Monday, October 29, 2012

Graphene Market is the Focus for Focus Graphite

Focus Graphite Inc.Focus Graphite Inc.

TSX VENTURE : FMS
OTCQX : FCSMF
FRANKFURT : FKC

October 29, 2012 12:11 ET

Focus Graphite Announces Positive Preliminary Economic Assessment of Lac Knife Project



OTTAWA, ONTARIO--(Marketwire - Oct. 29, 2012) - Focus Graphite Inc. ("Focus" or the "Company") (TSX VENTURE:FMS)(OTCQX:FCSMF)(FRANKFURT:FKC) announces positive results of the Preliminary Economic Assessment ("PEA") on its Lac Knife Graphite Project ("Lac Knife" or the "Project"). The PEA was prepared by Roscoe Postle Associates Inc. ("RPA"), in collaboration with Soutex Inc. ("Soutex" - responsible for metallurgy and mineral processing) and demonstrates that the Project has robust economics and excellent potential to become a profitable producer of graphite. Highlights of the PEA are summarized below:
Operational Highlights:
  • Proposed Life of Mine production of 6.0 million tonnes (Mt) of mill feed at a grade of 15.66% graphitic carbon (Cgr), based on the initial Mineral Resource estimate disclosed on January 19, 2012
  • Mine Life of 20 years, open pit operation at 300,000 tonnes per year
  • Processing through a sequence of crushing, grinding, flotation, magnetic separation, thickening and drying, producing a primary concentrate of graphite of various grades and flake sizes
  • Tailings directed through sulfide flotation circuit in order to minimize the volume of acid-generating residues and to enable proper management of both acid-generating tailings and waste rock within a unique disposal site
  • Average graphite recovery of 91.3% at Lac Knife process plant
  • Life of Mine production of 928,000 tonnes of concentrate at 92% Cgr on average at Lac Knife, or approximately 46,600 tonnes of concentrate per annum (tpa)
  • Thermal purification upgrade of approximately 40% of the primary concentrate to 99.99% Cgr by an existing producer with inherent purification losses of 15%
  • Life of Mine Project production of 868,000 tonnes of concentrate at 93.5% Cgr on average, including 338,000 tonnes of high purity 99.95% Cgr product
Financial Highlights:
  • Exchange rate US$1.00 = C$1.00
  • PEA economics for the Project calculated based on graphite market prices of $10,000, $1,300, and $800 per tonne of battery grade (>99.95% Cgr, +100 mesh), medium grade (>90% Cgr, -100+200 mesh) and fine grade (>80% Cgr, -200 mesh) respectively, on a FOB mine basis
  • $246 million pre-tax Net Present Value (NPV) (at a 10% discount rate)
  • 32% pre-tax Internal Rate of Return (IRR)
  • $926 million pre-tax undiscounted cash flow
  • $3.7 billion total net revenue
  • Pre-tax payback period of 2.8 years
  • $154 million initial capital cost, inclusive of $33 million and $24 million in working capital and contingency (25%), respectively
  • $68 per tonne average unit operating cost at Lac Knife
  • $435 per tonne average unit operating cost, assuming thermal purification on a contract basis
Note: This PEA is considered by RPA to meet the requirements of a Preliminary Economic Assessment as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). The economic analysis contained in the technical report is based, in part, on Inferred Resources (as defined in NI 43-101), and is preliminary in nature. Inferred Resources are considered too geologically speculative to have mining and economic considerations applied to them and to be categorized as Mineral Reserves (as defined in NI 43-101). Mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty that the reserves development, production, and economic forecasts on which the PEA is based will be realized.
Gary Economo, President and CEO of Focus Graphite, stated, "This is a great day for the Canadian graphite industry, our shareholders and the province of Québec. Lac Knife is a world-class resource and the publication of our Preliminary Economic Assessment confirms Focus has the potential to become one of the highest-grade lowest-cost producers of graphite in the world. We enter a new phase now, where we can expedite our financing, advance customer off-take agreements, and construction of our purification and anode facilities."

PEA SUMMARY
Project Location
The Project is located in the Côte-Nord administrative region of Québec. Fermont is the closest community and is located 27 km north-north east of the Project. Road distance from Montreal to Lac Knife is approximately 1,300 km and by all-season highway 389, it is 500 km from Baie-Comeau to Fermont. The municipalities of Wabush and Labrador City, in Newfoundland and Labrador are located 30 km from Fermont, and Wabush is home to a commercial airport with regular flights to Sept-Iles, Québec, and Montréal.

Geology and Mineral Resources
The Project hosts graphite enriched metasediments. Graphite occurs as lenses and bands. Currently, graphite rich rocks have been identified from drilling undertaken in 1989 and more recently in 2010-2011 with 12 drill holes aimed at twining the older holes with the objective of confirming the 1989 grade and lithology information. The mineralized zone extends approximately 650 m in length and 120 m in thickness. Mineralization reaches the surface under a layer of overburden. Mineralization is intersected at depths reaching 110 m. There is potential for the delineation of additional Mineral Resources at greater depth and along strike to the south.

