Shareholders approve merger of San Gold and Gold City

Vancouver — Shareholders of San Gold Resources (SGR-V) and Gold City Industries (GC-V) voted in favor of a proposed amalgamation to take effect June, 30, 2005. The surviving entity would be known as San Gold Corporation.

The companies formed a relationship in early 2004 when they jointly acquired, on an equal basis, a 100% interest in Harmony Gold Canada, a unit of Harmony Gold Mining of South Africa. The main asset of interest was Harmony’s past-producing Bissett gold mine, located 250 km northeast of Winnipeg, Manitoba.

Bissett has since been renamed the Rice Lake gold mine, which includes an underground mine, a 1,250-ton-per-day mill built in 1997, and all production and environmental permits.The project also includes a National Instrument 43-101-compliant geological resource of 539,000 tons grading 0.24 oz. gold per ton, an indicated resource of 728,100 tons grading 0.27 oz. gold, and an inferred resource of 734,700 tons grading 0.31 oz. gold.

In early 2004 Gold City also inked a deal to acquire 50% of San Gold’s extensive land package surrounding the mine and within the prospective Rice Lake greenstone belt. The land package includes several undeveloped gold deposits.

By the fall of 2004, Gold City and San Gold announced plans to merge and form a single company focused on reviving the Rice Lake mine, developing the nearby San Gold No.1 deposit and several other advanced deposits, and exploring new targets in the region.