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posted on Mar 02, 2010 03:30PM

San Anton Announces US$260M Net Cash Flow Base Case for Cerro Del Gallo Gold Heap Leach/Cil Project

TORONTO, ONTARIO--(Marketwire - March 2, 2010) - San Anton Resource Corporation (TSX:SNN)

Key scoping study outcomes:

- US$260M net free cash flow before tax (unadjusted for inflation) - post
capital expenditure payback

- US$82M estimated initial capital investment to be paid back in 2.25 years

- US$415 per ounce average life-of-mine operating cost after silver credits,

- Updated optimised pit results for combined heap leach/carbon-in-leach
processing of:

- 69.9Mt in-pit resource at 0.66g/t gold (Au) and 13.6g/t silver (Ag)

- 0.74:1 average strip ratio over 14 year mining life

- 4Mtpa initial processing rate, expanding to 5.5Mtpa

- US$900/oz gold/US$15/oz silver metal price assumptions

- Full feasibility study will now proceed for completion by last quarter

- 2011 current target for mining commencement - dependent on feasibility
study outcomes

San Anton Resource Corporation (TSX:SNN) is pleased to announce a highly encouraging US$260 million net free cash flow, US$415/oz production cost 'base case' scoping study finding for the Cerro del Gallo gold/silver project, part of the greater San Anton project in Guanajuato, Mexico.

This study represents a further advance on the indicative optimized pit and mine production schedule data released by the company in 2009, and incorporates independently verified capital/operating projections and assumptions.

The newly completed Cerro del Gallo scoping study tested the probability of economically developing part of the deposit to recover gold and silver via open pit mining and heap leach/carbon-in-leach ("CIL") processing.

Importantly, the scoping study is a 'base case' guide to the possible economic feasibility for the operation, using simple mining and processing techniques to generate significant cash flow within a short time frame.

Options to further optimise this 'base case' will be reviewed during a full feasibility study to take place over approximately the next 8 months. This will include options to further increase gold and silver recoveries.

The advanced status of the in-pit geological resource - 85% measured, 15% indicated - is a key positive factor enabling the company to progress planning with a high degree of confidence. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Pit Optimization Results

Mr. Tim Carew of Reserva International LLC in Reno, Nevada, USA, generated a series of open pit optimization studies using Gemcom Whittle Optimization software based on a heap leach/CIL flow sheet and representative costs for operations of a similar size and nature including mining costs of US$1.63/t for weathered and near surface material and US$1.93/t for all other rock types, processing costs of US$3.50/t heap leach, US$6.93/t CIL, US$0.68/t administration, plus transport and refining costs which are variable on a per ounce basis. Preliminary metallurgical recoveries (see Table 3) were assumed for each of three rock types based on the results of intermittent bottle roll tests.

At a gold price of US$900/oz and silver price of US$15/oz, resources within the pit were estimated at 69.9 Mt comprising 0.66g/t gold and 13.6g/t silver, or 1.49 million ounces of gold and 30.5 million ounces of silver (see Table 1). The conceptual strip ratio is 0.74:1. The pit optimization resources were incorporated into a preliminary mine and metal production schedule (see Table 2).

Table 1

Summary of Resources in Optimized Pit Shell Based on Au US$900/oz
and Ag US$15/oz

                      Tonnes        Au        Ag        Au        Ag
Resource Category   millions       g/t       g/t       Moz       Moz
Measured                60.2      0.68      14.0      1.31      27.0
Indicated                9.7      0.56      11.2      0.18       3.5
Total                   69.9      0.66      13.6      1.49      30.5

