Savage 12 - Rebarreling

[SKWERLZ]

It might help (that photo looks pretty bad), but my experience with Savages is that there's no good reference datum from which to base any "squaring up" process. With the floating-head bolt, the raceway is no good, and there is usually considerable run-out between the outer body of the action and the threads. If it were me, I'd just clean up those chatter marks with a granite plate and start with 320 grit wet-or-dry or so, working up to whatever grit your're willing to put the effort into.

With Savage, I've found that just adding a decent barrel and letting the nut/barrel/lug system take up the slack usually results in a decent shooter.

This is my thoughts on savages.
If the barrel runs fairly true in barrel channel just slap in a good barrel, lug and nut and they tend to shoot well.
If you plan on shooting it a lot order a extractor/ejector kit pronto.