St Andrew Goldfields Ltd.

St Andrew Goldfields Ltd.

May 12, 2009 16:30 ET

St Andrew Reports Q1 2009 Results

OAKVILLE, ONTARIO--(Marketwire - May 12, 2009) -


St Andrew Goldfields Ltd. (TSX:SAS) - ("St Andrew" or the "Company") reports a loss from continuing operations for the three months ended March 31, 2009 of $5,573,280 or $0.02 per share as compared to a loss from continuing operations of $9,613,383 or $0.04 per share for the same period in 2008. The reduced loss reflects the Company's continuance of its properties on care and maintenance during the first quarter of 2009, as well as the Company's efforts to reduce non-essential expenditures.

During the quarter, the Company sold its entire investment in common shares of Apollo Gold Corporation ("Apollo Gold") for net proceeds of approximately $4.5 million to fund its ongoing working capital requirements. Subsequent to March 31, 2009, the Company completed financings with gross proceeds of US$20.2 million. The net of these proceeds will be used to put the Holloway mine back into production, to advance the exploration and development of its Hislop Project (with the objective of completing a National Instrument 43-101 ("NI43-101") compliant technical report on the property in the second quarter of 2009), and for general corporate working capital purposes.

In conjunction with the financing, the Company extended the maturity date of approximately $7.6 million principal amount of its secured debentures by one-year from December 31, 2009 to December 31, 2010; in consideration for which the coupon on the debentures was increased from 10% to 12% per annum effective April 1, 2009.The Company also issued to holders of the amended debentures, warrants to purchase 3,777,500 common shares exercisable at a price of $0.44 per share until December 31, 2010. The Company intends to redeem approximately $0.4 million principal amounts of the remaining debentures.

Holloway-Holt Project

The Company is currently focused on bringing its Holloway mine into production by the fourth quarter of 2009. The Company estimates that it will incur pre-production and capital expenditures of $19.5 million over the next 6 months to restart production at the Holloway mine. The Company has commenced mine labour recruitment and material requisition activities with this objective in mind.

Based on the estimated proven and probable gold reserves of the Holloway mine as reported in the Company's current NI43-101 compliant technical report for the property, the Company anticipates a life of mine production plan of 3 years for a total of 142,000 contained ounces of gold.

Pre-production activities at the Holt mine will commence once the royalty issue is satisfactorily resolved provided that the Company has sufficient funding, either from cash flow from operations or from completion of additional financing.

Hislop Project

At the end of the first quarter 2009, assays from the first 44 delineation drill holes were returned. The assays for the remaining drill holes are expected within the next several weeks. The assay results received to date, which are consistent with previous drill results, confirm the relatively consistent nature of the gold mineralization over significant widths. While previous drilling was focused on better delineating the higher grade portions of the gold mineralization that was mined from underground, this phase of drilling was concentrated along the margins of the mineralized zone where only limited drilling and sampling existed.

The Company is currently updating a three-dimensional geological model that will be used as a foundation to estimate the mineral resources, and subsequently, an independent prefeasibility study. The independent NI43-101 prefeasibility study on the property is expected to be completed by the end of the second quarter of 2009, which, it is anticipated will allow for a positive production decision on the project. The Company believes that the low grade ore from Hislop will augment the high grade ore to be milled at the Company's Holt mill, enhancing the economics of both operations.

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

About St Andrew

St Andrew is a gold mining and exploration company with operations in Timmins, Ontario. St Andrew controls a large land position in the Timmins Mining Camp and an extensive land position at Eskay Creek in northern British Columbia.


This news release contains forward-looking information under applicable securities laws, concerning St Andrew'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", "anticipate", "intend" and similar words referring to future events and results, including in respect of the intended use of proceeds of the financings, the restart of mining at the Holloway mine, the commencement of preproduction at the Holt mine following satisfactory resolution of the Holt royalty issue, the intention and timing necessary to complete a resource estimate of the Hislop Project and the subsequent development of production at the Hislop Project. 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 materially include, but are not limited to, inaccurate assumptions concerning the exploration for and development of mineral deposits, delay or inability to raise additional financing on satisfactory terms, 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 and changes in conditions in the financial markets. Readers are cautioned not to place undue reliance on this forward-looking information as actual results may differ materially from those expressed or implied in the 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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