Santacruz Amends Terms of San Felipe Agreement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct 9, 2012) - Santacruz Silver Mining Ltd. ("Santacruz" or the "Company") (TSX VENTURE:SCZ) is pleased to announce that its subsidiary, Impulsora Minera Santacruz S.A. de C.V. ("Impulsora") has been successful in negotiating improved payment terms with Minera Hochschild Mexico S.A. de C.V. ("MHM") allowing Impulsora to extend out payments to acquire a 100% interest in the San Felipe project located near Hermosillo, Sonora, Mexico.

The prior terms, as previously disclosed, left a balance owing of US$38,000,000 due April 1^st, 2013 for a total purchase price of US$40,000,000.

Under the new revised agreement Impulsora can acquire 100% of the San Felipe project and additional concessions within an area of interest from MHM by:

1. making total cash payments of US$40,000,000 (2 million of which has been paid) as follows;
   1. US$1,000,000 was paid upon execution of the original agreement with MHM on August 3, 2011,
   2. US$1,000,000 was paid on December 15, 2011,
   3. US$4,000,000 will be paid on the execution of this amendment on October 9, 2012,
   4. US$16,000,000 is payable on or before April 1, 2013 and
   5. The remaining balance of US$18,000,000 is payable on or before October 1, 2014
2. US$3,000,000 in committed expenditures at the property due on or before December 1, 2013 as per the new agreement

In addition the terms on the 1% NSR for the San Felipe project, remain unchanged at a purchase cost of US$3,000,000. The other terms of the agreement with MHM remain as previously disclosed.

President Arturo Prestamo stated, "The amended terms of the San Felipe agreement with Hochschild provides us with more flexibility in managing our cash requirements as we advance towards production and achieve cash flow from our Rosario operation later this year."

About San Felipe

San Felipe is a late stage exploration project, located in the State of Sonora, approximately 130 kilometers north-west of the state capital Hermosillo City. Between 2001 to 2008, over 18,500 meters of diamond drilling and significant development work were completed on the La Ventana, San Felipe and Las Lamas veins. An August 30, 2012 43-101 Mineral Resource estimate by Kelsey Zabrusky under the supervision of Zachery Black SME-RM and Donald E. Hulse PE and SME-RM, of Gustavson Associates, LLC (Gustavson) estimates resources of measured and indicated resources of 39mm oz AgEq; inferred resources of 11mm oz AgEq and is available on SEDAR (www.sedar.com) and on the Company''s website at www.santacruzsilver.com.

About Santacruz Silver Mining Ltd.

Santacruz Silver is focused on three advanced stage silver deposits in Mexico with a corporate objective to reach production by first quarter 2013. The Company aims to become a mid-tier silver producer in Mexico.

Arturo Prestamo Elizondo, President, Chief Executive Officer and Director

All scientific or technical nature information herein was approved by Harald Hoegberg and Randy Henkle (both of whom are qualified persons as such term is defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects). Mr. Hoegberg and Mr. Henkle from Hoegberg and Associates based in Denver Colorado, U.S.A. are independent consultants for Santacruz Silver Mining Ltd.

Forward-looking information

Certain statements contained in this news release, such as potential mineralization on the Company''s properties, and the Company''s exploration and development plans and anticipated production dates on the Company''s mineral properties, constitute "forward-looking information" as such term is used in applicable Canadian securities laws. Forward-looking information is based on plans, expectations and estimates of management at the date the information is provided and is subject to certain factors and assumptions, including, that the Company''s financial condition and development plans do not change as a result of unforeseen events, that the Company obtains regulatory approval, future metal prices and the demand and market outlook for metals. Forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual results to vary materially from those projected in such forward-looking information. Factors that could cause the forward-looking information in this news release to change or to be inaccurate include, but are not limited to, the risk that any of the assumptions referred to prove not to be valid or reliable, that occurrences such as those referred to above are realized and result in delays, or cessation in planned work, that the Company''s financial condition and development plans change, delays in regulatory approval, risks associated with the interpretation of data, the geology, grade and continuity of mineral deposits, the possibility that results will not be consistent with the Company''s expectations, as well as the other risks and uncertainties applicable to mineral exploration and development activities and to the Company as set forth in the Company''s Filing Statement filed under the Company''s profile at www.sedar.com. The Company undertakes no obligation to update these forward-looking statements, other than as required by applicable law.

This news release does not constitute an offer to sell or solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable securities laws or an exemption from such registration is available.