San Gold Corp
		Symbol			SGR
		Shares Issued			278,236,714
		Close 2010-07-20			C$ 3.74
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San Gold drills 3.1 m of 134 g/t Au at 007 zone

2010-07-21 13:58 ET - News Release

BULK SAMPLING COMMENCES AT 007 ZONE, DRILLING CONFIRMS HIGH GRADE CORRIDOR, OPERATIONAL UPDATE AND OUTLOOK INCLUDING EXPANSION PLANS

San Gold Corp.'s infill drilling is confirming the high-grade nature of the 007 zone at all depths within currently known limits, especially within an established high-grade corridor that extends from surface to over 400 metres in depth and remains open. Results from the infill drill program in the immediate area of planned bulk sampling include drill hole No. CD-10-091, which yielded 134 g/tonne (3.9 oz/ton) over 3.1 meters (10.2 ft) at 240 meters (800 ft) below surface within a broader intersection of 53 g/tonne (1.55 oz/ton) over 9.6 meters (31.5 ft). Near surface or upper extension results were highlighted by drill hole # CD-10-68 which cut 26.5 g/tonne (0.77 oz/ton) over 3.3 meters (10.8 ft). Results from the lower extension of the deposit include drill hole # CD-10-040 which yielded 19 g/tonne (0.55 oz/ton) over 2.5 meters (8.2 ft) at a depth of 411 meters (1,350 ft) below surface. A summary of the current round of drill results is contained within the following table, as well, a detailed longitudinal section showing all results received to date are available on the company's website. Eight intersections are reported within six drill holes as tabulated below:

                                      Length m     Gold g/tonne
Hole #            From (m)   To (m)   (ft)         (oz/ton)        Zone/Lens
----------------- --------   ------   ----------   ------------   ----------
Bulk Sample
 Elevation
-----------------
CD-10-091            307.7    317.3   9.6   31.5    53.1   1.55     007 HGC
 
including            309.0    312.1   3.1   10.2   134.0   3.91     007 HGC
 
including            309.0    311.1   2.1    6.9   260.0   7.59     007 HGC
 
CD-10-103            288.3    289.7   1.4    4.6    29.5   0.86       007
 
CD-10-108            288.2    289.6   1.4    4.6    11.3   0.33       007
 
Upper Extension
-----------------
CD-10-068             83.5     86.8   3.3   10.8    26.5   0.77     007 HGC
 
CD-10-069             88.3     90.5   2.2    7.2    27.1   0.79     007 HGC
 
Lower Extension
-----------------
CD-10-040            430.7    433.2   2.5    8.2    18.9   0.55     007 HGC
 
 

This development has accessed the 007 zone at the 240 meter (800 ft) elevation at the west end of the deposit. Over 60 meters (200 ft) or approximately half of the estimated length of this zone has been developed at this elevation to date and continues to progress to the east toward the high grade corridor section of the deposit. Stockpiling of this development will continue until the full length of the zone is established. 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.

Operations at Rice Lake during the second quarter continued to emphasize development of the upper and eastern extensions known as the 98 area. This area is being developed in order to potentially eliminate the use of the lower "D" internal shaft (winze), which would reduce re-handling of ore. The location of the 98 zones are down dip and under the Hinge and 007 deposits and this development will serve also as exploration platforms for potential down dip extensions from surface. The Hinge Mine daily mined tonnage improved from the beginning of the quarter at 350 tons per day in April to an average of 485 tons per day in June. The Hinge Mine contributed 37,911 tons during the quarter for an average of 416 tons per day. The Rice Lake Mine contributed 25,113 tons or 276 tons per day. Difficulties during the quarter were experienced in the loading pocket and "D" shaft at the Rice Lake Mine and the loss of the jaw crusher for the last week in June resulting in more than 5,000 tons of ore mined than milled in June. As a result, mill production in the second quarter is expected to be similar to the first quarter. The statement regarding San Gold's expected mill production in the second quarter of 2010 is forward-looking information that is subject to the cautionary note set forth below.

Surface exploration and infill drilling is currently being conducted by three rigs on the 007 zone, one defining and extending the upper elevations towards surface, one drilling infill holes in and around the area currently being accessed and bulk sampled, and one drilling deep holes below 400 meters. Two other surface drill rigs are turning on the Emperor target located 500 meters east of the 007 zone and on the Murphy target located 500 meters south of the Hinge Mine.

San Gold intends to undertake an aggressive program of exploration, development and expansion over the next 18 to 36 months in order to convert mineral resources to reserves, extend and develop new zones to depth, and to consolidate and expand production capacity. San Gold anticipates that this program will consist primarily of: Additional development of the 007 Zone including the establishment of a decline access from the surface, accelerating access from the Hinge Mine, using the decline access to explore the Cohiba Zone and purchasing mobile mining equipment. Development of exploration and potential access drifts originating from within the Rice Lake Mine towards depth extensions of the L13 Zone, Hinge Zone and 007 Zone on the 8th (370 m level), 16th (730 m level) and 26th (1,200 m) levels. Utilizing the above exploration drifts for exploration drilling of the L13, Hinge and 007 zones. Expanding mill and tailings capacity. Beginning decline and bulk sampling of the L13 zone and accessing remaining mineral reserves and mineral resources in the upper levels of the Rice Lake Mine.

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.