Santa Fe Gold Receives $4 Million in Note Advances from International Goldfields in Connection with Proposed Merger

Santa Fe Gold Corporation (OTCBB: SFEG) today announced it has
received cash proceeds totaling approximately $4.0 million from
International Goldfields Limited (ASX: IGS) in fulfillment of an
important condition of the Heads of Agreement dated October 8, 2012. The
funds were advanced by way of two secured convertible notes that will be
forgiven upon completion of the proposed merger. The merger is
anticipated to close during the first quarter of 2013, subject to
regulatory and required consents and approvals.

'Timely receipt of the $4.0 million of initial funding constitutes a
strong signal that the merger is on track,? said Pierce Carson, CEO.
'These funds strengthen Santa Fe′s balance sheet and bolster working
capital. Together with a minimum of an additional $10.0 million
projected to be available at closing of the merger, we anticipate having
the capital available to reduce project debt levels, develop our
Mogollon project and advance our Ortiz project.?

On October 8, 2012, Santa Fe entered into a Binding Heads of Agreement
with IGS. Based upon a closing price of IGS ordinary shares of A$0.03 as
reported on the Australian Stock Exchange, the merger consideration
represented approximately US$0.37 in value for each share of SFEG common
stock. International Goldfields′ ordinary shares are listed on the ASX
under the symbol 'IGS? and will continue to be listed on the ASX upon
completion of the merger.

Upon anticipated completion of the merger, each outstanding share of
Santa Fe Gold common stock will be converted into the right to receive
American Depository Receipts ('ADRs?) of IGS. It is anticipated that the
IGS ADRs will be listed on the NYSE MKT Exchange.

Said Dr. Carson, 'Trading on two major exchanges is expected to increase
the combined company′s visibility as a diversified, well-capitalized,
low-cost gold-silver miner, explorer and developer with projects located
in emerging mining districts of Brazil, West Africa and the southwestern
United States.?

The two $A2.0 million convertible notes bear interest at a rate of 6%
per annum, have a three-year term, and are secured by Santa Fe′s
contractual rights to the Mogollon property. Upon completion of the
contemplated merger between IGS and Santa Fe, all outstanding principal
and accrued interest under the notes will be forgiven. Santa Fe has the
right to prepay the notes at any time without any premium or penalty.
Should Santa Fe fail to repay the notes on the maturity date or should
an event of default occur, then IGS may choose to have the outstanding
amounts repaid in Santa Fe shares at a conversion rate equal to the
daily volume weighted average sales price for the twenty trading days
immediately preceding the date of conversion.

Copies of the convertible notes are included as Exhibits 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.

FORWARD-LOOKING AND CAUTIONARY STATEMENTS ? SAFE HARBOR

This press release contains forward-looking statements, including with
respect to the negotiation, implementation and effects of a proposed
business combination between Santa Fe Gold Corporation ('Santa Fe?) and
International Goldfields Limited ('IGS?). Those statements and
statements made in this release that are not historical in nature,
including those related to future benefits, increases in shareholder
value, synergies, improved liquidity and profitability, constitute
forward-looking statements within the meaning of the Safe Harbor
Provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by the use of words such as
'expects,? 'projects,? 'plans,? 'will,? 'may,? 'anticipates,? believes,?
'should,? 'intends,? 'estimates,? and other words of similar meaning.
These statements are based on current plans, estimates and projections,
and, therefore, you should not place undue reliance on them. These
statements are subject to risks and uncertainties that cannot be
predicted or quantified, and our actual results may differ materially
from those expressed or implied by such forward-looking statements. For
Santa Fe, these statements are subject to the following risks and
uncertainties: difficulties, delays, unexpected costs or the inability
to reach definitive documents with respect to, or consummate, the
proposed business combination with IGS and other transactions referred
to in this press release and those described in the documents we file
with the U.S. Securities and Exchange Commission, and risks associated
with the inherent uncertainty of future financial results, and
additional capital financing requirements. All forward-looking
statements included in this release are made as of the date of this
press release, and Santa Fe assumes no obligation to update any such
forward-looking statements.

STATEMENT REGARDING ADDITIONAL INFORMATION THAT MAY BECOME AVAILABLE

If a transaction is to be proposed to the stockholders of Santa Fe and
IGS, Santa Fe and IGS would file with the Securities and Exchange
Commission and distribute a Registration Statement on Form F-4 covering
securities to be issued in the transaction. Santa Fe shareholders would
receive a prospectus and proxy/consent solicitation statement in
connection with such transaction. The final terms of the prospective
merger of Santa Fe and IGS remain subject to change and would only be
reflected in a binding definitive agreement that remains to be
negotiated between the companies. A copy of the definitive merger
agreement would be filed along with the prospectus. Santa Fe
stockholders would be urged to read these and any other related
documents the corporation may issue. If and when these documents are
filed, they can be obtained for free at the SEC′s website, www.sec.gov.
Additional information on how to obtain these documents from Santa Fe
would be made available to stockholders if and when a transaction is to
occur. IGS would provide disclosure and arrange for solicitation of the
votes of its shareholders in accordance with Australian regulations
following execution of a binding agreement. Such documents are not
currently available.

This communication shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act of 1933, as amended. Santa Fe, its
directors and executive officers, may be deemed to be participants in
the solicitation of proxies or consents from Santa Fe′s stockholders in
connection with any transaction that might be proposed to such
stockholders. Information about the directors and executive officers of
Santa Fe and their ownership of IGS and Santa Fe stock will be included
in the prospectuses and proxy/consent solicitation statements if and
when they become available.

Santa Fe Gold Corp

Pierce Carson, President and Chief Executive
Officer

505-255-4852

www.santafegoldcorp.com

or

Investor
Relations

Torrey Hills Capital

Clay Chase, 858-456-7300

cc@sdthc.com