WINNIPEG, MANITOBA--(Marketwired - Sept. 26, 2013) - San Gold Corporation (TSX:SGR)(OTCQX:SGRCF) today announced that it has entered into a purchase and sale agreement (the "Purchase Agreement") with Cougar Minerals Corp. ("Cougar") providing for the purchase by San Gold of a 100% interest in 18 mineral claims (the "Mineral Claims") representing approximately 2,885 hectares of land in the Rice Lake gold belt. The Mineral Claims are contiguous to San Gold's current mineral lease in the Rice Lake gold belt. San Gold will pay Cougar a total consideration of 400,000 shares of San Gold and $125,000.
San Gold and Cougar are parties to an option agreement dated June 14, 2011 (the "Option Agreement") pursuant to which San Gold holds an option to acquire 80% of the Mineral Claims in consideration for certain exploration expenditures on the Mineral Claims and the purchase of certain securities of Cougar. The Purchase Agreement will replace the Option Agreement and upon closing of the acquisition of the Mineral Claims by San Gold, the Option Agreement will be of no further force or effect.
Pursuant to the Option Agreement, San Gold would have been required to spend an aggregate of $1.5 million in exploration expenditures over a four year period to earn its 80% interest in the Mineral Claims as well as purchase $600,000 of securities of Cougar. Pursuant to the Purchase Agreement, San Gold will acquire a 100% interest in the Mineral Claims, thereby retaining the value of all previous work commitments, while significantly reducing future work commitments for the next two years and conserving cash.
"The acquisition of the Mineral Claims is consistent with San Gold's stated objective of consolidating prospective land in the Rice Lake gold belt while reducing overall exploration spending commitments," said Ian Berzins, San Gold's President, CEO and Chief Operating Officer.
The sale of the properties is subject to certain closing conditions including all requisite regulatory approvals, including the approval of the TSX Venture Exchange in the case of Cougar and the Toronto Stock Exchange in the case of San Gold. It is anticipated that the closing of the sale of the Mineral Claims will take place within the next two weeks.
About San Gold
San Gold is an established Canadian gold producer, explorer, and developer that owns and operates the Rice Lake Mining Complex near Bissett, Manitoba. San Gold employs more than 420 people and is committed to the highest standards of safety and environmental stewardship. San Gold is listed on the Toronto Stock Exchange under the symbol "SGR" and on the OTCQX under the symbol "SGRCF".
For further information on San Gold, please visit www.sangold.ca.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This news release may include certain "forward-looking statements". All statements, other than statements of historical fact included in this release, including, without limitation, statements regarding forecast gold production, gold grades, recoveries, cash operating costs, potential mineralization, mineral resources, mineral reserves, exploration results, and future plans and objectives of San Gold, are forward-looking statements that involve various risks and uncertainties. These forward-looking statements may include, but are not limited to, statements with respect to mining and processing of mined ore, achieving projected recovery rates, anticipated production rates and mine life, operating efficiencies, costs and expenditures, changes in mineral resources and conversion of mineral resources to proven and probable mineral reserves, and other information that is based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management.