San Gold Expands New High Grade Gold Zone at Deep Rice Lake

Marketwired

WINNIPEG, MANITOBA--(Marketwired - Jan 30, 2014) - San Gold Corporation (SGR.TO)(SGRCF) today provided updated drilling results from its underground program on 26 Level of the Rice Lake mine.

The Company continues to enjoy exploration success with drilling to the west of the recently discovered 710 and 710 HW zones. A new zone of gold mineralization is emerging with a strike length now in excess of 400 metres. The recent drilling returned high-grade gold values over significant widths from quartz veins and associated alteration that are interpreted to be similar to the vein orientations of the 16 and 38 type veins of the Rice Lake mine. Highlights include drill hole 614-13-015 which returned 10.6 g/t Au over 11.0 metres and drill hole 614-13-021 which returned 10.5 g/t Au over 6.9 metres.

The gold mineralization occurs within a newly defined mafic unit that has a width of more than 100 metres and is sub-parallel to and in the hanging wall of the original San Antonio Mining ("SAM") unit. All previous development and production at the Rice Lake mine (approximately 1.5 million ounces of gold) took place in the SAM unit up until the discovery of the Hinge and 007 deposits, which were discovered in similar mafic rocks to the north and in the hanging wall of the SAM unit. Several nearby mafic units are now being drilled and prepared for development, all in close proximity to existing workings.

Recent geological modelling has interpreted that local gold-bearing, quartz-carbonate veins have preferentially developed in competent mafic units such as the SAM unit and Shoreline Basalt and similarly in this recently discovered mafic horizon in the hanging wall of the SAM unit, specifically, where these units are cut by east-northeast trending shear zones and associated conjugate northwest trending structures. The discovery of gold in this sub-parallel mafic unit has the potential to significantly add to the current resource base and indicates a strong potential for future exploration to identify additional, sub-parallel, competent mafic units in the hanging wall and footwall regions of known zones.

"We are extremely pleased with the success of the Rice Lake drilling programs. We are discovering new zones of gold mineralization in close proximity to our existing infrastructure. It gives us justification to expand our search radius to include other locations where known but yet unexplored mafic units are intersected by shear zones that have yielded historical mineralization. It is important to note that these results are from new mining units and not extensions of known veins. We expect that this new zone can be easily integrated into our existing mine plan and developed in the near future," said Ian Berzins, San Gold's President, CEO and Chief Operating Officer.

The following table provides recent highlights of this drilling.

Hole Number Zone From
(m)
To
(m)
Core
Length
(1)
(m)
Grade(2)
g/t Au)
614-13-015 710 HW 131.6 142.6 11.0 10.6
Inc. 133.0 135.1 2.2 27.1
And Inc. 140.5 142.6 2.1 15.0
710 HW 158.6 160.1 1.5 34.0
614-13-021 711 HW 244.5 251.4 6.9 10.5
Inc. 247.6 251.4 3.8 17.4
Inc. 247.6 249.2 1.6 36.5
614-13-022 711 HW 124.5 127.9 3.4 20.3
Incl. 126.3 127.5 1.2 45.0
614-13-027 711 HW 189.9 193.4 3.5 15.1
Incl. 190.2 191.5 1.3 34.7
(1) Core lengths provided are actual drilled widths. Additional results are required for true width estimation.
(2) Assay values are capped at 102.8 g/t Au (3 oz per ton Au).

The 710 HW and 711 HW zones are located at the eastern extent of known mineralization at 26 Level of the Rice Lake mine and remain open to the east and northeast. They were identified as part of the Company's ongoing structural analysis to refine its exploration model.

Figure 1 at the end of this release provides a graphic illustration showing an updated plan view of existing 26 Level infrastructure and the location of known mafic units and shear structures in relation to recent 710 HW and 711 HW drill holes.

Figure 2 at the end of this release provides a graphic illustration showing an updated detailed plan view of the 710 HW and 711 HW drilling.

These figures can also be found on the Company web site (www.sangold.ca) and on SEDAR (www.sedar.com).

This program was carried out by San Gold mine geologists under the supervision of Michael Michaud, P.Geo., the Qualified Person for San Gold under National Instrument 43-101 who has reviewed and approved this news release. 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 Accurassay Laboratories of Thunder Bay, ON and Acme Analytical Laboratories Ltd in Winnipeg, MB.

About San Gold

San Gold is an established Canadian gold producer, explorer, and developer that owns and operates the Rice Lake Mining Complex near Bissett, Manitoba. The Company employs more than 420 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

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.

To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/sgr0130fig1.pdf.

To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/sgr0130fig2.pdf.

Contact:
San Gold Corporation
Ian Berzins
President, CEO, and Chief Operating Officer
Toll Free: 1 (855) 585-4653
San Gold Corporation
Tim Friesen
Investor Relations
Toll Free: 1 (855) 585-4653
sgr@sangold.ca
www.sangold.ca

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