Tyhee Gold Agrees to Merge With Santa Fe Gold

Tyhee Gold Corp. (TSX VENTURE:TDC) (the "Company" or "Tyhee") is pleased to
report that it has entered into an agreement (the "Merger Agreement") with Santa
Fe Gold Corporation ("Santa Fe") whereby, subject to certain conditions, Tyhee,
acting through a newly-incoporated Delaware subsidiary corporation, will acquire
100% of the issued and outstanding securities, including dilutive securities, of
Santa Fe in exchange for securities of Tyhee (the "Transaction"). Santa Fe
(OTCQB:SFEG) currently holds a number of precious metals properties in New
Mexico, USA, including the Summit gold mine, which began commercial production
in 2012 before mining activities were suspended in November 2013, primarily due
to operational challenges brought on by capital constraints. 


Trading of Tyhee shares, which was halted at the request of the Company on
January 17th, is expected to resume shortly following this announcement. The
unusual length of this halt has been due primarily to a number of regulatory and
financial complexities related to the Transaction, which have now been resolved.



The Merger Agreement, which will be filed under Tyhee's profile on SEDAR,
follows the completion of extensive due diligence by Tyhee's management and
technical team, including comprehensive discussions, site inspections and a
review of Santa Fe's financial situation. The board of directors of the Company
has concluded that, following a significant restructuring of Summit's
operations, mine plan and debt position - including a cash injection estimated
at US$19 million by Tyhee after completion of the Transaction into the Summit
Mine and Santa Fe's wholly owned Lordsburg Mill - the mine and mill can be
re-started in 2014, with further production expansions scheduled to be
implemented over the subsequent several months.


Following completion of the Transaction, Tyhee's President and CEO, Brian
Briggs, will continue in that capacity. Pierce Carson, PhD., Santa Fe's CEO, who
has had an accomplished international mining career spanning over 35 years with
extensive experience in directing exploration, development and mining of base
metals, precious metals and industrial minerals and in administering public
companies, will join Tyhee's board of directors and has agreed to consult for
Tyhee on a part-time basis. 


Upon completion of this merger, Tyhee's core assets will include the Summit mine
and Lordsburg Mill in New Mexico, as well as a significant growth asset, the
larger but longer term Yellowknife Gold Project ("YGP") in Canada's Northwest
Territories. (Details of these assets are provided below.)


The board of directors of both Santa Fe and Tyhee believe that the Transaction
will bring significant benefits to each of the companies and their shareholders,
and accordingly, the directors of both Santa Fe and Tyhee have unanimously
supported the proposed Transaction. 


The Transaction

Shareholders of Santa Fe will receive 0.9 of a common share of Tyhee (the "Tyhee
Shares"), and 0.45 of a warrant to purchase a common share of Tyhee (the "Tyhee
Warrants") in consideration for each Santa Fe share (the "Santa Fe shares"). The
Tyhee Warrants will be subject to certain restrictions on vesting and
exercisability. Each whole Tyhee Warrant will entitle the holder to purchase one
Tyhee Share at a price of CDN$0.25 for a period of four years following the
closing of the Transaction. All currently outstanding convertible securities of
Santa Fe will, subject to the approval and policies of the TSX Venture Exchange,
entitle the holder thereof to acquire, upon exercise, such number of Tyhee
Shares and Tyhee Warrants as such holder would have been entitled to acquire as
a result of the Transaction had the convertible securities been exercised
immediately prior to the closing of the Transaction. Existing Tyhee and Santa Fe
shareholders will own approximately 78% and 22%, respectively, of the
outstanding shares of Tyhee's common shares following the Transaction.
Outstanding convertible securities of Santa Fe will entitle the holders to
acquire common shares and warrants of Tyhee upon completion of the Merger. Tyhee
expects to set aside approximately an additional 92.5 million Tyhee common
shares for issuance upon exercise of outstanding Santa Fe convertible securities
and the Tyhee Warrants issued in connection with the Transaction.


It is anticipated that the Transaction will be structured as a combination of
Santa Fe into a newly-formed Delaware subsidiary of Tyhee, by way of a plan of
arrangement or other transaction that is supported by the management and board
of directors of Santa Fe. Further, completion of the Transaction, which will
require the approval of Santa Fe's shareholders, is targeted for the second
quarter of 2014. Closing of the Transaction is also subject to customary closing
conditions, including receipt of the approval of the TSX Venture Exchange and
any other regulatory approvals. In addition, the closing of the Transaction is
subject to the completion of certain debt restructurings by Santa Fe, noted
below, and the completion of a minimum of US$20 million financing by Tyhee, also
discussed below.


