San Gold's Rice Lake Mine Continues to Evolve With Higher Production Grades and Significant New High Grade Discoveries -- Including Mining Face Samples of 909 g/t Over 3 m (26.5 oz/t Over 10 ft)

BISSETT, MB--(Marketwire - January 20, 2010) - Dale Ginn, CEO of San Gold Corporation (TSX-V: SGR) is pleased to report that underground exploration drilling has discovered new high grade zones running parallel and to the south-east or to the footwall side of the "98" vein above the 28th mining level within the Rice Lake mine. Drill hole #28-09-21 cut 37 g/tonne (1.07 oz/ton) over 12.2 meters (40 ft) extending high grade gold mineralization extensively to the east into undeveloped and unexplored areas of the Rice Lake mine. This intersection included an extremely high grade segment of 122 g/tonne (3.55 oz/ton) over 3.6 m (12 ft) and contained coarse visible gold. Recent development of the ''98" vein above the 28 level (4500 ft) has also recently yielded the highest grading chip sampled face to date at 909 g/t (26.5 oz/t) over 3 m (10 ft).

Fourteen intersections are reported within nine drill holes sorted by zone as tabulated below, hole numbers not listed in sequence have not yet been drilled or logged:

Hole #    From (m)  To (m)  Length m (ft)  Gold g/tonne (oz/ton)  Zone/Lens28-09-21   130.4    142.6   12.2    40.0       36.6    1.07        98 FW 1including  130.4    134.0    3.6    11.8      121.6    3.55        98 FW 128-09-26    79.1     80.8    1.7     5.6       50.7    1.48        98 FW 128-09-28    92.8    104.5   11.7    38.4       15.1    0.44        98 FW 1including   92.8     94.5    1.7     5.6       68.2    1.99        98 FW 128-09-43   100.1    102.7    2.6     8.6        7.5    0.22        98 FW 1and        139.1    143.0    3.9    12.8        7.5    0.22        98 FW 228-09-44   106.3    107.9    1.6     5.3       21.2    0.62        98 FW 128-09-45   212.7    218.3    5.6    18.4        9.6    0.28        98 FW 128-09-46   assays pending28-09-47   152.0    154.5    2.5     8.2       10.6    0.31        98 FW 1and        178.7    186.5    7.8    25.5       11.0    0.32        98 FW 2and        190.4    193.1    2.7     8.9        4.8    0.14        98 FW 3and        196.4    198.6    2.2     7.2        6.8    0.20        98 FW 428-09-50   132.1    133.9    1.8     5.9       27.7    0.81        98 FW 1

The "98" vein area is located at the southeastern extremities of current Rice Lake mine development above the 28th level (4500 ft). The past two years have been spent improving access and infrastructure to this area in preparation for mining and exploration. This area of the mine is anticipated to account for 30% of San Gold's production for 2010 and has already contributed to an improvement in Rice Lake's production grade to 0.30 oz/ton in December. The main "98" vein above the 28th level has been developed to over 500 feet in length and is open above where drilling from the 26th level (4200 ft) is searching for extensions. Mining is now underway in numerous stopes within this vein above the 29th and 28th levels. The numerous new veins being discovered to the southeast and in the footwall of the "98" vein are in previously unexplored areas as there has been no access to this ground in the past. Numerous drill holes are now in the process of being deepened since the number and extent of new footwall zones is greater than anticipated.

Dale Ginn, CEO, stated, "San Gold management have long understood that developing higher grade areas of the Rice Lake mine in an upward and outward direction, rather than solely downward, are key to improved economics within this mine. This effort is now resulting in new high grade discoveries in open extensions to the host Rice Lake mine unit, as well as providing deep platforms for exploration well below the newer near surface Hinge, 007, L13 and Cohiba zones that are located in the hanging volcanic rock units. Our ability to chase these new deposits to depth is greatly enhanced by these developments. Our efforts will continue in an upward direction in order to improve ounces per vertical meter and to above 26 level where the use of our internal D winze (shaft) is not required, resulting in greater ore handling efficiencies."

Sections, plans and diagrams related to this press release are available at the company's website:  http://sangoldcorp.com/assets/files/20100120_HG28Level_WebVersion.pdf

The above program was carried out by mine geologists under the supervision of D. Ginn, P.Geo., the Qualified Person for San Gold under National Instrument 43-101. Underground drill core samples and chip samples are assayed on site in the company's assay lab using the fire assay method with an AA and gravimetric finish. San Gold's quality control and assurance program includes the insertion of blanks and standards, the retention of pulps and rejects, and spot checks utilizing independent labs including TSL Laboratories in Saskatoon, SK and 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 San Gold Corporation at 1-800-321-8564 or visit www.sangoldcorp.com.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.