San Gold reports fourth quarter and year-end 2009 financial results

BISSETT, MB, March 26 /CNW/ - (SGR: TSX-V) San Gold has released its financial results for the fourth quarter of 2010, which have been prepared on the basis of available information up to March 26th, 2010. To review the complete interim unaudited financial statements and associated management discussion and analysis, which should be read in conjunction with the most recent audited annual financial statements, please visit the company's website or SEDAR.

    Mr. Dale Ginn, Chief Executive Officer reports improved results and
several significant milestones.

    -   Record Revenue of $27,808,071 for 2009 fiscal year

    -   All convertible debt was retired during 2009

    -   The completion of a 43-101 compliant resource calculation, released
        in Q1 2010, bringing property wide Measured and Indicated Mineral
        resources to 835,755 oz. and property wide Inferred Mineral resources
        to 2,259,227 ounces

    -   2nd consecutive quarter of record gold production - 11,984 ounces
        produced with 97% recoveries achieved in the Rice Lake mill

    -   Completion of new Hinge Mine bulk test on June 30th, 2009 and the
        commencement of commercial gold production at the Hinge

    -   Discovery of the new Cohiba and L13 zones near surface

    -   Discovery and initiation of development for the new 007 high grade
        zone near surface

    -   Continued development and application of a predictive geological
        model that has resulted in multiple gold discoveries over the past
        two years

    -   Expansion into Timmins via SGX spinoff and acquisition of 31.5% of
        Davidson-Tisdale advanced project

Results of Operations

By the last month of the year San Gold's two mines produced 17,474 tons of ore for an average of 564 tons per day. A new single day production record of 1,069 tons of ore moved was established and the operation did achieve 8 days with production levels in excess of 700 tons per day. The Company has 5,096 ounces of salable gold in inventory that was shipped in the period immediately subsequent so will be recorded as part of Q1 2010 revenue. The overall plant recovery for December was 95.3% including 93.9% recovery on Rice Lake ore and 97.2% recovery on higher grade Hinge material. Management expects this is indicative of the types of recoveries going forward.

On a year to date basis San Gold employees have worked 576,776 hours and incurred four (4) lost time accidents resulting in a LTA frequency rate of 1.39. Comparatively during the same period in 2008 San Gold employees had incurred 14 lost time accidents and had a LTA frequency rate of 6.28. This represents an order of magnitude improvement year over year and is demonstrative of the operational focus on a safe and productive work environment.


At the Hinge mine the Company drilled 234,241 feet (71,400 meters) from surface and 85,002 feet (25,900 meters) from underground. Hinge drilling was focused on expanding knowledge of No.1, No.2, No.3 and No.6 veins as well as exploring for additional footwall lenses.

This significant surface and underground drilling continues to confirm the geologic model of the Hinge in what is proving to be a predictive model in identifying mineralization in the surrounding area; most notably at the Cohiba, L-13 and 007 areas - with activity at 007 well underway.

The Company drilled 105,197 feet (32,064 meters) from underground at Rice Lake - for a total of 424,440 feet (129,400 meters) drilled. Rice Lake drilling has been focused on the 26 level, 28 level and the Deep West areas where large, new zones continue to be encountered. These new zones include high grade gold-bearing veins and broad breccia vein systems that are not yet fully defined by drilling.


The Company continued its transition to commercial production with its operations at the new Hinge Mine. The Company recognized revenue of $11.7 MM for the quarter and $27.8 MM for the year to date. The result was a loss from operations of $1.1 MM for the quarter and $11.8 MM for the year. If non-cash items are added back to this amount, the quarter produced positive contribution of $2.2 MM whereas the year generated a cash loss of $4.4 MM (calculated before exploration, general and administrative and other revenue and expenses). This final quarter therefore continues the Company's improving performance trend started in the previous quarter. The increased level of Gold in process inventory of $8.6 MM compared to $4.7 MM at December 31, 2008 is a result of the increasing level of production activity through the period. The primary driver of the improved performance is the higher level of gold production as the Company continues to increase activity levels.

