San Gold continues operational improvement and exploration success in First
Quarter 2010
BISSETT, MB, May 13 /CNW/ - (SGR: TSX-V) First quarter results show substantial improvements on the production, exploration, and development fronts for San Gold Corporation, including the following highlights.
- The company experienced its third straight quarter of revenue growth. - Significant new discoveries were made in the Rice Lake East area of the Rice Lake mine. - Ongoing exploration also continues to suggest a relationship between recent near-surface discoveries and known ore bodies deep within the Rice Lake Mine. Substantial progress was made toward accessing the high grade 007 deposit. The following sections provide additional detail on these items. Production Record safety, production and revenue performance achieved. - We have achieved our best ever safety performance. The loss time accident (LTA) frequency has been reduced to 1.21. - The quarter saw record production of 63,323 tons of ore or the equivalent of 704 tons per day despite the negative impact of the loss of a DC hoist motor at D shaft resulting in loss of access to lower Rice Lake for two weeks. - Operations achieved 28 days with production levels in excess of 800 tons per day. - The mines achieved a new single day record of 1,506 tons including 1,006 tons from The Hinge. - This resulted in 11,984 oz of gold sales at $1,167 per ounce for total revenues of $13,988,260. - Grades were slightly below budget this quarter due to mining the narrower extensions in No. 1 and No. 3 veins at the Hinge mine resulting in higher % dilution coupled with a higher proportion of development at Rice Lake. Development
A new development drift has been created to gain access to the high grade 007 deposit.
- During the quarter the drift was advanced over 1,400 feet of a total distance of 2,300 feet. - This new access will provide for bulk sampling of the new 007 deposit in the third quarter of 2010 which wil provide a supplemental ore feed to Rice Lake and Hinge mine sources.
Exploration
San Gold continues to confirm that the geological model it is using at the Hinge mine is proving to be a predictive model for identifying mineralization across the surrounding area.
Our company geologists are now viewing the Rice Lake mine and new deposits as a larger single mineralized system rather than a collection of discrete deposits.
- On January 20, San Gold announced significant drill results in the 28 Level of the Rice Lake Mine. - On January 25, San Gold announced the discovery of a series of high grade veins as well as large, broad breccia vein systems had been encountered above the eastern extremity of mine development along the 26 Level. - On March 1, San Gold announced its initial mineral resource estimates for the Hinge and 007 deposits in accordance with the guidelines set out in National Instrument 43-101 and NI Form 43-101F1. This report also revealed that the Hinge and 007 deposits are related to the Rice Lake Mine "RLM" vein shear-structures. - On March 31, San Gold announced the discovery of a new high grade gold zone located beyond the eastern limits of known exploration from the 26 and 28 levels of the Rice Lake Mine. Confirmed in the subsequent period with hole No. 28-10-53 which was 121 g/T (3.53 opt) over 13.3 M (44 feet). Finance - On March 26, San Gold announced it had closed a $26 million "bought deal" private placement at $4.05 per share. - The financing, along with improvements across San Gold's entire operations, has resulted in adequate funding for the company's short and medium term plans. Quick Facts: ------------------------------------------------------------------------- 2010 2009 --------------------------------------------------------------- Q1 Q4 Q3 Q2 Q1 Revenue 13,988,260 11,719,526 8,844,634 3,537,833 3,706,077 Interest and Other Revenue 1,979,186 1,639,550 2,518,098 1,992,218 2,687,421 Income (Loss) (339,087) (5,223,695) (4,983,566) (10,763,594) (8,471,932) Per share (basic and fully diluted) (0.00) (0.02) (0.02) (0.04) (0.04) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Other Selected Operational Metrics: Tons Milled 59,325 50,486 52,826 33,453 27,659 Head Grade (g/t) 7.71 8.36 7.84 9.79 5.48 Recovery 93.36% 92.92% 92.27% 90.34% 88.19% Gold Sales - ozs 11,984 9,999 8,398 3,307 3,299 Realized price per ounce 1,167 1,172 1,053 1,070 1,117 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 2008 -------------------------------------- Q4 Q3 Q2 Revenue 3,209,754 2,096,521 2,529,511 Interest and Other Revenue 1,780,323 2,203,868 2,236,792 Income (Loss) 216,998 (9,842,028) (12,751,859) Per share (basic and fully diluted) 0.00 (0.04) (0.06) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Other Selected Operational Metrics: Tons Milled 27,980 26,935 31,975 Head Grade (g/t) 5.58 3.70 3.66 Recovery 85.42% 76.49% 83.65% Gold Sales - ozs 2,682 2,276 2,778 Realized price per ounce 1,013 922 910 ------------------------------------------------------------------------- ------------------------------------------------------------------------- SAN GOLD CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT FOR THE QUARTER ENDED MARCH 31 2010 2009 ------------------ ------------------ REVENUE $ 13,988,260 $ 3,706,077 OPERATIONS Operations 13,969,189 6,683,089 Asset retirement accretion 41,780 37,909 Amortization of property, plant, & equipment 538,474 449,009 Depletion of mineral properties 1,747,214 515,334 ------------------ ------------------ LOSS FROM OPERATIONS (2,308,397) (3,979,264) Exploration 2,662,783 2,004,010 General and administrative 1,456,988 1,656,870 Accretion of convertible debentures - 39,806 Amortization of financing fees - 50,029 Royalty expense 1,967,708 1,967,708 Interest expense 26,261 290,916 Share based compensation 1,790,722 1,170,750 ------------------ ------------------ LOSS BEFORE OTHER REVENUE (10,212,859) (11,159,353) OTHER REVENUE AND EXPENSES Indemnification fee 63,788 63,788 Interest income 1,979,186 2,623,633 Equity loss of SGX Resources Inc. (128,667) - ------------------ ------------------ LOSS BEFORE INCOME TAX (8,298,552) (8,471,932) Future income tax recovery 7,959,465 - ------------------ ------------------ LOSS AND COMPREHENSIVE LOSS FOR THE YEAR (339,087) (8,471,932) DEFICIT, BEGINNING OF THE YEAR (152,254,876) (121,011,395) Share issue costs (1,539,783) - Future income tax on flow-through shares (7,959,465) - ------------------ ------------------ DEFICIT, END OF THE YEAR $ (162,093,211) $ (129,483,327) ------------------ ------------------ ------------------ ------------------ LOSS PER COMMON SHARE: Basic & diluted (Note 17) $ - $ (0.15) -------------------------------------------------------------------------
This release is based on quarterly statements available for review at www.sedar.com. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. We seek safe harbour.
For further information: Gestur Kristjansson, Chief Financial Officer, San Gold Corporation, (204) 772-9149
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