ALBUQUERQUE, New Mexico - October 22, 2012 - 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, New Mexico, 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 September 19, 2012. Santa Fe paid a further $150,000 following approval of the agreement by the TSX Venture Exchange, which approval was obtained October 16, 2012. The payment schedule calls for an additional US$500,000 to be paid on or before December 30, 2012, and four payments of $937,500 each on June 30, 2013, December 30, 2013, June 30, 2014, and December 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, 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.