San Gold Reports Annual and Fourth Quarter Results for 2012

San Gold Reports Annual and Fourth Quarter Results for 2012 
WINNIPEG, MANITOBA -- (Marketwire) -- 03/25/13 --  
(All amounts in Canadian dollars unless otherwise stated) 
San Gold Corporation (the "Company") (TSX:SGR)(OTCQX:SGRCF) is
pleased to report its quarterly and full-year financial and operating
results for 2012 for the Company's 100% owned Rice Lake Mining
Complex (the "Property") located in Bissett, approximately 235
kilometres northeast of Winnipeg, Manitoba, Canada. The Property has
a permitted, modern gold mill currently processing ore at a capacity
of 2,500 tons per day, as well as modern surface infrastructure,
including a licensed tailings management facility and is connected to
the Manitoba power grid system. 
"The Company continues to make significant progress in building the
Rice Lake Mining Complex. We have increased production year over year
while improving cash flow from operations," said Ian Berzins,
President and Chief Executive Officer of San Gold. "Our recent
convertible debenture financing ensures that the Company is well
funded to finance its development plan. This will enable us to build
the infrastructure necessary to exploit the resource well into the
foreseeable future. We are confident that markets will recognize that
this investment will lead to improved operational and financial
performance." 
Q4 Financial and Operating Highlights 


 
--  Operating income of $3.5 million, compared to an operating loss of $7.5
    million in Q4 2011 and Net loss of $3.9 million, compared to a Net
    income of $3.2 million in Q4 2011. 
--  Production of 19,019 ounces of gold, a 7% decrease compared to 20,359
    ounces in Q4 2011. 
--  Revenue of $34.0 million on gold sales of 20,251 ounces at a realized
    price of $1,683 per ounce, a 3% increase from revenue of $33.0 million
    on gold sales of 19,482 ounces in Q4 2011. 
--  Average mill throughput of 1,827 tons per day. 

 
Full Year Financial and Operating Highlights 


 
--  Operating income of $20.6 million, compared to a 2011 operating income
    of $30.4 million and a net loss of $13.2 million, compared to a 2011 net
    loss of $5.1 million. 
--  Record production of 86,506 ounces of gold, a 16% increase over 2011
    production of 74,277 ounces. 
--  Record cash flow from operating activities before changes in non-cash
    working capital of $42.1 million, compared to $19.9 million in 2011. 
--  Record revenue of $142.1 million on gold sales of 85,690 ounces of gold
    at a realized price of $1,659 per ounce, a 25% increase from 2011
    revenue of $114.1 million on gold sales of 71,684 ounces of gold. 
--  Total cash costs of $855 per ounce of gold sold compared to 2011 cash
    costs of $848 per ounce. 
--  Realized a cash operating margin of $804 per ounce of gold sold with a
    realized price of $1,659 per ounce. 
--  Mill throughput of 1,719 tons per day, a 36% increase compared to 2011
    mill throughput of 1,263 tons per day. 
--  Cash and cash equivalents balance of $11.6 million as at December 31,
    2012. 
--  Completed 221,191 metres of exploration and definition diamond drilling.
--  Continued exploration success along the depth extension of the 007 zone
    that returned 12.6 g/t gold over 6.0 metres and 15.5 g/t gold over 11.1
    metres. 
--  Appointed Mr. Torben Jensen as Vice-President, Corporate Development,
    Mr. Michael Michaud VP, Exploration and appointed Mr. Robert (Bob)
    Brennan as an independent Director of the Company. 
--  Completed a number of transactions, expanding the Company's land base in
    the Rice Lake gold camp and in northern Ontario. 

