San Gold Corporation (SGRCF)

[NYBob]

Gold to Surge to $12,000/oz and Silver to $450/oz
Cazenove's Robin Griffiths

http://m.ibtimes.com/gold-silver-platinum-palladium-rhodium-precious-metals-145282.html





San Gold Reports Improved Results

2011-05-13 01:01 ET - News Release


TSX: SGR || OTCQX: SGRCF

BISSETT, MB, May 13 /PRNewswire-FirstCall/ -

George Pirie, President and CEO of San Gold Corporation,
(TSX: SGR) (OTCQX: SGRCF) released the company's first quarter
2011 financial statements today.
They reflect a large improvement in performance at
the Rice Lake Project in Bissett.

Mr. Pirie said "that San Gold continues to be one of the most
exciting gold mining and exploration companies in Canada
with huge gold potential.
We expect production to increase and cash costs per ounce
of gold to decrease substantially throughout the balance
of 2011.
In addition, we continue with a very aggressive exploration
drilling program, on the large prospective land package
surrounding the operating mines. This drilling program
demonstrates the size and strength of the gold mineralization
within the newly discovered Shoreline Basalt and is allowing
us to develop a new mine complex along this mafic unit."

The Company recognized revenue of $19.8 MM during the quarter
and experienced an operating income from operations of $3.2 MM.
The comprehensive loss from operations for the quarter
was $5.3 MM.
Comparable figures for the first quarter of 2010 are revenue
of $14.0 MM, operating loss of $2.3 MM and a comprehensive
loss of $2.7 MM.

The quarter generated positive cash flow from operations of
$4.4 MM.
Cash cost was $862 per ounce and $146 per ton.
This represents a 60% reduction in cash cost per ton
in comparison to the same quarter last year and a 35%
reduction in the cash cost per ounce.
This is consistent with management's objective of reducing
costs this year as we transition to a steady state producer.
(Please see discussion on Non-IFRS financial measures for
a detailed calculation and reconciliation of these figures
to our IFRS financial statements).

San Gold completed 87,000 metres of diamond during the first quarter of 2011. Of this, about 44,000 metres was drilled underground with the balance of 43,000 metres drilled from surface. These totals are slightly ahead of San Gold's 2011 plan.

San Gold invested $10.7 MM for the purchase of equipment during the quarter and capitalized development on mineral properties of $12.9 MM. This Capital investment positions San Gold well early in 2011 to achieve the budgeted increases in mine and mill production. San Gold maintains its expectation to produce 80,000 ounces during 2011 and approach cash costs of $650 per ounce by year end.

As at March 31st, 2011, the Company had a working capital surplus of $59.0 MM compared to a working capital surplus of $33.2 MM at March 31st, 2010. During the quarter, the Company completed a Flow-Through financing designed to fund exploration expenditure through 2011 and into 2012. Liquidity remains excellent and the Company continues to have sufficient cash reserves to meet currently planned exploration and development activities.

The information in this release may contain forward-looking information under applicable securities laws. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied in the forward-looking information.





SAN GOLD CORPORATION
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
FOR THE THREE MONTH PERIOD ENDED MARCH 31



2011 2010


REVENUE $ 19,817,478 $ 13,988,260

OPERATIONS
Operations (Note 16) 16,619,833 16,278,889

INCOME (LOSS) FROM OPERATIONS 3,197,645 (2,290,629)

Exploration 5,305,747 2,662,783
General and administrative (Note 17) 3,170,564 3,247,710

LOSS BEFORE OTHER REVENUE AND EXPENSES 5,278,666 8,201,122

OTHER REVENUE AND EXPENSES
Finance income - net (Note 18) 61,533 75,266
Finance costs (Note 18) (118,636) (35,808)
Equity loss of associate (Note 9) - (128,667)

LOSS BEFORE INCOME TAX 5,335,769 8,290,331

Income tax recovery on flow-through shares (Note 19) - 5,568,350

TOTAL LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD 5,335,769 2,721,981

LOSS PER COMMON SHARE: Basic & diluted (Note 22) $ 0.02 $ 0.01


For further information contact San Gold Corporation at 1-800-321-8564 or visit www.sangold.ca


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