BISSETT, MB, April 5 /CNW/ - George Pirie,
President and CEO of San Gold Corporation, (TSX: SGR) (OTCQX: SGRCF) is pleased
to announce preliminary first quarter production and development results from the
Rice Lake Project in Manitoba, Canada.
"Ore production from the company's two mines
exceeded current mill capacity through the last half of the quarter, finishing
the period with more than two weeks of ore stockpiled," said Mr. Pirie.
"This is an important milestone for achieving steady-state production at
the Rice Lake Project."
For the quarter ended March 31, 2011, San Gold
milled and processed a record 82,792 tons, including both production and
development ore, at a head grade of 7.1 g/tonne to
produce 14,690 oz gold. San Gold mines produced 102,000 tons, an average of
1,133 tons per day, to end the quarter with nearly 20,000 tons of ore
stockpiled ahead of the mill on surface (representing an additional estimated
3,500 oz gold).
Mill operations averaged 920 tons per day and achieved
a recovery rate of 93.9%. Over 3,840 meters (12,600 ft) of primary development
was completed during the quarter at the Rice Lake Mine, Hinge Mine, 007
Project, and the new L10 access. Thirteen diamond drills were in operation
during the quarter from both underground and surface stations. Additional
drills are to be deployed during the second quarter.
Modernization of the 26 Level (4,000 ft) of the Rice
Lake Mine continued in order to provide fully mechanized access for mining and
haulage as well as to provide drill platforms for the exploration of the
potential down-dip extensions of the Hinge, L10, L13 and 007 zones at depth. Drill stations are being prepared on the 16 Level (2,400 ft)
in order begin drilling downward extensions of these zones as well.
Development at the Hinge Mine continued with the main
decline, diamond drill platforms and initial development towards the newly
discovered L4 and L10 zones. The 007 Zone was accessed from the Hinge Mine
during the quarter with initial bulk sampling completed and sill development
underway. Access from the Hinge Mine is well underway towards the L10 Zone,
where initial ore development is expected to begin in May.
Replacement and upgrade of the cone
crusher, scheduled for early April, combined with the new jaw crusher are
expected to increase mill capacity by 20 to 25 percent. These improvements are
expected to cause five days of downtime for the mill but should not
significantly affect second quarter results.
Major capital projects for the first quarter included:
- Replacement and upgrade of jaw
crusher to 150 hp Elrus.
- Completion of new central
maintenance facility.
- Commence mill capacity
expansion project in crushing and flotation circuits.
- Arrival of additional mobile
mining equipment.
- Continued
power distribution upgrade.
A total of 77,497 meters (254,251 ft) of diamond
drilling was completed with 43,840 meters (143,830 ft) originating from
underground stations and 33,657 meters (110,421 ft) from surface exploration.
Underground drilling at the Hinge Mine remains focused on the discovery and
delineation of the L4 and L10 zones which exhibit robust widths and grade below
and in close proximity to the Hinge mine workings. Underground drilling at the 007
Zone continues to be extremely successful in extending the 007 zones to the
east with consistent strong widths and grade.
Rice Lake Mine exploration drilling is concentrating
on defining extensions to the Hinge, L10 and 007 zones between 4,000 and 4,500
feet (1,220 m to 1,370 m) in close proximity to the 26 Level mine workings.
This target area is approximately 1,000 meters (3,280 feet) down dip and below
the lowest surface drill intercepts of the Hinge, L10 and 007 zones. As well,
this drilling is expanding on the large 84 and 98 vein systems located above
the 26 Level. Surface drilling focused on the 007, 007 East and Emperor Zones
as well as numerous new targets within a 5 km radius of the Rice Lake Mine.
"San Gold management is pleased with first quarter
2011 mining results that are in line with 2011 gold production guidance of
80,000 ounces and we are looking forward to an exciting second quarter. We
anticipate a healthy news flow on the exploration front in keeping with the
outstanding performance of our exploration and mine geologists," said Mr. Pirie.
For further
information contact San Gold Corporation at 1-800-321-8564 or visit www.sangold.ca