WINNIPEG, MANITOBA--(Marketwire - July 12, 2012) - San Gold Corporation (TSX:SGR)(OTCQX:SGRCF) today announced preliminary results of 18,241 ounces of gold produced plus 55,000 tons of ore in surface stockpiles, representing approximately 10,000 ounces of gold. Overall, that brings total mine production to more than 28,000 ounces of gold during the quarter, a new company record, and positions the Company well to meet or exceed full year production guidance of between 95,000 and 105,000 ounces of gold in 2012.

"We are extremely pleased with the progress being made as we continue to increase production volumes in Rice Lake. We continue to acquire new, low-cost ounces and expose our shareholders to significant exploration upside in very favourable geologic belts within underexplored jurisdictions in Canada. We are very disappointed in the market's recent performance but remain confident that simply doing the right things right, investing wisely and remaining debt free, will deliver long-term shareholder value. We have an excellent team at all levels focused on the long-term generation of shareholder wealth," said San Gold President and Chief Executive Officer George Pirie.

The Company milled 116,546 tons in the quarter despite a four-week interruption to milling operations during the month of June. The Company set a daily average milling record of 2,032 tons per day in May. Grade was 5.70 grams per tonne for the quarter, slightly above the previous quarter. Recovery improved to 94.1% for the quarter. The mill resumed normal operations on schedule on July 1.

The operation mined 155,495 tons of ore in the quarter, 26% higher than the second quarter of 2011 and resulted in a daily mining record for the quarter of 1,709 tons per day. Underground mine operations remain focused on developing an extensive mining complex that will facilitate access to the down dip extensions of the L10 and 007 from the Rice Lake shaft infrastructure. The company completed 1,093 metres of lateral development and 235 metres of vertical development during the quarter. The Company also initiated a raise bore to improve ventilation capacity for mining operations and started development work toward the L10 Zone from 16 Level.

During the quarter, the Company released an updated resource and reserve statement which resulted in a 1.5 million ounce increase to our resource.

During the quarter, the Company also completed a number of transactions. The Company purchased a 100% interest in three properties owned by Opawica Explorations Inc. located in the Rainy River gold district of northwestern Ontario. This agreement effectively adds significant gold equivalent ounces associated with the Maybrun Deposit. The Company also purchased an 80% undivided interest in all precious metals including, but not limited to, gold and silver but specifically excluding platinum and palladium contained on Canadian Arrow Mines Ltd. properties. The Canadian Arrow agreement covers multiple properties including claims adjacent to the Opawica properties in the Rainy River gold district and claims nearby SGX properties in the Timmins gold camp. This agreement secures the region surrounding the Opawica property for gold exploration in support of the Company thesis that additional mineralization will be found near the Maybrun deposit.

The Company sold all of its interests in its Tisdale Township properties for consideration of approximately 8 million shares of SGX Resources Inc. each valued at $0.50 per SGX share, maintaining its ownership interest in that company. The Company will take its prorata share of SGX's expenses against this investment in the second quarter. The Company also completed a transaction with Strikepoint Gold Inc. related to claims previously covered by an option agreement between Strikepoint and the Company, providing greater flexibility in exploring the region.