Mine Operations Review

Holt (see Operating and Financial Statistics – Holt Mine on page 12)
Production increased by 5% from Q2 2014 as a result of an increase in ore grade due to mining sequence.  For Q2 2015, mine cash cost improved by US$52 per ounce of gold sold from Q2 2014, due to the increased strength of the US dollar relative to the Canadian dollar. 

Cash margin from mine operations in Q2 2015 improved by $1.6 million or 19% when compared to Q2 2014 due to an 11% increase in revenue, in conjunction with a 4% reduction in royalty costs.

Holloway (see Operating and Financial Statistics – Holloway Mine on page 13)
Both throughput and ore grade increased by 22% and 26%, respectively, from Q2 2014, resulting in a 55% increase in production from 4,893 ounces of gold in Q2 2014 to 7,582 ounces in Q2 2015.

In Q2 2015, cash margin from mine operations increased 3 times or by $2.1 million over Q2 2014 as a result of the increased throughput and ore grade.

Taylor Project
Underground development activities started at Taylor during Q1 2015 after the decision was made to advance the project into commercial production by the end of 2015. During Q2 2015, the Company commenced with the procurement of $7.2 million of mining equipment and initiated a recruitment campaign for miners to replace the current mine contractors for the project late this quarter. It is anticipated that ore mined during the pre-production period will be stockpiled and processed upon the receipt of the production closure plan. Applications for all permitting requirements, including the mine production closure plan, are currently underway.

Exploration Programs

Exploration activities during Q2 2015 continued to focus on the near mine targets, specifically exploring for strike and depth extensions of the known mineralized zones and also exploring for potential repetitions and satellite zones situated near the operations. In Q2 2015, SAS drilled a total of 11,400 metres of surface core and an additional 10,000 metres of underground drilling. The majority of surface drilling activities were focused on Phase 2 evaluation of Zone 4 West Extension, on the Tousignant West and Mattawasaga west pit extensions on the Holt property. At Holloway surface drilling targeted the down-dip extension of Blacktop mineralization and at Hislop North drilling continued to target the southerly strike extension of the "147 Zone style" mineralization. The majority of the underground drilling took place on the 710m and 925m Sub-levels at Holt targeting the Zone 6 extension, and on the 945m Sub-level at Holloway to evaluate the easterly strike potential of Smoke Deep (See press release dated August 5, 2015 available under the Company's profile on www.sedar.com or on the Company's website at www.sasgoldmines.com.).

Capital Resources

SAS generated $1.8 million in net cash flow in Q2 2015 as compared to a cash outflow of $2.6 million in Q2 2014, despite a 7% decline in gold price. Working capital at the end of quarter was $17.2 million , an increase of $7.5 million from working capital of $9.6 million at the end of 2014. The Company maintained a cash position of $26.8 million at the end of the quarter and also has a US$10.0 million revolving credit facility available and a $7.0 million capital lease facility to be used for the procurement of mining equipment for use at Taylor . In conjunction with the expected cash flows from operations, the Company is well positioned to finance its planned sustaining capital programs, the growth capital required for Taylor and to conduct its planned exploration programs for 2015.

Qualified Person

Production at Holt and Holloway, processing at the Holt Mill, and mine development at Taylor are conducted under the supervision of Marc-Andre Pelletier , P.Eng., the Company's Vice-President and General Manager of Operations.

Exploration activities on the Company's various mineral properties, including the drilling program at Taylor are under the supervision of Mr. Doug Cater , P. Geo., the Company's Vice-President of Exploration.

Messrs. Pelletier and Cater are qualified persons as defined by NI 43-101, and have reviewed and approved this news release.

The following abbreviations are used to describe the periods under review throughout this release.

Non-GAAP Measures

The Company has included the following non-GAAP performance measures: adjusted net earnings; operating cash flow per share; net cash flow; average realized price per ounce of gold sold; total cash cost and all-in sustaining cash costs per ounce of gold sold; cash margin from mine operations; cash margin per ounce of gold sold; and mine-site cost per tonne milled throughout this press release, which do not have standardized meanings prescribed by International Financial Reporting Standards ("IFRS") and are not necessarily comparable to other similarly titled measures of other companies due to potential inconsistencies in the method of calculation. The Company believes that, in addition to conventional measures   prepared in accordance   with   IFRS, the Company and certain investors use this information to evaluate the Company's performance. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Refer to pages 6 –11 of this press release for a discussion and the reconciliation of these non-GAAP measurements to the Company's Unaudited Q2 2015 Condensed Interim Financial Statements ("Financial Statements").

