Santa Fe Gold Announces New $20 Million Credit Facility and $5 Million Revolving Facility with Waterton Global and Conversion of $13.5 Million Senior Secured Convertible Debentures Due December 31, 2012

Santa Fe Gold Corporation (OTCBB: SFEG) (the 'Company? or 'Santa
Fe?), a U.S.-based mining and exploration enterprise focused on gold,
silver, copper and industrial minerals, today announced the closing of a
series of transactions, which significantly strengthens the Company′s
balance sheet, improves Santa Fe′s liquidity and positions the Company
to complete its strategic acquisition of Columbus Silver Corporation
(TSXV: CSC). The Columbus Silver acquisition is anticipated to increase
Santa Fe′s precious metals resources, including strategic gold and
silver resources in close proximity to its operating Summit mine and
mill in southwestern New Mexico.

NEW LONG-TERM DEBT AND REVOLVING WORKING CAPITAL FACILITY AND GOLD
AND SILVER SUPPLY AGREEMENT WITH WATERTON GLOBAL VALUE, L.P.AND
REPAYMENT OF $5 MILLION PRINCIPAL AMOUNT OF 15% SHORT-TERM SECURED LOAN

Santa Fe announced that it has closed the first $10 million tranche of a
Senior Secured Gold Stream Credit Agreement with Waterton Global Value,
L.P. ('Waterton?). This Credit Agreement provides for two $10 million
tranches and a $5 million revolving working capital facility. The
long-term debt carries a 9% coupon and amortizes over a 30-month term
(assuming both tranches are drawn), with an initial six-month grace
period during which Santa Fe is not required to make any payments. As
part of the transaction, Santa Fe has agreed to sell to Waterton the
gold and silver produced from the Summit mine and (upon closing of the
Columbus Silver transaction) the Mogollon project via a long-term supply
agreement.

Five million dollars of the first $10 million tranche of the Waterton
facility was used to retire the Company′s 15% Senior Secured Bridge loan
with Victory Park Capital Advisors, LLC. The second $10 million tranche,
which is subject to several funding conditions, is earmarked to fund the
strategic acquisition of Columbus Silver Corporation (TSXV: CSC).

'We are very pleased to make this investment in Santa Fe Gold,? said
Cheryl Brandon, Portfolio Manager at Waterton. 'Santa Fe′s team
impressed us with their excellent operational awareness. We believe
there is a strong opportunity for future growth of both the Summit Mine
and Santa Fe′s other and prospective properties.?

CONVERSION OF $13.5 MILLION PRINCIPAL AMOUNT OF SENIOR SECURED
CONVERTIBLE DEBENTURE INTO COMMON STOCK AT $1.00 PER SHARE

Santa Fe also announced the conversion of $13.5 million principal amount
of its Senior Secured Convertible Debentures held by Sulane Holdings,
Ltd. into 13.5 million shares of common stock at a conversion price of
$1.00 per share. Said Santa Fe′s CEO Dr. Pierce Carson, 'Sulane′s
election to convert the Senior Secured Convertible Debentures into
common stock at $1.00 per share, which is at a significant premium to
recent trading prices, demonstrates Sulane′s long-term support and
continued confidence in the future of the Company. This $13.5 million
conversion significant improves our equity ratio and significantly
deleverages our balance sheet.?

Dr. Carson continued, 'We believe that collectively these transactions
represent a significant milestone for Santa Fe. We now enjoy an enhanced
capital structure, which should provide the platform for us to execute
our strategic long-term growth objectives, and to become a stronger and
profitable mining company. We are encouraged by the strong support and
confidence of both Sulane and Waterton.?

Additional Information:

Santa Fe will include the main agreements related to these transactions
as Exhibits to its Current Report on Form 8-K to be filed with the SEC,
and available at www.sec.gov
and at www.sedar.com.

About Santa Fe Gold:

Santa Fe Gold is a U.S.-based mining and exploration enterprise focused
on acquiring and developing gold, silver, copper and industrial mineral
properties. Santa Fe controls: (i) the Summit mine and Lordsburg mill in
southwestern New Mexico, which began processing operations in 2010; (ii)
a substantial land position near the Lordsburg mill, comprising the core
of the Lordsburg Mining District; (iii) the Ortiz gold property in
north-central New Mexico; (iv) the Black Canyon mica deposit and
processing equipment near Phoenix, Arizona; and (v) a deposit of
micaceous iron oxide (MIO) in western Arizona. Santa Fe Gold intends to
build a portfolio of high-quality, diversified mineral assets with an
emphasis on precious metals.

To learn more about Santa Fe Gold, visit www.santafegoldcorp.com.

Cautionary Note Regarding Forward-Looking Statements:

This press release contains forward-looking statements and
forward-looking information (collectively, 'forward-looking statements?)
within the meaning of applicable U.S. and Canadian securities
legislation. All statements, other than statements of historical fact,
included herein are forward-looking statements. Although the Company
believes that such statements are reasonable, it can give no assurance
that such expectations will prove to be correct. Forward-looking
statements are typically identified by words such as: believe, expect,
anticipate, intend, estimate, postulate and similar expressions, or are
those, which, by their nature, refer to future events. The Company
cautions investors that any forward-looking statements by the Company
are not guarantees of future results or performance, and that actual
results may differ materially from those in forward looking statements
as a result of various factors, including, but not limited to,
variations in the nature, quality and quantity of any mineral deposits
that may be located, variations in the market price of any mineral
products the Company may produce or plan to produce, the Company's
inability to obtain any necessary permits, consents or authorizations
required for its activities, the Company's inability to produce minerals
from its properties successfully or profitably, to continue its
projected growth, to raise the necessary capital or to be fully able to
implement its business strategies, and other risks and uncertainties
disclosed in the Company′s Annual Report on Form 10-K for the year ended
June 30, 2011 and its most recent quarterly reports filed with the
United States Securities and Exchange Commission (the 'SEC?), and other
information released by the Company and filed with the appropriate
regulatory agencies. All of the Company's US public disclosure filings
may be accessed via www.sec.gov
and its Canadian public disclosure filings may be accessed via www.sedar.com,
and readers are urged to review these materials.

Santa Fe Gold Corp

W. Pierce Carson, 505-255-4852

President
and Chief Executive Officer