On January 19, 2012, Focus released an initial NI 43-101 compliant Mineral Resource estimate in a Technical Report. RPA reviewed and accepted the current Mineral Resources and has declared them adequate to support the current PEA with one modification to the Mineral Resource classification. RPA elected not to classify any Mineral Resources as Measured and, as a consequence, converted the January 2012 Measured Mineral Resources to the Indicated category. The Mineral Resources are presented in the table below.
MINERAL RESOURCE ESTIMATE
Category Tonnage
(tonnes)
Grade
(% Cgr)
Indicated 4,938,000 15.76
Inferred 3,000,000 15.58
Notes:
1. CIM definitions were followed for Mineral Resources.
2. Mineral Resources are estimated at a cut-off grade of 5% Cgr.
3. Numbers may not add due to rounding.
4. Cgr - graphitic carbon
Mining
Mining will be carried out using conventional truck and loader open pit mining methods. Life of Mine strip ratio averages 1.12:1. An owner-operated mining fleet is proposed over the life of the operation. Pre-stripping of overburden is required prior to commencement of mining operations.
Highlights of the production schedule are as follows:
  • A short ramp-up to full production with 270,000 tonnes produced in Year 1
  • Production of 300,000 tpa, or 822 tpd
  • Waste mining averaging 335,000 tpa
Production quantities total 6.0 Mt, at a grade of 15.66% Cgr. This includes mining extraction and dilution (at zero grade) factors applied to the potentially mineable graphite-bearing material.

Processing and Recovery
The selected process consists of crushing followed by a grinding and flotation separation circuit. The resulting concentrate is then thickened, dried and stored. The tailings generated by the concentration process passes through flotation cells to separate acid-generating tailings from clean non-acid tailings.
The PEA forecasted concentrate production is approximately 46,600 tpa with a tailings production expected at approximately 253,400 tpa. This is based on a concentrate average grade of 92% Cgr and a recovery of 91.3% derived from testwork results conducted by SGS Canada Inc. (SGS). Although laboratory and locked cycle tests were performed with a slightly higher potentially mineable ore grade than estimated, no significant impact is expected on the anticipated recovery.

Tailings, Waste Rock and Water Management
One of the challenges for the Project is the management of acid-generating materials. The graphite-bearing mineralization, the waste rock and the tailings showed acid-generating potential. Therefore, the mine water and the ore storage run-off water will likely be acidic. The global program to manage this issue will comprise the following:
  • Subaqueous co-disposition of acidic tailings and waste rock into a unique storage site: the tailings and waste rock storage facility (TSF).
  • Sulfide flotation to reduce the proportion of acidic tailings to 30% of the total volume.
  • Tailings managed in two separate streams.
  • Use of the 70% non-acidic alkaline tailings as inert material for encapsulation of acid-generating tailings and waste rock within the TSF.
  • Water treatment plant and polishing pond for pH neutralisation, metals precipitation, and sedimentation.
  • Water management to direct all industrial sourced waters through the water treatment plant and/or the polishing pond as required.
Thermal Purification
The Project considers the thermal purification of approximately 40% of the concentrate produced at the Lac Knife process plant. This portion of the primary concentrate production meets the specifications (+100 mesh, >95% Cgr) for purification to 99.99% Cgr. Graphite concentrate of this purity is used in battery production and other applications at high prices. It has been assumed that the thermal purification would be done under contract by an existing producer, with related losses of approximately 15%.

Revenue
Focus has initiated contacts with several major graphite consuming groups in North America, Europe and Asia. Marketing efforts have been targeted to high value end users requiring superior quality product in terms of product purity and flake size. Potential customers have provided Focus with product quality requirements and projected annual demand. RPA has reviewed these expressions of interest and is satisfied that there are sufficient indications of demand to support the projected PEA production forecast. To date, Focus has identified the following major product opportunities:
  • Ultra high purity thermo processed battery grade product based on large flake, high purity concentrate
  • Medium to fine flake graphite concentrate, -100+200 mesh, +90% graphitic carbon concentrate
  • Fine flake concentrate, -200 mesh, +80% graphitic carbon concentrate
Production quantities for each major grade category are based on the lock-cycle concentrate production test results and test recovery results from proprietary thermal purification processing of the high grade primary concentrate. Projected overall product volumes and product qualities are detailed in the following table.

