St Andrew Goldfields Ltd.

St Andrew Goldfields Ltd.

May 15, 2008 16:05 ET

St Andrew Reports 2008 Q1 Financial Results

OAKVILLE, ONTARIO--(Marketwire - May 15, 2008) - St Andrew Goldfields Ltd. (TSX:SAS)("St Andrew" or the "Company") reports that for the three-month period ended on March 31, 2008, it had a net loss of $11,564,207 or $0.05 per share, as compared to a loss of $15,240,618 or $0.23 per share for the same period in 2007.

Results of Operations

Three months ended March 31 2008 2007


Tonnes mined (1) 10,846 56,165
Tonnes milled (1) 9,207 46,603

Gold production (ounces) (1) 1,490 6,527
Gold grade (grams per tonne) 4.1 5.7
Gold sold (ounces) (2) 2,885 3,529

Net loss for the period $ 11,564,207 $ 15,240,618
Net loss per share $ 0.05 $ 0.23

Working capital deficit (3) $ 29,076,714 $ 20,696,451
Shareholders' equity (deficit) $ 38,667,642 $ (9,145,200)

Number of shares outstanding 235,421,654 65,269,710


(1) Tonnage (mining and milling) and gold production information for the three months ended March 31, 2008 were derived from the Company's Holloway-Holt mine, which operation is in the exploration and mine development stage. For the three months ended March 31, 2007, tonnage information (both mining and milling) was derived from the Company's gold production operations at the Stock Gold Complex and at the Nixon Fork Gold Mine.

(2) During the three months ended March 31, 2008, the Company sold 2,632 ounces of gold produced from the Holloway-Holt mine development and from the Holt Mill clean up. The Company also extracted and sold 253 ounces of gold from stripping activities conducted at the Stock Mill. Revenues generated from these activities were accounted for as reductions to the expenditures of the respective operation

(3) Included in the working capital deficit as at March 31, 2008 was $11,000,000 of secured debt due to a related party being the then current portion of that debt. Subsequent to the completion of the quarter, the maturity date of the debt was extended to April 1, 2009. In addition, the working capital deficit as at March 31, 2008 included an amount owed to a mining contractor of $17,344,978, for which the Company is currently negotiating a final settlement.

St Andrew's accounting policy requires all exploration and mine development expenditures prior to the establishment of economically recoverable reserves at a property be charged to operations. When the Company has determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, costs incurred to develop the property are then capitalized. With the exception of the Company's Nixon Fork Gold Mine, none of the Company's exploration and mine development projects had established that there are any economically recoverable reserves. During the quarter ended March 31, 2008, the Company incurred mine exploration expenditures of $4,876,104, after gold sales reduction of $2,433,467 from the sale of 2,885 ounces of gold recovered from the Holt Mill and the clean up of the Stock Mill.

Since the third quarter of 2007, the Company has focused on advancing the exploration and mine development activities at its flagship asset, the Holloway-Holt mine, with the objective of completing an independent technical report with respect to the asset, by the end of the second quarter of 2008. The Company anticipates making a production decision at the Holloway-Holt camp dependent upon receipt of a positive technical report on the project and the availability of financing. The Company is satisfied that this work at Holloway-Holt is progressing on schedule.

Liquidity and Capital Resources

At March 31, 2008, the Company has cash and equivalents of $6,008,543. Subsequent to the quarter end, the Company sold 29,429,000 of its holding of 65,514,999 common shares in Glass Earth Gold Limited ("Glass Earth") to private investors, of which 22,891,000 Glass Earth shares were sold to related parties, for gross proceeds of $4,037,390. In addition, the Company intends to continue its plan of divesting non-core assets, as deemed appropriate. The Company plans to use the proceeds from these divestitures to finance the ongoing exploration and mine development activities at the Holloway-Holt mine and for working capital purposes.

On April 21, 2008, the Company agreed with Herbert Abramson, the Chairman of the Company and Technifund Inc. ("Technifund"), a company controlled by Herbert Abramson, that the Company would issue 76,363,636 common shares valued at $0.55 per share in full satisfaction of $42,000,000 aggregate principal amount of indebtedness held by Herbert Abramson and Technifund. Completion of the transaction is subject to the approval of the minority shareholders of the Company, which will be sought at the upcoming annual and special meeting of shareholders of the Company to be held on June 23, 2008. Upon completion of the transaction, Herbert Abramson's direct and indirect ownership interest in the Company will increase from 15.1% to approximately 35.9%

About St Andrew

St Andrew is a gold mining and exploration company with operations in Timmins, Ontario and Alaska. 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 Gold Mine in the Kuskokwim-Tintina Mining Camp in Alaska. St Andrew also holds an approximate 23.3% equity interest in New Zealand based gold explorer Glass Earth Gold Limited which holds extensive land positions on the North and South Islands in New Zealand, and an approximate 17.8% equity interest in Apollo Gold Corporation, which has operations in Montana, Mexico and the Black Fox Deposit located in the vicinity of St Andrew's Timmins operations.


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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