SOURCE: San Gold Corporation

August 19, 2005 08:45 ET

San Gold and Marum to Jointly Explore the Rice Lake West Property

BISSETT, MB -- (MARKET WIRE) -- August 19, 2005 -- Mr. Dale Ginn, President, reports:

San Gold Corporation (TSX-V: SGR) and Marum Resources Inc. have entered into an option agreement to jointly explore the Rice Lake West gold property in Manitoba. The Rice Lake West property consists of twenty claims covering 2,223 hectares adjacent to the western boundary of San Gold's Rice Lake gold mine and 1,250 ton per day mill, located a 3-hour drive from Winnipeg.

San Gold and Marum can each earn a 50% undivided interest in the property by performing $750,000 in exploration work over the three-year period ending August 31, 2008 ($100,000 during the first year, $250,000 during the second year and $400,000 during the third year). In consideration of prior work performed on the property under a previous option agreement, Marum is deemed to have contributed $200,000 as an exploration contribution under the terms of the current option agreement. The optionor of the property will retain a 3% gross overriding royalty on precious metals and a 3% net smelter returns on base metal production. San Gold and Marum have the right to purchase two royalty percentage points by paying $750,000 for each royalty percentage point. San Gold will be the operator and manage exploration activities.

The option agreement between San Gold and Marum is of strategic importance for both companies since the western extension of the main Rice Lake mine gold-bearing vein system has been traced to the Rice Lake West joint venture property boundary by San Gold. The Rice Lake West joint venture significantly expands San Gold's position along the main Rice Lake gold-bearing trend. The joint venture is significant for Marum since it is carried for the next $200,000 in exploration expenditures on the Rice Lake West property and will have the benefit of San Gold's successful exploration expertise along the Rice Lake Gold belt.

A location map of the Rice Lake West property is available for viewing at www.sangoldcorp.com

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • For further information contact:
    Dale Ginn
    President of San Gold Corporation
    (204) 794-5818
    www.sangoldcorp.com.