St Andrew Goldfields Ltd.

St Andrew Goldfields Ltd.

November 13, 2009 11:41 ET

SAS Reports Q3 2009 Financial Results and Production Decision at Hislop

TORONTO, ONTARIO--(Marketwire - Nov. 13, 2009) - St Andrew Goldfields Ltd. (TSX:SAS), operating as "SAS Goldmines" - ("SAS" or the "Company") announces that its loss from continuing operations for the third quarter of 2009 was $7,165,822 or $0.02 per share. The loss from continuing operations for the nine months ended September 30, 2009, was $22,749,265 or $0.07 per share. SAS's accounting policy is to expense all mine pre-production expenditures, interest and financing transaction costs rather than the capitalization of certain of these expenditures as permitted. For the third quarter of 2009 and the nine months ended September 30, 2009, pre-production expenditures incurred at the Holloway Mine of $3.1 million and $5.6 million, respectively were expensed.

During the third quarter of 2009, the Company's principal operations included pre-production activities at its Holloway Mine and advancing exploration and development at its Hislop Project. As recently announced, the Holloway Mine commenced gold production in mid October 2009, with the first gold pour of approximately 1,220 ounces occurring on October 31, 2009. To date, approximately 4,200 ounces of gold, with a value of approximately US$4.6 million, were poured at the Holt Mill from the Holloway Mine ore.

"We are pleased with the progress of our business plan to bring three gold mines into production in the next 12 months in this exciting gold price environment." said Jacques Perron, President and CEO of SAS. "Having been able to put the Holloway Mine in production earlier than anticipated and under budget validates our plan and the capabilities of our team."


- Completed all necessary pre-production activities at the Holloway Mine and the Holt Mill at below budget and commenced production in mid October 2009.

- Made a production decision in November 2009 on the Hislop Project following the successful completion in September 2009 of a positive National Instrument 43-101 ("NI43-101") compliant Pre-Feasibility Study for the project, which outlined 1.9 million tonnes of Probable Mineral Reserves at an average grade of approximately 2.3 grams per tonne gold for a total of 142,500 ounces of contained gold.

- Completed a custom milling agreement to process approximately 100,000 tonnes of custom ore at the Company's Holt Mill.

- Obtained a favourable decision from the Superior Court of Justice (Ontario) in respect of SAS's rights and obligations under a royalty agreement entered into by Newmont Canada Limited and Barrick Gold Corporation in respect of the Company's Holt property. Newmont Canada Limited has appealed the Court's decision.

Financial review

During the third quarter of 2009, the Company incurred $5.3 million of pre-production capital and operating expenditures to bring the Holloway Mine into production, of which $2.2 million were capitalized in property, plant and equipment. During the quarter, SAS earned revenue of $1.7 million from the processing of custom ore at the Holt Mill.

For the nine months ended September 30, 2009, pre-production capital and operating expenditures incurred at the Holloway Mine and Holt Mill totalled $8.0 million. With a remaining capital for the Holloway Mine and Holt Mill estimated at $3.6 million (including $2.0 million for inventory procurement), the total forecasted costs to bring the Holloway Mine into operation is expected to be approximately $11.6 million, which is 41% less than the initial budgeted amount of $19.5 million made in May 2009.

The key factors in achieving this level of savings were attributable to the change in market conditions between the time the technical report was prepared (in mid 2008) and current with respect to the availability of skilled work force and the supply and availability of consumables and services, the reduced capital costs required for the Holt Mill, the maintenance of an effective mine site cost control system and the removal of the contingency amount included in the initial budget.

Amounts in thousands of Pre-production capital
Canadian dollars ---------------------------------------------
NI43-101 Actual, plus
technical estimate to
report (1) Budget (2) complete(3)
Mine capital
Holloway Mine $2,627 $3,150 $4,301
Holt Mine 6,041 - -
Holt Mill 1,942 2,022 1,533
Surface 717 449 386
Pre-production expenditures 8,070 7,307 3,135
Mine working capital - 4,000 2,000
Contingency 3,879 2,586 268
Total $23,276 $19,514 $11,623


(1) Amounts as reported in the Company's NI43-101 compliant technical report
on the Holloway-Holt Project filed on in July 2008.
(2) Revised budget made by the Company on May 12, 2009.
(3) Amounts represent actual expenditures incurred to September 30, 2009 and
capital expenditures accrued for the fourth quarter of 2009:
(4) The Company does not anticipate any sustaining capital is required for
the Holloway Mine on a stand-alone basis.

