VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 07/03/13 -- Sutter Gold Mining Inc. (TSX VENTURE: SGM)(OTCQX: SGMNF) ("Sutter" or the "Company") announces the implementation of several cost-cutting measures in response to recent gold market volatility and uncertainty in financing markets. RMB Australia Holdings Limited ("RMB" or the "Lender"), which has funded development and construction costs at Sutter's Lincoln Mine Project in the California Mother Lode for the past five years and continues to do so, requested cost reductions as a condition of further funding under the extension and increase of the bridge loan announced on May 23, 2013. An affiliate of RMB is also a 48% shareholder of Sutter Gold's common shares.
Sutter has implemented immediate changes to senior management, reduction of mine-site workforce, and refined the Lincoln Project development plan. The immediate effect of these changes will be to reduce ongoing costs and to focus the remaining workforce at the mine site on completion of specific, well defined capital projects.
Management Changes (effective July 1, 2013):
Mr. Richard A. Winters, President of RMB Resources Inc. and a Director of Sutter since July 2008, has been appointed Interim President and CEO. RMB Resources, the wholly-owned resource merchant banking division of the FirstRand Group of South Africa, provides equity and debt financing to small and mid-sized resource companies globally outside South Africa.
The Board of Directors wishes to thank Dr. Leanne Baker, who served as President and CEO since November 2011, for her efforts as CEO during her tenure. She will continue as a member of the Board.
The Board would also like to thank Mr. Matthew Collins for his efforts as Chief Operating Officer since September 2009.
The Board of Directors was also recently re-appointed at the AGM by the shareholders and is comprised of Mr. Mark T. Brown (Chairman), Dr. Leanne Baker, Mr. James Crombie, Mr. David Fennell, Mr. Allen Winters and Mr. Richard Winters. Mr. Robert Hutmacher has been re-appointed as Chief Financial Officer.
Approximately one-third of the current staff positions have been eliminated at the Lincoln Mine site. The remaining personnel will continue with execution of the next phase of planned development at the Project.
"These decisions were difficult but prudent in the current market environment," said Chairman Mark Brown. "Our Board of Directors and financial team are working with Mr. Winters and RMB to ensure that the Lincoln Mine Project has the best long-term chance of success. We will continue to take actions that support the most cost-effective ways of moving the project forward and to make decisions that are in the best interests of all of our shareholders."
Reduction in Interest Rate on Short Term Credit Facility
In concert with the Company's cost cutting efforts, RMB has agreed to reduce the interest rate on the existing Secured, Short Term Credit Facility (see press release of May 23, 2012). Beginning July 1, 2013, the interest rate on the Facility will be reduced from Libor plus 15%p.a. to Libor plus 10%p.a. This measure will reduce interest burden and direct increased funding for the next phase of development at the Lincoln Project.
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