PROJECTED PRODUCT MIX
Grade Tonnes (maximum annual) (1) Product Characteristics
Battery Grade 16,900 (2) >99.95% Cgr, +100 mesh
Medium Grade 11,200 >90% Cgr, -100+200 mesh
Fine Grade 15,500 >80% Cgr, -200 mesh
Total 43,600
Notes: (1) totals are rounded
(2) inclusive of conversion recovery factor from 19,900 t of primary concentrate
Current published prices for the Project's major graphite product opportunities are detailed as follows.
Grade Basis Units Price Range
Synthetic, 99.95%C, Swiss Swiss border US$/kg 20 - 7
Crystalline, 90%C, -100 mesh FCL, CIF European port US$/t 1,400 - 1,100
Amorphous powder, 80%-85%C, Chinese FCL, CIF European port US$/t 800 - 600
Source: Industrial Minerals, September 2012
Freight and insurance costs are projected to be approximately $63/t for product sold to customers in the United States, $200/t for deliveries to Europe and $428/t for deliveries to Asia. RPA has reviewed various price scenarios and has assumed the following price in the economic analysis:
  • Battery Grade $10,000/t FOB mine - $9,572/t CIF equivalent
  • Medium Grade $1,300/t FOB mine - $1,237/t CIF equivalent
  • Fine Grade $800/t FOB mine - $600/t CIF equivalent
The price set used in the PEA averages $4,196 per tonne of graphite concentrates FOB mine prior any deductions for marketing, freight and insurance; or 16,900 tpa at $9,572/t (purification losses considered) and 26,700 tpa at $867/t on average, CIF considered.

RPA considers these graphite prices to be appropriate for a PEA-level study. It is noted that the processing for the Battery Grade product, which accounts for some 86% of LOM revenue, is based on an expression of interest by a producer and is by no means a certainty, however, RPA considers the assumption to be reasonable for a PEA.

Total net revenue is $3.7 billion, averaging $185 million per year. On a unit basis, net revenue is $615 per tonne milled.

Capital Costs
The estimated initial capital cost has been developed to include all mining, processing, infrastructure, tailings and indirect capital costs. The capital cost estimate includes a contingency of $24 million (25% of direct and indirect capital costs) and is summarized in the table below.

INITIAL CAPITAL COST ESTIMATE
Capital Cost Item Cost
($ million)
Surface Infrastructure 18.7
Mining (incl. pre-stripping overburden/waste) 11.2
Processing 36.4
Tailings / Waste Rock & Water Treatment 3.1
EPCM 9.7
Indirect/Owner's 16.7
Warehouse Inventory 0.9
Contingency (25%) 24.2
Working Capital (3-month opex) 32.6
 Total Initial Capital Cost 153.5
Sustaining capital, totalling $25 million consists of mine, process, and infrastructure equipment replacement, tailings and waste rock storage facility expansion, progressive environmental rehabilitation, and mine closure costs.
Operating Cost
The Life of Mine operating costs have been estimated for mining, stockpile re-handling, processing, tailings and water treatment, and general and administration. The operating costs are summarized in the following table.
OPERATING COST ESTIMATE
Operating Costs Item Cost
($/t milled)
Mining / Re-handling 15
Processing / Tailings and Water Treatment 41
General and Administration 12
Total Operating Costs 68
In addition, the unit cost for thermal purification under contract was derived from a budget quote by an existing producer and considered the approximate 15% losses during the purification process. This cost equates to $367 per tonne milled, therefore bringing the overall operating cost to $435 per tonne milled.
Preliminary Economic Assessment
Financial evaluation of the Project was carried out using a cash flow model, on a pre-tax basis. Estimates are based on constant 2012 dollar basis, with no provision for escalation. Results are provided in the following table.
PEA FINANCIAL RESULTS
Value
($ million)
Gross Revenue 3,894
Marketing and CIF 225
Net Revenue 3,669
Total Operating Cost 2,597
Operating Cash Flow 1,072
Initial Capital Cost 154
Working Capital Recovery (33)
Sustaining Capital 21
Mine Closure 4
Pre-Tax Cash Flow 926
Net Present Value
8% discount rate 316
10% discount rate 246
12% discount rate 192
Pre-Tax IRR 32.1%
Payback Period 2.8 years
NPV Sensitivity Analysis
Key economic risks were examined by running cash flow sensitivities on:
  • head grade;
  • recovery;
  • graphite market price;
  • operating cost per tonne milled; and
  • capital cost
The pre-tax NPV (at 10%) sensitivity analysis has been calculated for -20% to +20% variations on the above items, with the exception of recovery which has been calculated for -20% to +5%. There is minimal to no effect on NPV when the head grade and recovery factors are adjusted above 0% because of the Project market ceiling on graphite concentrate sales. The NPV sensitivity is shown in the following graph.
NPV (10%) Sensitivity Chart is available at the following link : http://media3.marketwire.com/docs/NPV_Sensivity_Chart.pdf

The technical and economic information relating to the PEA contained in this press release has been reviewed and approved by Marc Lavigne, M.Sc., ing., Senior Mining Engineer for RPA, Robert de l'Étoile, M.Sc.A., ing., Principal Geological Engineer for RPA, and Pierre Roy, M.Sc., P.Eng., ing., Senior Metallurgist Specialist for Soutex, all independent qualified persons under NI 43-101. The technical report will be filed on SEDAR on or before October 31, 2012.