Cash used in operations for the third quarter 2009 was $5.2 million. The gold production target for the Holloway Mine in the fourth quarter of 2009 is forecasted at 15,000 ounces. The Company anticipates the Holloway Mine will generate positive cash flow from operations in the fourth quarter of 2009, sufficient to fund ongoing mine activities and to advance the exploration and development projects outlined below.

Hislop Project Update

Based on the positive NI 43-101 compliant Pre-feasibility Study for the Hislop Project, the Board of Directors has made a positive production decision to commence open pit operations. SAS is currently planning development activities for the end of November 2009, and anticipates that production will commence towards the end of the first quarter of 2010. Ore feed from the Hislop Project will be trucked to the nearby Holt Mill for processing. The Company anticipates the Hislop Project will produce approximately 25,000 ounces of gold in 2010.

Holt Mine Update

SAS continues to evaluate the economics and plans to start its Holt Mine, with an objective to put the Holt Mine into production during the second half of 2010. Commencement of mine preparation activities at the Holt Mine is subject to a favourable outcome of the appeal and is expected to be funded from cash flow from operations.

Exploration Update

Holloway Smoke Deep Exploration

SAS is currently conducting a 3,000-metre underground diamond drilling program from the 550-metre drift level at the Holloway Mine to increase its understanding of the mineralization in the Smoke Deep Zone, located between the Lightning Zone and the Blacktop Zone. The objective of the drill program is to follow up on limited exploration drilling conducted in March 2008, which consisted of 6 holes over approximately 500 metres of strike length. All 6 holes drilled in March 2008 returned anomalous gold values from altered mafic volcanic rocks adjacent to the contact with the ultramafic rocks to the north. The Company was very pleased with these results which included 10.05 g/t over 3.6 metres; 6.08 g/t over 4.5 metres; and 23.62 g/t over 0.4 metres (see press release dated March 28, 2008 for full list of results). The current program is expected to be completed by the end of the year at a budget of $0.5 million. The current program is being conducted under the supervision of Michael Michaud, the Company's Vice-President of Exploration, and is a Qualified Person under NI43-101 who has reviewed and approved this news release.

Regional Exploration

SAS has completed its regional exploration programs whereby the Company has fulfilled its exploration expenditure commitments for the Moneta-Guibord, PJV-Carr-Beatty and Barnet projects and has earned in its vested interests in these projects. All of these projects have experienced previously limited exploration which returned anomalous gold values.

For the fourth quarter of 2009 the Company is focused on laying out a near-term and long-term strategic exploration plan for SAS's entire land package in the Timmins mining district.

To review the complete unaudited Interim Consolidated Financial Statements and Management's Discussion and Analysis, please see SAS's SEDAR filings at and its website at

About SAS

SAS (operating as SAS Goldmines), is a Canadian based gold mining and exploration company with an extensive land package in the Timmins mining district, Northeastern Ontario, Canada, which lies within the world famous Abitibi greenstone belt. With near-term production and 120 km of upside exploration potential along the Porcupine-Destor Fault Zone, SAS is focussed on building a foundation for profitable growth.


This news release contains forward-looking information and forward-looking statements (collectively, "forward-looking information") under applicable securities laws, concerning the Company's business, operations, financial performance, condition and prospects, as well as management's objectives, strategies, beliefs and intentions. Forward-looking information is frequently identified by such words as "may", "will", "plan", "expect", "estimate", "anticipate", "believe", "intend" and similar words referring to future events and results, including the forecasted costs to bring the Holloway Mine into production, the production target for the Holloway Mine in the fourth quarter of 2009, the development and commencement of production at the Hislop Project, the timing thereof and its production target for 2010; the development and commencement of production at the Holt Mine and the timing thereof, the sufficiency of cash flows during the fourth quarter to maintain the Company's operations and planned programs, and the completion of the exploration program at the Smoke Deep Zone.
This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, uncertainties relating to the interpretation of the geology, continuity, grade and size estimates of the mineral reserves and resources, unanticipated operational or technical difficulties which could escalate operating and/or capital costs and reduce anticipated production levels, insufficient funding or delays or inability to raise additional financing on satisfactory terms, fluctuations in gold prices and exchange rates, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions, changes in conditions in the financial markets and an adverse appeal Court decision on the Holt Royalty . Such forward looking information is based on a number of assumptions, including but not limited to the expected timeline to complete pre-production activities, the availability of adequate financing, the level and volatility of the price of gold, the accuracy of reserve and resource estimates and the assumptions on which such estimates are based, the ability to achieve capital and operating cost estimates and general business and economic conditions. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking information and accordingly, readers are cautioned not to place undue reliance on this forward-looking information. SAS does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.

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