San Gold Reports 2013 Production Results

WINNIPEG, MANITOBA--(Marketwired - Jan 23, 2014) - San Gold Corp. (TSX:SGR)(OTCQX:SGRCF) today announced preliminary results of operations at its Rice Lake Mining Complex in Manitoba, Canada for the fourth quarter and full year ended December 31, 2013.

Fourth Quarter 2013 Preliminary Operating Results

The Company produced 15,118 ounces of gold in the fourth quarter, bringing full year production to 75,218 ounces, consistent with the Company's full-year guidance of between 75,000 and 85,000 ounces. The operation milled 148,042 tons in the quarter at an average daily throughput of 1,609 tons per day and mined 144,165 tons of ore at an average daily rate of 1,567 tons per day. Mill recovery was 92.7% and milled grade was 3.78 grams per tonne. The Company ended the year with approximately 4,000 tons in surface stockpiles.

"2013 was a transitional year for San Gold. While I am disappointed that we did not achieve higher grades during the quarter due to problems with sequencing of stoping activities we did achieve our overall guidance for gold production. On balance we made significant progress during the year towards integrating our Rice Lake operations and developing the underground infrastructure to support the addition of more stoping areas thereby providing better opportunity in future to blend ore zones and add incremental tonnage. During the fourth quarter we successfully developed into the new 710 HW ore zone on 26 Level in Rice Lake where we have begun mining and expect to see higher grade material from this zone in the coming months. In addition we have advanced our development workings on 16 Level underneath the current Hinge workings and we are now positioned to better define the down dip extensions of these zones and add additional stoping areas to the mining mix as the year progresses," said Ian Berzins, San Gold's President, CEO and Chief Operating Officer.

The Company is forecasting production of between 80,000 and 85,000 ounces of gold in 2014 at cash costs of $800 to $900 per ounce. The Company is planning capital expenditures of approximately $36 million related to its underground capital development, definition drilling and investment in property, plant and equipment, a significant reduction compared with capital expenditures of approximately $58 million in 2013. Surface drilling will be largely curtailed and underground drilling will be focused on supporting production and upgrading our large mineral resource. The Company remains well positioned to take advantage of the recent upswing in the Canadian dollar price of gold.

About San Gold

San Gold is an established Canadian gold producer, explorer, and developer that owns and operates the Rice Lake Mining Complex near Bissett, Manitoba. The Company employs more than 420 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".

For further information on San Gold, please visit www.sangold.ca.

Cautionary Note

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.