Other News - Bi-Weekly Default Status Report
As previously reported, the Company is presently in default because of its failure to file the PEA and supporting technical report (the "Technical Report") under NI 43-101 and will continue to be in default until such time as it files the required report on the Project.

In compliance with the alternative information guidelines set out in National Policy 12-203 - Cease Trade Orders for Continuous Disclosure Defaults ("NP 12-203") for issuers who have failed to comply with a specified continuous disclosure requirement within the times prescribed by applicable securities laws, Focus issued today a default status report by way of present press release confirming the Company's objective to file the PEA and Technical Report at the latest on October 31, 2012.
Until Focus completes the filing of the PEA and Technical Report, and until the Management Cease Trade Order ("MCTO") is subsequently lifted by the Ontario Securities Commission (the "OSC"), Focus will comply with the alternative information guidelines set out in NP 12-203. The guidelines, among other things, require the Company to issue bi-weekly default status reports by way of a news release so long as the PEA and Technical Report have not been filed.
The Company reports that since its original announcement on September 10, 2012 in respect of the notice of default received from the OSC and its subsequent announcement on September 25, 2012 relating to the issuance of the MCTO (collectively, the "Notice"), with the exception of the Company's announcement today of the PEA results, there has not been any other material changes to the information provided in the Notice nor any failure by the Company in fulfilling its stated intentions with respect to satisfying the alternative information guidelines required pursuant to NP 12-203. In addition, there has not been any other specified default by the Company under NP 12-203, nor are any anticipated and there is no other material information concerning the affairs of the Company that has not been generally disclosed.
This press release has been reviewed and approved by Marc-André Bernier, M.Sc., P.Geo. (Ontario and Québec), Technical Advisor and a Director of Focus, and a Qualified Person under NI 43-101.

About Focus Graphite
Graphene ...Graphene ...Focus Graphite Inc. is an emerging mid-tier junior mining development company, a technology solutions supplier and a business innovator. It is the owner of the NI 43-101 compliant Lac Knife graphite deposit grading 16% carbon as graphite. The company's goal is to assume an industry leadership position by becoming a low-cost producer of technology-grade graphite. As a technology-oriented enterprise with a view to building long-term, sustainable shareholder value, Focus Graphite is investing in the development of graphene applications and patents through Grafoid Inc.

(See: Why Graphene won scientists the Nobel Prize! )

Forward Looking Statements - Disclaimer
This news release may contain forward looking statements, being statements which are not historical facts, and discussions of future plans and objectives. There can be no assurance that such statements will prove accurate. Such statements are necessarily based upon a number of estimates and assumptions that are subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected. Important factors that could cause actual results to differ materially from the Company's expectations are in our documents filed from time to time with the TSX Venture Exchange and provincial securities regulators, most of which are available at www.sedar.com Focus Graphite disclaims any intention or obligation to revise or update such statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information


Mr. Gary Economo
President and Chief Executive Officer
613-691-1091, ext. 101
geconomo@focusgraphite.com
www.focusgraphite.com
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Thursday, October 25, 2012

Gold resource base growing at Brigus Gold's Black Fox Mine

Brigus Gold Provides Exploration Update (bwire)

HALIFAX, Nova Scotia (Business Wire) -- Brigus Gold Corporation (“Brigus Gold” or the “Company”) (NYSE : BRD ; TSX:BRD) is pleased to release results from the first underground drilling at the Black Fox mine since the Company was formed in June 2010. The Company is also pleased to provide an update on its exploration drilling program at the Grey Fox property.

The Black Fox Complex covers an area of approximately 18 square kilometres within the Timmins Mining District, Ontario, and includes the producing Black Fox gold mine and the Grey Fox property. The Grey Fox property hosts a series of prolific gold zones that are within close proximity, including the Contact, 147 and Grey Fox South zones. The Grey Fox property is located about four kilometres southeast of the Black Fox mine.

BLACK FOX MINE
An underground exploration program at the Black Fox mine commenced in June of this year, with two rigs. The drilling is being performed from a new exploration drift at the 9670 metre (m) level on the East side of the mine, and has returned excellent gold grades over significant widths. The objective of the drilling program is to extend the Black Fox orebody and increase the current gold resource at the mine.

The Black Fox orebody remains open at depth and along strike and includes gold reserves to a maximum depth of 500 metres. Orebodies in the region, along the Destor Porcupine Fault, often extend to depths of more than 1,000 metres. The ongoing underground drilling program at the Black Fox mine will drill beyond 500 metres and will continue into 2013 with the goal of expanding the underground resource.
Results from the initial holes include (all assays cut to 150 grams per tonne (gpt), average gold grades over core length widths):

Hole     Core Width (m)     Gold Assay (gpt)
672-01-E     3.40     18.03
672-09-E     3.00     14.93
672-10-E     2.30     19.93
672-11-E     2.00     16.72
and     5.94     3.27
672-13-E     7.82     4.66
672-14-E     8.40     7.01

The initial results from our new underground drill program at the Black Fox mine are excellent,” commented Wade Dawe, Brigus Gold's President and Chief Executive Officer. “This is the first exploration drilling at the mine since 2007, and we look forward to increasing both the minable gold reserves and the mine life as a result of the drill program. We are confident this drill program will have a positive and material impact on the value of the known gold resource at the mine.” 

