San Gold Corporation

San Gold Corporation

December 13, 2006 12:45 ET

San Gold Adds Significant Mineral Resources at Cartwright

BISSETT, MB--(CCNMatthews - December 13, 2006) - Dale Ginn, President of San Gold Resources Corporation (TSX-V: SGR), is very pleased to report that a comprehensive, NI 43-101 compliant Rice Lake Project report has been completed and has increased San Gold's total measured and indicated mineral resources to 403,000 ounces gold and total inferred resources to over 1.02 million ounces gold. A. C. A. Howe International Limited ("Howe") was retained by San Gold Corporation (the "Company") to prepare a technical report (the "Report") which is a feasibility study on the reserves and resources of the Rice Lake Mine and the San Gold #1 Zone and to complete an initial third-party estimate of resources in the San Gold #2-3 Zones and the Cartwright Zone. The Report was prepared in accordance with the Guidelines set out in National Instrument 43-101 and NI Form 43-101F1. The Resource and Reserve tables are summarized below:

Tons Grade Contained
Oz./ton Ounces
Rice Lake Mine
Measured Mineral Resources 320,100 0.28 88,530
Indicated Mineral Resources 644,000 0.29 186,770
Total Measured and Indicated Resources 964,100 0.29 275,300
Inferred Mineral Resources 1,151,800 0.30 342,270
San Gold #1 Mine
Measured Mineral Resources 69,000 0.15 10,280
Indicated Mineral Resources 214,200 0.24 52,150
Total Measured and Indicated Resources 283,200 0.22 62,430
Inferred Mineral Resources 936,500 0.22 206,900
Cartwright Zone
Indicated Mineral Resources 136,200 0.22 29,830
Inferred Mineral Resources 1,761,200 0.22 418,770
San Gold #2-3 Zones
Indicated Mineral Resources 173,100 0.20 35,320
Inferred Mineral Resources 195,600 0.26 50,210

Total Measured plus Indicated 1,556,600 0.26 402,880
Total Inferred Resources 4,045,100 0.25 1,018,150

Rice Lake Mine
Proven Mineral Reserves 389,600 0.26 98,970
Probable Mineral Reserves 597,100 0.28 162,700
Total Proven plus Probable Reserves 986,700 0.28 261,670
San Gold #1 Mine
Proven Mineral Reserves 75,950 0.14 10,280
Probable Mineral Reserves 180,150 0.26 47,100
Total Proven plus Probable Reserves 256,100 0.22 57,380
Cartwright Zone
Probable Mineral Reserves 64,100 0.27 17,100

Rice Lake Project Total Reserves 1,306,900 0.26 336,150

Note -- the measured and indicated resources include the proven and
probable reserves

Key assumptions and parameters used in calculating the mineral reserves are:

Gold price = $600 U.S., minimum mining width = 4 feet, mill call factor = 96%, mill recovery = 93%, cut-off grade = 0.15 oz/ton over 4 feet, dilution varies with width and geometry.

Key assumptions and parameters used in calculating the mineral resources are:

Measured Resource: Vertical extensions up to 50 feet above and below development and/or stoping. No strike extensions to open ground are included.

Indicated Resource: Maximum vertical extensions of 50 feet beyond measured blocks. Up to 50 feet along strike and 75 feet vertical projection from drill hole information.

Upon plotting of all data on cross section, long section and plan views, mineralized zones are interpreted and the polygonal method of calculating volumes is applied. The tonnage factor for Rice Lake and Cartwright is 11.5 cubic feet per ton, for San Gold #1, #2 and #3 is 11.3 cubic feet per ton.

(Canadian dollars unless indicated otherwise)

Reserves Only Reserves plus
Life of Mine ("LOM") 5 Minimum 10 years
LOM Ounces Gold Produced 315,200 927,360
LOM Average Assumed Gold Price US$ 600 US$ 600
-LOM Average Breakeven Gold Price US$ 345 US$ 375
Total Revenue $217,015,200 $638,487,400
Total Operating Costs $112,342,500 $344,526,400
Operating Revenue $104,672,700 $293,961,000
Capital Costs $ 10,996,500 $ 51,995,900
EBITDA $ 93,676,200 $241,965,100

- All of the development capital required to convert the inferred resources to reserves and develop those resources has been included in the financial evaluation. The breakeven life-of-mine gold price is US$375 to allow for recovery of ongoing development capital expenses.

Highlights from the Howe report are listed below:

-- Howe calculates an increase of the mineral resource base to 402,880
ounces gold in the measured and indicated categories in addition to
1,018,150 ounces gold in the inferred category, including over 400,000
ounces of inferred mineral resource in the new Cartwright deposit that was
discovered in April 2006. (Note: These estimates do not include recent and
significant discoveries at deep levels in the Rice Lake mine (press
releases of Oct. 5, Oct. 30, and Nov.1, 2006).

-- Howe concludes that the additional resources identified in the
Cartwright and San Gold # 2-3 zones will allow their development to occur
over the next two years and that subsequently the mill will reach full
capacity of 1,250 tons per day by the end of 2008.

-- Howe is of the opinion that the operating costs used in their economic
review in this Report are conservatively high as they are based on the
historic operating costs of the Rice Lake Mine, which is a deep, shaft and
internal shaft accessed operation. The San Gold #1 Mine, for at least the
next ten years, will be a ramp accessed, relatively shallow (less than
1,000 feet below surface operation). The same will apply to the Cartwright
and San Gold #2-3 zones. By the end of 2007 after a full year of
operations, the Company will be able to better quantify their overall
operating costs and then apply that information to a reassessment of their
resource and reserve economics.

-- The project is fully paid back at this time as the acquisition costs
and costs to bring the project to the production stage have been paid for
fully and are basically sunk costs funded by equity financings and
convertible debentures.

-- Howe concludes that no additional surface drilling is required at
Cartwright to justify beginning an underground program to initiate
underground delineation of the resources and to establish proven and
probable reserves. The Company has identified a location to collar the
ramp opening, which would be within 500 feet of the Rice Lake Mill and once
in operation would mean that ore could readily be delivered directly to the
mill via the ramp.

-- Howe would further recommend that the Company continue to fund general
surface exploration programs as their geological staff has been very
successful over the past three years in the discovery of new zones along
the Rice Lake trend.

Dale Ginn, President of San Gold, commented: "We are extremely pleased with these results, especially with the significance of the nearby Cartwright Zone which was just discovered in the spring of this year. Our discovery cost per resource ounce of under $10 to date is extremely low by industry standards and we have only explored a very small percentage of our landholdings to date in the Rice Lake Greenstone Belt. We are very confident that we will continue to upgrade and add to our resource base as well as to develop and discover high grade opportunities within the Rice Lake Mine. It is an extremely rare situation to be operating multiple mines without debt load and at the same time possess virtual control over a productive greenstone belt."

Peter George, P.Geo., of A.C.A. Howe International Ltd. is the independent qualified person in accordance with NI 43-101 responsible for the report referenced in this news release. Mr. George has made numerous site visits to this project over the past five years, is a geologist with over 40 years of experience and has prepared evaluation reports for a number of significant mining operations. Dale Ginn, P.Geo., President of San Gold, is the qualified person responsible for this news release.

For further information contact Dale Ginn, President of San Gold Corporation, at (204) 794-5818 or email A copy of the full report will be made available on the company's website and will be filed with Sedar shortly upon receipt of the final product.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. Mineral resources are not mineral reserves and have not yet demonstrated economic viability. This news release may contain forward-looking statements which are necessarily based upon estimates or assumptions that are subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected.

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