The unaudited Balance Sheets, Statements of Operations and Statements of Cash Flows for the Company for the three months and six months ended June 30, 2015 , can be found on pages 14 – 16 of this press release.

To review the complete unaudited Condensed Interim Financial Statements and the Q2 2015 Management's Discussion and Analysis, please see the Company's SEDAR filings under the Company's profile at www.sedar.com or the Company's website at www.sasgoldmines.com.

About SAS

SAS (operating as "SAS Goldmines"), is a gold mining and exploration company with an extensive land package in the Timmins mining district, north-eastern Ontario , which lies within the Abitibi greenstone belt, the most important host of historical gold production in Canada .

SAS owns and operates the Holt and Holloway mines and is also advancing its Taylor Project into commercial production. The Company is conducting various exploration programs across 120km of land straddling the Porcupine-Destor Fault Zone.

FORWARD-LOOKING INFORMATION

This news release contains forward-looking information and forward-looking statements (collectively, "forward-looking information") under applicable securities laws, concerning the Company's business, operations, financial performance, condition and prospects, as well as management's objectives, strategies, beliefs and intentions. Forward-looking information is frequently identified by such words as "may", "will", "plan", "expect", "estimate", "anticipate", "believe", "intend" and similar words referring to future events and results, including the Company's production and cash cost guidance for 2015; the advancement of Taylor towards production, the timing thereof, and Taylor's potential 2015 production level; the Company's exploration programs in 2015; and the sufficiency of the Company's capital resources to carry out its planned objectives. Also, Mineral Reserves and Mineral Resources are considered to be forward-looking information as they involve the assessment, based on certain estimates and assumptions, that such Mineral Reserves and Resources can be economically produced in the future.

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 expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, uncertainties relating to the interpretation of the geology, continuity, grade and size estimates of the mineral reserves and resources; unanticipated operational or technical difficulties which could escalate operating and/or capital costs and reduce anticipated production levels; the Company's dependence on key employees and changes in the availability of qualified personnel; fluctuations in gold prices and exchange rates; insufficient funding or delays or inability to raise additional financing on satisfactory terms if required; operational hazards and risks, including the inability to insure against all risks; changes in laws, regulations and the risks of obtaining necessary licenses and permits; changes in general economic conditions and changes in conditions in the financial markets. Such forward looking information is based on a number of assumptions, including but not limited to the level and volatility of the price of gold, the accuracy of reserve and resource estimates and the assumptions on which such estimates are based, the ability to achieve capital and operating cost estimates, the ability of the Company to retain and attract qualified personnel, the sufficiency of the Company's cash reserves and operating cash flow to complete planned development and exploration activities, the availability of additional financing on acceptable terms if and as required and the level of stability of general business and economic conditions. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking information and accordingly, readers are cautioned not to place undue reliance on this forward-looking information. SAS does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws. A description of these risks and uncertainties are can also be found in the Company's Annual Information Form obtained on SEDAR at www.sedar.com.

SUMMARIZED OPERATING AND FINAL INFORMATION

NON-GAAP MEASURES

Adjusted net earnings (loss)Adjusted net earnings (loss) is a non-GAAP performance measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS, and may not be comparable to information in other gold producers' reports and filings. Adjusted net earnings (loss) is calculated by removing the gains and losses, resulting from the mark-to-market revaluation of the Company's gold-linked liabilities and foreign currency derivative contracts, one-time gains or losses on the disposition of non-core assets, periodic adjustments to the Company's asset retirement obligations, and expenses, asset impairment gains or losses and significant tax adjustments not related to current period's earnings, as detailed in the table below. The Company discloses this measure, which is based on its Financial Statements, to assist in the understanding of the Company's operating results and financial position.