George Pirie, President and CEO of San Gold Corporation (TSX: SGR) (OTCQX: SGRCF) is pleased to report that crushing plant upgrades have been completed and that test milling has shown a large increase in production capacity for Rice Lake Project mill operations.
The first full week of operations using the improved crushing circuit (April 15 to April 21) realized an average of 1,513 tons per day processed, including an all-time daily record of 1,679 tons. Recovery rates were maintained at 94% during this period.
"These capital improvements were completed ahead of schedule and have increased our mill's capacity beyond design specifications," said Mr. Pirie. "This, combined with strong production tonnages keeping ore out in front of the mill, marks another important step toward establishing a steady-state production profile."
The crushing plant upgrades were completed during the first four days of April and consisted of the installation of a new Metso mobile gyratory crusher as well as a new Barmac mobile tertiary crusher.
A new Elrus primary jaw crusher was previously installed in January.
The combined result of these installations is an increase from 210 hp to 750 hp, allowing for increased throughput while reducing the size of the feed reporting to the grinding circuit.
Further capacity increases are anticipated towards 1,800 tons per day or higher this year as this new equipment is optimized and a larger capacity screening plant is installed in June.
San Gold Corporation is an emerging gold producer located in south-east Manitoba, immediately west of Red Lake, Ontario. The company is on track to produce over 80,000 ounces in 2011.
San Gold is also an aggressive explorer and developer, discovering seven gold deposits and developing four over the past five years.
The company is on track to complete over 300,000 meters of diamond drilling this year.
Drilling and development efforts are currently concentrated along a new mining horizon known as the Shoreline Basalt.
The Shoreline Basalt deposits, which include L10, L13, 007, 007 East and Emperor, are fully accessible from surface and to depths of over 2,000 meters using the modern mine infrastructure already in place at the Rice Lake Mine. This year's drilling and development program will mark a key step in San Gold's long-term plan to develop a new mine complex along the Shoreline Basalt.
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.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
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
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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