St Andrew Goldfields Ltd.
TSX : SAS

St Andrew Goldfields Ltd.

May 31, 2006 17:04 ET

St Andrew Announces 1 for 20 Share Consolidation and Financing Plans for Future Developments

OAKVILLE, TORONTO--(CCNMatthews - May 31, 2006) - St Andrew Goldfields Ltd. (TSX:SAS) ("St Andrew") is pleased to announce a planned 1 for 20 share consolidation and plans for a $20 million financing for future developments and working capital.

Share Consolidation

A resolution proposing the consolidation of its currently issued and outstanding common shares on the basis of 1 new common share for each existing 20 common shares will be placed before St Andrew shareholders at the Annual and Special Meeting to be held on June 14, 2006. Based on the existing approximately 813 million common shares outstanding, after the proposed consolidation, St Andrew will have approximately 40.7 million common shares outstanding. It is believed that the new capitalization will bring the company more in line with its peer group and make the share price more attractive to institutional and other investors.

Financing Plans

St Andrew is considering a number of financing alternatives to raise approximately $20 million to fund future developments and working capital. The use of proceeds for these funds will be for the development of the Nixon Fork Gold Mine (production is planned in Q3, 2006), the investigation and exploration of the open pit potential of the Hislop Mine at the Stock Gold Complex, near Timmins, additional subscriptions for shares of Glass Earth Limited, the engineering and updating of the feasibility study of the Aquarius Deposit at the Stock Gold Complex, near Timmins, some of which expenses have been pre-funded through the interim financing referred to below.

Interim Financing Arrangements

St Andrew has arranged interim financing by way of a $9 million demand loan from a related party. The interim funds have been applied to the reclamation bonding, equipment and gold mill upgrade activities at the Nixon Fork Gold Mine, subscription for additional Glass Earth shares, preliminary engineering and exploration drilling at the Hislop Mine open pit project.

It is planned to repay the loan from the proceeds of the $20 million financing. Subject to regulatory approval, the related party has indicated a willingness to participate in the proposed financing to the extent of the loan.

St Andrew (TSX:SAS) is a gold mining and exploration company with gold production operations at its Stock Gold Complex, Timmins, Ontario and Nixon Fork Gold Mine, Alaska. The company controls a very large land position in the Timmins Mining Camp, an extensive land position at Eskay Creek in northern British Columbia and land positions around Nixon Fork in the Kuskokwim - Tintina Mining Camp in Alaska. The Company also holds a strategic investment in Glass Earth Limited; a New Zealand based gold exploration company.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release are "forward-looking statements" and are prospective. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.


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