St Andrew Goldfields Ltd.
TSX : SAS

St Andrew Goldfields Ltd.

November 07, 2006 11:17 ET

St Andrew Closes Acquisition of Holloway-Holt Gold Mining and Exploration Assets From Newmont and Announces Funding Arrangements

OAKVILLE, ONTARIO--(CCNMatthews - Nov. 7, 2006) - St Andrew Goldfields Ltd. ("St Andrew")(TSX:SAS) is pleased to announce the closing of the previously announced purchase from Newmont Canada Limited ("Newmont") of the shares of its subsidiary Holloway Mining Company ("HMC"). HMC owns the Holloway-Holt gold mining and exploration assets, located in the Timmins Mining Camp and adjacent to and contiguous to St Andrew's East Timmins Golden Reward exploration properties ("Golden Reward Project").

The Holloway-Holt gold mining and exploration assets comprise the Holt McDermott and Harker Holloway gold mines with associated plant, infrastructure and equipment, a gold resource (measured, indicated and inferred categories) of approximately 1.23 million ounces, and approximately 36,000 acres of exploration properties. The purchase price was US$40 million cash plus a sliding scale schedule of NSR royalties on the existing HMC resources and exploration assets, and a 1% NSR royalty on any production from the St Andrew East Timmins Golden Reward Project and gold production from the Stock Gold Complex.

Funding Arrangements through Technifund and Trapeze Secured Debentures

Funding for the cash consideration required to purchase the shares of HMC, fund certain expenses and provide additional working capital has been provided by Technifund Inc. ("Technifund") (a company controlled by the Chairman of St Andrew) and Trapeze Asset Management Inc. and Trapeze Capital Corp. (collectively "Trapeze") (insiders of St Andrew). Technifund provided a Secured Debenture Facility of $70 million and Trapeze provided a further Secured Debenture Facility of $21 million. Both Secured Debentures are secured against the assets of the Company. The Secured Debentures have an 18 month term and bear interest at 10% per annum plus a commitment fee of 2% of the principal amount.

The Secured Debentures replace the existing 10% Demand Loans approximately $50 million previously advanced by Techifund and will also provide the Company with additional working capital for the interim period to fund the operating and capital requirements of the Company until the previously announced Rights Offer.

St Andrew Increases Size of Rights Offer to $100 million

The Board of St Andrew has decided to increase the size of the previously announced Rights Offer to $100 million. It is anticipated that a Rights Offering Circular will be filed in December, 2006 upon completion of the required financial statements for HMC. The completion of the Rights Offer is expected to take place in early 2007.

Technifund and Trapeze have agreed to act as standby guarantors for the Rights Offer on terms still to be negotiated. Accordingly, proceeds of this Rights Offer will retire Secured Debentures.

Holloway-Holt Gold Mining and Exploration Assets as part of St Andrew's consolidation of the Timmins Mining Camp and development strategy

The Holloway-Holt gold mining and exploration assets are strategically located adjacent to the St Andrew East Timmins Golden Reward Project and the Stock Gold Complex facilities in the Timmins Mining Camp, Ontario and form an important step in St Andrew's plans to further consolidate the Timmins Mining Camp; to increase St Andrew's gold production profile by 75,000 to 100,000 ounces of gold per annum; to significantly increase the total gold reserve and resource base of St Andrew and to continue St Andrew's strategy to become a mid-tier gold production and exploration company over the next 4 years.

The major components of the Holloway-Holt gold mining and exploration assets are as follows:

- A total gold resource of approximately 1,233,000 ounces based on a Roscoe Postle Associates ("RPA") 43-101 Report completed in October 2006 which determined a measured plus indicated resource of 4 million tonnes grading 7.4 grams gold per tonne for 963,000 ounces contained gold and an inferred resource of 1.2 million tones grading 7.3 grams gold per tonne for 270,000 ounces of contained gold.

- Holloway Mine facilities comprising two head frames (No.1 and 2 Shafts), complete with hoist rooms and hoists, a compressor building and compressors, an automatic surface cemented backfill mixing system, an office complex, a warehouse and shop buildings, two vertical shafts 441metres and 867 metres deep respectively, underground ventilation and heating systems, surface and underground electrical reticulation systems, a communication system for the underground mine, shafts and surface facilities and a dewatering system.

- Holt Mine (previously Holt-McDermott) facilities including a gold mill with a throughput capacity of 3000 tons per day, a head frame (No. 3 Shaft) complete with a hoist room and hoists, a compressor building with compressors, a surface backfill plant, an office complex, a warehouse and shop buildings, underground facilities including a 1,195 meter deep shaft, ventilation and heating facilities, an underground jaw crusher and dewatering systems.

- 36,000 acres of exploration properties with excellent exploration potential and five exploration prospects for immediate follow up.

St Andrew believes that the combination of the Holloway-Holt exploration properties and St Andrew's existing East Timmins Golden Reward Exploration properties will form one of the largest contiguous land packages in the Timmins Mining Camp with excellent potential for a major discovery. Any exploration discovery on this land package will have the added advantage of having ore treatment facilities available at the Holloway-Holt gold mill. Conceptual planning for the Holloway-Holt gold mine is based on gold production resuming in the first half of 2007 at a forecast production rate of 75,000 - 100,000 gold per annum.

St Andrew (TSX:SAS) is a gold mining and exploration company producing gold from its Stock Gold Complex in Timmins, Ontario and with gold production from its Nixon Fork project in Alaska scheduled to commence in November of 2006. The recently acquired Holloway-Holt Gold Mine in the Timmins Mining Camp is forecast to increase St Andrew's gold production by 75,000 to 100,000 ounces per annum. St Andrew controls a very large land position in the Timmins Mining Camp, an extensive land position at Eskay Creek in northern British Columbia and land positions around Nixon Fork in the Kuskokwim-Tintina Mining Camp in Alaska. St Andrew also holds an approximate 48.3% equity interest in New Zealand-based gold explorer, Glass Earth Limited.

For further information about St Andrew Goldfields Ltd., please visit St Andrew's website at www.standrewgoldfields.com or contact Investor Relations toll-free at 1-800-463-5139 or email investor@standrewgoldfields.com.

FORWARD LOOKING STATEMENTS

The information in this release may contain forward-looking information under applicable securities laws. 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 implied by the forward-looking information. Factors that may cause actual results to vary material include, but are not limited to, inaccurate assumptions concerning the exploration for and development of mineral deposits, political instability, currency fluctuations, unanticipated operational or technical difficulties, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions or conditions in the financial markets and the inability to raise additional financing. Readers are cautioned not to place undue reliance on this forward-looking information. St Andrew 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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