GOLD STOCK NEWS - Shares of gold mining company, San Gold (SGR.TSXV), have been on a tear over the past year and today’s news demonstrates why it has been one of the best performing gold stocks in the sector over the past twelve months. This morning, San Gold announced an initial comprehensive NI 43-101 compliant resource estimate for both the Hinge Zone and the 007 Zone near the company’s flagship Rice Lake gold mine.

At the Hinge Zone, The report shows a total of 777,900 gold ounces with 239,200 ounces at a grade of 13.4 grams per tonne (g/t) in the measured and indicated category and 538,700 ounces at the same grade in the inferred category. While the Hinge Zone gold resource was roughly in-line with expectations, San Gold’s resource at the 007 Zone exceeded most analyst projections.

At 716,600 ounces, with 193,700 at a grade of 88.4 g/t in the measured and indicate category and 522,900 at a grade of 61 g/t in the inferred category, the 007 zone now represents a new area of high-grade ore that San Gold can feed into its existing mine infrastructure at Rice Lake. Unburdened by significant CAPEX requirements, the company should be able to add the 007 zone into its mine-plan and produce more ounces at lower cash costs.

The report was released along with recent results of San Gold’s current drilling program which has confirmed and considerably expanded the gold mining company’s previously announced 007 discovery. Results include intersections of 52.5 g/t gold over 2.0 meters.

Drilling is ongoing in an effort to establish the dimensions and continuity of the gold mining company’s 007 zone following its high-grade discovery there in November - which returned a cut of 1,788 g/t gold over 2.1 meters. The 007 zone is located 1.2 miles northeast of the San Gold’s Rice Lake mine and the mill and is fully accessible by road and from the Hinge decline.

The Hinge Mine is producing at a rate of 350 tons per day, while progress towards the 007 Zone from the Hinge decline is underway. The company expects initial development and bulk sampling to begin in the third quarter 2010.

CI Capital Markets analyst Eldon Brown raised his price target on shares of San Gold (SGR.TSXV) from C$4.70 to C$5.70 due to “ 007 Zone surprises” and reiterated the firm’s “Sector Outperform” rating.

Shares of SGR.TSXV were down $0.01 at C$3.63, while the gold price traded higher by $1.37 to US$1,118.33 per ounce.