Upon closing, Tyhee will continue trading on the TSX Venture Exchange and plans
are in place to apply for a potential US listing on the OTCQX as well as a
German listing. The resultant increased visibility is expected to heighten
Tyhee's recognition as a diversified, well-capitalized, low-cost gold-silver
miner, explorer and developer. 


As a key part of this transaction process, Tyhee has negotiated the terms of
debt restructuring with Santa Fe's three primary creditors, Waterton Global
Resource Management, Sandstorm Gold Ltd. and International Goldfields Limited,
to restructure the terms of Santa Fe's indebtedness. Closing of the Transaction
is conditional upon the creditors entering definitive agreements for such
restructuring.


In the event that the Merger Agreement is terminated, a break fee in the amount
of US$300,000 (the "Break Fee") may be payable by Santa Fe to Tyhee, or by Tyhee
to Santa Fe depending on the circumstances of such termination.


Santa Fe is currently subject to a cease trade order issued by the British
Columbia Securities Commission dated November 25, 2003, and completion of the
Bridge Loan (described below) will be subject to Santa Fe obtaining a revocation
of such cease trade order sufficient to allow for the completion of the Bridge
Loan and the Transaction. 


Tyhee has agreed to lend Santa Fe US$3 million (the "Bridge Loan") to repay a
portion of that company's accounts payable, with the first advance to be made on
or before February 15, 2014. In the event that the Merger Agreement is
terminated, the principal amount and interest outstanding, and expenses incurred
by Tyhee in connection with the Bridge Loan may be, in certain circumstances at
the option of Tyhee, converted into common shares of Santa Fe. If the funds for
the Bridge Loan are not available by February 15, 2014, Santa Fe will have the
right to terminate the Merger Agreement.


Compelling Transaction

The proposed business combination will maximize value for both Tyhee and Santa
Fe shareholders, creating a combined company potentially benefiting from:




--  improved financial standing, with significantly improved liquidity and
    access to capital to properly capitalize the Summit mine for a return to
    full production, and enabling the Company to execute its strategy of
    building its production profile through additional acquisitions with
    near-term production potential; 
--  being transformed into a developing precious metals production company
    with gold and silver production planned from Summit; 
--  significantly enhanced development and exploration upside across a
    diverse portfolio of precious metals properties, including the Summit
    project in New Mexico as well as the large undeveloped gold resources
    (Feasibility Study - August 2012) at the YGP, NWT and the Ortiz project,
    NM. 
--  Tyhee's highly experienced underground mining team that will be key to
    successful operations at Summit; and, 
--  an expanded management team that includes complementary experience in
    exploration, development, operations, and financing



Denis Taschuk, Tyhee's Chairman of the Board, said, "We are all very pleased
about the potential we see with this agreement. It has taken a tremendous amount
of effort and cooperation from numerous parties, including Santa Fe's board and
management as well as their debt holders and we are confident that we will see
significant value generated for all of the stakeholders involved." 


Santa Fe's Chairman, Jakes Jordaan, added, "We are extremely pleased to have
found such an optimal fit in terms of both our combined assets and leadership
teams, particularly given the unusually challenging times virtually everyone in
our sector is facing. On behalf of Santa Fe's board, management and the Special
Committee that supported this agreement, I want to thank everyone involved and
we look forward to seeing the benefits we all agree are apparent in this
exciting restructuring as the Summit Mine is properly brought back into
production and expanded to its real potential as an integral part of Tyhee's
ambitious growth plans." 


Tyhee CEO, Brian Briggs stated, "This is precisely the sort of opportunity that
my team and I have been looking forward to over the past several months as
market conditions have affected the timing of our plan to bring the Yellowknife
Gold Project into production. Although we remain committed to that longer term
goal, we are extremely happy to be able to start producing gold at Summit and
then to optimize this operation in line with our target of becoming a profitable
new mid-tier, multi-project gold company." 


Corporate Strategy

As previously announced, Tyhee has been aggressively pursuing new opportunities
to enable the Company to benefit from gold production in 2014. This revised
corporate strategy is aimed at enhancing Tyhee's shareholder value by taking
advantage of corporate project opportunities available in the current challenged
resource investment environment to generate cash-flow, accelerate growth and
provide a strong platform on which to build a new multi-project gold mining
company. At the same time, the Company will continue to progress its YGP, an
advanced stage wholly-owned gold project in the development and permitting
stage.


