St Andrew Goldfields Ltd.
TSX : SAS

St Andrew Goldfields Ltd.

May 15, 2006 19:10 ET

St Andrew Announces First Quarter 2006 Operating and Financial Results

OAKVILLE, ONTARIO--(CCNMatthews - May 15, 2006) - St Andrew Goldfields ("St Andrew" or the "Company"), (TSX:SAS) is pleased to report the First Quarter 2006 Operating and Financial Results and to update its Development and Exploration Activities for the Three Month Period Ended March 31, 2006 (Q1/2006).

Result of Operations

St Andrew commenced gold production from the Stock Gold Complex near Timmins at the beginning of January, 2006.

Gold production from the Clavos Mine is being steadily increased as additional working faces are made available, working levels are developed and the mine crews increase their understanding of the nature and configuration of the Clavos ore shoots. The majority of the mining activity during the quarter was focused on underground development and the building up of the level of stoping operations.

A total of 22,517 tonnes of ore were milled during the quarter and 6,006 ounces of gold were sold. Gold production is expected to increase throughout the year towards the forecast 2006 annual production of 40,000 from the Clavos Mine.

Stock Gold Complex

Clavos Mine

The Clavos mine delivered 22,517 tonnes to the Stock Gold mill during the quarter. The grade of ore mined from the stoping areas was 5.9 grams per tonne (g/t). 35% of the mill feed was "development muck" blended with the mined ore leading to a lower grade milled ore of 5.0 g/t. The implementation of a suitable stoping method of either long hole stoping or shrinkage stoping or a combination of both was tested during the quarter depending on the nature and configuration of the Clavos ore body. The availability of suitably experienced mining personnel also has an influence on the type of mining method implemented.



Operating Statistics

Three Months Ended
March 31, 2006
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Tonnes Mined 27,255
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Mined grade (g/t) 5.9
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Mined volume (ounces) 5,297
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Tonnes milled 22,517
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Grade processed (g/t) 5.0
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Recovery (%) 85.3
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Sales Volume (ounces) 6,006
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Production Volume (ounces) 4,267
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Ramp development meters 374
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Sill and access development meters 648
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Underground Diamond drilling (meters) 4714
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The Clavos Mine operating plan for the 2nd Quarter 2006 will focus on the continued development of new stopes and working faces, the development of the Main Decline Ramp and internal ramps to access additional stoping areas and increased tonnes milled at the Stock Gold Mill. Testing of the most suitable mining method to achieve a balance between dilution and production volumes in relation to the nature and configuration of the Clavos ore body will continue. It is expected that the grade of the processed ore will still be affected by the greater volume of "development muck" that is generated during the period of production build up.

St Andrew continues to pursue an aggressive underground drilling program at the Clavos Mine. At any one time there are 2 diamond drills delineating the ore shoots ahead of development and exploring for new areas of mineralization both at depth and along strike.

Taylor Mine Advanced Exploration Project

At the Taylor Mine Advanced Exploration Project work continued on the construction of the surface infrastructure and the excavation of the box cut to access the starting position in "competent ground" for the Taylor Decline Ramp. It is forecast that development of the Taylor Decline Ramp will commence in the third quarter of 2006, subject to posting of the reclamation surety bond.

Nixon Fork Gold Mine, Alaska

During the Quarter the Company received the State and Federal permits necessary to recommence mining activities at the Nixon Fork Gold Mine. Modifications will take place on the existing mill to allow for treatment of both new ore and existing tailings from the previous operations by an enhanced gravity, flotation and cyanide leach process. In addition mine development activities are expected to begin in early summer. Mine and mill production is expected to begin in late summer at a rate of approximately 150 tonnes per day. Gold production of approximately 20,000 ounces is planned for 2006. When in full production, the mine is expected to employ approximately 50 individuals and produce approximately 45,000 ounces of gold per year.

A resource estimate by Roscoe Postle Associates, Inc. of Toronto and Vancouver, Canada in April, 2005 estimated the Measured and Indicated Resource at Nixon Fork at 91,400 tonnes grading 1.1 ounce per tonne or containing 100,300 ounces of gold. An additional 151,000 tonnes grading 0.4 ounce per tonne or 61,400 ounces of gold were classified as an Inferred Resource. This inferred resource includes approximately 116,000 tonnes of tailings from previous operations grading 0.26 ounces per tonne which the company expects to reprocess in the summer of 2007 and 2008 using the cyanide leach process being installed.

Exploration

East Timmins

At the East Timmins exploration program a total of 4,988 meters of diamond drilling was carried out to test exploration drill targets that had been developed in conjunction with Geoinformatics Exploration Inc. None of the targets produced any gold mineralization of note. It is planned to drill test further targets in the next quarter.

Nixon Fork Gold Mine

At Nixon Fork Gold Mine exploration drilling tested the Warrior Targets by drilling nine (9) holes totaling approximately 775 metres. Assay results are pending.



Financial Highlights

Three Months Ended
March 31, 2006
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Revenue ($ millions) $ 3.8
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Net Earnings (loss) ($ millions) $ (3.3)
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Earnings (loss) per share ($) $ .005
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Cash from (used in) Operations ($ millions) $ (4.3)
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Cash from (used in) operations per share ($) $0.007
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Average realized Gold Price (US$ /ounce) $ 555
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Total Cash Operating costs (US$/ounce) $ 710
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Working capital (deficiency) ($ millions) $ (8.5)
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St Andrew's net loss for the three months ended March 31, 2006 totaled $3,322,495 (2005 - $2,048,937) being a loss of $0.005 per share (2005 - $0.005 per share). Included in this loss is a future income tax recovery amount of $3,687,278 (2005 - $5,038,502), which was recorded and charged to share issue costs. The amount represents the tax benefit related to the renunciation of tax deductions to flow-through shares of $10,806,794 issued during 2005 for St Andrew.

Revenue for the first quarter of 2006 was $3,843,994 generated from gold sales from the Stock Gold Complex. Sales volume for the period was 6,006 ounces. The average gold price realized for the period was CDN$641.

For the quarter ending March 31, 2006, total mine and milling operating costs were $7,621,091. There are no comparable costs because this is the first quarter of gold production. The mine and milling costs include both development and operation costs for the quarter. It is the policy of St Andrew to write off as incurred, all development and exploration expenditures.

St Andrew (TSX.SAS) is a gold mining and exploration company with gold production from its Stock Gold Complex, Timmins, Ontario and planned in the second half of 2006 from its Nixon Fork Gold Mine, Alaska. The company controls a large land position in the Timmins Mining Camp and holds an extensive land position at Eskay Creek in northern British Columbia.

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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