SOURCE: San Gold Corporation

San Gold Corporation

January 25, 2010 08:52 ET

San Gold's Rice Lake Mine Exploration Produces New High Grade and Large Multi-Vein Gold Systems

BISSETT, MB--(Marketwire - January 25, 2010) - Dale Ginn, CEO of San Gold Corporation (TSX-V: SGR), is pleased to report that underground exploration drilling has discovered multiple new high grade gold zones above the eastern end of the 26th level of the Rice Lake mine. A series of high grade veins as well as large, broad breccia vein systems have been encountered above the eastern extremity of mine development in an open area above the "D" internal winze (shaft). New drill hole assay information has also been received for the high grade "98" area immediately below the 26th level and above the 28th level as reported January 20, 2010. Drill hole #28-10-38 cut 82 g/tonne (2.4 oz/ton) over 6.4 meters (21 ft) below 26 level extending the high grade "98" vein upward and above mine development that recently reported grades as high as 909 g/tonne (26.5 oz/t) over 3 m (10 ft). Drill hole #26-09-35 intersected three new zones including a large, homogenous breccia vein grading 12 g/tonne (0.36 oz/t) over a 21.4 m (70 ft) width. A previously unknown downward extension of the "84" vein was also encountered as demonstrated by drill hole #26-09-37, cutting 13 m (42 ft) of 10 g/tonne (0.30 oz/t) with other holes as listed below representing widths of up to 28 m (92 ft).

Twenty-one intersections are reported within nine drill holes as tabulated below, hole numbers not listed in sequence have not yet been drilled or logged:

Hole #    From (m)  To (m)  Length m (ft)  Gold g/tonne (oz/ton)  Zone/Lens

26-09-35    103.2   105.0    1.8     5.8       6.5     0.19         new
and         315.7   318.7    3.0     9.9       8.6     0.25          93
and         323.2   325.7    2.5     8.2      14.7     0.43         new
and         339.5   360.9   21.4    70.2      12.3     0.36         new
including   343.5   345.9    2.4     7.9      56.2     2.35         new

26-09-37    179.2   181.1    1.9     6.2       7.5     0.22         new
and         189.8   202.7   12.9    42.4      10.3     0.30          84
including   191.0   194.4    3.4    11.2      23.3     0.68          84
and         353.7   360.9    7.2    23.6      12.3     0.36         new

26-09-38    112.2   114.6    2.4     7.9      53.1     2.44         new
and         196.3   224.4   28.1    92.2       6.0     0.18          84

26-09-39    no significant values

26-09-40     21.7    24.2    2.5     8.2       3.4     0.10         new
and         138.2   143.5    5.3    17.4       3.8     0.11         new

26-09-41    123.3   126.3    3.0     9.9       8.6     0.25          84

26-09-44     15.7    17.8    2.1     6.9       8.2     0.24         new
and         125.6   127.1    1.5     4.9       9.9     0.29         new
and         238.2   240.5    2.3     7.6      13.4     0.39          84
28-09-46    145.5   148.8    3.3    10.8      11.3     0.33          98

28-10-38    140.5   146.9    6.4    21.0      81.8     2.39          98
including   140.5   144.2    3.7    12.1     138.0     4.03          98

The eastern end of the 26th level (4200 ft) has not been accessible since the 1950s and has remained untested by drilling until recently by San Gold. The recent exploration and development success from the 28th level in the high grade "98" vein system extends upward toward this end of the 26th level. As well, the large "84" vein which was last developed on the 24th level (3900 ft) in the 1940s extends downward. The recent exploration success has encountered numerous new high grade veins plus broad breccia style veins in an area with rough dimensions of 200 meters in height, 200 meters in width and 400 meters in length, between the mine's 24th and 28th levels. Any new mining that is to occur above the 26th level has the efficient advantage of moving directly to the main shaft, avoiding the internal "D" winze (shaft), a step that all Rice Lake ore must currently pass through. As well, the 26th level will be used as an exploration platform in order to look for deep extensions of the Hinge and 007 systems which are currently only explored to depths of 400 meters below surface.

The "98" vein area is located at the southeastern extremities of current Rice Lake mine development above the 28th level (4500 ft). The past two years have been spent improving access and infrastructure to this area in preparation for mining and exploration. This area of the mine is anticipated to account for 30% of San Gold's production for 2010 and has already contributed to an improvement in Rice Lake's contribution of 0.30 oz/ton to a record production grade in December. The main "98" vein above the 28th level has been developed to over 500 feet in length and is open above where drilling from the 26th level (4200 ft) is searching for extensions. Mining is now underway in numerous stopes within this vein above the 29th and 28th levels.

Sections, plans and diagrams related to this press release are available at the company's website www.sangoldcorp.com.

The above program was carried out by mine geologists under the supervision of D. Ginn, P.Geo., the Qualified Person for San Gold under National Instrument 43-101. Underground drill core samples and chip samples are assayed on site in the company's assay lab using the fire assay method with an AA and gravimetric finish. San Gold's quality control and assurance program includes the insertion of blanks and standards, the retention of pulps and rejects, and spot checks utilizing independent labs including TSL Laboratories in Saskatoon, SK and Accurassay Laboratories of Thunder Bay, ON. The core lengths are actual lengths as drilled and have not been adjusted for the true width of the mineralized zones.

For further information contact Dale Ginn, CEO of San Gold Corporation, at (204) 794-5818 or investor information at 1-800-321-8564 or visit www.sangoldcorp.com.

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

Contact Information

  • Contact:
    Dale Ginn
    CEO
    San Gold Corporation
    (204) 794-5818

    Investor information:
    1-800-321-8564
    visit www.sangoldcorp.com