San Gold Corporation (TSX:SGR)(OTCQX:SGRCF) today announced preliminary results of 18,241 ounces of gold produced plus 55,000 tons of ore in surface stockpiles, representing approximately 10,000 ounces of gold. Overall, that brings total mine production to more than 28,000 ounces of gold during the quarter, a new company record, and positions the Company well to meet or exceed full year production guidance of between 95,000 and 105,000 ounces of gold in 2012.
"We are extremely pleased with the progress being made as we continue to increase production volumes in Rice Lake. We continue to acquire new, low-cost ounces and expose our shareholders to significant exploration upside in very favourable geologic belts within underexplored jurisdictions in Canada. We are very disappointed in the market's recent performance but remain confident that simply doing the right things right, investing wisely and remaining debt free, will deliver long-term shareholder value. We have an excellent team at all levels focused on the long-term generation of shareholder wealth," said San Gold President and Chief Executive Officer George Pirie.
The Company milled 116,546 tons in the quarter despite a four-week interruption to milling operations during the month of June. The Company set a daily average milling record of 2,032 tons per day in May. Grade was 5.70 grams per tonne for the quarter, slightly above the previous quarter. Recovery improved to 94.1% for the quarter. The mill resumed normal operations on schedule on July 1.
The operation mined 155,495 tons of ore in the quarter, 26% higher than the second quarter of 2011 and resulted in a daily mining record for the quarter of 1,709 tons per day. Underground mine operations remain focused on developing an extensive mining complex that will facilitate access to the down dip extensions of the L10 and 007 from the Rice Lake shaft infrastructure. The company completed 1,093 metres of lateral development and 235 metres of vertical development during the quarter. The Company also initiated a raise bore to improve ventilation capacity for mining operations and started development work toward the L10 Zone from 16 Level.
During the quarter, the Company released an updated resource and reserve statement which resulted in a 1.5 million ounce increase to our resource.
During the quarter, the Company also completed a number of transactions. The Company purchased a 100% interest in three properties owned by Opawica Explorations Inc. located in the Rainy River gold district of northwestern Ontario. This agreement effectively adds significant gold equivalent ounces associated with the Maybrun Deposit. The Company also purchased an 80% undivided interest in all precious metals including, but not limited to, gold and silver but specifically excluding platinum and palladium contained on Canadian Arrow Mines Ltd. properties. The Canadian Arrow agreement covers multiple properties including claims adjacent to the Opawica properties in the Rainy River gold district and claims nearby SGX properties in the Timmins gold camp. This agreement secures the region surrounding the Opawica property for gold exploration in support of the Company thesis that additional mineralization will be found near the Maybrun deposit.
The Company sold all of its interests in its Tisdale Township properties for consideration of approximately 8 million shares of SGX Resources Inc. each valued at $0.50 per SGX share, maintaining its ownership interest in that company. The Company will take its prorata share of SGX's expenses against this investment in the second quarter. The Company also completed a transaction with Strikepoint Gold Inc. related to claims previously covered by an option agreement between Strikepoint and the Company, providing greater flexibility in exploring the region.
About San Gold
San Gold is an established Canadian gold producer, explorer, and developer that owns and operates the Hinge, 007, and Rice Lake mines near Bissett, Manitoba. The Company employs more than 400 people and is committed to the highest standards of safety and environmental stewardship. San Gold is on the Toronto Stock Exchange under the symbol "SGR" and on the OTCQX under the symbol "SGRCF".
For further information on San Gold, please visit www.sangold.ca.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This news release includes certain "forward-looking statements". All statements, other than statements of historical fact included in this release, including, without limitation, statements regarding forecast gold production, gold grades, recoveries, cash operating costs, potential mineralization, mineral resources, mineral reserves, exploration results, and future plans and objectives of the Company, are forward-looking statements that involve various risks and uncertainties. These forward-looking statements include, but are not limited to, statements with respect to mining and processing of mined ore, achieving projected recovery rates, anticipated production rates and mine life, operating efficiencies, costs and expenditures, changes in mineral resources and conversion of mineral resources to proven and probable mineral reserves, and other information that is based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management.
Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be "forward-looking statements." Forward-looking statements are subject to a variety of risks and uncertainties that could cause actual events or results to differ from those reflected in the forward-looking statements.
There can be no assurance that forward-looking statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include, among others, the actual results of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future prices of precious metals, as well as those factors discussed in the section entitled "Other MD&A Requirements and Additional Disclosure and Risk Factors" in the Company's most recent quarterly Management's Analysis and Discussion ("MD&A"). Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
FOR FURTHER INFORMATION PLEASE CONTACT:
Tim Friesen San Gold Corporation Communications Director 1 (855) 585-4653
George Pirie San Gold Corporation President and CEO 1 (416) 214-0024 www.sangold.ca