Sage Extends High Grade Gold Mineralisation Below and East of Clavos Deposit

TORONTO, ONTARIO--(Marketwire - Aug. 25, 2011) - Sage Gold Inc. (TSX VENTURE:SGX) announces additional drill results from its 2011 surface drill program. The drill program continued to target the newly discovered 960 Zone (Press release of June 2, 2011), the down plunge and down dip projection of the main DL Zone mineralized horizon east and below the existing mine workings and below the 2006 resource. The company has spent $2.2 million to date at Clavos and is well ahead of the 60% earn-in schedule with St Andrew Goldfields Ltd. (TSX:SAS).

Sage Gold President and CEO, Nigel Lees comments: "These holes represent potential additions to the new resource estimation (Fall 2011) and with respect to the down plunge and down dip holes, these are located close to the underground workings. Sage intends to continue surface drilling at Clavos to expand the resource before dewatering and rehabilitating the existing underground infrastructure in advance of production. We are pleased that high grade values were encountered at deeper levels suggesting that the resource can be expanded at depth and along strike. Gold mines in the Timmins camp typically exhibit significant gold mineralisation at depth".

Holes CL-11-07, CL-11-11 and CL-11-13 were drilled into the 960 zone and are approximately 600 metres east of the underground workings. These three holes intersected the same style of mineralization encountered in previous 960 Zone drilling of numerous grey silicified and/or chlorite-rich and silicified intermediate to mafic intrusive units within the sericite-carbonate altered fragmental to massive ultramafic volcanic rocks of the DL alteration zone. Significant quartz-ankerite veining, pyrite and arsenopyrite mineralization occurs within the intermediate to mafic intrusive unit(s).

Holes CL–11-16 to CL–11-19 were drilled between 75-150 metres east and down plunge of the eastern end of the underground workings and of the 2006 resource. Hole CL–11-20 was drilled approximately 150 metres vertically below the central part of the underground workings and approximately 75 metres vertically below the 2006 resource blocks. The style of mineralization in both of these areas is very similar, encountering increased pyrite-arsenopyrite peripheral to quartz-carbonate veins and stringers within the sericite-carbonate altered fragmental ultramafic volcanic rocks of the DL alteration zone near or at the boundaries with feldspar porphyry intrusion(s). Visible gold was noted in two of the three drill holes reported in this press release that intersected the DL alteration zone.

These holes represent potential additions to the new resource estimation (Fall 2011) and with respect to the down plunge and down dip holes, these are located close to the underground footprint. Sage intends to continue surface drilling at Clavos to expand the resource.

Please go to our corporate website and homepage at www.sagegoldinc.com to view the Clavos 3D Drill Hole video.

CLAVOS 2011 DRILL PROGRAM
EAST DRILLING - 960 ZONE
HOLEID	SECTION	FROM (M	)	TO (M	)	INTERVAL(M	)	ASSAY(GPT	)
CL-11-07	514900E	52.5		53.0		0.5		6.86
		55.5		56.1		0.6		3.09
		120.5		126.8		6.3		8.08
	INCL	120.5		124.0		3.5		11.72
CL-11-11	514900E	99.8		101.2		1.4		9.33
		168.35		169.05		0.7		10.85
		239.6		244.2		4.6		1.47
		289.5		291.25		1.75		0.81
CL-11-13	514840E	153		155.5		2.5		1.36
		156.3		161.85		5.55		2.97
	INCL	160.5		161.85		1.8		5.48
		170		170.85		0.85		8.32
		183.3		185.7		2.4		0.56
		261.5		265.3		3.8		1.44
CL-11-14	514870E			ASSAYS PENDING
CL-11-31	514900E			ASSAYS PENDING

DOWNPLUNGE DRILLING
CL-11-16	514150E		ASSAYS PENDING
CL-11-17	514270E	361.6	362.2	0.6	13.55
		391.9	393.7	1.8	3.53
		429.9	433	3.1	1.65
		441.2	446.8	5.6	2.11
	INCL	446.4	446.8	0.4	10.9
		464	465.1	1.1	1.81
CL-11-18	514330E	HOLE ABANDONED BEFORE TARGET - NSV
CL-11-19	514330E	419.5	420.85	1.35	5.02
	INCL	420.5	420.85	0.35	11.25
		502.8	503.7	0.9	1.61
		503.7	505.1	1.4	1.03
		510	511.35	1.35	1.49

BELOW WORKINGS DRILLING
CL-11-20	513280E	433.85	436.1	2.25	4.91
	INCL	434.6	435.6	1.0	9.31
		454.95	462.7	7.75	1.22

Italics denote previously reported assay results.

Note – Interval widths reports are drill intercept widths and not true widths.

The technical content of this news release has been reviewed and approved by Sage's consulting geologist David Gliddon P.Geo. of Glider Geoservices Inc., who is a qualified person as defined by NI 43-101.

Sage continues to work towards completing its' 60% earn in the Clavos deposit and finalizing the permitting. Negotiations are ongoing for contract milling and underground rehabilitation required to restart production at the Clavos mine. The current strength in the price of gold enhances the potential economic viability of the Clavos deposit and Sage's surface drill results indicate that the mineralization continues down plunge and down dip of the existing resource. The 960 zone needs additional drilling and represents a potential strike extension east and updip of the main mineralized horizon of the DL alteration zone.

QA/QC Program Protocols

Sage Gold Inc. has implemented a rigorous QA/QC program using best practice principles are being applied to the sampling/analysis of the drill core and complies with National Instrument 43-101 requirements for the Clavos property. The NQ core is delivered to the secure core shack facility on site by the drill contractor and/or Sage personnel. Prior to splitting, all drill core is photographed. Core splitting is done with a diamond core saw and ½ of the drill core is submitted to ALS Chemex Laboratories, an accredited laboratory for analysis. The remainder of the core is stored at the Clavos Mine Property. All samples are shipped in sealed bags with numbered security tags and transported in a company truck from the property to ALS Chemex Laboratories preparation lab in Timmins, ON.

Sage routinely inserts certified standards, blanks and field duplicate samples into the sample stream. The sample preparation procedures for drill core samples consist of crushing the samples to 70% minus 9 mesh (2mm), pulverizing a 1000g sub-sample to 85% minus 200 mesh (75um), and analyzed by standard fire assay (FA) method using a 30 gram sample with AA finish and any samples assaying greater than 5.0 gpt Au are re-analyzed using a gravimetric finish. For mineralized zone intervals where visible gold is observed to be present, samples are submitted for analysis using the metallic screen method where the entire half core is crushed, pulped and screened to 100 mesh. The screen coarse and fine fractions are analyzed by fire assay (FA) method with a gravimetric finish and the total assay result is calculated. The ALS Chemex and internal Sage QA/QC samples are routinely monitored for contamination, accuracy and precision by an independent consultant.

SAGE is a mineral exploration and development company which has primary interests in near –term production and exploration properties in Ontario. Its main properties are the Clavos Gold mine in Timmins and the Lynx deposit and other exploration properties in the Beardmore -Geraldton Gold Camp. Technical reports and information relating to the properties can be obtained from the System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com and www.sagegoldinc.com

This release was prepared by management of the Company who takes full responsibility for its contents.

This news release contains certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended and "Forward Looking Information" within the meaning of applicable Canadian securities legislation.Some forward looking statements and forward looking information contained in this release are forward-looking and, therefore, involve uncertainties or risks that could cause actual results to differ materially. Such forward-looking statements include comments regarding mining and milling operations, mineral resource statements and exploration program performance. Factors that could cause actual results to differ materially include metal price volatility, economic and political events affecting metal supply and demand, fluctuations in mineralization grade, geological, technical, mining or processing problems, exploration programs and future results of exploration programs, future profitability and production. The Company disclaims any obligation to update forward-looking statements.