Sabina Gold & Silver Corp. reported today Glencore Xstrata has disclosed a new mineral resource estimate for the Hackett River project.
The Company also is pleased to report approval from the Nunavut Impact Review Board (NIRB") to continue through the environmental assessment process on the port and road. The Company also announced its financial results for the interim period ended March 31, 2013.
Hackett River Project
Hackett River, located 45 km west of the Company's Back River gold project in Nunavut, is a silver rich volcanogenic massive sulphide ("VMS") project and is one of the largest undeveloped projects of its type. In 2011, the Company sold the project to Xstrata Zinc Canada Ltd which is now part of the newly formed Glencore Xstrata Plc ("Xstrata").
As consideration for the sale, the Company received $50 million in cash and retains a significant silver royalty on the project. Under the terms of the agreement, Sabina would receive 22.5% of silver production up to the first 190 million ounces produced and 12.5% of all silver produced thereafter at Hackett River.
Since its acquisition of the project and its initial resource estimate on Hackett in 2011, Xstrata has been moving the project forward including drilling over 50,000 meters in 2012.
On May 3, 2013 in its annual report of mineral resources and ore reserves as at December 31, 2012, Xstrata provided a summary of the mineral resources and mineral reserves on its projects, including a new mineral resource estimate for Hackett River. Xstrata now reports measured and indicated resources of 25 million tonnes grading 4.2% Zn and 130 g/t Ag and an additional inferred resource of 57 million tonnes grading 3% Zn and 100 g/t Ag. The project also contains appreciable copper, lead and gold.
Xstrata disclosed that Aline Côté, Project Manager for Xstrata Zinc served as the Competent Person for Xstrata in connection with this mineral resource estimate.
The new mineral resource is an increase of approximately (34%) in all categories (measured, indicated and inferred) over Xstrata's previously published estimate in December 2011.
"The Hackett royalty is a significant asset to Sabina," said Rob Pease, President & CEO. "We are very encouraged by Xstrata's progress on the project and their current activities. The more work done to de-risk and advance the project, the more the value of the royalty should materialize for our shareholders. We are also pleased to have NIRB approval to advance through the permitting process for BIPR. We view the port and road as infrastructure that will serve both industry and the regional communities of Nunavut. We have a good working rapport with what is now the Canadian zinc division of Glencore Xstrata, and look forward to continuing our mutually beneficial relationship."
The Company does not expect Xstrata will prepare a technical report in respect of the new Hackett River mineral resource estimate. Consequently, the Company has not had an opportunity to fully review or assess the assumptions, parameters or methods used by Xstrata to make such estimate, although it has no reason to believe that such estimate is not reliable. Accordingly, the Company is currently working to complete its own mineral resource estimate based upon Xstrata's field work as well as a technical report. The Company expects that it will publish its new mineral resource estimate for Hackett River later this month.