Mr. Greg Gibson reports

KERR MINES ANNOUNCES $5 MILLION NON-BROKERED PRIVATE PLACEMENT AND A $10 MILLION BROKERED SUBSCRIPTION RECEIPT FINANCING

Kerr Mines Inc. intends to complete a proposed private placement offering of up to 16,666,667 units of the company at a price of 30 cents per unit for gross proceeds of up to $5-million. Each unit will comprise one common share and one-half of one common share purchase warrant, each warrant entitling the holder thereof to acquire a common share at a price of 39 cents per share for a period of 24 months from the date of issuance.

Kerr is also pleased to announce the terms of a best efforts subscription receipt financing to be completed in connection with the company's proposed business combination with San Gold Corp. Primary Capital Inc., together with a syndicate including Northcrest Capital Ltd., will act as agents in the financing.

Pursuant to the financing, Kerr will issue up to 33,333,333 subscription receipts at a price of 30 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 transaction and certain other ancillary conditions into units without any further consideration on the part of the purchaser immediately prior to effecting the transaction. Each unit shall consist of one common share and one-half of one warrant. Each whole warrant will entitle the holder thereof to purchase one common share at a price of 39 cents at any time prior to the date that is 24 months from the satisfaction of the release conditions.

In addition, Kerr has granted the agents an option to sell up to an additional 10 million subscription receipts at a price of 30 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.

The gross proceeds from the financing will be held in escrow pending delivery by the company and the agents of a joint release notice indicating that release conditions, including the conditions precedent to the transaction, have been satisfied or waived in accordance with the terms of the arrangement agreement between the company and San Gold, whereupon the units of Kerr will be issued to the purchasers, the net proceeds of the financing will be paid to the company and the cash commission (as discussed below) will be paid to the agents.

In the event the release notice is not provided on or before Dec. 31, 2014, the gross proceeds of the financing shall be returned to the purchasers, pro rata (together with all accrued and actual interest earned thereon), and the subscription receipts shall be automatically cancelled.

The agents will be paid a cash commission by the company equal to 6 per cent of the gross proceeds of the financing.

Proceeds of the offering and the financing will be used for general working capital purposes. The closing of the offering is anticipated to take place on or about Sept. 12, 2014, and the closing of the financing is anticipated to take place in one or more tranches, with the first tranche expected to occur on or about Sept. 18, 2014 (or such other date as the company and the agents 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.