San Gold Corporation

TSX : SGR
OTCQX : SGRCF


San Gold Corporation

October 22, 2012 07:00 ET

007 Drill Results Continue to Expand the Deposit

WINNIPEG, MANITOBA--(Marketwire - Oct. 22, 2012) - George Pirie, President and Chief Executive Officer for San Gold Corporation (TSX:SGR)(OTCQX:SGRCF), is pleased to announce interim results of its ongoing 2012 diamond drilling program on the 007 deposit within the Company's 100% owned Rice Lake Project located in Bissett, approximately 235 kilometres northeast of Winnipeg, Manitoba, Canada. The Rice Lake Project has a permitted, modern gold mill currently processing ore at a capacity of 2,500 tons per day, modern surface infrastructure including a licensed tailings management facility, and is connected to the Manitoba power grid system.

Since being discovered in 2009, the 007 deposit continues to demonstrate robust grades and widths across all four lenses of the deposit and it continues to be consistent at depth while structural characteristics are becoming increasingly predictable.

This drilling activity is part of the Company's program to upgrade resources into higher confidence categories and to increase reserves within the mining complex. Overall results are positive and comparable with the Company's March 31, 2012 resource update. The Company will continue drilling for the remainder of 2012 and provide a resource update in the first quarter of 2013.

"The 007 deposit drilling continues to prove up high-quality resources which are accessible from existing infrastructure. The drilling continues to confirm the continuity of the deposit at depth. The ongoing development of the 16 and 26 Levels will provide drill platforms for further resource and reserve definition. Mining is currently scheduled to begin from these levels in early 2014," said Mr. Pirie.

Highlights of the drilling program include:

Hole Zone From
(m)
To
(m)
Grade
(g/t)
Length
(m)
Below
Surface (m)
DX-12-023 007 1026.7 1038.0 11.3 11.3 718
DX-12-034 007 1044.9 1050.7 15.9 5.7 757
S887-12-021 730 44.2 49.1 24.2 4.9 361
S890-12-007 730 117.7 120.2 42.6 2.5 416
607-12-031 Shoreline Basalt 185.1 187.4 28.8 2.3 1239
607-12-032 Shoreline Basalt 208.1 209.9 20.0 1.8 1246

Drilling for this program was carried out in three regions from drill stations located on surface and underground, with a total of 98 drill holes intercepting the 007 deposit and adjacent regions of the Shoreline Basalt Unit so far this year. The Company is very encouraged by the results of the Shoreline Basalt Unit drilling program as it continues to demonstrate the expansion of existing mineralized zones and the potential of new zones to be discovered along the Shoreline Basalt Unit both east and west and at depth.

The following provides a brief summary of the drilling program in each of the three regions:

  1. 61 intersections were obtained between 300 and 595 metres below surface. Drilling in this region occurred both from surface and underground drill stations. These infill targets were identified to support the Company's near-term mining plans within the active mining region accessed by ramp from the Hinge/007 portal.

  2. 7 intersections were obtained from between 700 and 895 metres below surface from surface drilling stations. The Company intends to drill this region more fully once development from 16 Level has reached the Hinge district.

  3. 30 intersections were obtained from between 900 and 1,250 metres below surface. These infill targets were identified to support planned development of the 007 deposit from 26 Level. The 26 Level is the closest portion of the Rice Lake mine infrastructure to the projections of the 007 deposit. Development is currently underway in this region and mining is expected to commence in early 2014.

    Table 1 at the end of this release provides the full list of results from this year's drilling program to date.

    Figure 1 at the end of this release provides a longitudinal section of the three main drilling regions within the 007 deposit and planned development from 16 and 26 Level.

    Figure 2 at the end of this release provides a plan view of planned development of the 007 deposit from 16 Level of the Rice Lake mine.

    Figure 3 at the end of this release provides a plan view of planned development of the 007 deposit from 26 Level of the Rice Lake mine.

Underground drill core samples are assayed on site in the company's assay lab using the fire assay method with an AA and gravimetric finish. San Gold's quality control and assurance program includes the insertion of standards, the retention of pulps and rejects, and spot checks utilizing independent labs including TSL Laboratories in Saskatoon, SK and Accurassay Laboratories of Thunder Bay, ON. The core lengths are actual lengths as drilled and have not been adjusted for the true width of the mineralized zones.

This drilling program was carried out by San Gold mine geologists under the supervision of D. Ginn, P.Geo., the Qualified Person for San Gold under National Instrument 43-10, who has reviewed and approved the press release.

About San Gold

San Gold is an established Canadian gold producer, explorer, and developer that owns and operates the Hinge, 007, and Rice Lake mines near Bissett, Manitoba. The Company employs more than 400 people and is committed to the highest standards of safety and environmental stewardship. San Gold is on the Toronto Stock Exchange under the symbol "SGR" and on the OTCQX under the symbol "SGRCF".