GREY FOX PROPERTY
In addition to ongoing drilling at the Black Fox mine, the Company currently has three drills working at the Grey Fox property with a fourth being added next month. The Company's exploration program at Grey Fox over the past two years has been extremely successful with the definition of a new 571,000 ounce resource including 480,850 ounces in the indicated category from the Contact and 147 zones, and the recent announcement of a new discovery named the Grey Fox South Zone (see attached map). All three zones remain open for expansion.

Brigus recently announced $10 million in flow-through financing which will fully fund an increased exploration program for 2013.

“We are very pleased with our exploration success year over year at the Black Fox Complex,” said Howard Bird, Senior Vice President of Exploration. “With ongoing drilling on the Contact and 147 zones we will continue to increase our stated gold resources on the property, and now with the recent discovery of the Grey Fox South Zone, we look forward to demonstrating a significantly larger gold resource during 2013.

The zones within the Grey Fox property provide Brigus with near term production growth opportunities because of their proximity to the Black Fox mine infrastructure.

Grey Fox Property: Contact and 147 Zones
The following drill results include highlights of new high-grade assays at increased depth:
Zone       Hole       Core Width (m)       Gold Assay (gpt)       Vertical Depth From Surface (m)    
147       GF12-561       57.00       5.17       280


Contact       GF12-376       20.90       4.79       425 



A location map showing the gold zones on the Grey Fox property within the Black Fox Complex can be found on the Company's website.

Surface drilling was conducted by Norex Drilling and was supervised by the Brigus exploration team. All surface drill hole sample analyses reported herein were performed by Polymet Labs of Cobalt, Ontario, which is ISO 9001:2000 certified in North America using standard fire assay procedures. The Black Fox mine underground drilling was conducted by Boreal Drilling and drill hole sample analyses were performed by Accurassay Laboratories in Thunder Bay, Ontario using standard fire assay procedures. Intercepts cited do not necessarily represent true widths, unless otherwise noted. Brigus Gold's quality control checks include insertion of blanks, standards and duplicates to ensure laboratory accuracy. Senior Exploration Project Manager John A. Dixon, P. Geo., reviewed the technical exploration information in this release as the Qualified Person for the Company.

About Brigus Gold
Brigus is a profitable and growing Canadian gold producer committed to maximizing shareholder value through a strategy of efficient production, targeted exploration and select acquisitions. The Company operates the wholly owned Black Fox Mine and Mill in the Timmins Gold District of Ontario, Canada. The Black Fox Complex encompasses the Black Fox Mine, the new Grey Fox property and adjoining properties in the Township of Black River-Matheson, Ontario, Canada. The Black Fox mine is in production and the Grey Fox mine, located four kilometres from Black Fox is in development. Brigus is also advancing the Goldfields Project located near Uranium City, Saskatchewan, Canada, which hosts the Box and Athona gold deposits. In Mexico, Brigus owns the Ixhuatan Project located in the state of Chiapas. In the Dominican Republic, Brigus has signed an agreement to sell its remaining interests in three mineral exploration projects.

Cautionary and Forward-Looking Statements
Statements in this news release, which are not historical facts, are forward-looking statements that involve risk, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. All statements regarding the Company's ability to successfully expand the Black Fox Complex gold resource, add to Black Fox resources, advance new discoveries to production, convert resource estimates into near-term production, release of an updated mineral resource estimate in 2012 and the Black Fox underground mine exploration drilling program and continue to obtain positive down dip continuity of significant gold mineralization are forward-looking statements and estimates that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from these forward-looking statements include environmental risks and other factors disclosed under the heading “Risk Factors” in Brigus Gold's most recent Annual Information Form and Management Discussion and Analysis filed under the company's name at www.sedar.com and annual report on Form 40-F filed with the United States Securities and Exchange Commission at www.sec.gov and elsewhere in Brigus Gold's documents filed from time to time with the Toronto Stock Exchange, the NYSE Amex, the United States Securities and Exchange Commission and other regulatory authorities. All forward-looking statements included in this news release are based on information available to the Company on the date hereof. The Company assumes no obligation to update any forward-looking statements, except as required by applicable securities laws.


Brigus Gold Corp.
Jennifer Nicholson, CA
Executive Vice President
902-442-7186
jnicholson@brigusgold.com
or
Kate Wood
Manager, Stakeholder Relations
902-442-7184
kwood@brigusgold.com
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Monday, October 22, 2012

San Gold reports expanded resource base!