                             SAN GOLD CORPORATION
                       FOR THE YEARS ENDED DECEMBER 31

                                                     2009           2008
                                                -------------- --------------

    REVENUE                                     $  27,808,071  $   8,700,375

      Operations                                   32,193,830     29,391,331
      Asset retirement accretion                      151,637        137,584
      Amortization of property, plant,
       & equipment                                  1,908,244      2,194,744
      Depletion of mineral properties               5,394,763      1,397,875
                                                -------------- --------------

    LOSS FROM OPERATIONS                          (11,840,403)  (2 4,421,159)

      Exploration                                   6,534,754      6,197,117
      General and administrative                    6,844,830      5,447,894
      Accretion of convertible debentures             134,157        237,947
      Amortization of financing fees                  152,423        249,222
      Royalty expense                               7,870,839      7,870,798
      Interest expense                                966,389        892,422
      Share based compensation                      3,952,219      3,538,004
                                                -------------- --------------

    LOSS BEFORE OTHER REVENUE                     (38,296,014)   (48,854,563)

      Indemnification fee                             255,153        255,153
      Interest income                               8,582,135      8,633,251
      Equity loss of SGX Resources Inc.               (18,033)             -
                                                -------------- --------------

    LOSS BEFORE INCOME TAX                        (29,476,759)   (39,966,159)

      Future income tax recovery                            -      6,608,250
                                                -------------- --------------

    LOSS AND COMPREHENSIVE LOSS FOR THE YEAR      (29,476,759)   (33,357,909)

    DEFICIT, BEGINNING OF THE YEAR               (121,011,395)   (80,309,943)

      Share issue costs                            (1,696,224)    (1,247,769)
      Debentures redeemed                                   -        509,367
      Options expired                                  71,734          3,109
      Warrants expired                                 75,210              -
      Share issue costs of SGX Resources Inc.        (217,442)             -
      Future income tax on flow-through shares              -     (6,608,250)
                                                -------------- --------------

    DEFICIT, END OF THE YEAR                    $(152,254,876) $(121,011,395)
                                                -------------- --------------
                                                -------------- --------------

     Basic & diluted (Note 17)                  $       (0.12) $       (0.15)

    Summary of Published Mineral Resources Information

    Rice Lake Mine                                Tons    Oz./ton     Ounces
    Measured Mineral Resources                 320,100       0.28     88,530
    Indicated Mineral Resources                644,000       0.29    186,770
    Total Measured and Indicated Resources     964,100       0.29    275,300
    Inferred Mineral Resources               1,879,500       0.29    551,620

    San Gold No. 1 Mine
    Measured Mineral Resources                  69,000       0.15     10,280
    Indicated Mineral Resources                214,200       0.24     52,150
    Total Measured and Indicated Resources     283,200       0.22     62,430
    Inferred Mineral Resources                 936,500       0.22    206,900

    Cartwright Zone
    Indicated Mineral Resources                136,200       0.22     29,830
    Inferred Mineral Resources               1,761,200       0.22    388,940

    San Gold No. 2-3 Zones
    Indicated Mineral Resources                173,100        0.2     35,320
    Inferred Mineral Resources                 195,600       0.26     50,210

    Hinge Mine
    Measured Mineral Resources                 116,300       0.53     61,980
    Indicated Mineral Resources                496,300       0.36    177,200
    Total Measured and Indicated Resources     612,600       0.39    239,180
    Total Inferred Resources                 1,375,200       0.39    538,700

    007 Zone
    Indicated Mineral Resources                 74,960       2.58    193,695
    Inferred Mineral Resources                 293,740       1.78    522,857

    San Gold Global Total Mineral Resources       Tons    Oz./ton     Ounces

    Total Measured plus Indicated Resources  2,244,160       0.37    835,755

    Total Inferred Resources                 6,441,740       0.35  2,259,227

    Documents are available for review at

       The TSX Venture Exchange does not accept responsibility for the
                    adequacy or accuracy of this release.

                            We seek safe harbour.

SOURCE San Gold Corporation

For further information: For further information: Gestur Kristjansson, Chief Financial Officer of San Gold Corporation at 1-800-321-8564

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