July 19, 2010 07:30 ET

Bulk Sampling Commences at 007 Zone, Drilling Confirms High Grade Corridor, Operational Update and Outlook Including Expansion Plans

BISSETT, MB--(Marketwire - July 19, 2010) - Dale Ginn, CEO of San Gold Corporation (TSX-V: SGR) is pleased to report that infill drilling is confirming the high grade nature of the 007 Zone at all depths within currently known limits, especially within an established high grade corridor (HGC) that extends from surface to over 400 meters deep and remains open. Results from the infill drill program in the immediate area of planned bulk sampling include drill hole # CD-10-091 which yielded 134 g/tonne (3.9 oz/ton) over 3.1 meters (10.2 ft) at 240 meters (800 ft) below surface within a broader intersection of 53 g/tonne (1.55 oz/ton) over 9.6 meters (31.5 ft). Near surface or upper extension results were highlighted by drill hole # CD-10-68 which cut 26.5 g/tonne (0.77 oz/ton) over 3.3 meters (10.8 ft). Results from the lower extension of the deposit include drill hole # CD-10-040 which yielded 19 g/tonne (0.55 oz/ton) over 2.5 meters (8.2 ft) at a depth of 411 meters (1,350 ft) below surface. A summary of the current round of drill results is contained within the following table, as well, a detailed longitudinal section showing all results received to date are available on the company's website. Eight intersections are reported within six drill holes as tabulated below:

Hole #		From (m)		To (m)		Length m (ft)				Gold g/tonne (oz/ton)				Zone/Lens
Bulk Sample Elevation
CD-10-091		307.7		317.3		9.6		31.5		53.1		1.55		007 HGC
including		309.0		312.1		3.1		10.2		134.0		3.91		007 HGC
including		309.0		311.1		2.1		6.9		260.0		7.59		007 HGC
CD-10-103		288.3		289.7		1.4		4.6		29.5		0.86		007
CD-10-108		288.2		289.6		1.4		4.6		11.3		0.33		007
Upper Extension
CD-10-068		83.5		86.8		3.3		10.8		26.5		0.77		007 HGC
CD-10-069		88.3		90.5		2.2		7.2		27.1		0.79		007 HGC
Lower Extension
CD-10-040		430.7		433.2		2.5		8.2		18.9		0.55		007 HGC

007 Bulk Sampling and Initial Development

This development has accessed the 007 zone at the 240 meter (800 ft) elevation at the west end of the deposit. Over 60 meters (200 ft) or approximately half of the estimated length of this zone has been developed at this elevation to date and continues to progress to the east toward the high grade corridor section of the deposit. Stockpiling of this development will continue until the full length of the zone is established. 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.

Operations Update

Operations at Rice Lake during the second quarter continued to emphasize development of the upper and eastern extensions known as the 98 area. This area is being developed in order to potentially eliminate the use of the lower "D" internal shaft (winze), which would reduce re-handling of ore. The location of the 98 zones are down dip and under the Hinge and 007 deposits and this development will serve also as exploration platforms for potential down dip extensions from surface. The Hinge Mine daily mined tonnage improved from the beginning of the quarter at 350 tons per day in April to an average of 485 tons per day in June. The Hinge Mine contributed 37,911 tons during the quarter for an average of 416 tons per day. The Rice Lake Mine contributed 25,113 tons or 276 tons per day. Difficulties during the quarter were experienced in the loading pocket and "D" shaft at the Rice Lake Mine and the loss of the jaw crusher for the last week in June resulting in more than 5,000 tons of ore mined than milled in June. As a result, mill production in the second quarter is expected to be similar to the first quarter. The statement regarding San Gold's expected mill production in the second quarter of 2010 is forward-looking information that is subject to the cautionary note set forth below.

