San Gold Extends 007 East to depth with High Grade Intercept of 31 g/tonne over 8.3 meters

SGR:TSX  ||  SGRCF:OTCQX
www.sangold.ca

BISSETT, MB, Jan. 12 /PRNewswire/ - George Pirie, CEO of San Gold Corporation (SGR:TSX  ||  SGRCF:OTCQX) is pleased to report that exploration step-out drilling from surface and underground continues to expand on the eastern extension to the 007 Zone.  Drill hole # CD-10-189 intersected 30.6 g/tonne (0.89 oz/ton) over 8.3 meters (27.2 ft) down dip from and below initial discovery holes CD-10-178 and CD-10-183 (see press release dated December 2, 2010).  Drilling confirmed the high grades and widths that were initially encountered as demonstrated by #CD-10-185: 103.5 g/tonne (3.02 oz/ton) over 3.3 meters (10.8 ft) and by #CD-10-181: 17.0 g/tonne (0.50 oz/ton) over 11.0 meters (36.1 ft).  Additionally, drilling continues from an underground drill station at the 9220 level (240 meters below surface) of the 007 decline. The first underground hole (S922-10-60) intersected substantial grade and width: 24.0 g/tonne (0.70 oz/ton) over 26.6 meters (87.3 ft) midway between the known eastern limit of the 007 Zone and the East Extension discovery hole. The follow-up drill holes as reported below appear to join the main body of the 007 Zone with the eastern extension below the 250 meter level, giving a combined strike length of over 450 meters so far.  

All drill holes for which assays have been received on the 007 East Extension zone are listed below:

*revised upward due to receipt of whole metallic assays

From Surface

Initial development of the main 007 Zone is underway at the 260 meter level and is expected to initially intersect the eastern extension later this month.

George Pirie, CEO stated, "The Shoreline Basalt appears to be a new host rock for high grade and wide gold mineralization near surface.  The fault and pathway structures that have been identified by our geologists intersect this rock unit in a repetitive fashion, which bodes extremely well for future exploration and development potential both near surface and from our current underground infrastructure.  I look forward to continuing to report on not only drill results, but mining development results from the 007 and 007 East zones."

The 007 East Extension 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 stratigraphically overlying Hinge type deposits and seem, based on preliminary results, to carry consistently high gold grades. 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 1.5 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 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.

A detailed longitudinal section displaying the results obtained to date is available at the company's website: www.sangold.ca.

This program was carried out under the supervision of W.S. Ferreira, P.Geo., the Qualified Person for this project under National Instrument 43-101. The drill core was split, with half sent to TSL Laboratories in Saskatoon, SK and fire assayed with an AA and gravimetric finish.  Whole metallic assays were performed on samples containing visible gold.  Check assays were also performed on pulps and rejects by both TSL and by 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.

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