San Gold reported unaudited consolidated earnings results for the first quarter ended March 31, 2014. The company reported quarterly loss from operations of CAD 2.8 million and a total net and comprehensive loss of CAD 7.7 million, compared to a loss from operations of CAD 0.04 million and a total net and comprehensive loss of CAD 9.7 million in the first quarter of 2013. The increase in loss from operations is primarily due to reduced gold production and gold sales in the first quarter of 2014. Basic and diluted loss per share was CAD 0.02 against CAD 0.03 of prior year period. Revenue for the quarter was CAD 14.9 million against CAD 24.3 million of prior year period. The decrease in gold sales revenue in the first quarter of 2014 is a result of a 32% decrease in the number of ounces sold and a 9% decrease in the average realized gold price compared to the first quarter of 2013. Loss before income tax was CAD 7.7 against CAD 11.2 of prior year period. For the quarter ended March 31, 2014, the company invested CAD 11.9 million in operating and development capital compared with expenditures of CAD 18.9 million in the same quarter of the prior year. The company used CAD 5.6 million of cash flow from operating activities before changes in non-cash working capital in the first quarter of 2013, compared with a use of CAD 2.2 million in the previous quarter. After changes in non-cash working capital, operating activities used CAD 5.2 million in the first quarter of 2014, compared to CAD 6.5 million used in the first quarter of 2013. Loss before other income and expenses was CAD 6.058 million against CAD 10.125 million a year ago.

For the quarter, the company produced 12,083 ounces of gold during the quarter compared with 17,354 ounces in the first quarter of 2013. The decrease in the number of ounces of gold produced was a result of a 12% decrease in milled head grade and a 23% decrease in tons of material processed by the mill. The decrease in mill head grade in the first quarter of 2014 is primarily a result of lower than planned grade from the Hinge and 007 mines due to mining of lower grade material and the sequencing of stopping activities. During the quarter, the company milled 119,996 tons of ore at an average grade of 3.67 grams of gold per tone of ore compared with ore milled of 156,013 tons at an average grade of 4.15 grams of gold per tone a year ago. The company achieved a quarterly mill throughput rate of 1,333 tons per day in the first quarter of 2014, a 23% decrease compared to throughput of 1,733 tons per day in the first quarter of 2013. The company mined ore at a quarterly rate of approximately 1,376 tons per day for a total of 123,868 tons, a decrease of 14% compared to the rate of 1,598 tons per day for a total of 143,859 tons for the same period of 2013. The decrease in tonnage relative to the prior period was due to short-term challenges related to the transition from mechanical cut and fill to long-hole mining as the company's primary mining method and the implementation of new grade control initiatives.