Dale Ginn, CEO of San Gold Corporation (“San Gold”) and Richard Boulay, CEO of StrikePoint Gold Inc.(“StrikePoint Gold”)
(collectively, the “Parties”) are pleased to announce that San Gold and StrikePoint Gold have entered into a letter agreement
(the “Letter Agreement”) setting forth the terms and conditions of a transaction (the “Option”) whereby San Gold can earn a
50% undivided interest in the Strike Point property that lies adjacent and to the north and northwest of San Gold’s mining
lease that contains the Rice Lake Mine, the Cartwright deposit and the high grade gold Hinge Mine and Cohiba Zones. Pursuant
to the Letter Agreement the parties have agreed to negotiate a subsequent definitive option agreement (the “Option
Agreement”).
The Letter Agreement provides that San Gold shall pay StrikePoint Gold a refundable advance deposit (the “Advance Deposit”)
of $150,000 cash upon execution of the Letter Agreement. In addition, San Gold shall pay StikePoint Gold $50,000
cash on the first anniversary of the execution of the Letter Agreement and shall conduct $1,500,000 in exploration work on the
property over three years at a minimum rates of $400,000, $500,000 and $600,000 per year, respectively, to earn a 50% undivided
interest in the Strike Point property. The Advance Deposit shall be refunded by StrikePoint to San Gold in the event that
the Option Agreement is not executed by December 31, 2009 or such other date that is agreeable to both parties.
StrikePoint Gold will be the operator of the project subject to a standard joint venture operating committee structure. Strike-
Point Gold shall have the right to accelerate exploration by spending its own funds and an amount equal to such expenses
shall be added to San Gold’s work requirement for the year in which they are expended. When San Gold has earned its 50%
interest, both parties shall become working parties, each responsible for 50% of expenditures, subject to standard dilution provisions.
San Gold and StrikePoint Gold shall each have 90 days to remedy any shortfall to prevent dilution. Each Party to the
Option Agreement shall have a first right of refusal to purchase the other Party’s interest. San Gold and StrikePoint Gold will
agree that no Party shall purchase any common shares of the other Party without the approval of both boards of directors,
during the existence of the Option Agreement or for a period of two years following the termination of the Option Agreement or
ensuing joint venture agreement. The proposed Option Agreement between San Gold and StrikePoint Gold is a Reviewable
Transaction as defined in TSX
Venture Exchange Policy 5.3 since
Richard A. Boulay and Courtney
Shearer are directors and officers
of StrikePoint Gold and directors of
San Gold.
The Strike Point property consists
of twenty six claims covering 3595
hectares adjacent to the northwestern
boundary of San Gold's Rice
Lake gold mine and mill property at
Bissett, Manitoba, located a 3 hour
drive from Winnipeg. During 2008,
StrikePoint Gold conducted mapping
and prospecting activities on
the Strike Point property and added
six more claims to the original 20
claims to cover new showings to
the north. The Strike Point property
is underlain by Archean volcanic
rocks that are identical to or similar
to the hanging wall volcanic rocks
that host San Gold’s Hinge and
Cohiba zones. As well, an embayment of volcanic rocks extends northward across the regional Wanipigow Shear where it
contains mafic volcanics and interbedded iron formations that remain largely unexplored. More importantly, the hanging wall
volcanics of the southern part of the Strike Point property contain structural elements that are identical or similar to the structures
that host San Gold’s Hinge and Cohiba zones. Significantly, the Strike Point property contains the western 5 kms of a 10
km long faulted fold axis that extends eastward from Horseshoe Lake to the San Gold #1 mine. This important 10 km long
structure is considered to be a possible mineralization conduit for the multiple parallel Hinge Structures on the San Gold mining
lease.