St Andrew Goldfields Ltd.

St Andrew Goldfields Ltd.

August 14, 2009 16:30 ET

SAS Reports Q2 2009 Financial Results and Update on Holloway Mine

TORONTO, ONTARIO--(Marketwire - Aug. 14, 2009) -


St Andrew Goldfields Ltd. (TSX:SAS) - ("SAS" or the "Company") announces that its loss from continuing operations for the second quarter of 2009 was C$10,010,163 or C$0.03 per share as it moved forward to bring its Holloway Mine into production by November 2009. The loss from continuing operations for the six months ended June 30, 2009, was C$15,583,443 or C$0.05 per share.

During the second quarter of 2009, SAS successfully completed financings totalling US$20.2 million. These financings, consisting of a gold note debt financing of US$16.2 million and a US$4.0 million royalty financing, will be sufficient to bring its Holloway Mine into production in the fourth quarter of 2009 and to advance the exploration and development of the Hislop Project. Pre-production activities at the Holloway Mine commenced in May 2009, and are progressing as planned. Mill operation is expected to commence by November 2009.

"We are pleased with our progress on bringing the Holloway Mine into production in the fourth quarter and the Hislop Project into production in early 2010", said Jacques Perron, President and CEO of SAS. "We are also very pleased that the Ontario Court has confirmed that our obligation under the Holt royalty held by Royal Gold is limited to a 0.013% NSR, which is an insignificant amount. We are moving forward on finalizing our plan for the development of the Holt Mine".

Holloway-Holt and Hislop Projects

During Q2 2009, SAS improved the economics of the Holloway Mine when it reached an agreement with one of its royalty holders to reduce the sliding scale royalty burden on the Holloway Mine. Based on a current gold price of approximately US$950 per ounce, that net smelter return royalty has been lowered from 7% to 4%.

The Company estimated that it would require six months (from the time it received the necessary financing), at a total estimated operating and capital expenditure of C$19.5 million, to complete all mine and mill rehabilitation activities, and these activities remain on schedule.

Since receiving the required financing in May 2009, the mine operations have undergone the necessary changes from care and maintenance to operational mode, and the pre-production programs are progressing according to plan and within budget. The Company has advanced a number of critical tasks including, the development of a backfill system, stope development, surface and underground equipment rehabilitation, infrastructure improvements to mine and mill and recruitment in the technical, operational and administrative areas.
The recruitment effort of qualified personnel has exceeded the Company's expectations, and will continue into the third quarter. There are 120 employees currently at site. Rehabilitation of stationary and mobile equipment is ongoing and will continue for the next three months. Mill upgrades such as installation of a modern mill operating control system, cleaning and testing of all mill motors, bearing and alignment testing of mills, and repair of the electrical components for the refinery furnace are ongoing and are expected to be completed in September. In addition, the newly equipped assay lab is expected to produce required determinations in early September.

SAS is currently evaluating the economics and plans, in order to start mine preparation activities at its Holt Mine, with an objective to put the Holt Mine into production by the second half of 2010. Commencement of mine preparation activities at the Holt Mine will be funded either from cash flow from operations or from the completion of additional financing.

As announced recently on August 7, 2009, the Company completed a National Instrument 43-101 ("NI 43-101") compliant mineral resource estimate on its Hislop Project and is currently preparing a prefeasibility study for the property. Subject to a positive production decision, SAS anticipates that ore feed from the Hislop Project will be trucked to its nearby Holt Mill for processing beginning in early 2010.


The Company anticipates the Holloway Mine will generate positive cash flow from operations in the fourth quarter of 2009 sufficient to fund ongoing mine activities. SAS anticipates that it will able to generate sufficient cash flow from operations in fiscal 2010 to sustain mine operations and developments, to satisfy its gold delivery commitments to its Gold Notes and royalty holders and to repay the outstanding C$7.6 million principal amount secured debentures which will become due on December 31, 2010.

To review the complete unaudited Interim Consolidated Financial Statements and Management's Discussion and Analysis, please see SAS's SEDAR filings at and its website at

About SAS

SAS is a Canadian based gold mining, and exploration Company with an extensive land package in the Timmins mining district, Northeastern Ontario, Canada, which lies within the world famous Abitibi greenstone belt. With near-term production and 120 km of exploration upside potential, SAS is focussed on building a foundation for profitable growth.


This news release contains forward-looking information and forward-looking statements ("forward-looking information") under applicable securities laws, concerning the Company's business, operations, financial performance, condition and prospects, as well as management's objectives, strategies, beliefs and intentions. Forward-looking information is frequently identified by such words as "may", "will", "plan", "expect", "anticipate", "intend" and similar words referring to future events and results, including in respect of the Company's return to being a gold producing company, initially at the Holloway Mine and subsequently with the development of the Hislop Project and the development and restart of the Holt Mine, into producing mines and the timelines therefor; the Company's pre-production and production budgets and timelines and life of mine estimates at the Holloway Mine; the Company's timelines for the restart of the Holt Mill; the expansion of mineral resources and levels of production through successful exploration and development; the completion of a prefeasibility study on the Hislop property and the anticipated positive production decision thereafter; the sufficiency of the financings completed by the Company in the second quarter of 2009 and the adequacy of those financings to restart the Holloway Mine; the Company' ability to attract and maintain adequate skilled manpower to operate its Mine; the Company's intention to repay the secured debentures when they become due and the physical gold delivery commitments to the Gold Notes and royalty holders . This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, uncertainties relating to the interpretation of the geology, continuity, grade and estimates of the mineral resources, unanticipated operational or technical difficulties, delay or inability to raise additional financing on satisfactory terms, fluctuations in gold prices and exchange rates, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions and changes in conditions in the financial markets. Readers are cautioned not to place undue reliance on this forward-looking information as actual results may differ materially from those expressed or implied in the forward-looking information. SAS does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.

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