The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
SBB: TSX
President and CEO: Bruce McLeod
VP, Project Development: Wes Carson
VP, Exploration: Angus Campbell
Sabina Gold & Silver Corp. is on a mission to evolve from a successful mineral exploration company to a mid-tier gold producer by developing its portfolio of assets in Canada's North.
Towards this goal, the company commissioned a feasibility study for its Back River gold project in western Nunavut.
The study, led by JDS Energy & Mining Inc., envisions a 6,000-metric-ton-per-day mill producing an average of about 346,000 ounces of gold annually over a 10-year mine life.
The operation outlined in this study was projected to mill some 19.8 million metric tons of ore at an average grade of 5.7 grams per metric ton gold, producing 3.4 million ounces of gold at costs of roughly US$535/oz, including royalties.
To build this mine, however, Sabina would need to raise roughly C$695 million, which would be challenging in the current market.
The company says the resource at Back River offers an option to selectively mine higher grade zones with a smaller initial operation.
In September, Sabina released the results of a second feasibility study that evaluates the potential of a 3,000 tpd operation.
At an average head grade of 6.3 g/t gold, the study anticipates the reduced mill rate would produce an average of 198,100 oz/year gold over an 11.8-year mine life at a cost of US$534/oz. Initial capital for the project is estimated at C$415 million with sustaining capital of C$185 million.
"Both of these studies delivered very positive economic results which demonstrate the optionality of these high-grade continuous deposits.
The 3,000 tpd FS is the most compelling opportunity for Sabina in this current market environment," said Sabina President and CEO Bruce McLeod.
In addition to Back River, Sabina also owns a significant silver royalty on Hackett River, a silver-rich volcanogenic massive sulphide project located some 45 kilometers (28 miles) west of Back River.
In 2011, Sabina sold Hackett River to Xstrata Canada Corp, now Glencore Canada Corp., for C$50 million in cash.
Sabina retained a royalty of 22.5 percent of the first 190 million ounces produced at Hackett River and 12.5 produced thereafter.
Sabina's Nunavut assets also include the Wishbone project, a series of 48 mining claims that blanket a prospective extension of the Hackett River Greenstone belt.
The company also holds five gold properties in Ontario and on in northern British Columbia.
Sabina expects to end 2015 with C$16 million in cash and equivalents.
Cash and short-term deposits: C$22.2 million (June 30, 2015)
Working capital: C$22.4 million (June 30, 2015)
Market capitalization: C$71.8 million (Sept. 23, 2015)
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