St Andrew Goldfields Ltd.

St Andrew Goldfields Ltd.

April 03, 2007 16:54 ET

St Andrew Reports 2006 Financial Results

OAKVILLE, ONTARIO--(CCNMatthews - April 3, 2007) - St Andrew Goldfields Ltd. (TSX:SAS) ("St Andrew") reports its financial results for the year ended December 31, 2006.

The Audited Financial Statements of St Andrew along with Management Discussion and Analysis, and the Annual Information Form have been filed with SEDAR ( These financial materials will be mailed to shareholders along with the Company's Information Circular and Annual General Meeting materials.

The Company reported a loss for 2006, on gold sales of $11,425,042, of $75,056,346 (including a write down of the Stock Gold Complex of $27,109,150) or $1.84 per share compared to a loss of $18, 266,379 or $0.69 per share in 2005 (on nil gold sales).

For the fourth quarter ended December 31, 2006, the Company incurred a loss, on gold sales of $2,740,157, of $35,098,347 (including a further write down of the Stock Gold Complex of $18,125,002) or $0.71 per share as compared to a loss of $6,287,097 or $0.21 per share (on nil gold sales) for the fourth quarter of 2005.

St Andrew expenses all exploration and mine development expenditures. All these expenditures are included as operating expenses. In addition, the mine development activities at the Company's Hislop Property, the advance exploration activities at the Taylor Project and costs incurred in the fourth quarter 2006 at the Holloway-Holt Gold Mine were charged to operations.

Stock Gold Complex

During the fourth quarter of 2006, due to the continued operating loss incurred at the Stock Gold Complex since the commencement of operations in January 2006, Management has carried out a further cash flow analysis of its Stock Gold Complex based on quantities of recoverable minerals, expected gold prices (considering current and historical prices, price trends and related factors), production levels and operating costs of production and capital, all based on life-of-mine plans and have concluded the Stock Gold Complex is impaired as of December 31, 2006 and recorded a further impairment loss of $18,125,002, as aforementioned, to its estimated fair value of $2,003,970. The write down of the Stock Gold Complex consists of the mineral interest and mine site infrastructure at the Hislop Mine and the Taylor Advanced Exploration Project and the Stock Gold Mill.

Gold production from the Stock Gold Complex was significantly below the Company's expectations and projections for 2006. The poor operating performances at the Stock Gold Complex are currently being considered as part of a review of the business plan for the Stock Gold Complex by the Company.

Nixon Fork Gold Mine

In the first quarter of 2006, St Andrew commenced a program of upgrading, rehabilitating and re-commissioning the 150 tonne per day gold mill and related surface infrastructure. The program was completed in the fourth quarter, 2006. In addition, a cyanide leach circuit will be installed during in 2007 to leach tailings produced by the operation in addition to extracting and retreating the tailings from the previous operation.

Initial underground ore extraction commenced in the fourth quarter of 2006 and retreatment of the existing tailings is expected to begin in the summer of 2007. Gold production commenced in the first quarter of 2007.

Holloway-Holt Gold Mine

St Andrew is undertaking an exploration and development program at the Holloway-Holt Gold Mine and expects a production decision to be made in the second quarter of 2007.

Aquarius Property

The Company plans to produce a bankable feasibility study on the Aquarius Deposit and has engaged SRK Consulting (US) Inc. as manager and co-coordinator of the study which is expected to be completed by the end of 2007.

Rights Offering

On February 26, 2007, the Company filed a preliminary 124,012,449 unit rights offering prospectus to raise approximately $124 million in gross proceeds.

On March 28, 2007, after discussions with the Ontario Securities Commission, the Company retracted the preliminary prospectus due to the production estimates included within the prospectus being management estimates only and not being supported by independently prepared technical reports under National Instrument 43-101.

The Company intends to file an amended and restated preliminary rights offering prospectus removing all references to production projections. The Rights Offering is subject to the approval of the Toronto Stock Exchange ("TSX") and applicable securities commissions.

Of the proposed $124 million unit rights offering, $110 million is guaranteed pursuant to a standby guarantee agreement with related parties of the Company.

2006 Activities

Notwithstanding the challenges at the Clavos Project operation and the write down at the Stock Gold Complex, 2006 was an active year for the Company and it increased its assets considerably from $57 million in 2005 to $144 million in 2006 by the acquisition of Holloway-Holt Gold Mine together with 36,000 acres of exploration properties, the acquisition of the Aquarius Property from Kinross, the acquisition of control of Glass Earth Limited, a strategic investment in Apollo Gold Corporation and a major capital investment at Nixon Fork.

St Andrew is a gold mining and exploration company producing gold from the Stock Gold Complex in Timmins, Ontario and the Nixon Fork Gold Mine in Alaska. St Andrew anticipates making a gold production decision with respect to its Holloway-Holt Gold Mine in the Timmins Mining Camp in the second quarter of 2007. 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 50.2 % equity interest in New Zealand based gold explorer, Glass Earth Limited (TSX VENTURE:GEL) and an approximate 12.6 % equity interest in Apollo Gold Corporation.

For further information about St Andrew Goldfields Ltd., please contact Investor Relations toll-free at 1-800-463-5139 or email


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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