San Gold Confirms High Grades with Bulk Sample of 007 Zone

TSX:SGR || OTCQX:SGRCF
www.sangold.ca

BISSETT, MB, March 4 /PRNewswire/ - George Pirie, CEO of San Gold Corporation (TSX:SGR) (OTCQX: SGRCF), is pleased to report on preliminary  mine development and bulk sampling within the 007 and 007 East Zones from 250 meters (820 ft) below surface. 

Over 305 meters (1,000 ft) of strike length has been developed so far at this elevation with three distinct zones identified having strike lengths of 76 meters (250 ft) to 92 meters (300 ft) each. 15,405 tons have been processed in the Rice Lake mill so far this year from the 007 zones giving a mill head grade of 11.3 g/tonne (0.33 oz/ton).

Mining of the 007 zones have contributed to a record month in terms of tonnage mined in February of 37,825 tons or 1,351 tons per day average, including a new daily mined record of 2,674 tons.  Individual face grades have assayed up to 11.2 oz/ton (384 g/tonne) over a true width of 3.4 meters (11.0 ft) with visible gold being routinely observed throughout.  Chip sample results are presented in the table below using vein only as well as full face widths in order to fully account for dilution.   Chip sample face averages are also presented by zone using uncut assay values and a 103 g/tonne (3 oz/ton) cutting factor for all individual assays that lie over that threshold. 

Ninety-two development faces were chip sampled resulting in a total of 458 samples assayed for gold with individual values ranging from 0.34 g/tonne (0.01 oz/ton) to 1,163 g/tonne (33.96 oz/ton).  Level development continues in both the east and west directions as well as in numerous vein offshoots while incline and decline development is ongoing in order to access the zones at levels above and below the  250 meter (820 foot) level.  Drilling from underground and surface continues over 100 meters to the east of this development along strike from the 007 East Zone and down dip from the Emperor Zone. 

The 007 East Zone, as well as the 007, L10 and Emperor Zones all occur near to or within a mafic flow rock unit known as the Shoreline Basalt, striking roughly east-west, parallel to and stratigraphically above the Rice Lake Mine or SAM unit.  More precisely, the close association of the 007 and recently discovered eastward extensions with the Shoreline Basalt has produced gold deposits that are more planar or regular in shape than the overlying Hinge type deposits.  All of the Shoreline Basalt zones are located proximal to a series of identified shears and their intersections with the mafic flow unit.  The above mentioned mineralized zones of the Shoreline Basalt system combine to form a known strike length of over 2 kms.  The combined strike length of the 007 and Emperor Zones is currently over 500 meters long as demonstrated by drilling to date.  Mineralization consists of free gold and pyrite within quartz-carbonate veining and associated alteration consistent with the Rice Lake and Hinge Mines and the 007 development.

The Shoreline Basalt has been pierced approximately 1,400 meters (4,900 feet) below surface with horizontal drill intersections from drill sites on 26 Level (see press statement released Feb 17, 2011). This basalt unit will be explored further and is planned to be developed from current infrastructure on 10 Level, 16 Level and 26 Level.

The 007 zone is located approximately 2 kms to the north-east of San Gold's operating Rice Lake mine and mill, is fully accessible by road and is accessible from the Hinge Mine decline.  The 007 zone was initially discovered by San Gold geologists in November 2009 and mine development towards the zone began early in 2010 originating from the Hinge Mine.

The above 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 43-101. Chip, muck and mill 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. 

NOTE: The information in this release may contain forward-looking information under applicable securities laws. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied in the forward-looking information.

Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE San Gold Corporation