San Gold Corp Com (NASDAQOTH:SGRCF)

CAPS Rating: 1 out of 5

Recs

1
Player Avatar dantefromsomm (< 20) Submitted: 11/14/2009 12:31:51 PM : Outperform Start Price: $2.99 SGRCF Score: -181.61

First Operational Profit
2009-11-13 15:19 ET - News Release
BISSETT, MB, Nov. 13 /CNW/ - (SGR: TSX-V) San Gold has released its financial results for the third quarter of 2009, which have been prepared on the basis of available information up to Nov. 13, 2009. To review the complete interim unaudited financial statements and associated management discussion and analysis, which should be read in conjunction with the most recent audited annual financial statements, please visit the company's website or SEDAR.

Mr. Dale Ginn, Chief Executive Officer reports record third quarter revenue of $8,844,634 and first ever operating profit.

The Company transitioned to commercial production in its accounting for activities at the Hinge mine this quarter. In part this was responsible for the net income from operations of $0.2 MM - this is the first time the Company has reported operating income which is a significant milestone for the Company and is the beginning of what management expects will be improved performance in the future. The increased level of Gold in process inventory of $7.5 MM compared to $4.7 MM at December 31, 2008 and $3.0 MM at the same time last year is a result of the increasing level of production activity through the period. The Company has 4,484 ounces of salable gold in inventory that was shipped in the period immediately subsequent so will be recorded as part of Q4 revenue.

Operations

----------

On a year to date basis San Gold has achieved an LTA (lost time accidents) frequency of 1.44 representing an order of magnitude improvement year over year and is demonstrative of the operational focus on a safe and productive work environment. A new Company record for milling activity in a month was set in September with over 24,000 tons or 794 tons per day for the month and 582 tons per day for the quarter taken as a whole. Development continued at an aggressive pace at the Hinge and Rice Lake mines with 2,500 feet of level and decline development having been completed during the quarter. Projects completed during the quarter included the installation of a new transformer and power distribution upgrade, Hinge ventilation raise including surface building and heaters and the installation of a new 67 person camp, increasing current camp capacity to 180 persons.

Exploration

-----------

The Company drilled 72,740 feet underground during the quarter and 55,364 feet from the surface. This significant surface and underground drilling continues to confirm the geologic model of the Hinge in what is proving to be a predictive model in identifying mineralization in the surrounding area; most notably at the Cohiba and L-13 areas where plans are underway to determine feasibility. The L-13 zone was discovered during the quarter and of special significance is its proximity to both the Rice Lake mine workings and to the Hinge decline. Within the Rice Lake mine, the Deep West zone was discovered - a zone containing a very high sulphide content that is not constrained by traditional mine unit diabase rocks, and was encountered while looking for hinge-like targets at depths below 5,000 feet. Drilling continues to focus on specific high grade targets within close proximity to existing infrastructure. Construction of a new core-handling facility began during the quarter and is expected to help alleviate a backlog of over 30,000 feet of unlogged drilled surface core.

Financial

---------

The Company recognized record revenue during the quarter ended September 30th, 2009 of $8,844,634 on sales of 8,398 ounces of gold. This compares to revenue of $2,096,521 on sales of 2,276 ounces in the same quarter last year. For the year to date the Company has recognized revenue of $16,088,544 on sales of 15,004 ounces compared to sales of $5,490,621 on sales of 6,046 ounces in the same period last year. The Company reported a net loss of $4,983,566 ($0.02 per share) for the three months ended September 30th, 2009 compared to a loss of $9,842,028 ($0.04 per share) for the comparable period in the prior year. For the year to date, the Company reports a loss of $24,253,063 ($0.10 per share) in comparison to a loss of $33,574,907 ($0.16 per share) for the first nine months of the prior year. The improvement in performance over the same period last year is mostly attributable to increases in revenue as the cost structure has a high component of fixed expense. Of note during the quarter is an operational profit - signifying what management expects is an inflection point towards higher levels of performance. There is a significant level of fixed expense in the operation so that as production from the Hinge comes on-line and the historical Rice Lake mine is further developed the resultant top line gains should translate directly to bottom line improvement.

<<
Interim Consolidated Statements of Operations and Deficit

THREE MONTH PERIOD ENDED NINE MONTH PERIOD ENDED
SEPT 30 SEPT 30 SEPT 30 SEPT 30
2009 2008 2009 2008
-------------- -------------- -------------- --------------
REVENUE $ 8,844,634 $ 2,096,521 $ 16,088,544 $ 5,490,621

OPERATIONS
Operations 6,525,833 6,518,694 22,578,703 23,789,430
Asset
retirement
accretion 37,910 34,396 113,728 103,188
Amortization
of property,
plant and
equipment 487,732 507,996 1,394,932 1,732,119
Depletion of
mineral
properties 1,544,290 318,914 2,648,131 920,981
-------------- -------------- -------------- --------------
LOSS/(PROFIT)
FROM OPERATIONS (248,869) 5,283,479 10,646,950 21,055,097

Exploration 2,646,155 2,302,189 5,375,503 6,038,348
General and
administrative 1,172,674 1,344,576 4,697,718 4,133,378
Accretion of
convertible
debentures 39,806 34,506 119,419 228,008
Amortization
of financing
fees 50,029 69,119 150,087 235,785
Royalty
expense 2,446,795 1,967,700 6,382,211 5,903,099
Interest
expense 284,014 150,562 874,119 800,264
Share-based
compensation 1,111,060 893,765 3,204,793 2,289,008
-------------- -------------- -------------- --------------
LOSS BEFORE
OTHER REVENUE 7,501,664 12,045,896 31,450,800 40,682,987

