San Gold Reports Record Q3 Gold Production of 27,084 oz

WINNIPEG, MANITOBA -- (Marketwire) -- 10/11/12 -- San Gold Corporation (TSX: SGR)(OTCQX: SGRCF) today announced preliminary results of operations at its Rice Lake Mining Complex in Manitoba, Canada for the quarter ended September 30, 2012.

Q3 Production Highlights

--  Record gold production of 27,084 ounces.
--  Mill production of 191,105 tons.
--  Mine production of 143,949 tons.

Third Quarter 2012 Preliminary Operating Results

San Gold produced 27,084 ounces of gold in the third quarter, bringing year-to-date production to 67,487 ounces. The operation milled a record 191,105 tons in the quarter at an average daily throughput of 2,077 tons per day, a 53% increase over the third quarter of 2011. Mill recovery was 93.3%. Milled grade was 5.21 grams per tonne which is slightly below the previous quarter.

"The quarterly milled grade and mine production reflect a slight delay in extracting ore from our higher grade stoping blocks. However, the Company remains on track to achieve our guidance of 95,000 to 105,000 ounces of gold in 2012," said San Gold President and Chief Executive Officer George Pirie.

Underground mine operations remain focused on developing an extensive mining complex that will facilitate access to the down dip extensions of the L10 and 007 deposits from the 16 and 26 Levels of the Rice Lake shaft infrastructure. This will allow the company to increase the number of working stopes in the Rice Lake Mine Complex and will also provide an ore handling infrastructure utilizing the Rice Lake shaft for ore generated from the L10 and 007 deposits. The company completed 1,632 metres of lateral development and 276 metres of vertical development during the quarter. The Company also completed a raise bore to improve ventilation capacity for mining operations.

About San Gold

San Gold is an established Canadian gold producer, explorer, and developer that owns and operates the Hinge, 007, and Rice Lake mines near Bissett, Manitoba, approximately 235 kilometres northeast of Winnipeg, Manitoba, Canada. The Rice Lake Project has a permitted, modern gold mill currently processing ore at a capacity of 2,500 tons per day, modern surface infrastructure including a licensed tailings management facility, and is connected to the Manitoba power grid system. The Company employs more than 400 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.

Contacts:

San Gold Corporation

George Pirie

President and CEO

Toll Free: 1 (855) 585-4653


San Gold Corporation

Manish Grigo

Director Investor Relations

Toll Free: 1 (855) 585-4653
info1@sangold.ca
www.sangold.ca