San Gold CorporationSan Gold Corporation

TSX : SGR
OTCQX : SGRCF


October 22, 2012 07:00 ET

007 Drill Results Continue to Expand the Deposit



WINNIPEG, MANITOBA--(Marketwire - Oct. 22, 2012) - George Pirie, President and Chief Executive Officer for San Gold Corporation (TSX:SGR)(OTCQX:SGRCF), is pleased to announce interim results of its ongoing 2012 diamond drilling program on the 007 deposit within the Company's 100% owned Rice Lake Project located in Bissett, approximately 235 kilometres northeast of Winnipeg, Manitoba, Canada. The Rice Lake Project has a permitted, modern gold mill currently processing ore at a capacity of 2,500 tons per day, modern surface infrastructure including a licensed tailings management facility, and is connected to the Manitoba power grid system.

Since being discovered in 2009, the 007 deposit continues to demonstrate robust grades and widths across all four lenses of the deposit and it continues to be consistent at depth while structural characteristics are becoming increasingly predictable. 

This drilling activity is part of the Company's program to upgrade resources into higher confidence categories and to increase reserves within the mining complex. Overall results are positive and comparable with the Company's March 31, 2012 resource update. The Company will continue drilling for the remainder of 2012 and provide a resource update in the first quarter of 2013.

"The 007 deposit drilling continues to prove up high-quality resources which are accessible from existing infrastructure. The drilling continues to confirm the continuity of the deposit at depth. The ongoing development of the 16 and 26 Levels will provide drill platforms for further resource and reserve definition. Mining is currently scheduled to begin from these levels in early 2014," said Mr. Pirie.
Highlights of the drilling program include:

Hole Zone From
(m)
To
(m)
Grade
(g/t)
Length
(m)
Below
Surface (m)
DX-12-023 007 1026.7 1038.0 11.3
11.3 718
DX-12-034 007 1044.9 1050.7 15.9
5.7 757
S887-12-021 730 44.2 49.1 24.2
4.9 361
S890-12-007 730 117.7 120.2 42.6
2.5 416
607-12-031 Shoreline Basalt 185.1 187.4 28.8
2.3 1239
607-12-032 Shoreline Basalt 208.1 209.9 20.0
1.8 1246

Drilling for this program was carried out in three regions from drill stations located on surface and underground, with a total of 98 drill holes intercepting the 007 deposit and adjacent regions of the Shoreline Basalt Unit so far this year. The Company is very encouraged by the results of the Shoreline Basalt Unit drilling program as it continues to demonstrate the expansion of existing mineralized zones and the potential of new zones to be discovered along the Shoreline Basalt Unit both east and west and at depth.
The following provides a brief summary of the drilling program in each of the three regions:
  1. 61 intersections were obtained between 300 and 595 metres below surface. Drilling in this region occurred both from surface and underground drill stations. These infill targets were identified to support the Company's near-term mining plans within the active mining region accessed by ramp from the Hinge/007 portal.

  2. 7 intersections were obtained from between 700 and 895 metres below surface from surface drilling stations. The Company intends to drill this region more fully once development from 16 Level has reached the Hinge district.

  3. 30 intersections were obtained from between 900 and 1,250 metres below surface. These infill targets were identified to support planned development of the 007 deposit from 26 Level. The 26 Level is the closest portion of the Rice Lake mine infrastructure to the projections of the 007 deposit. Development is currently underway in this region and mining is expected to commence in early 2014.

    Table 1 at the end of this release provides the full list of results from this year's drilling program to date.

    Figure 1 at the end of this release provides a longitudinal section of the three main drilling regions within the 007 deposit and planned development from 16 and 26 Level.

    Figure 2 at the end of this release provides a plan view of planned development of the 007 deposit from 16 Level of the Rice Lake mine.

    Figure 3 at the end of this release provides a plan view of planned development of the 007 deposit from 26 Level of the Rice Lake mine.

Underground drill core samples are assayed on site in the company's assay lab using the fire assay method with an AA and gravimetric finish. San Gold's quality control and assurance program includes the insertion of standards, the retention of pulps and rejects, and spot checks utilizing independent labs including TSL Laboratories in Saskatoon, SK and 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.
This drilling program was carried out by San Gold mine geologists under the supervision of D. Ginn, P.Geo., the Qualified Person for San Gold under National Instrument 43-10, who has reviewed and approved the press release.