Table 2
Cerro del Gallo Deposit - Preliminary Mine Metal Production Schedule

          Material           Feed Grade                   Metal Recovered
         Processed  Strip     Au     Ag         Au          Ag      Au Eq(1)
Year        Tonnes  Ratio    g/t    g/t         oz          oz         oz
1        4,000,000   0.04   0.72   18.3     57,276     863,519     71,668
2        4,000,000   0.46   0.71   19.0     64,033   1,324,127     86,102
3        5,426,540   0.88   0.60   13.9     68,910   1,306,472     90,684
4        5,500,000   0.45   0.72   14.7     88,230   1,168,851    107,711
5        5,468,620   1.26   0.85   16.0     99,436     973,658    115,663
6        5,500,000   1.62   0.55   15.9     69,564     855,059     83,815
7        5,515,068   1.29   0.61   15.7     75,245     905,595     90,338
8        5,500,000   0.47   0.70   12.0     83,907     731,351     96,096
9        5,500,000   0.98   0.72   12.7     83,080     707,113     94,865
10       5,500,000   0.84   0.57   10.0     70,215     545,257     79,302
11       5,515,068   0.54   0.59   11.5     69,819     633,965     80,385
12       5,500,000   0.24   0.70   10.2     80,968     576,380     90,575
13       3,973,151   0.55   0.61   11.2     58,686     407,017     65,470
14       2,970,440   0.14   0.60    8.6     37,359     252,987     41,575
15               0      0                    2,739      25,849      3,170
Totals  69,861,558   0.74   0.66   13.6  1,009,466  11,277,199  1,197,419

(1) Gold equivalence ("AuEq") has been calculated based on a US$900/oz gold
    price and US$15/oz silver price. The gold equivalent of the metal
    recovered was calculated using the following formula: AuEq = Au +
   (Ag / 60). It is the company's opinion that the gold and silver
    included in the metal equivalent calculation have a reasonable
    potential to be recovered as outlined in this announcement.


Metallurgical testing to support the scoping study has focused on a cyanide heap leach flow sheet utilizing the three material types from the gold/silver domain. Metallurgical testing was completed by SGS Lakefield Oretest in Perth, Australia.

For the purposes of the pit optimization study, it was assumed that an optimized heap leach flow sheet would result in gold and silver recoveries as shown in Table 3.

Table 3
Assumed Process Recoveries

Material Type          Process  Au Rec   Ag Rec
                                    (%)      (%)
Weathered           Heap Leach      75       55
Oxidized            Heap Leach      55       45
Fresh          Carbon-in-Leach      78       20

These assumed values were established from indicative results from metallurgical testing completed to date, which included 18 bottle roll tests (intermittent rolling), as well as the reported results of comparable operations. Two column leach tests have been completed on the weathered material and which achieved similar (75% at 12.5mm and 78% at 6.3mm) gold recoveries as the bottle roll tests. CIL recoveries are based on actual results from earlier leach test work conducted at laboratories in Perth, Australia. Extensive metallurgical testing will be completed as part of the full feasibility study.

Engineering & Operating Costs

Sedgman Metals Engineering Services ("Sedgman") in Perth, Australia independently reviewed the initial capital cost estimate, the operating costs and the metallurgical parameters used for the scoping study. Capital costs of US$82 million for the 4Mtpa crushing/heap leach plant are the costs recommended for the scoping study following Sedgman's review. After reviewing the operating costs and making adjustments as per Sedgman's recommendations, the heap leach processing costs were estimated at US$3.54 per tonne plus an allowance for contingency. Sedgman listed several risks and recommendations in their review in moving forward with a full feasibility study. Sedgman also reviewed the metallurgical test work completed to date and commented on the recoveries used for the scoping study.

From the limited test work completed for the scoping study, Sedgman feel that the slightly lower gold recovery of 72% for the weathered material would have been recommended but agree that the 75% used is within the degree of accuracy for this level of study.

Sedgman has recommended significantly more test work be undertaken for the full feasibility study to gain more confidence in gold and silver recoveries and reagent consumptions for the different material types as well as a detailed engineering study.

An estimate of an additional US$68 million (including contingencies) for the inclusion of a 2.8Mtpa CIL plant has been included in the scoping study. This estimate is based on the costs of several similar projects completed over the past 3 years.

Table 4 summarizes the scoping study capital costs for the project development. These costs have been estimated from actual quotes for new equipment, estimates based on other similar operations and general unit costs plus contingencies appropriate for this level of study. There is the possibility of reducing the costs if suitable used equipment becomes available.

