Fact Sheet | Company Presentation

TSX:KER 0.12 VOL:  12.69K


US:KERMF 0.08 VOL:  2.69K

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Winnipeg, Manitoba and Toronto, Ontario – October 10, 2014 – San Gold Corporation (TSX: SGR) (OTCQX: SGRCF)(“San Gold”) and Kerr Mines Inc. (“Kerr Mines”) (TSX: KER)are pleased to announce that they have mailed their joint management information circular (the “Circular”) and related proxy materials to their respective shareholders in connection with the special meeting of shareholders of each of San Gold and Kerr Mines to be held on November 6, 2014 (the “Meetings”).

At the Meetings, shareholders will be asked to approve, among other things, the previously announced acquisition of all of the common shares of Kerr Mines (“Kerr Mines Shares”) by San Gold by way of a statutory plan of arrangement (the “Arrangement”).  The Arrangement is being proposed under, and is subject to the terms and conditions of an arrangement agreement dated August 19, 2014, between Kerr Mines, San Gold and 8982805 Canada Ltd. (the “Arrangement Agreement”), as amended. Assuming the Arrangement becomes effective, holders of Kerr Mines Shares will receive three common shares of San Gold (“San Gold Shares”) for each Kerr Mines Share held.   The Circular contains, among other things, details concerning the Arrangement, the background to and reasons for the favourable recommendation of the Arrangement by the respective boards of directors of San Gold and Kerr Mines, the requirements for the Arrangement to become effective, the procedure for the exchange of Kerr Shares under the Arrangement for San Gold Shares, procedures for voting at the Meetings and other related matters. Shareholders are urged to carefully review the Circular and accompanying materials, which includes a copy of the Arrangement Agreement, as they contain important information regarding the Arrangement and its consequences to shareholders of both companies. A copy of the Circular is available on the San Gold website at www.sangold.ca, on the Kerr Mines website at www.kerrmines.com or on SEDAR at www.sedar.com.

In addition, further to a press release of Kerr Mines dated August 27, 2014, announcing the terms of a “best efforts” subscription receipt financing (the “Financing”) by Kerr Mines to be completed in connection with the Arrangement, San Gold and Kerr Mines have agreed to amend the terms of the Financing to provide that San Gold will undertake the Financing rather than Kerr. Pursuant to the Financing, San Gold will issue up to 100,000,000 subscription receipts (the “Subscription Receipts”) at a price of $0.10 per Subscription Receipt to raise gross proceeds of up to $10,000,000.  Each Subscription Receipt will automatically convert on the satisfaction or waiver of all conditions precedent to the Arrangement and certain other ancillary conditions (the “Release Conditions”) into units of San Gold (“Units”) without any further consideration on the part of the purchaser immediately prior to effecting the Arrangement.  Each Unit shall consist of one San Gold Share and one-half of one San Gold warrant (a “Warrant”).  Each whole Warrant will entitle the holder thereof to purchase one San Gold Share at a price of $0.13 at any time prior to the date that is 24 months from the satisfaction of the Release Conditions.

In addition, Primary Capital Inc. (the “Agent”) has the option to sell up to an additional 30,000,000 Subscription Receipts at a price of $0.10 per Subscription Receipt for aggregate proceeds of up to $3,000,000, exercisable at any time up to 48 hours prior to the date of the closing of the Financing.

It is anticipated that the proceeds of the Financing will be used for general working capital purposes.  The Financing is anticipated to take place in one or more tranches on or before November 6, 2014, or such other date as San Gold and the Agent may agree. Such closings are subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange (the “TSX”).

For further information on San Gold, please visit www.sangold.ca or contact: