San Gold drills 3.4 m of 415 g/t Au at 007 zone

2010-12-02 08:34 ET - News Release

Mr. Dale Ginn reports

SAN GOLD EXTENDS 007 ZONE EASTWARD BY 200 METERS WITH HIGH GRADE INTERCEPT OF 415 G/TONNE OVER 3.4 METERS

Exploration step-out drilling from surface and underground has now confirmed an eastern extension to San Gold Corp.'s 007 Zone. Drill hole # CD-10-183 intersected 415.0 g/tonne (12.12 oz/ton) over 3.4 meters (11.2 ft) at over 200 meters to the east of the currently developed strike length extent of the 007 Zone. Additionally, drilling was undertaken from an underground drill station at the 9220 level (240 meters below surface) of the 007 decline. The first underground hole (S922-10-60) intersected substantial grade and width midway between the known eastern limit of the 007 Zone and the East Extension discovery hole. This intersection of 20.9 g/tonne (0.61 oz/ton) over 25.5 meters (83.7 ft) is located over 60 meters to the west of discovery hole #CD-10-178 at the same depth below surface of 260 meters. For reference, discovery hole # CD-10-178 intersected 66.1 g/tonne (0.61 oz/ton) over 25.5 meters (83.7ft) as reported in a Press Release dated November 16, 2010. The strike length confirmed by drilling of the 007 and 007 East Extension zones combined is now over 300 meters (1,000 ft) at 260 meters (850 ft) below surface as clearly shown by the detailed plan view of this elevation and longitudinal section with drill hole pierce points attached to the graphics version of this press release.

All drill holes for which assays have been received on the 007 East Extension zone are listed
below:
Hole #             From (m)       To (m)         Length m (ft)       Gold g/tonne        (oz/ton)         Zone/Lens

CD-10-183          339.6          343.0          3.4      11.2            415.0            12.12          007 East Ext

S922-10-60         167.3          192.8          25.5     83.7             20.9             0.61          007 East Ext

Including          167.3          169.2          1.9      6.2              84.9             2.48          007 East Ext

CD-10-178          351.2          363.2          12.0     39.4             66.1             1.93          007 East Ext

The 007 East Extension Zone, as well as the 007, L10 and Emperor Zones all occur near to or within a mafic flow rock unit known as the Shoreline Basalt, striking roughly east-west, parallel to and stratigraphically above the Rice Lake Mine or SAM unit. More precisely, the close association of the 007 and recently discovered eastward extensions with the Shoreline Basalt has produced gold deposits that are more planar or regular in shape than the stratigraphically overlying Hinge type deposits and seem, based on preliminary results, to carry consistently high gold grades. All of the Shoreline Basalt zones are located proximal to a series of identified shears and their intersections with the mafic flow unit. The above mentioned mineralized zones of the Shoreline Basalt system combine to form a known strike length of over 1.5 kms. The combined strike length of the 007 and Emperor Zones is currently over 500 meters long as demonstrated by drilling to date. Mineralization consists of free gold and pyrite within quartz-carbonate veining and associated alteration consistent with the Rice Lake and Hinge Mines and the 007 development. 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.

Sections, plans and diagrams related to this press release are available at the company's website www.sangold.ca, 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.

We seek Safe Harbor.