Revision in line with expectations

San Gold announced the results of its updated resource estimate on its Rice Lake

project on September 3. The new estimate includes the company's Rice Lake, Hinge

and SG#1 mines, as well as the 007, Cartwright, SG2/3 and Cohiba zones. Overall,

estimated ounces (in all categories) dropped by about 14% (Table 1) due primarily

to a reduction in grade of the 007 Zone, in line with our expectations. The revised

estimates have little impact on our forecasts and valuation of San Gold, and we are

maintaining our

BUY rating and 12-month price target of C$5.40/share.