Sargold Resource Corporation

Sargold Resource Corporation

March 28, 2007 14:52 ET

Sargold Pours First Gold at Furtei-Developing Longer Term Production Plan

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 28, 2007) - Sargold Resource Corporation (TSX VENTURE:SRG)(FRANKFURT:DU4) ("Sargold" or the "Company") is pleased to announce it has poured its first gold bar after successfully refurbishing the Furtei processing plant in the fourth quarter of 2006. This first pour launched a near-term production plan that is based on processing the upgraded ore from the residual heap leach pad at the site. The head grade of this residual ore is being upgraded by screening off the oversize material from the 450,000 tonnes of ore remaining on the heap leach pad. The screened oversize ore is then processed through the carbon-in-leach ("CIL") circuit after primary crushing and fine grinding. This production is expected to yield approximately 500 ounces of gold per month for a period of several months.

President and Chief Operating Officer, George Paspalas, says, "While the production from this low grade material is modest, it marks the successful re-start of the Furtei plant, where operational expertise is being re-honed and the future rehabilitation liability of the heap leach pad is being significantly reduced. Most importantly, the Company is beginning to generate operating cash flow for the first time since its entry into Sardinia, which will form a basis for growth in 2007."

The Company was pleased to be able to refurbish the Furtei plant for a marginal cost. After being decommissioned in 2002, the refurbished plant was re-commissioned in late December 2006 and was fully water tested prior to the end of the year. The local workforce completed the following refurbishments at the plant before successfully obtaining a new cyanide usage permit in January 2007:

- Removing the old stockpile of low grade enargite sulphide ore

- Replacing/repairing mechanical and electrical components to get mill and leach tanks operational

- Clearing solid slurry from the pipelines of the compressed air system

- Confirming reliable operation of the process computer and logic control systems

- Realizing significant value from recovering activated carbon from around the CIL floor, sumps and spent ore left settled in the tanks - enough to carry through to 2008

- Fully testing the tailing disposal system and water distribution systems

After preparing the treatment plant for production, a trial was conducted early in the first quarter of 2007 to determine whether the head grade could be upgraded by screening. The trial was conducted over an eight-day period, with the resultant screened oversize ore grade indicating a minimum 44% upgrading to 0.75 - 0.80 g/t. The trial was also successful in determining key unit operating costs, such as lime, cyanide and power consumptions. The assessment concluded it was economic to process screened oversize material from the heap leach pad at Furtei.

The Company intends to conduct a trial for leaching sulphide ore from the Sa Perrima open pit as the next step in the re-start of the Furtei facility. If successful, this ore could be used to increase and sustain mid-term production following the completion of the upgraded ore from the residual heap leach pad.

Longer Term Production Plan

Sargold has been conducting a broad suite of metallurgical testwork to determine the best approach to processing the sulphide refractory ore contained at Furtei. The objective of the testwork is to define a business plan that will realize profitable and sustainable processing of both pyrite-hosted gold and enargite-hosted copper and gold, both of which comprise the majority of the existing resources at Furtei. Historical processing of these ores has proven problematic and stalled exploration work on the property, particularly at depth.

Some significant breakthroughs have been achieved in this testwork program and the company is now working up an assessment to determine the optimal long term processing strategy for Furtei. Removing the refractory constraint will open up the Furtei area to a new generation of exploration and development. It is expected that these testwork programs will be completed in the second quarter 2007. Please note that feasibility study has not been completed and there is no certainty that the company's proposed operations will be economically viable.

Mr. Paspalas added, "Our investigative metallurgical testwork is starting to pay some dividends now, however we still need to finalize some of the testing and confirm capital and operating costs for the long term plan. In the interim, the successful heap leach re-processing trial has given us the opportunity to establish ourselves as operators and gold producers, and will provide some essential cash flow for the near term."

ABOUT SARGOLD RESOURCE CORPORATION. Sargold controls the largest precious metals exploration and exploitation land area in Sardinia, Italy. These assets include a 90% ownership interest in the fully permitted Furtei mine and processing plant, in addition to the large Monte Ollasteddu mineralized system in the Eastern Paleozoics. Furthermore, the Company holds the same interest in an advanced exploration property at Osilo, the site of several existing discoveries located in northwestern Sardinia. The island of Sardinia, located approximately 150 kilometers west of Rome, is the second largest in the Mediterranean Sea covering over 24,000 square kilometers.


George Paspalas, President & Chief Operating Officer

FORWARD-LOOKING STATEMENTS - The statements that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties that could cause actual results to vary materially from targeted results. Such risks and uncertainties include those described from time to time in the Company's latest annual report and management discussion and analysis. The Company assumes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this News Release.

Contact Information

  • Sargold Resource Corporation
    Marlo Hamer-Jackson
    Investor Relations Manager
    (604) 687-1717
    (604) 687-1715 (FAX)