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ST. GEORGE METALS CLOSES FINANCING PACKAGE

 ST. GEORGE METALS CLOSES FINANCING PACKAGE
 HOUSTON, Dec. 19 /PRNewswire/ -- St. George Metals, Inc.


(OTC: SGGM; Vancouver) today announced that it has closed its financing package and commenced mining for pilot processing.
 St. George Metals, a Houston-based company, has completed a financing package to fund continuing development, mining and ore processing at its underground Dean Mine in Battle Mountain, Nev. The equity/debt units package was implemented through a private placement with accredited investors.
 The units equity portion consists of convertible preferred stock and the debt portion, three-year loan commitments with warrants attached. Under Phase I, the units provide $1,450,000 in cash and up to $2,900,000 in loans. Under Phase II, the company has a call on an additional $2,500,000 in loans. The five-year warrants issued as the loans are called under Phase I are on a 1:1 basis and priced at 75 cents per share, warrants issued under Phase II are on a 2:1 basis and priced at 37-1/2 cents per share.
 Full implementation of Phase I would provide financing of $4,350,000, resulting in common stock dilution of 36 percent if all of the preferred stock was converted and the warrants exercised. If both Phase I and II are implemented, then financing of $6,850,000 would be provided with a resulting common stock dilution of 47 percent.
 St. George's mining contractor is currently working in four different adit levels within the Dean Mine. Pilot production has commenced in the stopes between levels four and three, levels six and five, and is expected to expand to a total of three stopes by the end of March 1992.
 As previously indicated, the Dean's high grade (0.8 to 0.9 opt) bulk sample ore has been tested for precious metals recovery utilizing heap leaching and various milling techniques. Those results demonstrated the Dean ore is easily processed by any of the recovery techniques. However, flotation, followed by concentrate leaching yielded the highest gold/silver recoveries and was the most environmentally desirable.
 Using the McClelland Laboratory test results, DETOX and Treatment Consulting of Littleton, Colo. has developed a processing mill design and evaluation for the Dean ore. St. George will use this design criteria to evaluate mill processing (tolling) proposals from four companies and will weigh them against constructing the environmentally permitted pilot heap leaching facility.
 St. George has completed the acquisition of a 640-acre mill site approximately 10 miles from the Dean Mine. The site, on level ground, already has sufficient water and power in place to supply all of the company's future processing requirements.
 The Vancouver Stock Exchange has neither approved nor disapproved the content of this release.
 -0- 12/19/91
 /CONTACT: William H. Hoffman III, vice president-finance of St. George Metals, 713-977-4471/
 (SGGM) CO: St. George Metals Inc. ST: Texas IN: MNG SU: FNC


TS -- NY041 -- 3890 12/19/91 12:12 EST
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Publication:PR Newswire
Date:Dec 19, 1991
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