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Press release from Marketwire

007 Drill Results Continue to Expand the Deposit

Monday, October 22, 2012

007 Drill Results Continue to Expand the Deposit07:00 EDT Monday, October 22, 2012WINNIPEG, MANITOBA--(Marketwire - Oct. 22, 2012) - George Pirie, President and Chief Executive Officer for San Gold Corporation (TSX:SGR)(OTCQX:SGRCF), is pleased to announce interim results of its ongoing 2012 diamond drilling program on the 007 deposit within the Company's 100% owned Rice Lake Project located in Bissett, 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. Since being discovered in 2009, the 007 deposit continues to demonstrate robust grades and widths across all four lenses of the deposit and it continues to be consistent at depth while structural characteristics are becoming increasingly predictable. This drilling activity is part of the Company's program to upgrade resources into higher confidence categories and to increase reserves within the mining complex. Overall results are positive and comparable with the Company's March 31, 2012 resource update. The Company will continue drilling for the remainder of 2012 and provide a resource update in the first quarter of 2013."The 007 deposit drilling continues to prove up high-quality resources which are accessible from existing infrastructure. The drilling continues to confirm the continuity of the deposit at depth. The ongoing development of the 16 and 26 Levels will provide drill platforms for further resource and reserve definition. Mining is currently scheduled to begin from these levels in early 2014," said Mr. Pirie.Highlights of the drilling program include:HoleZoneFrom (m)To (m)Grade (g/t)Length (m)Below Surface (m)DX-12-0230071026.71038.011.311.3718DX-12-0340071044.91050.715.95.7757S887-12-02173044.249.124.24.9361S890-12-007730117.7120.242.62.5416607-12-031Shoreline Basalt185.1187.428.82.31239607-12-032Shoreline Basalt208.1209.920.01.81246Drilling for this program was carried out in three regions from drill stations located on surface and underground, with a total of 98 drill holes intercepting the 007 deposit and adjacent regions of the Shoreline Basalt Unit so far this year. The Company is very encouraged by the results of the Shoreline Basalt Unit drilling program as it continues to demonstrate the expansion of existing mineralized zones and the potential of new zones to be discovered along the Shoreline Basalt Unit both east and west and at depth.The following provides a brief summary of the drilling program in each of the three regions:61 intersections were obtained between 300 and 595 metres below surface. Drilling in this region occurred both from surface and underground drill stations. These infill targets were identified to support the Company's near-term mining plans within the active mining region accessed by ramp from the Hinge/007 portal. 7 intersections were obtained from between 700 and 895 metres below surface from surface drilling stations. The Company intends to drill this region more fully once development from 16 Level has reached the Hinge district. 30 intersections were obtained from between 900 and 1,250 metres below surface. These infill targets were identified to support planned development of the 007 deposit from 26 Level. The 26 Level is the closest portion of the Rice Lake mine infrastructure to the projections of the 007 deposit. Development is currently underway in this region and mining is expected to commence in early 2014. Table 1 at the end of this release provides the full list of results from this year's drilling program to date. Figure 1 at the end of this release provides a longitudinal section of the three main drilling regions within the 007 deposit and planned development from 16 and 26 Level.Figure 2 at the end of this release provides a plan view of planned development of the 007 deposit from 16 Level of the Rice Lake mine.Figure 3 at the end of this release provides a plan view of planned development of the 007 deposit from 26 Level of the Rice Lake mine.Underground drill core samples are assayed on site in the company's assay lab using the fire assay method with an AA and gravimetric finish. San Gold's quality control and assurance program includes the insertion of standards, the retention of pulps and rejects, and spot checks utilizing independent labs including TSL Laboratories in Saskatoon, SK and Accurassay Laboratories of Thunder Bay, ON. The core lengths are actual lengths as drilled and have not been adjusted for the true width of the mineralized zones. This drilling program was carried out by San Gold mine geologists under the supervision of D. Ginn, P.Geo., the Qualified Person for San Gold under National Instrument 43-10, who has reviewed and approved the press release.About San GoldSan 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".