Sabina advances toward Back River decision

Sabina Gold & Silver Corp. Feb. 22 said it plans to invest roughly C$41 million at its Back River gold project in Nunavut this year.

A 2015 feasibility study details plans for developing three deposits at Goose, one of seven properties that make up Sabina's larger Back River project. Ore from these deposits would feed a 3,000-metric-ton-per-day mill forecast to produce an average of 198,100 ounces of gold per year over an 11.8-year mine.

Sabina gained the permits to develop this mine last year and this year's program is designed to advance Goose towards a production decision with measured initiatives within the company's financial resources.

This will build upon the advancements the company made last year.

One of the major de-risking projects completed in 2018 was the construction of a port on Bathurst Inlet, about 80 kilometers (50 miles) north of the Goose Mine site.

The new port includes a 45-person camp, quarry, 730,000-liter (192,845 gallons) fuel depot, desalination water plant, waste management infrastructure, satellite communications, power generation, heavy equipment roads, a barge offloading shore ramp, large laydown area and a 1,200-meter (3,937 feet) all-season gravel airstrip.

Receiving the first sealift deliveries last year, the company has completed a winter ice road to Goose and is hauling materials and large construction equipment purchased and staged at the marine laydown area earlier to the developing mine site.

In addition to completing project development aimed at reducing execution risk, the 2019 program will include continued drilling of targets that could add value to the mine.

The delivery of the equipment and fuel allows Sabina to more efficiently carry out high-priority pre-development earthworks at Goose, including work on the process plant site, pads and access roads.

Sabina also plans to complete the detailed engineering required to secure a construction contract for the processing plant.

Additional construction equipment, fuel and supplies are expected to be delivered to the Port facility in the summer of 2019.

These activities are designed to provide greater certainty on capital expenditure (CAPEX) components of the gold mine at Back River and de-risk critical logistical elements of the project – creating value and improving the project readiness for when the time is right to make a production decision.

"2019 will be another significant year for the company as our work programs continue to advance Back River towards a production decision and focus on high value exploration targets at the Goose property" said Sabina Gold President and CEO Bruce McLeod. "Through our project development activities, we continue to demonstrate the constructability and improve the logistics and infrastructure of the project while delivering better confidence in capital costs through the delivery of an EPC (engineering, procurement, and construction) contract."

Sabina will also continue to conduct multi-stage exploration and target initiatives at Back River in 2019.

The exploration part of the company's 2019 program will include roughly 8,000 meters of drilling, geologic mapping and rock sampling across a number of target areas; till and soil sampling; and geophysics surveys.

The drilling strategy will continue to focus at the Goose project in the key areas of resource growth and optimization in high-grade zones, and advancement of new target concepts.

The Nuvuyak discovery will be a high-priority target for this drilling.

The Nuvuyak discovery hole, reported by Sabina in August, cut 39.5 meters of 11.58 g/t gold.

Follow-up drilling continued to rapidly expand this high-grade gold discovery, including 13 meters of 8.17 g/t gold in hole 18GSE559.

This discovery is found along the same 7,000-meter-long trend that hosts the 7 million metric tons of proven reserves averaging 5.98 g/t gold (1.35 million oz) gold and 5.36 million metric tons of probable reserves averaging 6.72 g/t (1.16 million oz) gold slated to be mined at Goose.

In addition to drilling at Nuvuyak, the 2019 drilling will target Hook, a prospective zone of shallower level high-grade gold mineralization and further targeting in the high-grade portions of the Llama extension and north Vault, both in the reserve area. With additional confirmatory drilling, Sabina said these three high-grade discoveries made since the 2015 feasibility represent opportunities to extend the mine life and/ improve the already robust economics of the Back River project.

"This work continues to unlock a much larger picture in terms of resource and district potential and the potential of Back River to be a multi-generational mining district," McLeod said of the 2019 exploration.

Goose camp is expected to open in mid-March with drilling beginning in April. If warranted, additional drilling would be planned in the summer months to follow up on results from the spring program.

The C$41 million budget for this year includes C$6 million to C$8 million in discretionary expenditures for earthworks programs at Goose. Sabina said this discretionary spending will be assessed during the year and depending on prevailing market sentiment could be deferred resulting in a larger cash balance at the end of 2019.

–SHANE LASLEY