We continue to believe that improved production should allow the market to better focus on the

remarkable exploration success that the company is enjoying - success that we expect should result

in a larger and higher quality resource/reserve base than is presently quantified and a higher share

price. We are maintaining our BUY (Top Pick) rating on San Gold; however, given the realities of grade

dilution at the operation (see below),

we are lowering our 12-month price target slightly to C$4.80/share (previously C$5.00 /share).