Funds to Advance Rice Lake Project Exploration Programs

SGR:TSX || SGRCF:OTCQX
www.sangold.ca

BISSETT, MB, Feb. 17 /CNW/ - San Gold Corporation (Bissett, Manitoba) (TSX: SGR) (OTCQX: SGRCF) (the "Company") is pleased to announce that it has arranged a financing co-led by Primary Capital Inc. and CIBC together with a syndicate of agents (the "Agents"), under which the Agents have agreed to sell, on a guaranteed agency private placement basis, 5,400,000 flow-through common shares (the "Flow-Through Shares") of San Gold at a price of $3.75 per Flow-Through Share ("Issue Price") for total gross proceeds to San Gold of $20,250,000. The Agents have been granted an option to sell up to an additional 1,350,000 Flow-Through Shares at the Issue Price for up to additional $5,062,500, exercisable in whole or in part at any time up to 48 hours before the closing.

Closing of the offering is scheduled to occur on or about March 15, 2011. All securities issued will be subject to a four month hold period. The offering is subject to a number of conditions, including, without limitation, receipt of all regulatory approvals.

The net proceeds will be used to continue exploration and development on the Company's Rice Lake property.

These securities being offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold in the United States or to, or for the benefit of, U.S. persons (as defined in Regulation S under the U.S. Securities Act) absent registration or an applicable exemption from registration requirements. This release does not constitute an offer for sale of securities in the United States.

NOTE: The information in this release may contain forward-looking information under applicable securities laws. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied in the forward-looking information.

Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.