[Near the end of Dundee's Research report, they offer this conclusion which tells us very plainly what we can expect from the boys at Dundee over the coming weeks and months. Dundee has been involved on the selling side for the past while, and I expect that this is now going to turn around. That will be a welcome change and hopefully will more than counter the selling that is still going on as various other funds are still unloading their metals assets in order to access cash. JMHO]

CONCLUSION - EXPLORATION POTENTIAL AND PRODUCTION GROWTH PROVIDE BUYING OPPORTUNITY

We are initiating coverage on San Gold Corporation with a BUY rating, High Risk, and a 12-month price target of $2.00.

San Gold is an emerging producer with demonstrated exploration potential. The company expects to see a surge of production as areas within the Rice Lake and SG #1 mines and an initial bulk sample from the Hinge Discovery are processed during Q4, 2008. Exploration continues to produce exciting developments, with recent high-grade results from the Hinge Discovery and underground zones adjacent to the Rice Lake Mine.

Following the recent financing, San Gold is well-funded to conduct exploration and ramp up production at its mining operations. The company expects to use proceeds from the flow-through financing to continue exploration. With the expected production profile, we project that the company has enough cash to continue operations until the mine becomes cash-flow positive in 2009, with a sufficient buffer to cover cost overruns or moderate production delays.

San Gold's fundamentals have remained strong, but its share price has weakened, providing a buying opportunity. Although San Gold's share price has held up better than most of its peer group, it is well off its highs from early in the summer. We believe this share price weakness has provided an opportunity to buy San Gold shares.