Jul 30 2015
Sabina Gold & Silver Corp. announces that it has begun work on the Feasibility Study for the Initial Project on its 100% owned Back River Gold Project or located in Nunavut, Canada.
Earlier this year, the Company released a feasibility study on Back River that contemplated a 6,000 tonne per day ("tpd") operation, producing approximately 350,000 ounces of gold for ~10 years ("Large Project" see news release dated May 20, 2015). The Large Project Feasibility Study indicated a very positive project generating an after tax internal rate of return of 21.7% and NPV of C$540 million. The study was completed using US$1,200 / oz gold and C$0.87.
"We are very pleased with the results of the recent feasibility study, and believe it indicates the potential for Back River to become a significant gold producer," said Bruce McLeod, President & CEO "However, raising the initial C$695 million to build the Large Project would be challenging for a company the size of Sabina in the current market environment. Recognizing this, as part of the work completed for the Large Project Feasibility Study, a scenario that starts smaller targeting a lower initial capex at Back River was explored. We are happy to commence a full feasibility study on this Initial Project scenario which we anticipate will be completed early this fall."
A unique feature of the Back River Project is the combination of high grade open pit and underground resources. These resources offer the optionality to selectively mine and process higher grade zones through the utilization of a higher cutoff grade, while preserving considerable upside in the existing deposits for future development.
The Initial Project Feasibility Study will evaluate the potential of a project at 3,000 tpd generating ~250,000 ounces of gold per year over ~10 years targeting a lower initial capital requirement.
To complete the Initial Project feasibility study Sabina has retained the same group of Arctic experts that completed the Large Project study. The feasibility study will be led by JDS Energy & Mining Inc. ("JDS") and contributed to by Hatch Ltd. ("Hatch"), SRK Consulting (Canada) Inc. ("SRK"), AMC Mining Consultants (Canada) Ltd., ("AMC"), and Knight Piésold Ltd. ("KP").
The Initial Project feasibility study is scheduled for completion and release in late Q3 2015.
The Qualified Person under NI 43-101 for Sabina Gold & Silver Corp. is Wes Carson, P.Eng Vice-President, Project Development, who has reviewed the content of this news release and approved its dissemination.
SABINA GOLD & SILVER CORP
Sabina Gold & Silver Corp. is an emerging precious metals company with district scale, world class undeveloped assets in one of the world's newest, politically stable mining jurisdictions: Nunavut, Canada.
Sabina has recently released a Feasibility Study on its 100% owned Back River Gold Project which presents a project that has been designed on a fit-for purpose basis, with the potential to produce ~350,000 ounces a year for ~10 years with a rapid payback of 2.2 years. At a US$1,200 gold price and a 0.87 exchange rate, the Study delivers a potential after tax internal rate of return of approximately 22% with an initial CAPEX of $695 million.
In addition to Back River, Sabina also owns a significant silver royalty on Glencore's Hackett River Project. The silver royalty on Hackett River's silver production is comprised of 22.5% of the first 190 million ounces produced and 12.5% of all silver produced thereafter.
The Company expects to end the year with $16 million in cash and equivalents.
This news release has been authorized by the undersigned on behalf of Sabina Gold & Silver Corp.
Source: http://www.sabinagoldsilver.com