Exploration

Surface exploration and infill drilling is currently being conducted by three rigs on the 007 zone, one defining and extending the upper elevations towards surface, one drilling infill holes in and around the area currently being accessed and bulk sampled, and one drilling deep holes below 400 meters. Two other surface drill rigs are turning on the Emperor target located 500 meters east of the 007 zone and on the Murphy target located 500 meters south of the Hinge Mine.

Expansion plans

San Gold intends to undertake an aggressive program of exploration, development and expansion over the next 18 to 36 months in order to convert mineral resources to reserves, extend and develop new zones to depth, and to consolidate and expand production capacity. San Gold anticipates that this program will consist primarily of:

• Additional development of the 007 Zone including the establishment of a decline access from the surface, accelerating access from the Hinge Mine, using the decline access to explore the Cohiba Zone and purchasing mobile mining equipment.
• Development of exploration and potential access drifts originating from within the Rice Lake Mine towards depth extensions of the L13 Zone, Hinge Zone and 007 Zone on the 8^th (370 m level), 16^th (730 m level) and 26^th (1,200 m) levels.
• Utilizing the above exploration drifts for exploration drilling of the L13, Hinge and 007 zones. 
• Expanding mill and tailings capacity.
• Beginning decline and bulk sampling of the L13 zone and accessing remaining mineral reserves and mineral resources in the upper levels of the Rice Lake Mine.

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

For further information, contact Dale Ginn, CEO of San Gold Corporation, at (204) 794-5818 or investor information at 1-800-321-8564 or visit www.sangoldcorp.com.

Cautionary Note Regarding Forward-Looking Information

The statements in this press release relating to San Gold's expected mill production in the second quarter of 2010 are forward-looking statements that contain forward-looking information. Forward-looking statements require assumptions and are subject to inherent risks and uncertainties. Readers are cautioned to not place undue reliance on forward-looking statements because a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements. Forward-looking statements are provided for the purpose of providing information about management's expectations. Other than as specifically required by law, San Gold does assume any obligation to explain any material difference between subsequent actual events and forward-looking statements, or to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results or otherwise. The forward-looking statements with respect to expected mill production in the second quarter of 2010 represent management's best judgment based on material factors and assumptions that management considers reasonable. With respect to the forward-looking statement regarding expected mill production in the second quarter of 2010, material factors and assumptions that management considers reasonable include that: there are no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; permitting, development, operations, expansion and acquisitions at the Rice Lake Project continue on a basis consistent with San Gold's current expectations; the exchange rate between the Canadian dollar and the U.S. dollar stays approximately consistent with current levels; certain price assumptions for gold hold true; prices for fuel, electricity and other key supplies remains consistent with current levels; production and cost of sales forecasts meet expectations; the accuracy of San Gold's current mineral reserve and mineral resource estimates hold true; and labour and material costs increase on a basis consistent with San Gold's current expectations.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of San Gold to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. As well as those factors discussed in the section entitled "Risk Factors" in San Gold's annual information form, material risk factors which could cause actual results to differ materially from the results stated in the forward-looking statements contained herein, include, among others: fluctuations in the currency markets; fluctuations in the spot and forward price of gold or certain other commodities (such as fuel and electricity); changes in interest rates; changes in national and local government legislation, taxation, controls, regulations and political or economic developments in Canada; business opportunities that may be presented to, or pursued by, San Gold; the San Gold's ability to successfully integrate acquisitions; operating or technical difficulties in connection with mining or development activities; employee relations; the speculative nature of gold exploration and development, including the risks of obtaining necessary licenses and permits; diminishing quantities or Grades of Mineral Reserves; and contests over title to properties, particularly title to undeveloped properties. In addition, there are risks and hazards associated with the business of gold exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or the inability to obtain insurance, to cover these risks). There are also risks associated with the Offering, including potential loss of the entire investment in Common Shares, price volatility, changes to proposed use of proceeds and potential dilution.

Although San Gold has attempted to identify material factors and risks that could cause actual actions, events or results to differ materially from those described in the forward-looking statements contained herein, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking 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.

Neither the 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.