San Gold Announces $50 Million Offering of Convertible Debentures

WINNIPEG, MANITOBA--(Marketwire - Feb. 13, 2013) -
THIS PRESS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES
San Gold Corporation (TSX:SGR)(OTCQX:SGRCF) (the "Company") today entered into an agreement with a syndicate of underwriters co-led by Scotiabank and CIBC under which they have agreed to act as underwriters to purchase, on a bought deal basis, 50,000 convertible unsecured subordinated debentures (the "Debentures") of the Company at a price of C$1,000 per Debenture, for total gross proceeds of C$50 million (the "Offering").
The Underwriters have been granted an option (the "Option") to purchase up to an additional 15% of the Offering, exercisable in whole or in part at any time up to 30 days following the closing of the Offering, which is scheduled to occur on or about March 6, 2013 (the "Closing Date").
The Debentures will mature on March 31, 2018 (the "Maturity Date"), unless earlier redeemed, and will bear interest, accruing, calculated and payable semi-annually in arrears on March 31 and September 30 of each year, at a rate of 8.00% per year. The Debentures will be convertible at the holder's option into common shares ("Common Shares") of the Company at any time prior to the close of business on the earlier of the Maturity Date and the business day immediately preceding the date fixed for redemption of the Debentures at a conversion price of C$0.50 per Common Share (the "Conversion Price"), subject to adjustment in certain circumstances.
The net proceeds of the offering will be used to fund continued development of the Company's mineral properties and for general working capital purposes.
The Debentures will be direct unsecured obligations of the Company ranking subordinate to all liabilities except liabilities, which by their terms rank in right of payment equally with or subordinate to the Debentures. The Debentures will rank pari passu with all subordinate indebtedness issued by the Company from time to time, to the extent subordinated on the same terms.
The Offering is subject to a number of conditions, including, without limitation, receipt of all regulatory approvals. The Offering is subject to the approval of the TSX.
These securities being offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold in the United States or to, or for the benefit of, U.S. persons (as defined in Regulation S under the U.S. Securities Act) absent registration or an applicable exemption from registration requirements. This release does not constitute an offer for sale of securities in the United States.
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, approximately 235 kilometres northeast of Winnipeg, Manitoba, Canada. The Rice Lake Project has a permitted, modern gold mill currently processing ore at a capacity of 2,500 tons per day, modern surface infrastructure including a licensed tailings management facility, and is connected to the Manitoba power grid system. 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 the Company, please visit www.sangold.ca.
Cautionary Note
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.
Drill core obtained as part of the surface drill program was split, with half sent to TSL Laboratories in Saskatoon, SK and fire assayed followed by an Atomic Absorption and gravimetric finish. Whole metallic assays were performed on samples containing visible gold. Underground drill core samples were assayed on site in the Company's assay laboratory using the fire assay method with an Atomic Absorption and gravimetric finish. The Company's quality control and assurance program includes the insertion of standards, the retention of pulps and rejects, and spot checks utilizing independent laboratories including TSL Laboratories in Saskatoon, SK and Accurassay Laboratories of Thunder Bay, ON.
Exploration results that include geophysics, sampling, and drill results on wide spacings may not be indicative of the occurrence of a mineral deposit. Such results do not provide assurance that further work will establish sufficient grade, continuity, metallurgical characteristics, and economic potential to be classed as a category of mineral resource. A mineral resource that is classified as "inferred" or "indicated" has a great amount of uncertainty as to its existence and economic and legal feasibility. It cannot be assumed that any or part of an "indicated mineral resource" or "inferred mineral resource" will ever be upgraded to a higher category of resource. Investors are cautioned not to assume that all or any part of mineral deposits in these categories will ever be converted into proven and probable reserves.
FOR FURTHER INFORMATION PLEASE CONTACT:
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
Contact Information:

San Gold Corporation

Dale Ginn, P.Geo

Qualified Person and Executive Vice Chairman

1 (855) 585-4653





San Gold Corporation

George Pirie

President and CEO

1 (855) 585-4653





San Gold Corporation

Manish Grigo

Director Investor Relations

1 (855) 585-4653

info1@sangold.ca

www.sangold.ca