OTHER REVENUE
Indemnification
fee 63,788 63,788 191,364 191,364
Interest income 2,454,310 2,140,080 7,006,373 6,916,716
-------------- -------------- -------------- --------------
LOSS AND
COMPREHENSIVE
LOSS FOR THE
PERIOD 4,983,566 9,842,028 24,253,063 33,574,907

DEFICIT -
BEGINNING OF
THE PERIOD (141,442,383) (104,142,508) (121,011,395) (80,309,943)
Share issue
costs - - (1,236,701) (99,686)
Expired
warrants - - 75,210 -
-------------- -------------- -------------- --------------
DEFICIT - END
OF THE
PERIOD $(146,425,949) $(113,984,536) $(146,425,949) $(113,984,536)
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
LOSS PER
COMMON SHARE:
Basic &
diluted
(Note 16) $ (0.02) $ (0.04) $ (0.10) $ (0.16)
-------------- -------------- -------------- --------------

Member Avatar dantefromsomm (< 20) Submitted: 11/23/2009 9:21:35 AM
Recs: 0

San Gold Drills 1787 g/tonne Gold Over 2.1 Meters at New "007" Discovery
BISSETT, MB, Nov 23, 2009 (MARKETWIRE via COMTEX) -- Dale Ginn, CEO of San Gold Corporation (SGR), is pleased to report that a new high grade gold occurrence christened the 007 Zone has been discovered by surface diamond drilling and is located approximately 600 meters to the southeast of the Hinge Mine. Drill hole #CD-09-007 encountered 1787.7 g/tonne (52.20 oz/ton) over 2.1 meters (6.9 ft) at 200 meters (660 feet) below surface in a continuous quartz-carbonate vein containing abundant visible gold throughout. Results from this hole are summarized below but due to the extremely high grade nature of this intersection, an accompanying table is also provided in order to present each individual assay interval within the geologically defined mineralized boundaries. The first hole drilled in this area -- CD-09-001 is also reported below and is located above and to the east of hole #CD-09-007. The locations of the above intersections and of the remaining holes with pending assay data are displayed in the longitudinal section provided within the graphical version of this press release.

Hole # .......From .......To ...........Length ........Gold g/tonne .....Zone
.....................................................(oz/ton)
--------- ...------- ....------- ....------------- ...-------------- ....-----
CD-09-007 ...290.3 m ....292.4 m ....2.1 m (6.9 ft) ...1787.7 (52.20) .... 007
CD-09-001 ...294.0 m ....295.6 m ....1.6 m (5.3 ft) ... 2.4 ..(0.07) .... 007

Distribution of grade within CD-09-007:
From ............To .......Length ...Gold ..g/tonne (oz/ton) .......Rock Type
..................................Assay
-------- .....-------- ....------ ...----------------------- ..----------------
290.30 m .....290.84 m ....0.54 m ...........0.3 ....(0.01) ....Qtz Vein, Py
290.84 m .....291.36 m ....0.52 m ........1691.4 ...(49.39) ....Qtz Vein, Py, VG
291.36 m .....291.79 m ....0.43 m ........6465.4 ..(188.79) ....Qtz Vein, Py, VG
291.79 m .....292.40 m ....0.61 m .........200.7 ....(5.86) ....Qtz Vein, Py, VG

Dale Ginn, CEO of San Gold stated: "Our exploration team led by Bill Ferreira has made its fourth high grade discovery near surface in close proximity to our mill in the past 18 months and its third discovery this year. Hole #007 is the highest grade intersection that I can recall in the Rice Lake Belt, rivaling the best holes ever drilled in the neighboring Red Lake camp and certainly eclipses anything we have drilled to date in the Hinge zone. This discovery is again testimony to the solid and unique geological thinking that our exploration team has undertaken as well as a credit to the time tested success that drilling near past and producing mines brings."

Assays are pending from intersections of the same zone in four holes: CD-09-002, 003, 004 and 005. Hole #006 has not yet been logged while hole #008 was shut down early due to hole deviation from the intended target. This zone remains open along strike to the north-east and to the south-west as well as at depth and to surface. The 007 zone dips steeply to the north-northwest and is made up of quartz and carbonate veins containing gold and pyrite mineralization. The dominant deposit control appears to be structural as with the previous three deposits (Hinge, Cohiba and L13); however the lithology is slightly different in that this deposit occurs at or near an intermediate-mafic contact. Strong chloritic alteration of the mafic unit is observed at the footwall contact immediately below the mineralized veining, the strike length of this contact is currently unknown. A second diamond drill has been moved from the Cohiba area in order to assist in grid drilling this zone. The 007 zone is located approximately 2 kms to the north-east of San Gold's operating Rice Lake mine and mill, is fully accessible by road and is potentially accessible from the Hinge Mine decline.

This program was carried out under the supervision of W.S. Ferreira, P.Geo., the Qualified Person for this project under National Instrument 43-101. The drill core was split, with half sent to TSL Laboratories in Saskatoon, SK and fire assayed with an AA and gravimetric finish. Whole metallic assays were performed on samples containing visible gold. Check assays were also performed on pulps and rejects by both TSL and by 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.

Graphical Version of Press Release:

http://sangoldcorp.com/assets/files/091123_007Discovery_LoRes.pdf

San Gold Corp.

1-800-321-8564

www.sangoldcorp.com

email unsubscribe

Featured Broker Partners


Advertisement