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.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.Table 1: 2012 007 Drill Intersections by Elevation 1Drill HoleZoneFrom (m)To (m)Grade (g/t)Length (m)Below Surface (m)Active Mining Region Drilling1JH-11-044700453.9457.019.43.13002JH-11-047700469.3470.11.40.83083CD-11-296740433.5436.912.53.43244CD-11-297740443.0444.81.61.83355887-12-0507302.46.44.33.93366887-12-0517304.16.711.42.73367CD-12-298740446.7449.49.32.73388CD-12-290730455.1456.510.31.43389CD-12-311740443.6453.51.210.034010CD-12-268730453.2463.59.810.334211S887-12-00573043.444.61.51.234612CD-12-317740457.6457.920.50.334713CD-12-283730460.2464.424.54.134714CD-11-303740452.6453.474.60.834815S887-12-00174054.456.318.11.934816CD-12-324730461.1465.95.24.834917CD-12-276730460.9466.06.05.235318CD-12-289730464.8468.03.53.235419S887-12-00673046.447.72.01.335420S887-12-02573041.946.011.14.135721S887-12-00274062.365.517.13.236022CD-12-275730466.4470.47.44.036023S887-12-02973052.457.82.65.436124CD-11-304740460.5462.23.81.736125S887-12-02173044.249.124.24.936126CD-12-269730467.8473.610.55.836427S887-12-02673050.153.94.33.836728JH-11-029720512.4514.93.72.236929S887-12-03073061.763.229.31.536930CD-12-263730473.8477.14.93.336931S887-12-00374076.078.016.32.037432S887-12-02273056.360.58.34.237733S887-12-01773059.663.45.23.837934JH-11-048700486.1487.31.31.237935S890-12-00973081.389.90.38.538236S887-12-02773061.970.05.88.138437S887-12-00873076.880.37.63.538938S887-12-00474092.494.22.51.839639S890-12-00173095.097.08.22.039840CD-12-271730496.4498.19.51.739941S887-12-01873079.085.313.96.340242CD-12-264730490.7496.53.35.840243CD-12-299740495.3497.31.32.040644CD-12-325740499.7501.50.51.941445S890-12-007730117.7120.242.62.541646CD-12-291730505.1508.118.83.041747S887-12-02373098.6104.716.16.142048S882-12-008700166.5167.45.70.942449CD-12-270730506.5512.11.95.642450CD-12-279730511.6513.936.02.343351CD-12-274730518.3520.80.42.543552S887-12-013740118.5122.37.33.743753S882-12-006700197.5201.54.44.044054S882-12-004700215.4216.80.11.444255S882-12-002700239.2240.20.31.044956S882-12-003700243.4244.20.00.947357CD-12-301740548.5549.21.00.648058CD-12-266730545.7547.313.11.648059CD-12-329730570.0574.53.84.550560CD-12-267730585.7589.56.43.753361CD-12-326740592.0596.80.94.853816 Level Access Drilling62DX-12-0320071025.01049.01.724.070163DX-12-0230071026.71038.011.311.371864DX-12-0340071044.91050.715.95.775765DX-12-0280071059.91063.41.23.576366DX-11-0210071082.81084.90.22.181967DX-12-0260071045.01047.912.12.882368DX-12-0270071094.21094.532.10.382926 Level Access Drilling69607-12-005Shoreline Basalt118.7119.156.20.490570607-12-003Shoreline Basalt115.0117.13.32.1112871607-12-021Shoreline Basalt113.5123.63.810.0114372607-12-017Shoreline Basalt151.5152.22.50.6114873607-12-006Shoreline Basalt76.679.13.22.5114874607-12-023Shoreline Basalt191.9192.131.60.2114975607-12-020Shoreline Basalt180.5183.52.83.0115376607-12-019Shoreline Basalt269.8272.24.52.4116977607-12-010Shoreline Basalt161.5162.41.50.9117278607-12-001Shoreline Basalt192.4194.010.01.7117279607-12-022Shoreline Basalt192.0192.58.30.4117580607-12-016Shoreline Basalt186.3187.10.10.8117881607-12-009Shoreline Basalt69.171.60.72.6118182607-12-004Shoreline Basalt92.094.20.02.2118283607-12-002Shoreline Basalt130.9135.85.24.9118384607-12-011Shoreline Basalt8.29.14.00.9118485607-12-013Shoreline Basalt66.068.41.62.4118586607-12-007Shoreline Basalt16.516.74.80.2118687607-12-024Shoreline Basalt152.3153.16.20.8119288607-12-033Shoreline Basalt187.5191.43.63.9119489607-12-028Shoreline Basalt185.6186.411.50.8119890607-12-025Shoreline Basalt175.7179.23.63.5120591607-12-029Shoreline Basalt142.4144.20.11.9120792607-12-030Shoreline Basalt152.9154.71.21.8121793607-12-039Shoreline Basalt222.9224.41.51.5121794607-12-034Shoreline Basalt252.8253.72.80.9122495607-12-026Shoreline Basalt182.3183.28.40.9122496607-12-035Shoreline Basalt260.2262.91.52.7123497607-12-031Shoreline Basalt185.1187.428.82.3123998607-12-032Shoreline Basalt208.1209.920.01.812461 The intersections presented herein may not necessarily represent the true width of mineralization. To view the figures associated with this release, please visit the following links:Figure 1: http://media3.marketwire.com/docs/SGR1019Figure1.pdfFigure 2: http://media3.marketwire.com/docs/SGR1019Figure2.pdfFigure 3: http://media3.marketwire.com/docs/SGR1019Figure3.pdfAttachment Available: http://cnrp.marketwire.com/cnrp_files/20121019-SGRCNRP.pdfFOR 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 CorporationGeorge PiriePresident and CEOToll Free: 1 (855) 585-4653San Gold CorporationManish GrigoDirector Investor Relationsinfo1@sangold.cawww.sangold.ca