Table 4
Estimated Capital Costs +/- 30%

Direct Cost
      Mining                                                      1,850
      Process                                                    41,150
      Infrastructure                                              9,360
      Subtotal                                                   52,360
Indirect Costs
      EPCM                                                        6,310
      Construction                                                8,660
      Subtotal                                                   10,850
Direct + Indirect Costs                                          63,210
Owners Costs                                                      8,660
Contingency                                                      10,260
                           Project Cost 4mtpa Heap Leach         82,130
 For Additional 2.8mtpa CIL Facility + Crusher Expansion
                             (including 19% contingency)
                         Life of mine sustaining capital         30,000

John Cook, President and Chief Executive Officer of San Anton stated that "The next stage for the development of the Cerro del Gallo deposit will be to continue with the full feasibility study work which will mainly include more detailed metallurgical test work to increase the confidence in the data and the possible improvement in the gold and silver recoveries for the different material types within the deposit and detailed engineering study and equipment costing."

John Skeet, Chief Operating Officer of Kings Minerals, which owns 71.3% of San Anton and which oversees technical operations for the San Anton project, stated that "We are very pleased with the outcome of this scoping study for Cerro de Gallo. The study indicates the opportunity to generate a significant cash flow from a relatively simple and low cost operation located in an area with well established infrastructure. The results from the study have also indicated that including CIL processing for the 'fresh' rock material will significantly improve the economics of the development."

Within the next 45 days, San Anton will be releasing an updated National Instrument 43-101 compliant technical report which will include all of the details of the scoping study plus an updated independent review of the capital cost estimates. The updated report will be filed on SEDAR and available under San Anton's profile at www.sedar.com.

Mr. Tim Carew of Reserva International LLC in Reno, Nevada, USA, and Sedgman Metals Engineering Services in Perth, Australia, both of whom are independent Qualified Persons under National Instrument 43-101, have reviewed and approved the technical information in this press release.

Corporate Update

As announced by the company on February 3, 2010, San Anton has agreed in principle with Kings Minerals to complete a business combination whereby Kings will acquire all of the issued and outstanding shares of San Anton not presently owned by Kings Minerals in exchange for shares of Kings Minerals on the basis of two (2) ordinary shares in the capital of Kings Minerals for each San Anton common share held. Completion of the transaction is subject to a number of conditions, including the receipt of all required regulatory, stock exchange, director and shareholder approvals. The special committee of independent directors formed by the Board of Directors of San Anton has recently retained an independent valuator to provide a valuation for the proposed transaction and to consider the fairness of the proposed transaction, from a financial point of view, to the shareholders of San Anton (other than Kings Minerals). Additional details regarding the valuation and fairness opinion and the proposed transaction will be announced as the work of the valuator and the special committee progresses. Subject to these conditions, it is expected the business combination will be finalized by the end of May 2010.

About San Anton Resource Corporation

San Anton Resource Corporation is an exploration and development company that is listed on the Toronto Stock Exchange and is totally focused on the mining friendly jurisdiction of Mexico. The Company's principal asset is a 64% interest in the San Anton Property (Goldcorp 36%), which hosts the near-surface Cerro del Gallo gold-silver- copper deposit. The Property is located in a historic gold-silver mining district and has only recently been subjected to modern exploration techniques. This work quickly identified several targets and has led to the delineation of a NI 43-101 Measured & Indicated Mineral Resource of 461 million tonnes grading 0.27g/t gold (3.9Moz), 11g/t silver (163Moz) and 0.11% copper (1.09Blb) and an Inferred Mineral Resource of 166 million tonnes grading 0.11g/t gold (0.6Moz), 7 g/t silver (39Moz) and 0.10% copper (0.36Blb). Within the overall deposit, there is a 'gold domain zone' containing Measured & Indicated Mineral Resource of 209 million tonnes grading 0.48g/t gold (3.2Moz) and 11g/t silver (71Moz) and within this zone, there is a relatively higher grade gold resource defined at surface. The deposit remains open in several directions.

The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release. This press release includes certain "forward-looking statements". All statements other than statements of historical fact included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of San Anton are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the expectations of San Anton are detailed from time to time in the filings made by San Anton with securities regulators.

        John Cook, President & CEO
        [email protected]
		Christian Del Valle, Manager, Corporate Development
        [email protected]

Source: San Anton Resource Corporation
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