to be awarded
MSHA approval of ventilation plan and emergency contingency plan is required
Surface Fill Unit construction during summer 2012 Surface Fill Unit construction during summer 2012 Section 404 (Wetlands Permit) required from Army Corps of Engineers
Mitigation plan is proceeding, with cooperation from the Corps
SFU to be ready to receive tailings once mill is operating SFU to be ready to receive tailings once mill is operating
Mill and other facilities to be operational in Q4 2012 Mix of used and new equipment, some refurbishing requiredMix of used and new equipment, some refurbishing required
New gravity circuit
Concentrate production to require third‐party processing
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2012 Priorities & beyond
Preparing for production: Completing mine development and building construction
Obtain remaining construction financing
Targeting production this year
Planning for resource expansion ‐ Exploration
Completed Completed Initial
Ground Breaking Production Expand p
43‐101 PEA Initial Financing
Breaking 2011 in 2012
pResource
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Pipeline of ProjectsCalifornia mother lode
Exploration potential on other projects adjacent to the Lincoln project Exploration potential on other projects adjacent to the Lincoln project
2012 focus is to advance exploration within existing land holdings::
KeystoneLincolnEureka Bunker Hill
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2012 exploration program
Goal of the Program:d ld h l
INSERT PHOTO HERE Expand gold resources at the Lincoln
Mine Project
Drill the under‐explored area between the Lincoln and Comet ore zonesLincoln and Comet ore zones
Better define the initial stage of underground mining
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Exploration Program Highlights
Phase 1 As of April 10Phase 2
Includes 17 diamond drill holes in the southern
Lincoln segment, including much of the
pResults have been
announced for the first seven holes. Best results to date include 4 317 opt
Will include 13 drill holes in the northern Comet
segment, where drilling in the past was inclined in
the wrong direction All gunder-explored area
between the Lincoln and Comet ore zones. The
program will drill i t l 5 900 f t
to date include 4.317 opt in 1.8-foot interval and
1.791 opt in 2.1-foot interval – all bonanza
grades
the wrong direction. All but one of Sutter’s drill
holes in 2012 will be inclined to the northeast, to capture the southwest-approximately 5,900 feet grades to capture the southwest
dipping structures
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Phase 1 of exploration program9 of 17 holes completed
Lincoln and Southern portion of Comet resource (shown in red) at a 0.22 opt Au cut‐off.
Nddh‐206
ddh 203ddh‐201 & 202
ddh‐199& 200
ddh‐196& 197
ddh‐203 & 204
& 202& 200ddh‐198
LINCOLN ZONECOMET ZONE
Phase I Drilling (Southern) Long Section: looking N30°E showing projection of
0 200’
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Phase I Drilling (Southern) Long Section: looking N30 E showing projection of completed drill holes (green lines) and planned drill holes (yellow lines).
Investment Opportunity
Potential for a three‐pronged increase in per‐ounce gold multiple: As we receive the rest of our permits and complete construction of the first As we receive the rest of our permits and complete construction of the first
commercial gold mine in the California Mother Lode in more than 50 years As we complete the ramp‐up to full production in 2013 As we add to our near‐term gold resource with current drilling program g g p g
Longer‐term upside potential to grow shareholder value: Exploration on adjacent land holdings
D l ti Deep exploration once we areunderground
Increasing leverage to gold price as we repay prepaid gold facility
Eventual ability to pay a dividend Other opportunities using a similar
model of smaller, narrow‐vein,high‐grade gold deposits
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high grade gold deposits
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