San Gold Corporation Files Early Warning Report in Respect of Cougar Minerals Corp.

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WINNIPEG, MANITOBA--(Marketwire - Oct 31, 2012) - San Gold Corporation (SGR.TO)(SGRCF) (the "Company") today announces that it has purchased a total of 600,000 units ("Units") of Cougar Minerals Corp. ("Cougar") at a price of $0.15 per Unit pursuant to a subscription agreement effective as of October 30, 2012. Each Unit is comprised of one common share of Cougar (a "Common Share") and one Common Share purchase warrant (a "Warrant"). Each Warrant entitles the holder thereof to purchase one Common Share at a price of $0.15 per share for a period of two years from the date of issuance. The Units were acquired by the Company pursuant to the "accredited investor" exemption contained in National Instrument 45-106 Prospectus and Registration Exemptions.

The Common Shares and Warrants forming part of the Units represent approximately 10.56% of the issued and outstanding Common Shares of Cougar, assuming exercise of the Warrants. The acquisition results in the Company beneficially owning and controlling an aggregate of 1,000,000 Common Shares, 600,000 Warrants and 400,000 previously issued Common Share purchase warrants of Cougar. This represents a material change over the 400,000 Common Shares and 400,000 Common Share purchase warrants held by the Company prior to this transaction. If the Company were to exercise all of its outstanding warrants to purchase Common Shares, the Company would own 2,000,000 Common Shares, representing approximately 16.72% of the issued and outstanding Common Shares.

The purpose of the Company in effecting the transaction was to comply with its requirements pursuant to a property option agreement between the Company and Cougar dated June 14, 2011 (the "Option Agreement") pursuant to which the Company has the option to acquire certain mineral properties of Cougar. Pursuant to the Option Agreement, the Company is required to subscribe for $200,000 principal amount of Common Shares and Warrants of Cougar in 2012. Accordingly, the Company anticipates subscribing for an additional $110,000 of Common Shares and Warrants in the near future.

An early warning report in respect of the above-noted transaction will be filed on SEDAR and will be available at www.sedar.com.

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 San Gold, 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.

Contact:
San Gold Corporation
George Pirie
President and CEO
Toll Free: 1 (855) 585-4653
San Gold Corporation
Manish Grigo
Director Investor Relations
info1@sangold.ca
www.sangold.ca

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