I cut this from the chithouse board as posted by FC

JAY TAYLORS Energy & Tech Stocks

Weekly Hotline Message (Now in our 26th Year) November 14, 2008

San Gold Corp.
More Spectacular Goldcorp/Red Lake Like Assays from The Hinge Deposit


SAN GOLD'S RICE LAKE MINES .


A geologist explained the geology at
the company’s Rice Lake Mine in Manitoba
was identical to that of Goldcorp’s company making
Red Lake Mine. He said something
like, “We’re pretty sure we have a Red Lake like
deposit here. It’s just a matter of finding it.” It is looking more and more like San Gold has found something akin to the spectacular Red Lake Gold Deposit that made
Goldcorp into a household name.


One of our favorite emerging gold
mining firms is San Gold. I visited the
company’s Rice Lake Project in 2007 and
was quite impressed at that time. Since then,
this has evolved from a good story to what is
arguably a spectacular new high-grade gold
mining company in the making. Yet, as is
typical with so many mining firms in this
environment, San Gold gets no respect.
When I visited the property during the
summer of 2007, the company’s exploration
geologist explained to me how the geology at
the company’s Rice Lake Mine in Manitoba
was identical to that of Goldcorp’s companymaking
Red Lake Mine. He said something
like, “We’re pretty sure we have a Red Lakelike
deposit here. It’s just a matter of finding it.”
It is looking more and more like San Gold has found something akin to the spectacular Red Lake Gold Deposit that made
Goldcorp into a household name. While San Gold is currently mining from two different deposits from which we
expected the company to begin reporting positive cash flows as early as this quarter, what has us really excited is this
new discovery, named the Hinge Deposit. This high-grade deposit is believed to extend at least 5,000 ft. to depth and it
has a number of parallel zones. And since the deposit extends almost to surface, we expect some of this high-grade mill
feed may actually be put through the company’s mill as early as this quarter or by the first quarter of 2009.
What do we mean by “high-grade” gold? Check out these recent headlines from Stockwatch:
San Gold drills 2.8 m of 75.7 g/t Au at Hinge 2008-11-10 08:04 ET - News Release
San Gold drills 142 g/t gold over two m 2008-10-22 08:42 ET - News Release
San Gold drills 1.8 m of 103 g/t Au at Hinge No. 4 2008-10-07 08:56 ET - News Release
San Gold drills 2.7 metres of 51.4 g/t Au at Rice Lake 2008-09-15 07:51 ET - News Release
San Gold drills 6.4 m of 27.84 g/t Au at Rice Lake 2008-08-06 08:54 ET - News Release
San Gold drills 3.9 m of 19.9 g/t Au at Hinge No. 4 2008-07-30 08:23 ET - News Release
San Gold drills 16.6 m of 16.8 g/t Au at Hinge 2008-06-18 09:28 ET - News Release
San Gold drills 9.4 m of 28.1 g/t Au at Hinge No. 4 2008-06-10 08:30 ET - News Release
San Gold drills 56.7 g/t Au over 4.0 m on Hinge No. 4 2008-05-28 09:42 ET - News Release
San Gold drills 6.22 m of 85.1 g/t Au at Hinge No. 4 2008-05-21 08:37 ET - News Release
San Gold drills 1.5 m of 60.6 g/t Au at Hinge zone 2008-04-21 08:33 ET - News Release
San Gold drills 2.7 m of 31.8 g/t Au at Rice Lake 2008-02-26 14:29 ET - News Release


San Gold drills 2.3 m of 20.1 g/t Au at Hinge 2008-02-19 10:00 ET - News Release
San Gold drills 23.2 g/t Au over 2.5 m near Rice Lake 2008-01-15 08:13 ET - News Release
Many Americans are not used to thinking in metric terms, so you may want to convert grams per tonne into ounces per
ton. The conversion factor for that is roughly 31.1. Simply divide the grams/tonne figure by 31.1 and you will have the
approximate number of ounces per ton for each of the drill holes above. To convert meters into feet, multiply the meter
number by roughly 3.28. For example, taking the top figure above, 2.8 meters of 75.7 grams of gold/tonne equates to
2.43 ounces/ton over a 9.18 ft. intersection. Of course we are not yet ready to proclaim Rice Lake to be a new Red Lake.
But these are the kind of numbers I remember seeing a few years back as that world class deposit was being revealed to
the market and as Goldcorp was moving that project back into production.
Based on discussions I had with company president, Dale Ginn, and other members of management, I am expecting the
company to be cash flow positive during the current quarter. Before the Hinge Deposit was discovered, we were
anticipating something like an average grade of 0.18 oz/tonne, in which event, once the company was able to feed the
mill at a rate of 800 tonnes per day, it would be expected to achieve a cash flow positive result. And with a mill having a
capacity of 1,250 tonnes per day, it was believed that it could make money with those grades. Now comes the Hinge
Deposit that can be and we expect will be mined in the near future, in which event the average grades could be
substantially higher and we could be looking at considerable positive cash flows in 2009. Moreover, the project has very
considerable growth potential, given the potential size of the Hinge Deposit, very considerable exploration on existing
mines, and surrounding other properties in the area. Moreover, the mill can be increased in size without San Gold
needing to spend a huge amount of new capital.
The bottom line is we see San Gold as being on the verge of reporting positive cash flows from this quarter and very
rapid growth potential into the future. Also with higher-grade reserves from the Hinge, we think San Gold could turn into
a huge winner and household name in the near future as it begins to gain recognition and respect this year from markets
that will be looking far and hard to find winners. When the big markets begin to focus on gold mining—one of the few
sectors that will likely bring big profits—we think shares of SGR and many other newly producing juniors will do
exceedingly well.