In line with this strategy, Tyhee also announced plans to create a special
purpose vehicle (the "SPV"), through which funds of up to US$37.5 million are
intended to be raised through an offering of secured, convertible debt (the "SPV
Financing"). Closing on a minimum of US$20.0 million in the SPV Financing is a
condition to the closing of the Transaction, and the Break Fee may be payable if
such financing is not completed by March 15, 2014. The SPV Financing is expected
to fund the proposed cash injection into the Summit Mine and Lordsburg Mill
complex.


Up to 10 per cent of the funds raised through the SPV are to be used for general
corporate purposes, including the ongoing development of Tyhee's YGP. 


IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC

In connection with the proposed transaction, Tyhee and Santa Fe intend to file
relevant materials with the Securities and Exchange Commission (the "SEC"),
including the filing by Tyhee with the SEC of a Registration Statement on Form
F-4 (the "Registration Statement"), which will include a preliminary prospectus
and related materials to register the Tyhee Shares and Tyhee Warrants to be
issued in exchange for Santa Fe common shares. The Registration Statement will
incorporate a proxy statement/ prospectus (the "Proxy Statement/Prospectus")
that Santa Fe plans to mail to its stockholders in connection with obtaining
approval to the proposed merger. The Registration Statement and the Proxy
Statement/Prospectus will contain important information about Santa Fe, Tyhee,
the transaction and related matters. Investors and security holders are urged to
read the Registration Statement and the Proxy Statement/Prospectus carefully
when they are available. Investors and security holders will be able to obtain
free copies of the Registration Statement and the Proxy Statement/Prospectus and
other documents filed with the SEC by Santa Fe and Tyhee through the web site
maintained by the SEC at www.sec.gov.


Santa Fe and its directors and executive officers also may be deemed to be
participants in the solicitation of proxies from the stockholders of Santa Fe in
connection with the transaction described herein. Information regarding the
special interests of these directors and executive officers in the transaction
described herein will be included in the Proxy Statement/Prospectus described
above. Additional information regarding these directors and executive officers
is also included in Santa Fe's annual report on Form 10-K, which was filed with
the SEC on September 30, 2013. This document is available free of charge at the
SEC's web site at www.sec.gov.


Tyhee and its directors and executive officers may be deemed to be participants
in the solicitation of proxies from the stockholders of Santa Fe in connection
with the transaction described herein. Information regarding the special
interests of these directors and executive officers in the transaction described
herein will be included in the Proxy Statement/Prospectus described above. 


The debt securities to be offered pursuant to the SPV Financing have not been,
nor will they be, registered under the United States Securities Act of 1933, as
amended, and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons absent U.S. registration or an
applicable exemption from the U.S. registration requirements. This news release
does not constitute an offer for sale of securities for sale, nor a solicitation
for offers to buy any securities. Any public offering of securities in the
United States must be made by means of a prospectus containing detailed
information about the issuer and management, as well as financial statements.


Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.


All statements in this news release that address events or developments that the
Company expects to occur, other than statements of historical facts, is
"forward-looking information." Forward-looking information is necessarily based
on estimates and assumptions that are inherently subject to known and unknown
risks, uncertainties and other factors that may cause the Company's actual
results, performance or achievements to be materially different from those
expressed or implied by such forward-looking statements. Generally,
forward-looking information can be identified by the use of forward-looking
terminology such as "expects", "believes", "anticipates", "budget", "scheduled",
"estimates", "forecasts", "intends", "plans" and variations of such words and
phrases, or by statements that certain actions, events or results "may", "will",
"could", "would" or "might", "be taken", "occur" or "be achieved". Forward
looking statements made in this news release include all statements related to:
the Company's intention to establish a special purpose vehicle the Company's
ability to implement the Company's corporate strategy; the anticipated structure
of the Transaction; the composition of the resulting board of directors of the
Company; the anticipated restructuring of the Summit Mine's operations, mine
plan and debt position, the plan to re-start and expand production from the
Lordsburg Mill; the planned Bridge Loan and cash injection into Santa Fe; the
Company's plan to apply for listings in the United States and Germany; receipt
of shareholder approval for the Transaction from shareholders of Santa Fe; the
target date for shareholder approval; the potential for an acquisition or merger
by the Company; becoming the next generation of multi project gold mining
company; the heightened recognition of the Company resulting from the
Transaction; maximization of value to shareholders; the potential benefits of
the Transaction to shareholders of the Company and Santa Fe, including improved
financial standing, liquidity, access to capital and near-term production
potential, the profitability of the Company from metal production from the
Summit Mine, enhanced development and exploration potential from the Summit and
Ortiz projects, and the expanded management team; and the continued progress of
the Company's Yellowknife Gold Project. 


