Santa Fe Gold Closes Mogollon Option Agreement

Santa Fe Gold Corporation (OTCBB: SFEG) is pleased to announce it
has closed the Mogollon Option Agreement with Columbus Silver
Corporation. Under the agreement, Santa Fe may acquire the Mogollon
Project, Catron County, N.M., for payments aggregating $4,500,000
scheduled to be paid through the end of 2014. The Mogollon Project
encompasses most of the Mogollon district in southwest New Mexico, which
has substantial recorded historical production of silver and gold.

'This acquisition fits our strategic objective of developing new ore
sources to augment ore currently processed through our flotation mill at
Lordsburg,? stated Pierce Carson, CEO. 'The Mogollon district contains
partially drilled silver and gold deposits that hold promise for new
mines, and those deposits will be our initial focus. The district also
offers a number of excellent exploration targets with potential for
discovery of multi-million ounce silver-gold deposits.?

Santa Fe paid $100,000 to Columbus Silver upon signing the agreement on
Sept. 19, 2012. Santa Fe paid a further $150,000 following approval of
the agreement by the TSX Venture Exchange, which approval was obtained
Oct. 16, 2012. The payment schedule calls for an additional US$500,000
to be paid on or before Dec. 30, 2012, and four payments of $937,500
each on June 30, 2013, Dec. 30, 2013, June 30, 2014, and Dec. 30, 2014.
Additionally, Santa Fe must maintain the property in good standing by
paying underlying claim and lease payments.

Santa Fe and Columbus Silver have entered into a mutual release
regarding the previous plan of arrangement between the parties, which
expired by its terms on May 31, 2012. Approximately $1,060,000 was
advanced by Santa Fe to Columbus Silver in connection with the
foregoing, and the parties acknowledged that the funds are
non-refundable.

Additional Information:

The option agreement contains other terms and conditions, and a full
copy is included as an Exhibit to Santa Fe′s Current Report on Form 8-K,
which it will file promptly with the SEC and will be available at www.sec.gov,
and also may be accessed via 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 commercial production in 2012; (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 near
Phoenix, Ariz.; 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, 2012 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 U.S. 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 Corporation

Pierce Carson, 505-255-4852

President
and Chief Executive Officer

or

Investor Relations

Torrey
Hills Capital

Clay Chase, 858-456-7300

cc@sdthc.com