Santa Fe Gold Obtains Financing to Proceed with Columbus Silver Acquisition

Santa Fe Gold Corporation (OTCBB: SFEG) is pleased to announce it
has satisfied an important financing condition to proceed with its
acquisition of Columbus Silver Corporation (TSXV: CSC). Santa Fe′s $20
million debt financing announced December 23, 2011 provides for a
conditional $10 million facility earmarked for the acquisition of
Columbus Silver and satisfies the financing requirement under the
definitive agreement between Santa Fe and Columbus Silver. The
acquisition, when completed, will add significantly to Santa Fe′s silver
and gold resources potentially available for processing at its fully
permitted and operating flotation mill near Lordsburg, New Mexico.

Santa Feannounced December 15, 2011 it had conditionally agreed
to acquire all of the common stock of Columbus Silver for CDN$0.20 per
share in a cash transaction valued at approximately $10 million. The
parties have agreed to use commercially reasonable efforts to complete
the transaction by March 31, 2012, and in any event by May 31, 2012. The
acquisition remains subject to conditions, including Columbus Silver
obtaining shareholder and regulatory approvals.

Santa Fe′s President and CEO, Pierce Carson, said 'As a result of a
series of transactions recently completed, the Company now has a much
stronger balance sheet and is in a position to move forward with the
strategic acquisition of Columbus Silver. These transactions include
completion of $20 million in long term debt financing and an additional
$5 million revolving credit facility, retirement of $5 million of short
term debt, and conversion to equity at $1.00 per share of $13.5 million
in convertible debt due December 31, 2012.?

Dr. Carson continued, 'We believe that collectively these transactions
represent an important milestone for Santa Fe. We now enjoy an enhanced
capital structure, which should provide the platform for us to execute
our strategic long-term growth objectives, including expansion of our
Lordsburg mining and milling operations and development of the Ortiz
gold project.?

Additional Information:

The Arrangement and Financing
Agreements with Columbus Silver will be included as Exhibits to Santa
Fe′s Current Report on Form 8-K to be filed with the SEC, and available
at www.sec.gov
and at 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, 2011
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

www.santafegoldcorp.com