Such forward-looking information may is based on management's reasonable
estimates and assumptions, including without limitation, assumptions about:
general economic conditions and conditions in the financial markets; limited
changes in demand and prices for minerals; the ability of the Company to access
sufficient financing as contemplated in this news release; the ability of the
Company to identify appropriate merger or acquisition opportunities, or if an
opportunity is identified, to conclude a transaction on satisfactory terms or to
realize the expected benefits of any transaction; the ability of the Company to
satisfy the conditions in any agreement related to such a transaction; the
belief that due diligence investigations of any involved party will not identify
any materially adverse facts or circumstances; that the required approvals will
be obtained from shareholders; that all required third party, regulatory and
government approvals will be obtained; and that Tyhee will be able to achieve
its operational, production and/or financial objectives in respect of any
acquisition and generally. 


Factors that could cause future events to differ from those anticipated in
forward looking statements include: inability to identify merger or acquisition
opportunities, or once identified, negotiate a transaction on terms acceptable
to Tyhee; inability to meet the conditions provided for in the Merger Agreement,
including obtaining sufficient funding for the Bridge Loan and the proposed cash
injection; delays in obtaining approvals for acquisition or merger activity,
including approval of the TSX Venture Exchange and securities regulatory
authorities; litigation, legislative, environmental and other judicial,
regulatory, political and competitive developments; fluctuations in foreign
exchange rates and interest rates; inability to achieve operational efficiencies
on any acquired property sufficient to overcome the costs of acquisition or
merger; discrepancies between actual and estimated reserves and resources or
between actual and estimated metallurgical recoveries; costs of production;
capital expenditure requirements; the costs and timing of any acquisition or
merger, including but not restricted to construction, expansion or enhancement
of new or existing operations; the success of exploration and permitting
activities; parts, equipment, labor or power shortages or other increases in
costs; mining accidents, labour disputes or other adverse events; changes in
applicable laws or regulations; that there are no material variations in the
current tax and regulatory environment or the tax positions taken by the
Company; that the regulatory and political environment within any country where
any such targeted entity or project may be located will support the development
of environmentally safe mining projects, and any other factors that may cause
Tyhee's actual results, performance or achievements to be materially different
from those expressed or implied by such information. 


In addition to the above, the factors described or referred to under the
headings "Financial Risks and Uncertainties" and "Operational Risks and
Uncertainties" in Tyhee's Management Discussion and Analysis for the nine months
ended August 31, 2013, which is available on the SEDAR website at ww.sedar.com,
should be reviewed in conjunction with the information found in this news
release. 


Although Tyhee has attempted to identify important factors that could cause
actual results, performance or achievements to differ materially from those
contained in forward-looking information, there can be other factors that cause
results, performance or achievements not to be as anticipated, estimated or
intended. There can be no assurance that such information will prove to be
accurate or that management's expectations or estimates of future developments,
circumstances or results will materialize. As a result of these risks and
uncertainties, any proposed transaction could be modified, restricted or not
completed, and the results or events predicted in these forward looking
statements may differ materially from actual results or events. Accordingly,
readers should not place undue reliance on forward-looking information. 


The forward-looking information in this news release is made as of the date of
this news release, and Tyhee disclaims any intention or obligation to update or
revise such information, except as required by applicable law. This news release
does not constitute an offer to buy any securities or a solicitation of any vote
or approval or a solicitation of an offer to sell any securities.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Tyhee Gold
Brian Briggs
President
604 681-2877
info@tyhee.com


Tyhee Gold
Greg Taylor
Investor Relations
905 337-7673 or 416 605-5120
gtaylor@tyhee.com


Santa Fe Gold
Pierce Carson
President & CEO
(505) 255-4852
pcarson@santafegoldcorp.com
Tyhee Gold Corp. (TSXV:TDC)
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