About San Gold
San Gold is an established Canadian gold producer, explorer, and developer that owns and operates the Hinge, 007, and Rice Lake mines near Bissett, Manitoba. The Company employs more than 400 people and is committed to the highest standards of safety and environmental stewardship. San Gold is on the Toronto Stock Exchange under the symbol "SGR" and on the OTCQX under the symbol "SGRCF".
Cautionary Note
This news release includes certain "forward-looking statements". All statements, other than statements of historical fact included in this release, including, without limitation, statements regarding forecast gold production, gold grades, recoveries, cash operating costs, potential mineralization, mineral resources, mineral reserves, exploration results, and future plans and objectives of the Company, are forward-looking statements that involve various risks and uncertainties. These forward-looking statements include, but are not limited to, statements with respect to mining and processing of mined ore, achieving projected recovery rates, anticipated production rates and mine life, operating efficiencies, costs and expenditures, changes in mineral resources and conversion of mineral resources to proven and probable mineral reserves, and other information that is based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management.
Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be "forward-looking statements." Forward-looking statements are subject to a variety of risks and uncertainties that could cause actual events or results to differ from those reflected in the forward-looking statements.
There can be no assurance that forward-looking statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include, among others, the actual results of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future prices of precious metals, as well as those factors discussed in the section entitled "Other MD&A Requirements and Additional Disclosure and Risk Factors" in the Company's most recent quarterly Management's Analysis and Discussion ("MD&A"). Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
Exploration results that include geophysics, sampling, and drill results on wide spacings may not be indicative of the occurrence of a mineral deposit. Such results do not provide assurance that further work will establish sufficient grade, continuity, metallurgical characteristics, and economic potential to be classed as a category of mineral resource. A mineral resource that is classified as "inferred" or "indicated" has a great amount of uncertainty as to its existence and economic and legal feasibility. It cannot be assumed that any or part of an "indicated mineral resource" or "inferred mineral resource" will ever be upgraded to a higher category of resource. Investors are cautioned not to assume that all or any part of mineral deposits in these categories will ever be converted into proven and probable reserves.
Table 1: 2012 007 Drill Intersections by Elevation 1
Drill Hole Zone From
(m)
To
(m)
Grade
(g/t)
Length
(m)
Below
Surface (m)
Active Mining Region Drilling
1 JH-11-044 700 453.9 457.0 19.4 3.1 300
2 JH-11-047 700 469.3 470.1 1.4 0.8 308
3 CD-11-296 740 433.5 436.9 12.5 3.4 324
4 CD-11-297 740 443.0 444.8 1.6 1.8 335
5 887-12-050 730 2.4 6.4 4.3 3.9 336
6 887-12-051 730 4.1 6.7 11.4 2.7 336
7 CD-12-298 740 446.7 449.4 9.3 2.7 338
8 CD-12-290 730 455.1 456.5 10.3 1.4 338
9 CD-12-311 740 443.6 453.5 1.2 10.0 340
10 CD-12-268 730 453.2 463.5 9.8 10.3 342
11 S887-12-005 730 43.4 44.6 1.5 1.2 346
12 CD-12-317 740 457.6 457.9 20.5 0.3 347
13 CD-12-283 730 460.2 464.4 24.5 4.1 347
14 CD-11-303 740 452.6 453.4 74.6 0.8 348
15 S887-12-001 740 54.4 56.3 18.1 1.9 348
16 CD-12-324 730 461.1 465.9 5.2 4.8 349
17 CD-12-276 730 460.9 466.0 6.0 5.2 353
18 CD-12-289 730 464.8 468.0 3.5 3.2 354
19 S887-12-006 730 46.4 47.7 2.0 1.3 354
20 S887-12-025 730 41.9 46.0 11.1 4.1 357
21 S887-12-002 740 62.3 65.5 17.1 3.2 360
22 CD-12-275 730 466.4 470.4 7.4 4.0 360
23 S887-12-029 730 52.4 57.8 2.6 5.4 361
