SOURCE: San Gold Resources Corp.

March 03, 2005 09:08 ET

San Gold / Gold City Intersect High-Grade Gold in New San Gold #3 Zone

BISSETT, MB -- (MARKET WIRE) -- March 3, 2005 -- Dale Ginn, President of San Gold Resources Corporation (TSX-V: SGR), and Fred Sveinson, President of Gold City Industries Ltd. (TSX-V: GC), are pleased to announce that drilling at the San Gold #3 Zone, located 6 kilometers east of their Rice Lake Gold Mine, is producing excellent results over widths similar to those that have been mined at the nearby Rice Lake Gold Mine. Highlights of this program to date include:

Hole #      From      To        Length             Gold g/tonne (oz/ton)
------      ----      --        ------             ---------------------
SG-05-05    128.8 m   130.3 m   1.5 m  (4.9 ft)    4.0     (0.12)
SG-05-05    131.4 m   132.7 m   1.3 m  (4.3 ft)    4.9     (0.14)

SG-05-06    50.5 m    51.9 m    1.4 m  (4.6 ft)    3.6     (0.11)

SG-05-07    92.5 m    94.0 m    1.5 m  (4.9 ft)    12.4    (0.36)

SG-05-08    53.9 m    55.0 m    1.1 m  (3.6 ft)    3.5     (0.10)

SG-05-12    196.4 m   199.9 m   3.5 m  (11.5 ft)   22.0    (0.64)
including   198.8 m   199.9 m   1.1 m  (3.6 ft)    68.2    (1.99)
The San Gold #3 zone is located along the major east-west trending "mine" horizon that also hosts the Rice Lake Gold Mine (6 km west), San Gold #1 deposit (3 km west) and San Gold #2 Zone (300 m west). Twelve holes have been drilled to date in the #3 zone, all of which intersected the host shear structure with variable degrees of mineralization. The high grade intercept in hole #12 is also significant in that it is the deepest hole drilled to date on this zone and displays continuity with holes #5 and #7. The San Gold #2 zone (300 m west) was discovered in 2002 by San Gold Resources as follow-up to a surface geophysical survey. Eleven holes were drilled (SGR press release dated Feb. 27, 2003), all of which hit the mineralized zone including the following highlights:
Hole #      From      To        Length             Gold g/tonne (oz/ton)
------      ----      --        ------             ---------------------
SN-02-06    133.2 m   138.7 m   5.5 m  (18.0 ft)   6.2     (0.18)
SN-02-08    127.1 m   128.3 m   1.2 m  (3.9 ft)    7.1     (0.21)
SN-02-11    190.5 m   192.3 m   1.8 m  (5.9 ft)    8.8     (0.28)
The partners have now clearly demonstrated that gold mineralization occurs over a minimum strike length of six kilometers so far with only a fraction of the 15 kilometers of "mine" horizon explored to any extent. "We are beginning to see very clearly the early stages of a multi-deposit gold camp emerging in the Rice Lake Greenstone Belt. Our vision of a central operating gold mine surrounded by near-surface satellite gold deposits under one simple ownership structure is proving to be valid," stated Dale Ginn, President of San Gold Resources. "Our experience with narrow vein mining in this belt, our existing operations, infrastructure and environmental permits, means that the economics for these new deposits is much better than if discovered elsewhere."

Other developments:

Resource calculations are underway, both in-house and by an independent consulting firm, on the San Gold #1 deposit, where ramp development is in progress in order to intersect the zone for the first level of bulk sampling at the 50-meter level. Follow up drilling to the high-grade Wingold discovery, located just one kilometer north of the mine site will also take place in the coming months. Ground geophysical crews have also been contracted to survey the Oro Grande properties, located 30 kilometers east of the mine site.

Merger Progress:

The partners (San Gold and Gold City) have finalized the terms for consolidation of their jointly owned mine, deposits and land package. The terms of this consolidation will be made public in a matter of days, once final legal clearance and documentation have been completed.

This program was carried out under the supervision of W. S. Ferreira, M.Sc., P.Geo., and D. Ginn, P.Geo., the Qualified Persons for this project under National Instrument 43-101. The drill core was split, with half sent to TSL Laboratories in Saskatoon, SK and fire assayed with an AA and gravimetric finish. Check assays were also performed on pulps and rejects by both TSL and by Acurassay Laboratories of Thunder Bay, ON.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. The statements made in this news release may contain forward-looking statements. Actual events or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the Company.

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