Mr. Tim Friesen reports

KERR MINES AND SAN GOLD MAIL SPECIAL MEETING MATERIALS TO APPROVE ARRANGEMENT

San Gold Corp. and Kerr Mines Inc. have mailed their joint management information 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 Nov. 6, 2014.

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 by San Gold by way of a statutory plan of arrangement. The arrangement is being proposed under, and is subject to the terms and conditions of, an arrangement agreement dated Aug. 19, 2014, between Kerr Mines, San Gold and 8982805 Canada Ltd., as amended. Assuming the arrangement becomes effective, holders of Kerr Mines shares will receive three common shares of San Gold 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, on the Kerr Mines website or on SEDAR.

In addition, further to a press release of Kerr Mines dated Aug. 27, 2014, announcing the terms of a best efforts subscription receipt 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 million subscription receipts at a price of 10 cents per subscription receipt to raise gross proceeds of up to $10-million. Each subscription receipt will automatically convert, on the satisfaction or waiver of all conditions precedent to the arrangement and certain other ancillary conditions, into units of San Gold 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. Each whole warrant will entitle the holder thereof to purchase one San Gold share at a price of 13 cents at any time prior to the date that is 24 months from the satisfaction of the release conditions.

In addition, Primary Capital Inc. has the option to sell up to an additional 30 million subscription receipts at a price of 10 cents per subscription receipt for aggregate proceeds of up to $3-million, 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 Nov. 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.

We seek Safe Harbor.