24 CD-11-304 740 460.5 462.2 3.8 1.7 361
25 S887-12-021 730 44.2 49.1 24.2 4.9 361
26 CD-12-269 730 467.8 473.6 10.5 5.8 364
27 S887-12-026 730 50.1 53.9 4.3 3.8 367
28 JH-11-029 720 512.4 514.9 3.7 2.2 369
29 S887-12-030 730 61.7 63.2 29.3 1.5 369
30 CD-12-263 730 473.8 477.1 4.9 3.3 369
31 S887-12-003 740 76.0 78.0 16.3 2.0 374
32 S887-12-022 730 56.3 60.5 8.3 4.2 377
33 S887-12-017 730 59.6 63.4 5.2 3.8 379
34 JH-11-048 700 486.1 487.3 1.3 1.2 379
35 S890-12-009 730 81.3 89.9 0.3 8.5 382
36 S887-12-027 730 61.9 70.0 5.8 8.1 384
37 S887-12-008 730 76.8 80.3 7.6 3.5 389
38 S887-12-004 740 92.4 94.2 2.5 1.8 396
39 S890-12-001 730 95.0 97.0 8.2 2.0 398
40 CD-12-271 730 496.4 498.1 9.5 1.7 399
41 S887-12-018 730 79.0 85.3 13.9 6.3 402
42 CD-12-264 730 490.7 496.5 3.3 5.8 402
43 CD-12-299 740 495.3 497.3 1.3 2.0 406
44 CD-12-325 740 499.7 501.5 0.5 1.9 414
45 S890-12-007 730 117.7 120.2 42.6 2.5 416
46 CD-12-291 730 505.1 508.1 18.8 3.0 417
47 S887-12-023 730 98.6 104.7 16.1 6.1 420
48 S882-12-008 700 166.5 167.4 5.7 0.9 424
49 CD-12-270 730 506.5 512.1 1.9 5.6 424
50 CD-12-279 730 511.6 513.9 36.0 2.3 433
51 CD-12-274 730 518.3 520.8 0.4 2.5 435
52 S887-12-013 740 118.5 122.3 7.3 3.7 437
53 S882-12-006 700 197.5 201.5 4.4 4.0 440
54 S882-12-004 700 215.4 216.8 0.1 1.4 442
55 S882-12-002 700 239.2 240.2 0.3 1.0 449
56 S882-12-003 700 243.4 244.2 0.0 0.9 473
57 CD-12-301 740 548.5 549.2 1.0 0.6 480
58 CD-12-266 730 545.7 547.3 13.1 1.6 480
59 CD-12-329 730 570.0 574.5 3.8 4.5 505
60 CD-12-267 730 585.7 589.5 6.4 3.7 533
61 CD-12-326 740 592.0 596.8 0.9 4.8 538
16 Level Access Drilling
62 DX-12-032 007 1025.0 1049.0 1.7 24.0 701
63 DX-12-023 007 1026.7 1038.0 11.3 11.3 718
64 DX-12-034 007 1044.9 1050.7 15.9 5.7 757
65 DX-12-028 007 1059.9 1063.4 1.2 3.5 763
66 DX-11-021 007 1082.8 1084.9 0.2 2.1 819
67 DX-12-026 007 1045.0 1047.9 12.1 2.8 823
68 DX-12-027 007 1094.2 1094.5 32.1 0.3 829
26 Level Access Drilling
69 607-12-005 Shoreline Basalt 118.7 119.1 56.2 0.4 905
70 607-12-003 Shoreline Basalt 115.0 117.1 3.3 2.1 1128
71 607-12-021 Shoreline Basalt 113.5 123.6 3.8 10.0 1143
72 607-12-017 Shoreline Basalt 151.5 152.2 2.5 0.6 1148
73 607-12-006 Shoreline Basalt 76.6 79.1 3.2 2.5 1148
74 607-12-023 Shoreline Basalt 191.9 192.1 31.6 0.2 1149
75 607-12-020 Shoreline Basalt 180.5 183.5 2.8 3.0 1153
76 607-12-019 Shoreline Basalt 269.8 272.2 4.5 2.4 1169
77 607-12-010 Shoreline Basalt 161.5 162.4 1.5 0.9 1172
78 607-12-001 Shoreline Basalt 192.4 194.0 10.0 1.7 1172
79 607-12-022 Shoreline Basalt 192.0 192.5 8.3 0.4 1175
80 607-12-016 Shoreline Basalt 186.3 187.1 0.1 0.8 1178
81 607-12-009 Shoreline Basalt 69.1 71.6 0.7 2.6 1181
82 607-12-004 Shoreline Basalt 92.0 94.2 0.0 2.2 1182
83 607-12-002 Shoreline Basalt 130.9 135.8 5.2 4.9 1183
84 607-12-011 Shoreline Basalt 8.2 9.1 4.0 0.9 1184
85 607-12-013 Shoreline Basalt 66.0 68.4 1.6 2.4 1185
86 607-12-007 Shoreline Basalt 16.5 16.7 4.8 0.2 1186
87 607-12-024 Shoreline Basalt 152.3 153.1 6.2 0.8 1192
88 607-12-033 Shoreline Basalt 187.5 191.4 3.6 3.9 1194
89 607-12-028 Shoreline Basalt 185.6 186.4 11.5 0.8 1198
90 607-12-025 Shoreline Basalt 175.7 179.2 3.6 3.5 1205
91 607-12-029 Shoreline Basalt 142.4 144.2 0.1 1.9 1207
92 607-12-030 Shoreline Basalt 152.9 154.7 1.2 1.8 1217
93 607-12-039 Shoreline Basalt 222.9 224.4 1.5 1.5 1217
94 607-12-034 Shoreline Basalt 252.8 253.7 2.8 0.9 1224
95 607-12-026 Shoreline Basalt 182.3 183.2 8.4 0.9 1224
96 607-12-035 Shoreline Basalt 260.2 262.9 1.5 2.7 1234
97 607-12-031 Shoreline Basalt 185.1 187.4 28.8 2.3 1239
98 607-12-032 Shoreline Basalt 208.1 209.9 20.0 1.8 1246
1 The intersections presented herein may not necessarily represent the true width of mineralization.

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

Contact Information


  • San Gold Corporation
    George Pirie
    President and CEO
    Toll Free: 1 (855) 585-4653

    San Gold Corporation
    Manish Grigo
    Director Investor Relations
    info1@sangold.ca
    www.sangold.ca
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