 
2012 marked a year of significant milestones in terms of both
financial and operational metrics. In 2012, the Company achieved
record operating performance with record gold production of 86,506
ounces, a 16% increase compared to the same period of 2011.
Investments made in crushing and milling capacity, the implementation
of more cost-effective mechanized mining methods, and the removal of
constraints from operations will continue to contribute to increased
gold production.  
In 2012, the Company completed a significant exploration program
within the Rice Lake greenstone belt. Approximately 221,000 metres of
exploration diamond drilling were completed by the Company. The
Company is very encouraged by the results of the exploration drilling
completed to date as it continues to demonstrate the potential for
the expansion of existing mineralized zones and the discovery of new
zones in the Rice Lake area. 
Review of Financial Results 
The Company reports a total and comprehensive loss of $13.2 million
for 2012, compared with a loss of $5.1 million in 2011. The change
was due in large part to the increased rate of depletion of mineral
properties expense after the new resource and reserve estimate was
released during the second quarter. Depletion expense was $41.2
million in 2012, compared with depletion expense of $18.3 million in
2011. This is a 126% increase in the recognized expense while
production levels increased by only 16%. 
San Gold earned revenue of $142.1 million in 2012, a 25% increase
compared to revenue of $114.1 million in 2011. This increase was a
result of both increased gold sales and an increased realized price
of gold. The Company sold 85,690 ounces of gold in 2012, a 20%
increase compared to gold sales of 71,684 ounces in 2011. The Company
realized $1,659 per ounce of gold sold in 2012, a 4% increase
compared to the $1,592 the Company realized per ounce in 2011.  
The Company generated record cash flow from operating activities
before changes in non-cash working capital of $42.1 million in 2012,
a substantial increase compared to a $19.9 million in 2011. After
changes in non-cash working capital, operating activities generated
$51.1 million in 2012, compared to $9.6 million in 2011.  
The Company reported income from operations of $20.6 million,
compared with income from operations of $30.4 million from operations
in 2011.  
Capital spending in 2012 was focused on mine development, increasing
mill capacity, improving key infrastructure, and sustaining capital.
The Company capitalized $62.2 million of mine development and $15.5
million of property, plant, and equipment during the year compared to
$50.4 million and $27.8 million in 2011, respectively.  
Tables 1 to 4 at the end of this release provide a detailed summary
of the Company's key financial and operating metrics for 2012. 
Outlook 
The Company is pleased to report strong operating and financial
results emphasizing its transition from explorer to positive cash
flow gold producer while executing its plan to aggressively explore
and develop the Rice Lake greenstone belt. Going forward, the Company
anticipates improved operating cash flows while reinvesting in its
mineral properties. 
2013 will mark another significant step forward in the evolution of
the Rice Lake Mining Complex by extending operational access beneath
the current mining areas at the 007 and Hinge mines. This development
will provide the drill platforms required to increase mineral
reserves for long-term mine planning and will also provide access for
continued exploration of targets located along strike from known
deposits at depth. The Company continues to be excited about the
resource potential at depth as recent drill results below 26 Level
confirms continuity of the geological structures. 
Throughout 2013, the Company will be focusing production on the Hinge
and 007 areas while developing the Shoreline Basalt deposits and
increasing the capacity of the Rice Lake shaft at depth. During the
fourth quarter the Company suspended regular mining operations in the
Rice Lake Mine in order to concentrate on capital development
projects on 16 and 26 levels and on increasing the capacity of the
1,200 metre main shaft. The goal is to accelerate access to the down
dip extensions of the existing ore zones in L10 and 007 by drifting
into the Shoreline Basalt on 16 and 26 levels. This will result in an
increased number of stopes and an improvement in the material
handling capabilities in the mine complex. Current engineering
studies indicate that A-Shaft may not be shut down as previously
announced; its capacity can be improved by a combination of lighter
skips and ropes together with increased hoisting and loading pocket
capacity. This would allow the Company to meet its ounce guidance and
waste development timetable on 16 and 26 Level. This improved
infrastructure would enable the Company to access the higher grade
Rice Lake Mine earlier than anticipated and defer capital development
on the Cohiba deposit. This strategy will continue to be reviewed
throughout 2013.  
In 2013, the Company will continue its aggressive exploration program
within the Rice Lake greenstone belt. The Company has budgeted to
drill in excess of 270,000 metres of exploration diamond drilling.
Exploration activities for 2013 will continue to focus on definition
and extension drilling for both production planning and exploration
purposes at the San Antonio Mining Unit, the Shoreline Basalt Unit,
the Normandy Creek Shear Zone, and within the intermediate volcanic
rock unit north of the Shoreline Basalt Unit. The objectives of the
Company's exploration program is to develop a larger mine complex
that can be exploited through existing infrastructure. In 2013, the
Company will also have exploration activities associated with
optioned properties in and around the Rice Lake area. 
2012 Financial Results Conference Call 
The Company's senior management plans to host a conference call on
April 12, 2013 at 11:00 am Eastern Standard Time to discuss the 2012
financial results, and to provide an update of the Company's
operating, exploration, and development activities. 
Participants may join the conference call by dialing 1 (866) 226-1792
or 1 (416) 340-2216 for participants outside of Canada and the United
States. The conference call will also be available by webcast on the
Company's website at www.sangold.ca. 
A recorded playback of the conference call can be accessed after the
event until April 28, 2013 by dialing 1 (800) 408-3053 or 1 (905)
694-9451 for calls outside Canada and the United States. The pass
code for the conference call playback is 1034500. The archived audio
webcast will also be available on the Company's website at
www.sangold.ca. 
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". 
This press release should be read in conjunction with the Company's
consolidated financial statements for the quarter ended December 31,
2012 and associated Management's Discussion and Analysis ("MD&A"),
which are available from the Company's website (www.sangold.ca), in
the "News & Reports" section under "Financial Statements", and on
SEDAR (www.sedar.com). 
For further information on San Gold, please visit www.sangold.ca. 
Cautionary Non-IFRS Statements 
The Company believes that investors use certain indicators to assess
gold mining companies. They are intended to provide additional
information and should not be considered in isolation or as a
substitute for measures of performance prepared with International
Financial Reporting Standards ("IFRS"). "Total cash operating costs"
as used in this analysis is a non-IFRS term typically used by gold
mining companies to assess the level of gross margin available to the
Company per ounce of gold by subtracting these costs from the unit
price realized during the period. This non-IFRS term is also used to
assess the ability of a mining company to generate cash flow from
operations. There may be some variation in the method of computation
of "total cash operating costs" as determined by the Company compared
with other mining companies. In this context, "total cash operating
costs" reflects the per ounce cash costs allocated from in-process
and dore inventory associated with ounces of gold sold in the period
and net royalties. "Total cash operating costs" may vary from one
period to another due to operating efficiencies, quantity of ore
processed, grade of ore processed, and gold recovery rates. 
Cautionary Note Regarding Forward Looking Statements 
No stock exchange, securities commission or other regulatory
authority has approved or disapproved the information contained
herein. 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 cl
assed 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. 
Cautionary Note to United States and Other Investors Concerning
Estimates of Measured, Indicated and Inferred Mineral Resources: 
This press release uses the terms "Measured", "Indicated", and
"Inferred" resources. United States investors are advised that while
such terms are recognized and required by Canadian regulations, the
United States Securities and Exchange Commission does not recognize
them. "Inferred Mineral Resources" have a great amount of uncertainty
as to their existence, and as to their economic and legal
feasibility. It cannot be assumed that all or any part of an Inferred
Mineral Resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of Inferred Mineral Resources may not form
the basis of feasibility or pre-feasibility studies. United States
investors are cautioned not to assume that all or any part of
Measured or Indicated Mineral Resources will ever be converted into
Mineral Reserves. United States investors are also cautioned not to
assume that all or any part of a Mineral Resource is economically or
legally mineable. 
Table 1: 2012 Income Statement 


