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Sabina Gold & Silver Provides Progress Report on Optimization Work at Back River Gold Project

Sabina Gold & Silver Corp. (the "Company") is pleased to provide a progress report on optimization work currently being undertaken as part of the Feasibility Study ("FS") being prepared on the Company's 100% owned Back River Gold Project, ("Back River") or (the "Project") Nunavut, Canada.

The FS, launched in June of this year, is being completed by a team of highly qualified engineering and environmental firms: JDS Energy and Mining Inc. (lead), Hatch, SRK Consulting, Knight Piesold Ltd., and AMC Consultants Pty Ltd. All of these firms have extensive recent Arctic experience.

"Our studies for the Back River FS are very much on track," said Rob Pease, President & CEO "the Pre-feasibility Study ("PFS") was a snapshot in time and enabled us to identify strategies to optimize the Project. While final results and economics for the FS are not expected to be completed until the first half of next year, we are very encouraged by our progress so far and believe with the volume of additional information we now have, that Back River is going to be a compelling project. We are also very fortunate to have what we believe is the best Arctic team in Canada working on the Project. Our consultants all have significant Northern experience in design, construction, operations and permitting which will bring relevant hands-on credibility to the FS."

After completion of the PFS announced in October 2013, a number of opportunities to enhance Project economics in the FS were identified and work has progressed in these areas (some of which were announced earlier this year):

  • As announced in March of this year, a new Mineral Resource estimate was completed compiling approximately 82,000 meters drilled in 2013 that were not included in the PFS. The current estimate includes a Measured Mineral Resource of 10.4 million tonnes grading 5.2 g/t for 1,761,000 million contained ounces Au, an Indicated Mineral Resource of 17.9 million tonnes grading 6.1 g/t for 3,536,000 contained ounces Au and an Inferred Mineral Resource of 8.2 million tonnes grading 7.3 g/t for a contained 1,927,000 ounces Au. (see press release dated March 4, 2014). Although the impact of the increased resource on the Project will not be fully known until completion of the FS, we believe that the increase in measured and indicated mineral resources and increase in confidence in the continuity and grade of the deposits offers the potential for a larger mineral reserve on the project and a potentially longer mine life;
  • For the FS, a comprehensive review of all the mining areas is being undertaken. This review is focusing primarily on underground areas where conversion of inferred resources into the Measured and Indicated categories has demonstrated increased continuity leading to potentially more efficient development strategies and mining methods. The FS will consider whether this could offer a potential reduction in underground mining costs, increased mining recovery and decreased dilution;
  • The life of mine ("LOM") gold recoveries in the PFS were estimated to average 88.0%. As previously announced, metallurgical testing since the PFS has resulted in increased recoveries to an estimated 93.9% over the LOM. This indicates approximately 5% more metal over the LOM relative to the PFS, and more significantly, a potentially bigger impact in the early years from the first two pits at Llama and Umwelt which had the lowest recoveries in the PFS (see news release dated April 22, 2014);
  • The PFS contemplated underground development occurring from the bottom of the open pits and a single tailings storage facility ("TSF") to accommodate tailings waste for the LOM. Current studies for the FS are evaluating the effects of ramp access to the underground external to the open pits. This change allows for other tailings disposal options to be considered in the FS, including the use of open pits for tailings disposal. This may have a positive impact on sustaining capital as well as on the permitting process; and
  • In the PFS the Project envisioned a 5,000 tonne per day operation, producing a LOM average of approximately 287,000 ounces Au per year. Analysis is underway for the FS on a scenario which would increase the throughput of the process plant by up to 20% for the majority of the LOM. This could alleviate some of the planned open pit stockpiling and increase the overall production profile.

Detailed engineering on these concepts is ongoing and Project economics are not yet available. Readers are cautioned that until the FS is completed, the implications of these concepts on the Project, including on Project economics, will not be fully understood. Results will be used to support the FS which is expected to be completed in the first half of 2015.

Permitting

On January 22, 2014, the Company submitted the Back River draft Environmental Impact Study ("DEIS") and associated water license application for the Project to the Nunavut Impact Review Board ("NIRB") and the Nunavut Water Board. The DEIS presents scientific and community based knowledge that determined key aspects of the natural and socio-economic environments in the region. Project interactions were identified; residual effects assessed and proposed mitigation and monitoring plans developed for the construction, operation and closure of the Project. In February 2014, the Company received notice from NIRB that the Back River DEIS conformed to the environmental assessment guidelines. In March, 2014 the Company received information requests from the technical review process. On July 23, 2014, the company submitted its information request responses to NIRB. On July 31, 2014, NIRB advised that the Company's submission was conformant and that meetings for the technical review process had been set for November 13-15, 2014, and the pre-hearing conference was set for November 17-19, 2014 in Cambridge Bay.

The Back River Final Environmental Impact Statement ("FEIS") will be informed by the FS early next year and is expected to be submitted to NIRB during the third quarter of 2015.

Project Financing

It is anticipated that the Company will end 2014 with approximately $30 million in cash. Sabina remains well funded to take the Project through completion of the FS and the environmental assessment process. The Company forecasts that its cash balance after completion of the FS and the FEIS would be approximately $23 million (at the end of 2015 and not including any field work that may be required to complete the FEIS).

Management is currently informally exploring project financing alternatives and opportunities. While the Project is expected to be substantively de-risked by the end of 2015, (with the FS and environmental assessment completed), subject to the results of the FS and FEIS, the Company would start construction of the Back River Project at an appropriate time once financing is secured on satisfactory terms in a manner which is in the best interests of all shareholders.

Quality Assurance

The Mineral Resources for the Back River deposits were estimated by AMC Mining Consultants (Canada) Ltd. The Qualified Persons are Dinara Nussipakynova, P Geo. and Andrew Fowler MAusIMM CP (Geo) both of AMC Mining Consultants (Canada) Ltd., and both are independent of Sabina.

Wes Carson, P.Eng. and Vice-President, Project Development for Sabina Gold & Silver Corp. is a Qualified Person under the terms of NI 43-101 and has reviewed the technical content of this press and has approved its dissemination.

Source: http://www.sabinagoldsilver.com/

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