Santa Fe Gold to Acquire Columbus Silver in an All Cash Transaction

Santa Fe Gold Corporation (OTCBB:SFEG) is pleased to announce it
has entered into a Memorandum of Understanding with Columbus
Silver ?Corporation (TSXV: CSC) ('Columbus Silver?) pursuant to which
Santa Fe has conditionally agreed to acquire all of Columbus Silver′s
outstanding common stock for cash consideration of Cdn $0.20 per share
in a transaction currently valued at Cdn $9,977,285. The acquisition of
Columbus Silver is a notable step forward in Santa Fe′s objective to
become a significant North American precious metals producer.

Santa Fe′s President and CEO, Pierce Carson, said 'This transaction is
strategically important to Santa Fe and potentially will more than
double our controlled silver and gold resources available for processing
at our fully-permitted and operating flotation mill near Lordsburg, New
Mexico. This will build on current silver and gold production sourced
from our Summit mine. Furthermore, Columbus Silver′s portfolio of seven
high quality US silver-gold properties in New Mexico, Arizona, Nevada
and Utah provides excellent upside exploration potential.?

Columbus Silver′s President and CEO, Robert F. Giustra, commented that
'This is a very positive development for Columbus Silver shareholders;
the consideration per share represents a significant premium over market
prices for the last several months.?

The Memorandum of Understanding contemplates a business combination by
way of a court approved plan of arrangement. ?The proposed transaction is
subject to the final approval of the boards of directors of both
companies and is conditional on stock exchange, regulatory and court
approvals. The transaction also is subject to Columbus Silver
shareholder approval and Santa Fe′s commitment of the required funding.
If Santa Fe does not notify Columbus Silver by November 30, 2011 that it
has obtained a firm commitment for the required funding, Columbus Silver
will have the option to terminate the acquisition. Until closing of the
transaction, Santa Fe has agreed to provide bridge financing to Columbus
Silver to fund leasehold payments and for working capital, which through
the end of December 2011 totals $513,716.

Any ore developed at Columbus Silver′s Mogollon Project located in
southwest New Mexico could be processed at Santa Fe′s mill near
Lordsburg, NM. Drilling in the 1980's beneath the old Consolidated Mine
outlined a partially delineated deposit of 845,000 tons averaging 9.35
oz/ton silver and 0.15 oz/ton gold and the deposit is open along strike
and at depth. A proposed drilling program has been permitted.

The Mogollon Project covers an extensive, silver-gold bearing epithermal
vein field with geological similarities to Comstock Lode, Nevada and
Guanajuato District, Mexico. Historical production from the Mogollon
Project from 1905 to 1942 is reported as 15,700,000 ounces of silver and
327,000 ounces of gold. Considerable additional resource expansion is
provided by dozens of mineralized and potentially mineralized veins with
a combined strike length of more than 45 miles, which have never been
drill-tested. Santa Fe estimates initial potential for 60 million silver
equivalent ounces (1.5 million gold equivalent ounces).

The historical figures presented herein are not NI 43-101 compliant.
They should not be relied upon and Santa Fe does not treat them as
current.

Additional Information:

The Memorandum of Understanding 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 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 US 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, 2010
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, President and Chief Executive
Officer

505-255-4852