San Gold extends 007 zone, drills 95 g/t Au over 2.1 m

2010-06-10 08:59 ET - News Release

Mr. Dale Ginn reports

007 DECLINE APPROACHES ZONES AS DRILLING EXTENDS THE HIGH GRADE 007 ZONE UPWARD TO SURFACE AND TO DEPTH

San Gold Corp.'s surface exploration drilling has considerably expanded the vertical dimensions of the 007 zone in both the up and down directions, establishing a continuous, high-grade deposit from surface extending to a depth of 450 metres (1,500 feet) to date. Highlighted results from the upper extension of the deposit include drill hole # CD-10-066 which yielded 95 g/tonne (2.8 oz/ton) over 2.1 meters (6.9 ft) at only 61 meters (200 ft) below surface. Results from the lower extension of the deposit include drill hole # CD-10-020 which yielded 51 g/tonne (1.5 oz/ton) over 2.7 meters (8.9 ft) at a depth of 335 meters (1,100 ft) below surface.

The discovery holes of the "007" zone from November, 2009 (see press release dated Nov. 23, 2009) as well as the follow up drill hole results (see press release dated Feb. 3, 2010) were previously concentrated in a range of depths between 175 meters (575 ft) and 300 meters (1,000 ft) from surface. The drill results contained within the table below are located both above (Upper Extension) and below (Lower Extension) the previously known range giving a new range of positive results between surface and 450 meters (1,500 ft). A summary of the current round of results is contained within the following table, as well, a detailed longitudinal section showing all results received to date and other descriptive graphics are available on the company's website. Drill holes located outside of the mineralized zone with low values are located on the detailed longitudinal section. Drill hole numbers not listed or displayed have not yet been drilled, logged or sampled. Eleven intersections are reported within eleven drill holes as tabulated below:

Hole #          From (m)      To (m)         Length m (ft)           Gold g/tonne (oz/ton)         Zone/Lens

Upper Extension
CD-10-066              79.4        81.5        2.1           6.9           94.9         2.77         007

CD-10-075             101.3       102.3        1.0           3.3           44.9         1.31         007

CD-10-025             141.5       143.5        2.0           6.6            8.9         0.26         007

CD-10-073             161.1       163.5        2.4           7.9            7.9         0.23         007

CD-10-023             170.1       174.3        4.2        13.8              3.9         0.11         007

Lower Extension
CD-10-022             353.0       355.6        2.6           8.5            5.8         0.17         007

CD-10-008             347.9       349.6        1.7           5.6           20.9         0.61         007

CD-10-018             353.9       356.5        2.6           8.5           28.9         0.84         007
  CD-10-020             367.4       370.1         2.7         8.9              51.4          1.50        007

 CD-10-024             411.8       415.7         3.9        12.8              17.1          0.50        007

 CD-10-036             443.4       446.2         2.8         9.2              12.7          0.37        007

The "007" zone has now been drill tested over an approximate 200 meter strike length and to depths of over 450 meters with horizontal widths ranging between 1.0 and 4.5 meters with the zone remaining open along strike to the south-west as well as at depth. The 007 zone dips steeply to the north-northwest and is made up of quartz and carbonate veins containing gold and pyrite mineralization. The dominant deposit control appears to be structural as with the previous three hanging wall deposits (Hinge, Cohiba and L13); however the 007 lithology is slightly different in that this deposit occurs at or near an intermediate-mafic contact. Strong chloritic alteration of the mafic unit is observed at the footwall contact immediately below the mineralized veining. The strike length of this contact is currently unknown. The Lidar data (detailed topography) recently acquired by San Gold displays a series of pronounced sub parallel lineations (shears) in outcrop extending from the Rice Lake mine eastward to the "007" discovery and beyond . These lineations or shears are considered by San Gold geologists to be key controls for the gold mineralization in the region including the Rice Lake Mine, Hinge Mine, 007, L13 and Cohiba deposits. 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.

San Gold also reports that development has been progressing well toward the "007" zone from the Hinge decline. Over 600 meters (2,000 ft) of development has been completed since January with just over 30 meters (100 ft) remaining to reach the 007 zone at the 240 meter (800 ft) level (depth from surface) where initial ore development and a bulk sample program will take place during the third quarter.

Sections, plans and diagrams related to this press release are available at the company's website www.sangoldcorp.com, including a detailed longitudinal section displaying the results to date.

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.