October 08, 2009 08:44 ET

San Gold Acquires Advanced Stage Gold Properties in Timmins

BISSETT, MB--(Marketwire - October 8, 2009) - Dale Ginn, CEO of San Gold Corporation (TSX-V: SGR) is pleased to announce that San Gold has signed a Letter of Intent with Laurion Mineral Exploration Inc. to purchase all of Laurion's property interests in Tisdale Township, in the Timmins, Ontario mining camp in consideration of a payment to Laurion of $1,000,000 and 1,000,000 common shares of San Gold.

The Tisdale Township properties consist of a 31.5% ownership in the Davidson-Tisdale gold deposit and a 100% interest in the North Tisdale property. The purchase of the Davidson-Tisdale will be outright and free of any royalty while Laurion will retain a 2% NSR on the North Tisdale property. A formal agreement will be entered into between Laurion and San Gold upon completion of standard due diligence, expected to take approximately 60 days. The remaining 68.5% of the Davidson-Tisdale deposit is currently owned by VG Gold Corp. Following a re-evaluation of prior work, San Gold intends to actively explore with the view to developing the Davidson-Tisdale deposit following the negotiation of a joint venture agreement with VG Gold Corp.

Davidson-Tisdale Property

Laurion currently holds a 31.5% interest in the 12 Davidson-Tisdale claims consisting 28 units (25 claims) covering approximately 1150 acres (465 ha) in Tisdale Township near the City of Timmins in the Porcupine Gold Mining Camp. The property is accessible via an all-weather road off of Crawford Street in South Porcupine and has been the subject of various exploration programs since 1911. Several shafts have been sunk on the property with a decline driven for 1,081 m and to a vertical depth of approximately 200 m.

The property has an interesting history that has resulted in a valuable accumulation of technical information. Sporadic attempts at development took place in the early 1900s. Mining and processing of a 44,000 tonne bulk sample in 1988 produced 7,300 ounces of gold. The most intensive exploration program was carried out by Getty Canadian Metals and successor companies between 1984 and 1988 during which several mineral estimates were completed. A 1984 mineral estimate to a vertical depth of 200 m indicated 747,600 tonnes@ 12.39 g Au/t. and a 1987 estimate by Getty indicated 512,500 tonnes @ 16.53 g Au/t. The above grades and tonnages are considered historical, were recorded before the implementation of National Instrument 43-101, do not conform to current regulatory standards and should not be relied upon.

A summary of NI 43-101 compliant mineral resource estimates for the Davidson-Tisdale deposit completed in 2003 by Geostats System International and in 2007 by P+E Mining Consultants was filed by VG Gold and is available on Sedar. More recently, exploration conducted by VG Gold (formerly Vedron Gold Inc.) during the period 2003 to 2005 consisted of 56 drill holes with a total of 12,138 meters.

San Gold will also acquire a 100% interest in the 15 claims comprising the North Tisdale Property. The Tisdale Kinch Shaft Zone is reported to host historic exploration shafts and a number of gold bearing zones consisting of numerous quartz carbonate veins. The North Tisdale Property has seen very little exploration and is considered to be a very prospective grassroots exploration play in a prolific gold camp adjoining the advanced Davidson-Tisdale deposit.

Dale Ginn, CEO stated: "This proposed acquisition is a valuable addition to our expanding exploration and development campaign in the Timmins gold camp. Our experience in the Rice Lake Belt of Manitoba has demonstrated clearly the potential for further discovery and expansion that is possible within stable and prolific gold producing greenstone belts."

San Gold is an aggressive and successful gold mining and exploration company with mine and mill operations in the Rice Lake Belt of Manitoba, as well as a number of new high grade gold discoveries. San Gold has also accumulated a strategic portfolio of properties in the Timmins gold camp. San Gold's Timmins area exploration is being carried out under the supervision of John Boissoneault, P.Eng., the Qualified Person for these projects under National Instrument 43-101.

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
    San Gold Corporation
    (204) 794-5818

    Investor Information
    1-800-321-8564
    visit www.sangoldcorp.com