Cautionary Note

This news release includes certain "forward-looking statements". All statements, other than statements of historical fact included in this release, including, without limitation, statements regarding forecast gold production, gold grades, recoveries, cash operating costs, potential mineralization, mineral resources, mineral reserves, exploration results, and future plans and objectives of the Company, are forward-looking statements that involve various risks and uncertainties. These forward-looking statements include, but are not limited to, statements with respect to mining and processing of mined ore, achieving projected recovery rates, anticipated production rates and mine life, operating efficiencies, costs and expenditures, changes in mineral resources and conversion of mineral resources to proven and probable mineral reserves, and other information that is based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be "forward-looking statements." Forward-looking statements are subject to a variety of risks and uncertainties that could cause actual events or results to differ from those reflected in the forward-looking statements.

There can be no assurance that forward-looking statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include, among others, the actual results of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future prices of precious metals, as well as those factors discussed in the section entitled "Other MD&A Requirements and Additional Disclosure and Risk Factors" in the Company's most recent quarterly Management's Analysis and Discussion ("MD&A"). Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Exploration results that include geophysics, sampling, and drill results on wide spacings may not be indicative of the occurrence of a mineral deposit. Such results do not provide assurance that further work will establish sufficient grade, continuity, metallurgical characteristics, and economic potential to be classed as a category of mineral resource. A mineral resource that is classified as "inferred" or "indicated" has a great amount of uncertainty as to its existence and economic and legal feasibility. It cannot be assumed that any or part of an "indicated mineral resource" or "inferred mineral resource" will ever be upgraded to a higher category of resource. Investors are cautioned not to assume that all or any part of mineral deposits in these categories will ever be converted into proven and probable reserves.

