San Gold Corporation (SGRCF)

[goldenpolarbear]

Rice Lake Action Plan
Klondex intends to implement at Rice Lake the same grade and dilution control methods it has applied to the narrow veined Fire Creek and Midas operations. By applying a more selective mining approach to the Rice Lake operation, Klondex will reduce tonnage, minimize dilution and focus on producing higher margin ounces.

Transaction Overview
Under the terms of the agreement, Klondex will acquire 100% of Rice Lake along with certain related assets and equipment. In addition to Rice Lake, the Company is also acquiring a 50% interest in the Tully gold project located near Timmins, Ontario and approximately 43 million common shares in SGX Resources Inc., representing approximately 32% of the issued and outstanding common shares of SGX.

The Acquisition is expected to close by the end of the first quarter of 2016, subject to regulatory approvals and the satisfaction of other standard conditions precedent.

Rice Lake Overview
Rice Lake is an underground gold mining operation consisting of three underground deposits with a modern, fully-permitted 2,500 ton per day mill. Gold was originally discovered at Rice Lake in 1911 and intermittent mining operations since 1931 have produced more than 1.5 million ounces of gold. Mining took place continuously from 2007 until May 2015 over which time in excess of C$375 million was invested into the property and approximately 390,000 ounces of gold were produced. Mining ceased and the operation was placed on care and maintenance in May 2015.

Rice Lake Historical Mineral Estimate

A historical mineral estimate of the mineral reserves and resources for Rice Lake as of December 31, 2014 is shown below. These mineral reserves and resources were prepared by the prior owner in accordance with National Instrument 43-101 under the supervision of a qualified person. However, a qualified person from Klondex has not done sufficient work to classify this historical mineral estimate as current mineral reserves or mineral resources and Klondex is not treating such estimate as current mineral reserves or mineral resources. Klondex anticipates completing the work necessary to prepare and file an updated National Instrument 43-101 technical report after the transaction closes. - See more at: http://www.klondexmines.com/s/news.asp?ReportID=734329#sthash.rz2YfSh5.k93rngep.dpuf

http://www.klondexmines.com/s/news.asp?ReportID=734329#sthash.rz2YfSh5.qGZZu2mo.dpbs