Santacruz Silver Exercises Option to Acquire El Gachi Project

Santacruz Silver Mining Ltd. ("Santacruz Silver" or the "Company") is pleased to announce that pursuant to the San Felipe Agreement with Hochschild Mining, dated August 18, 2011, it has exercised its option to acquire the 48,057.33 hectare El Gachi project located 30 kilometers from the San Felipe project in Sonora state.

The project includes a historical producing mine operated by Anaconda Mining Company and Peñoles, in the 1960's and 1970's respectively. During the 1980's Minera Serrana shipped high grade ore from El Gachi to its nearby San Felipe mill. El Gachi is a high-grade manto and vein mineralized system located 30 kilometers by paved road from San Felipe project in the state of Sonora México.

President Arturo Préstamo states "We are very pleased to add El Gachi to our portfolio of silver projects. This is a large land position in a known silver belt with excellent exploration potential and infrastructure."

Under the terms of the agreement, Santacruz has the option to retain the property by making a US$3million payment before or by October 2014. This will give Santacruz 100% ownership of the El Gachi property.