Table 1: 2012 007 Drill Intersections by Elevation 1

Drill Hole Zone From
(m)
To
(m)
Grade
(g/t)
Length
(m)
Below
Surface (m)
Active Mining Region Drilling
1 JH-11-044 700 453.9 457.0 19.4 3.1 300
2 JH-11-047 700 469.3 470.1 1.4 0.8 308
3 CD-11-296 740 433.5 436.9 12.5 3.4 324
4 CD-11-297 740 443.0 444.8 1.6 1.8 335
5 887-12-050 730 2.4 6.4 4.3 3.9 336
6 887-12-051 730 4.1 6.7 11.4 2.7 336
7 CD-12-298 740 446.7 449.4 9.3 2.7 338
8 CD-12-290 730 455.1 456.5 10.3 1.4 338
9 CD-12-311 740 443.6 453.5 1.2 10.0 340
10 CD-12-268 730 453.2 463.5 9.8 10.3 342
11 S887-12-005 730 43.4 44.6 1.5 1.2 346
12 CD-12-317 740 457.6 457.9 20.5 0.3 347
13 CD-12-283 730 460.2 464.4 24.5 4.1 347
14 CD-11-303 740 452.6 453.4 74.6 0.8 348
15 S887-12-001 740 54.4 56.3 18.1 1.9 348
16 CD-12-324 730 461.1 465.9 5.2 4.8 349
17 CD-12-276 730 460.9 466.0 6.0 5.2 353
18 CD-12-289 730 464.8 468.0 3.5 3.2 354
19 S887-12-006 730 46.4 47.7 2.0 1.3 354
20 S887-12-025 730 41.9 46.0 11.1 4.1 357
21 S887-12-002 740 62.3 65.5 17.1 3.2 360
22 CD-12-275 730 466.4 470.4 7.4 4.0 360
23 S887-12-029 730 52.4 57.8 2.6 5.4 361
24 CD-11-304 740 460.5 462.2 3.8 1.7 361
25 S887-12-021 730 44.2 49.1 24.2 4.9 361
26 CD-12-269 730 467.8 473.6 10.5 5.8 364
27 S887-12-026 730 50.1 53.9 4.3 3.8 367
28 JH-11-029 720 512.4 514.9 3.7 2.2 369
29 S887-12-030 730 61.7 63.2 29.3 1.5 369
30 CD-12-263 730 473.8 477.1 4.9 3.3 369
31 S887-12-003 740 76.0 78.0 16.3 2.0 374
32 S887-12-022 730 56.3 60.5 8.3 4.2 377
33 S887-12-017 730 59.6 63.4 5.2 3.8 379
34 JH-11-048 700 486.1 487.3 1.3 1.2 379
35 S890-12-009 730 81.3 89.9 0.3 8.5 382
36 S887-12-027 730 61.9 70.0 5.8 8.1 384
37 S887-12-008 730 76.8 80.3 7.6 3.5 389
38 S887-12-004 740 92.4 94.2 2.5 1.8 396
39 S890-12-001 730 95.0 97.0 8.2 2.0 398
40 CD-12-271 730 496.4 498.1 9.5 1.7 399
41 S887-12-018 730 79.0 85.3 13.9 6.3 402
42 CD-12-264 730 490.7 496.5 3.3 5.8 402
43 CD-12-299 740 495.3 497.3 1.3 2.0 406
44 CD-12-325 740 499.7 501.5 0.5 1.9 414
45 S890-12-007 730 117.7 120.2 42.6 2.5 416
46 CD-12-291 730 505.1 508.1 18.8 3.0 417
47 S887-12-023 730 98.6 104.7 16.1 6.1 420
48 S882-12-008 700 166.5 167.4 5.7 0.9 424
49 CD-12-270 730 506.5 512.1 1.9 5.6 424
50 CD-12-279 730 511.6 513.9 36.0 2.3 433
51 CD-12-274 730 518.3 520.8 0.4 2.5 435
52 S887-12-013 740 118.5 122.3 7.3 3.7 437
53 S882-12-006 700 197.5 201.5 4.4 4.0 440
54 S882-12-004 700 215.4 216.8 0.1 1.4 442
55 S882-12-002 700 239.2 240.2 0.3 1.0 449
56 S882-12-003 700 243.4 244.2 0.0 0.9 473
57 CD-12-301 740 548.5 549.2 1.0 0.6 480
58 CD-12-266 730 545.7 547.3 13.1 1.6 480
59 CD-12-329 730 570.0 574.5 3.8 4.5 505
60 CD-12-267 730 585.7 589.5 6.4 3.7 533
61 CD-12-326 740 592.0 596.8 0.9 4.8 538
16 Level Access Drilling
62 DX-12-032 007 1025.0 1049.0 1.7 24.0 701
63 DX-12-023 007 1026.7 1038.0 11.3 11.3 718
64 DX-12-034 007 1044.9 1050.7 15.9 5.7 757
65 DX-12-028 007 1059.9 1063.4 1.2 3.5 763
66 DX-11-021 007 1082.8 1084.9 0.2 2.1 819
67 DX-12-026 007 1045.0 1047.9 12.1 2.8 823
68 DX-12-027 007 1094.2 1094.5 32.1 0.3 829
26 Level Access Drilling
69 607-12-005 Shoreline Basalt 118.7 119.1 56.2 0.4 905
70 607-12-003 Shoreline Basalt 115.0 117.1 3.3 2.1 1128
71 607-12-021 Shoreline Basalt 113.5 123.6 3.8 10.0 1143
72 607-12-017 Shoreline Basalt 151.5 152.2 2.5 0.6 1148
73 607-12-006 Shoreline Basalt 76.6 79.1 3.2 2.5 1148
74 607-12-023 Shoreline Basalt 191.9 192.1 31.6 0.2 1149
75 607-12-020 Shoreline Basalt 180.5 183.5 2.8 3.0 1153
76 607-12-019 Shoreline Basalt 269.8 272.2 4.5 2.4 1169
77 607-12-010 Shoreline Basalt 161.5 162.4 1.5 0.9 1172
78 607-12-001 Shoreline Basalt 192.4 194.0 10.0 1.7 1172
79 607-12-022 Shoreline Basalt 192.0 192.5 8.3 0.4 1175
80 607-12-016 Shoreline Basalt 186.3 187.1 0.1 0.8 1178
81 607-12-009 Shoreline Basalt 69.1 71.6 0.7 2.6 1181
82 607-12-004 Shoreline Basalt 92.0 94.2 0.0 2.2 1182
83 607-12-002 Shoreline Basalt 130.9 135.8 5.2 4.9 1183
84 607-12-011 Shoreline Basalt 8.2 9.1 4.0 0.9 1184
85 607-12-013 Shoreline Basalt 66.0 68.4 1.6 2.4 1185
86 607-12-007 Shoreline Basalt 16.5 16.7 4.8 0.2 1186
87 607-12-024 Shoreline Basalt 152.3 153.1 6.2 0.8 1192
88 607-12-033 Shoreline Basalt 187.5 191.4 3.6 3.9 1194
89 607-12-028 Shoreline Basalt 185.6 186.4 11.5 0.8 1198
90 607-12-025 Shoreline Basalt 175.7 179.2 3.6 3.5 1205
91 607-12-029 Shoreline Basalt 142.4 144.2 0.1 1.9 1207
92 607-12-030 Shoreline Basalt 152.9 154.7 1.2 1.8 1217
93 607-12-039 Shoreline Basalt 222.9 224.4 1.5 1.5 1217
94 607-12-034 Shoreline Basalt 252.8 253.7 2.8 0.9 1224
95 607-12-026 Shoreline Basalt 182.3 183.2 8.4 0.9 1224
96 607-12-035 Shoreline Basalt 260.2 262.9 1.5 2.7 1234
97 607-12-031 Shoreline Basalt 185.1 187.4 28.8 2.3 1239
98 607-12-032 Shoreline Basalt 208.1 209.9 20.0 1.8 1246
1 The intersections presented herein may not necessarily represent the true width of mineralization.

To view the figures associated with this release, please visit the following links:

Figure 1: http://media3.marketwire.com/docs/SGR1019Figure1.pdf

Figure 2: http://media3.marketwire.com/docs/SGR1019Figure2.pdf

Figure 3: http://media3.marketwire.com/docs/SGR1019Figure3.pdf

Attachment Available: http://cnrp.marketwire.com/cnrp_files/20121019-SGRCNRP.pdf

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

Contact Information

  • San Gold Corporation
    George Pirie
    President and CEO
    Toll Free: 1 (855) 585-4653

    San Gold Corporation
    Manish Grigo
    Director Investor Relations
    info1@sangold.ca
    www.sangold.ca