San Gold closes $40-million financing

2007-11-30 12:28 ET - News Release

Mr. Dale Ginn reports

SAN GOLD ANNOUNCES CLOSING OF $40 MILLION "BOUGHT DEAL" PRIVATE PLACEMENT

San Gold Corp. has closed its private placement offering of 17.9 million units of the company at a price of $1.40 per unit for total gross proceeds to the company of $25.06-million. Dundee Securities Corp., Cormark Securities Inc. and GMP Securities LP acted as underwriters for the offering. Each unit consists of one common share plus one-half of one transferable common share purchase warrant with each whole purchase warrant exercisable into a common share at a price of $2.00 for a period of 18 months from closing. The underwriters also exercised their overallotment option to purchase up to an additional 10,725,000 units for an additional $15,015,000 in gross proceeds to the company. The common shares and warrants comprising the units are subject to a hold period of four months and a day from the date of issuance in accordance with applicable securities laws and the policies of the TSX Venture Exchange.

In connection with the offering, the underwriters received a cash commission equal to 6 per cent of the gross proceeds raised under the offering plus broker warrants equal to 4 per cent of the number of units sold under the offering. The broker warrants are exercisable into common shares at a price of $2.00 per broker warrant for a period of 18 months from closing.

The final closing of the offering is subject to the approval of the TSX Venture Exchange. The net proceeds of the offering will be used for accelerating the development of deep high-grade gold zones in the Rice Lake mine, the continued development of the San Gold No. 1 mine as well as for general corporate purposes including working capital.