 
                            SAN GOLD CORPORATION                            
         CONSOLIDATED STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS         
                      FOR THE YEARS ENDED DECEMBER 31                       
                                                                            
                                                                            
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                                                        2012           2011 
                                              ------------------------------
                                                                            
                                                                            
REVENUE                                        $ 142,141,548  $ 114,124,699 
                                                                            
OPERATIONS                                                                  
  Operations (Note 16)                           121,547,816     83,726,249 
                                                                            
INCOME FROM OPERATIONS                            20,593,732     30,398,450 
                                                                            
  Exploration                                     16,716,995     24,498,550 
  General and administrative (Note 17)            16,286,259     16,394,578 
                                                                            
LOSS BEFORE OTHER INCOME AND EXPENSES             12,409,522     10,494,678 
                                                                            
OTHER INCOME AND EXPENSES                                                   
  Finance income - net (Note 18)                     368,087        604,478 
  Finance costs (Note 18)                           (391,083)      (444,373)
  Equity loss of associate (Note 9)               (5,030,000)      (483,350)
                                              ------------------------------
                                                                            
LOSS BEFORE INCOME TAX                            17,462,518     10,817,923 
                                                                            
Income tax recovery on flow-through shares                                  
 (Note 19)                                         4,274,846      5,727,373 
                                              ------------------------------
                                                                            
NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD $  13,187,672  $   5,090,550 
                                              ------------------------------
                                              ------------------------------
                                                                            
NET LOSS PER COMMON SHARE: (Note 22)                                        
  Basic                                        $        0.04  $        0.02 
                                              ------------------------------
                                              ------------------------------
  Diluted                                      $        0.04  $        0.02 
                                              ------------------------------
                                              ------------------------------

 
Table 2: Financial Highlights 


 
----------------------------------------------------------------------------
                                                         YTD            YTD 
                                                        2012           2011 
----------------------------------------------------------------------------
                                                                            
Total and comprehensive income (loss) (000)    $     (13,188) $      (5,091)
Items not affecting cash (000)                 $      55,279  $      25,032 
----------------------------------------------------------------------------
Cash provided (used) by operating activities                                
 before changes in non-cash working capital                                 
 (000)                                         $      42,091  $      19,942 
                                                                            
Net change in non-cash working capital (000)   $       8,981  $     (10,326)
                                                                            
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Cash provided by operating activities (000)    $      51,072  $       9,616 
                                                                            
Earnings (loss) per share                                                   
- basic                                        $       (0.04) $       (0.02)
- diluted                                      $       (0.04) $       (0.02)
                                                                            
Weighted average number of common shares                                    
 outstanding                                                                
- basic                                          324,862,278    309,069,325 
- diluted                                        324,862,278    309,069,325 
----------------------------------------------------------------------------

 
Table 3: Production Summary and Statistics 


 
----------------------------------------------------------------------------
                                                           Change    Change 
                                         2012      2011       (#)       (%) 
----------------------------------------------------------------------------
                                                                            
Ore milled (tons)                     629,276   461,150   168,126        36%
Head grade (g/tonne Au)                  5.06      5.93     -0.87     -14.6%
----------------------------------------------------------------------------
Contained gold (ounces)                92,948    79,802    13,147        16%
                                                                            
Ounces of gold produced                86,506    74,277    12,229        16%
                                                                            
Ore mined (tons)                      615,344   486,579   128,765        26%
                                                                            
Ore milled per day (tons)                1719     1,263       456        36%
Ore mined per day (tons)                1,681     1,333       348        26%
Mill recovery (%)                          93%       93%        0%      0.0%
                                                                            
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Table 4: Quarterly Production Summary and Statistics 


 
----------------------------------------------------------------------------
                 Q4      Q3      Q2      Q1      Q4      Q3      Q2      Q1 
               2012    2012    2012  
  2012    2011    2011    2011    2011 
----------------------------------------------------------------------------
                                                                            
Ore milled                                                                  
 (tons)     168,088 191,105 116,546 153,537 141,890 121,844 114,624  82,792 
Head grade                                                                  
 (g/tonne                                                                   
 Au)           4.22    5.21    5.70    5.35    5.36    5.83    6.35    6.47 
----------------------------------------------------------------------------
Contained                                                                   
 gold                                                                       
 (ounces)    20,539  29,029  19,385  23,995  22,190  20,732  21,244  15,636 
                                                                            
Ounces of                                                                   
 gold                                                                       
 produced    19,019  27,084  18,241  22,162  20,359  19,119  20,111  14,688 
                                                                            
Ore mined                                                                   
 (tons)     171,351 143,949 155,495 144,549 136,166 124,952 123,261 102,200 
                                                                            
Ore milled                                                                  
 per day                                                                    
 (tons)       1,827   2,077   1,281   1,687   1,542   1,324   1,260     920 
Ore mined                                                                   
 per day                                                                    
 (tons)       1,863   1,565   1,709   1,588   1,480   1,358   1,355   1,136 
Mill                                                                        
 recovery                                                                   
 (%)             93%     93%     94%     92%     92%     92%     95%     94%
                                                                            
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NOTE: Final refinery settlements, or the effects of rounding, may
have resulted in increases or decreases to reported gold production.
Contacts:
San Gold Corporation
Gestur Kristjansson
Chief Financial Officer
1 (855) 585-4653 
San Gold Corporation
Ian Berzins
Chief Executive Officer
1 (855) 585-4653
info1@sangold.ca
www.sangold.ca