St Andrew Goldfields Ltd.

St Andrew Goldfields Ltd.

January 16, 2007 16:16 ET

St Andrew Announces Terms of $110 Million Rights Offering

OAKVILLE, ONTARIO--(CCNMatthews - Jan. 16, 2007) - St Andrew Goldfields Ltd. (TSX:SAS) ("St Andrew") is pleased to announce the terms of its previously announced Rights Offering.

Terms of Rights Offering

St Andrew intends to issue to the holders of its outstanding common shares 1.7 rights for each common share held. Each full right will entitle eligible shareholders to subscribe for one Unit ("Rights Offer Unit") at a subscription price of $1.00 per Unit. Each Rights Offer Unit will consist of one common share and one half common share purchase warrant. Each whole common share purchase warrant will entitle the holder to acquire one common share at a price of $1.25 for a period of 18 months. The record date for determining shareholders entitled to receive rights and other details of the offering will be determined and announced at the time of filing the final rights offering prospectus. The Rights Offering is subject to approval of the Toronto Stock Exchange ("TSX") and applicable securities commissions.

St Andrew currently has 65.2 million common shares outstanding. If fully subscribed, the rights offering will raise gross proceeds of $110 million and result in the issuance of 110,920,857 common shares and 55,460,428 common share purchase warrants.

Standby Guarantors for the Rights Offering

As previously announced, Technifund Inc., a company controlled by the Chairman of St Andrew, ("Technifund") and managed accounts of Trapeze Asset Management Inc. and of Trapeze Capital Corp., (collectively, "Trapeze accounts"), acquired Secured Debentures of St Andrew to fund the operating and capital requirements of the Company until the closing of this Rights Offering. Technifund acquired Secured Debentures in the amount of $70 million and Trapeze accounts acquired Secured Debentures in the amount of $22 million. The Secured Debentures have an 18 month term and bear interest at 10 % per annum plus a commitment fee of 2% of the principal amount.

Technifund and Trapeze accounts have agreed to act as standby guarantors for up to $100 million of the Rights Offering for a 6% standby guarantee fee.

Use of Proceeds from the Rights Offering

Proceeds from the Rights Offering will be used to retire the Secured Debentures above from Technifund and Trapeze accounts, pay the standby guarantee and commitment fees, fund the development and drilling programs at Holloway-Holt Gold Mine, provide for additional capital expenditure for Nixon Fork and for general corporate and working capital purposes.

St Andrew is a gold mining and exploration company producing gold from the Stock Gold Complex in Timmins, Ontario and the Nixon Fork Gold Mine in Alaska. The recently acquired Holloway-Holt Gold Mine in the Timmins Mining Camp is forecast to increase St Andrew's gold production by 75,000 to 100,000 ounces per annum. St Andrew 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. St Andrew also holds an approximate 50.2 % equity interest in New Zealand based gold explorer, Glass Earth Limited and an 10 % equity interest in Apollo Gold Corporation.

For further information about St Andrew Goldfields Ltd., please visit St Andrew's website at or contact Investor Relations toll-free at 1-800-463-5139 or email


The information in this release may contain forward-looking information under applicable securities laws. 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 implied by the forward-looking information. Factors that may cause actual results to vary material include, but are not limited to, inaccurate assumptions concerning the exploration for and development of mineral deposits, political instability, currency fluctuations, unanticipated operational or technical difficulties, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions or conditions in the financial markets and the inability to raise additional financing. Readers are cautioned not to place undue reliance on this forward-looking information. St Andrew 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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