San Gold Finds Deep Extensions to 007 and L10 Zones

Feb 17, 2011, 08:18 ET from San Gold Corporation

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

BISSETT, MB, Feb. 17 /PRNewswire/ - George Pirie, CEO of San Gold Corporation (TSX:SGR) (OTCQX:SGRCF) is pleased to report that recent drilling from the 26th and 28th levels of the Rice Lake Mine as reported below traces the Shoreline Basalt geologic feature to depths of over 1,400 meters (4,900 feet), with significant gold mineralization. Multiple and variable intersections were encountered in many of the drill holes, with significant widths as in hole #28-10-135, which contained a grade 10.3 g/tonne over 18 meters.

The Shoreline Basalt is a second and parallel mine horizon that has been identified as a key host to the numerous new gold deposits that occur near surface. Numerous new deposits (L13, L10, 007, 007 East and Emperor) that lie within or in close proximity to the Shoreline Basalt have been extensively drilled from surface over the past 18 months to maximum depths of approximately 420 meters.

"These results strongly suggest that the mineralization associated with the Shoreline Basalt extends to depths that are completely accessible for both exploration and development from current infrastructure.   This is very exciting for the company and continues to confirm San Gold's regional exploration model," stated George Pirie, San Gold's President and CEO.

To obtain these results, San Gold geologists targeted the Shoreline Basalt rock unit down plunge by over 1,000 meters from the L10 and 007 zones to projected locations near the 26th level (1,250 meters) of the Rice Lake Mine. Selected drill holes were sent out to these projected targets from underground drill stations resulting in the following intersections:

Hole #   From (m)  To (m)  Length  m (ft)  Gold g/tonne   (oz/ton)  Zone/Lens
28-10-134  179.1  180.2  1.1  3.6  33.6  0.98  SB Deep
and  239.4  251.7  12.3  40.4  11.7  0.34  SB Deep
including  239.4  247.7  8.3  27.2  16.1  0.47  SB Deep
28-10-135  191.9  209.6  17.7  58.1  10.3  0.30  SB Deep
including  192.6  197.8  5.2  17.1  23.0  0.67  SB Deep
28-10-136  255.2  257.9  2.7  8.9  4.5  0.13  SB Deep
28-10-137  199.7  201.0  1.3  4.3  15.9  0.46  SB Deep
and  255.0  256.9  1.9  6.2  17.8  0.52  SB Deep
28-10-145  288.5  289.7  1.2  3.9  37.8  1.10  SB Deep
and  321.4  325.7  4.3  14.1  6.6  0.19  SB Deep
26-10-093  255.1  256.7  1.6  5.3  9.9  0.29  SB Deep
and  347.2  348.2  1.0  3.3  20.9  0.61  SB Deep
and  355.9  357.9  2.0  6.6  6.9  0.20  SB Deep
and  391.2  394.7  3.5  11.5  5.2  0.15  SB Deep

The new deposits as listed above generally occur on or near to the hangingwall (north) contact of the Shoreline Basalt unit which runs parallel to the Rice Lake Mine or SAM unit which hosts the Rice Lake Mine. The Shoreline Basalt is located between 300 to 500 meters north of the SAM unit, dips steeply to the north and is up to 100 meters wide. The known associated mineralized zones (west to east) are: 334 Vein, L13 Zones, L10 Zone, 007 and 007 East Zones, Emperor Zone, and occur along a 3 kilometer section of the Shoreline Basalt. The intersections as listed above appear to be down dip and down plunge from the L10 and 007 Zones by over 1,000 meters from the nearest current drill hole information.

The 334 Vein was developed on the 3rd level (150 meters) of the Rice Lake Mine over a strike length of 100 meters. This vein also outcrops at surface, strikes roughly east-west and parallel to the Shoreline Basalt and has not yet been drill tested by San Gold.

The L13 Zones have now been drill tested between surface and 400 meters in depth over a strike length of approximately 200 meters. Two main lenses have been defined which strike north-east, roughly parallel to the main Hinge zones. Ramp development is underway towards the L13 Zone from the Hinge decline and is scheduled to intersect the zone at the 250 meter level by the third quarter of this year. Drilling is currently underway from surface on this zone.

The L10 Zone has now been drill tested between 240 meters and 500 meters in depth over a strike length of approximately 150 meters. Ramp development is underway towards the L10 Zone from the 007 decline and is anticipated to begin initial mining in April, 2011. This zone lies underneath and offset approximately 75 meters to the south of the Hinge Mine and was initially thought to be part of the Hinge series of lenses. It is now understood that this zone strikes approximately east-west and is located along the hangingwall (north) contact of the Shoreline Basalt. Drilling is currently underway from drill stations within the Hinge Mine.

The 007 and 007 East Zones have been drill tested between surface and 400 meters in depth. Mine development has reached the main body of the 007 zone from the Hinge decline and initial development is underway on multiple levels below 240 meters. Sill development at the 260 meter level is showing at least 4 mineralized zones over a strike length of 400 meters, including the 007 East. Detailed mill and mine results including width, grade and recovery will be released upon completion of bulk sampling in March, 2011. Drilling is currently underway from surface and underground, especially concentrated on the new 007 East extension.

The Emperor Zone has been sparsely drilled from surface to 200 meters in depth and lies along strike to the east of the 007 Zone. Drilling from the 007 Zone will move eastward toward and underneath the Emperor Zone during 2011.

Deeper exploration of the above mentioned zones in order to fill in the information void between 400 meters and 1,400 meters in depth is now underway as part of the 2011 exploration plan.  Drill sites are being prepared on the 16th and 26th levels of the Rice Lake Mine in order to aid in the exploration of the Shoreline Basalt zones.  It is also anticipated that these levels would be the logical first access for the deeper development of these zones.     

Detailed sections and 3-dimesional views displaying the results obtained to date are 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