Emerging gold producer, San Gold (SGR.TSXV), reported that surface exploration drilling has discovered a new gold mineralized zone known as L-13. The newly reported intercepts are located approximately 500 meters to the west of the company’s Hinge project, one of Canada’s highest-grade gold discoveries in years, and 1 km to the northeast of San Gold’s Rice Lake mine and mill. According to the company “these zones are also located directly under the existing Hinge zone decline access at approximately the half way point between the decline collar and the Hinge zones under current development. The lower zone or L-13 #2 appears to host the strongest mineralization of the zones to date as highlighted by the deepest drill hole #KL-09-29 which encountered 45 g/tonne (1.31 oz/ton) over 3.1 meters (10.2 ft) at 275 meters (900 ft) below surface.”

The L-13 zones have been confirmed by several drill holes, and have identified at least three “stacked” lenses to date within a 300 meter strike length. San Gold went on to say that surface drilling continues to expand the zones which are open along strike and to depth, and that the L-13 area represents the third high grade discovery made within the past 18 months using a geological targeting model that has identified a repetitive structural pattern. The first of these zones, the Hinge Zone, was discovered in April 2008 and is now entering production following a successful bulk sampling program completed in July, 2009, and the second zone is the Cohiba zone located 500 meters to the east of the Hinge zone.

The company also added that numerous additional targets nearby have been located using the same structural model and are being drilled or are scheduled to be drilled over the next few months. An estimated 10 to 20 kilometers of San Gold lands consisting of identical proposed structures remain unexplored currently. The company has designed exploration and development drifts from the existing Hinge decline in order to access the Cohiba zone as well as to access the L-13 zones, and additionally to join the Hinge decline with the upper levels of the company’s Rice Lake mine. According to San Gold, “this new underground development will allow independent access to the upper levels of the Rice Lake mine, which contain numerous targets that were identified by previous operators. Synergies with regards to exploration, ventilation, emergency escape ways, and ore haulage are also being considered between Rice Lake and surrounding zones as a result of the L-13 discovery.” The Hinge, Cohiba, and L-13 zones are each located northeast of Rice Lake, and are fully accessible by the company’s private road, and lie within the company’s fully permitted mine lease.

Mr. Ginn and his exploration team continue to discover higher grade gold ore within the confines of the existing infrastructure at Rice Lake. These discoveries near the company’s existing mill have the potential to increase San Gold’s gold production without any significant CAPEX by feeding this high-grade material through its existing mill. San Gold, who has been drilling and defining one of Canada’s highest-grade gold discoveries in years, the Hinge, continues to raise its profile in the gold mining sector. Volume is picking up as institutional investors have increased their exposure to San Gold. The company’s share price is up 146% this year as CEO and geologist, Dale Ginn, continues to deliver on his geological interpretation - his company is ramping up production while continuing to drill off Canada’s newest high-grade gold camp, a land package that continues to demonstrate significant blue-sky potential.

San Gold is a Canadian-based mining company focused on gold exploration and mining in the Rice Lake Greenstone Belt in SE Manitoba, Canada. San Gold owns or controls nearly 15,000 hectares of exploration lands along the Rice Lake Greenstone Belt of SE Manitoba. In mid-day trading shares of SGR.TSXV were up $0.01 at C$2.94, while the gold price was up $2.23 to $1,093.19 per ounce.