Several years ago a similar operation was underway in Manitoba.. Gold city combined with san Gold turned into San Gold Resources and was trading at .18 ..... Took several years and many placements to bring SGR back into production and define resources.

I think SAM has a leg up on SGR in the production side, producing about the same amount as SGR right now. There is also considerable upside at SAM for the resource side... This is where the company needs to emphasise the potential buildout of SAM.... That financed when the share price increases,,, at this time the share structure of SAM is very good.... doing a PP at the right time to fund exploration has the potential to drasticly increase sharholder value.

So far this looks pretty good!

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The company also had positive cash flow from operations of $100,000 for the six months ended Jan. 31, 2009.

                        SAN MARTIN MINE PRODUCTION
                                                       Actual
                                                      results       Actual
                                                          for      results
                                                 three months          for
                                                        ended   year ended
                                                      Jan. 31,     Jan. 31,
                                  Unit of measure        2009         2009

Production of gold in dore        thousand ounces         5.0         19.0
Production of silver in dore      thousand ounces        43.8        160.3
Equivalent ounces of gold(i)      thousand ounces         5.5         21.6
Milled                        thousands of tonnes        68.9        266.2
Operating cost per
equivalent ounce               U.S. dollars/tonne         400          433

(i) This assumes a 79:1 silver to gold equivalency ratio for three months 
and 62:1 for the year ended Jan. 31, 2009.

Over all, equivalent gold production was 5,500 ounces, which is comparable to the prior year average of 5,400 ounces per quarter.

The company expects to maintain or increase the current ore grades over the next quarter and continues exploration efforts to increase reserves of resources and to find higher-grade deposits. Management also continues efforts to cut mine and administration costs, where possible, to improve earnings and cash flow.