SOURCE: San Gold Corporation

San Gold Corporation

February 03, 2010 08:15 ET

San Gold Begins Development of the 007 Deposit as New Drill Results Demonstrate High Grade Features and Continuity of New Mine

BISSETT, MB--(Marketwire - February 3, 2010) - Dale Ginn, CEO of San Gold Corporation (TSX-V: SGR), is pleased to report surface exploration drilling results that have considerably expanded on and confirmed the recently announced "007" discovery. The deepest intersection encountered so far in drill hole # CD-09-011 yielded 52.5 g/tonne (1.53 oz/ton) over 2.0 meters (6.6 ft) at over 300 meters (1000 ft) below surface. The results of this series of drill holes stem from the first efforts toward establishing dimensions and continuity of the "007" zone following the recent announcement of the high grade discovery hole CD-09-007, which cut 1788 g/tonne (52.2 oz/ton) over 2.1 meters (6.9 ft), (see press release dated Nov. 23, 2009).

A summary of results obtained to date is contained within the following table, as well, a detailed longitudinal section is available on the company's website. Fifteen intersections are reported within thirteen drill holes as tabulated below, hole numbers not listed in sequence have not yet been drilled or logged:

                                                     Gold g/tonne     Zone/
Hole #       From (m)     To (m)    Length m (ft)       (oz/ton)      Lens
---------    -------      -----     ------------      -----------    ------
CD-09-001     294.0       295.6      1.6      5.3      2.4     0.07     007

CD-09-002     322.2       325.2      3.0      9.9      2.4     0.07     007

CD-09-003     314.0       318.5      4.5     14.8     28.8     0.84     007
including     314.7       316.5      1.8      5.9     67.5     1.97     007
and           365.8       366.5      0.7      2.3     24.0     0.70     new

CD-09-004     321.4       323.7      2.3      7.6      8.0     0.24     007

CD-09-005     294.7       296.5      1.8      5.9      2.4     0.07     007

CD-09-006     325.2       326.2      1.0      3.3     15.8     0.46     007

CD-09-007     290.3       292.4      2.1      6.9   1787.7     52.2     007

CD-09-008        no significant   values

CD-09-010     329.0       330.1      1.1      3.6      4.5     0.13     007

CD-09-011     320.5       322.5      2.0      6.6     52.5     1.53     007

CD-09-012     355.1       356.1      1.0      3.3      5.8     0.17     007

CD-09-013     278.2       281.2      3.0      9.9     13.1     0.38     007

CD-09-014     325.2       327.4      2.2      7.2      1.0     0.03     007

The "007" zone has now been drill tested over an approximate 200 meter strike length and to depths of over 300 meters. Assay results to date are generally stronger on the west side of the deposit and below 100 meters, although hole #008 may not have crossed the plane of the zone as it deviated from the intended target. The zone remains open along strike to the north-east and to the south-west as well as at depth and to surface as all holes except for #008 encountered veining and mineralization. The 007 zone dips steeply to the north-northwest and is made up of quartz and carbonate veins containing gold and pyrite mineralization. The dominant deposit control appears to be structural as with the previous three deposits (Hinge, Cohiba and L13); however the lithology is slightly different in that this deposit occurs at or near an intermediate-mafic contact. Strong chloritic alteration of the mafic unit is observed at the footwall contact immediately below the mineralized veining, the strike length of this contact is currently unknown. The recent surface Lidar (detailed topography) survey undertaken by San Gold displays a pronounced lineation in outcrop extending from the Rice Lake mine eastward to the "007" discovery and beyond. The 007 zone is located approximately 2 kms to the north-east of San Gold's operating Rice Lake mine and mill, is fully accessible by road and is accessible from the Hinge Mine decline.

San Gold also reports that development has commenced toward the "007" zone from the Hinge decline. Mobilization of the mining contractor Cementation took place during the first week in January and advance of approximately 20 feet per day is now underway with contract crews. This initial access drift is approximately 550 meters (1800 ft) long and is expected to reach the "007" zone late in the second quarter.

Dale Ginn, CEO, noted that "It is truly astonishing to be part of a team that has not only such a high discovery rate, but also has the ability to pull the trigger and begin development of these high grade zones within months of the first drill holes. Our exploration and mining teams continue to raise the bar and it will be interesting to see if we can continue this rapid pace of discovery and development into the future. Certainly, the vast geometry of the hanging wall volcanic rocks provides the volume and targets necessary for future discoveries within a few kilometers from our mill."

Sections, plans and diagrams related to this press release are available at the company's website www.sangoldcorp.com, including a detailed longitudinal section displaying the results to date.

This program was carried out under the supervision of W.S. Ferreira, P.Geo., the Qualified Person for this project under National Instrument 43-101. The drill core was split, with half sent to TSL Laboratories in Saskatoon, SK and fire assayed with an AA and gravimetric finish. Whole metallic assays were performed on samples containing visible gold. Check assays were also performed on pulps and rejects by both TSL and by 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.

For further information contact Dale Ginn, CEO of San Gold Corporation, at (204) 794-5818 or investor information at 1-800-321-8564 or visit www.sangoldcorp.com.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Contact
    Dale Ginn
    CEO of San Gold Corporation
    (204) 794-5818

    Investor Information
    1-800-321-8564