WINNIPEG, MANITOBA--(Marketwired - Dec. 2, 2013) - San Gold Corporation (TSX:SGR) (OTCQX:SGRCF) ("San Gold") today announced that it has entered into a purchase and sale agreement (the "Purchase Agreement") with Canadian Arrow Mines Limited ("Canadian Arrow") providing for the purchase by San Gold of a 100% interest in 49 mineral claims (the "Mineral Claims") in the Atikwa and Turtlepond regions located northeast of Rainy River, Ontario. The Mineral Claims are contiguous with and surround San Gold's Atikwa Project which includes the past producing Maybrun copper-gold mine previously acquired from Opawica Explorations Inc. As consideration for the Mineral Claims, San Gold shall issue to Canadian Arrow 1,750,000 common shares of San Gold and shall pay Canadian Arrow $150,000 in cash.
San Gold and Canadian Arrow are parties to an option agreement dated June 25, 2012 (the "Option Agreement") pursuant to which San Gold holds an option to acquire an 80% interest in all precious metals, including but not limited to gold and silver but specifically excluding platinum and palladium, on the Mineral Claims as well as certain other mineral claims in consideration for undertaking certain exploration expenditures on the Mineral Claims and the purchase of certain securities of Canadian Arrow. 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 additional $1,250,000 in order to earn its 80% interest in the precious metals on the Mineral Claims as well as on certain other mineral claims. 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 three years and conserving cash.
"Our Atikwa area claims package is located in a highly prospective region with existing mineral resources and significant mineral exploration potential. The acquisition of a 100% stake in these Mineral Claims improves the overall quality of this land package while reducing the Company's exploration spending commitments, an important strategic short-term goal for the Company," said Ian Berzins, San Gold's President, CEO and Chief Operating Officer.
The sale of the Mineral Claims is subject to certain closing conditions including all requisite regulatory approvals, including the approval of the Toronto Stock Exchange in the case of San Gold. It is anticipated that the closing of the purchase of the Mineral Claims by San Gold will take place in the upcoming 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.