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San-Gold Corp. sees surge in gold production

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San Gold Corp. took some write-downs on depletion of mineral properties but otherwise the Manitoba gold miner achieved record gold production, record cash flow and record revenue.

The company that owns 100 per cent of the Rice Lake Mining Complex in Bissett, approximately 235 kilometres northeast of Winnipeg, produced 86,506 ounces of gold in 2012, a 16 per cent increase over 2011 production of 74,277 ounces.

Revenue for the year was $142.1 million on sales of 85,690 ounces of gold at $1,659 per ounce, a 25 per cent increase from 2011 revenue of $114.1 million on gold sales of 71,684 ounces of gold.

San Gold’s costs per ounce of gold sold was up slightly from $848 to $855 per ounce in 2012

The company reported a loss of $13.2 million for 2012, compared with a loss of $5.1 million in 2011. It said the change was due in large part to the increased rate of depletion of mineral properties expense after the new resource and reserve estimate was released during the second quarter.

Newly appointed CEO Ian Berzins, said in a prepared statement, "The company continues to make significant progress in building the Rice Lake Mining Complex. We have increased production year over year while improving cash flow from operations."

He said the company’s recently completed $50 million convertible debenture offering will ensure that the company is well funded to finance its development plan.

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