Gold mining producer San Gold (SGR.TSXV) reported that development towards the 007 zone has begun from the Hinge decline. New surface exploration drilling results have continued to encounter high grade gold intercepts further validating the 007 discovery. The Canadian-based gold mining company announced on November 23, 2009 the initial discovery of the 007 zone - which is located approximately 2 kilometers to the northeast of San Gold’s operating Rice Lake gold mine and mill. The zone is also located approximately 600 meters southeast of the Hinge project - one of Canada’s highest-grade gold discoveries in years.

The highlight of the results from the Canadian gold mining company was the deepest intercept, drill hole # CD-09-111, which yielded 52.5 grams per tonne (g/t) of gold over 2.0 meters at over 300 meters below surface. In addition, San Gold stated that the results of this series of drill holes are a product of the company’s progress in establishing dimensions and continuity of the 007 zone subsequent to the November 20, 2009 announcement of high grade discovery hole CD-09-007, which yielded 1,788 g/t of gold over 2.1 meters.

San Gold went on to provide further details about the 007 zone, which has now been drill tested over an approximate 200 meter strike length and to depths of greater than 300 meters. The gold mining company stated that the zone “remains open along strike to the north-east and to the south-west as well as at depth and to surface as all holes except for #008 encountered veining and mineralization. The 007 zone dips steeply to the north-northwest and is made up of quartz and carbonate veins containing gold and pyrite mineralization. ” Furthermore, the 007 zone is also fully accessible by road and from the Hinge Mine decline.

In terms of existing and future developments at the 007 zone, San Gold reported in the first week of January mobilization of mining contractor Cementation occurred and is advancing approximately 20 feet per day. This work continues to progress. This first access drift is roughly 550 meters long and the gold mining company expects it to reach the 007 zone late in the second quarter of 2010.

These results are the latest in a series of high-grade gold intercepts within several ore discoveries by San Gold’s geological team led by CEO Dale Ginn. Commenting on the results, the Canadian gold mining CEO stated that “It is truly astonishing to be part of a team that has not only such a high discovery rate, but also has the ability to pull the trigger and begin development of these high grade zones within months of the first drill holes. Our exploration and mining teams continue to raise the bar and it will be interesting to see if we can continue this rapid pace of discovery and development into the future. Certainly, the vast geometry of the hanging wall volcanic rocks provides the volume and targets necessary for future discoveries within a few kilometers from our mill.”

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 morning trading shares of SGR.TSXV were up $0.04 at C$3.49, while the gold price traded lower by $3.41 to $1,110.90 per ounce.