Sabina Gold & Silver Corp. (the "Company" or "Sabina") reported today that it has signed a definitive agreement for the sale of the Company's 100% owned Newman-Madsen property to Laurentian Goldfields Ltd. ("Laurentian").
The Newman Madsen property is an early stage exploration project comprised of 38 patented mining claims located in the Red Lake Mining Division of Ontario, 3.5 km southwest of the town of Red Lake and 4.5 km northeast the Madsen Mine.
"Sabina views the Newman-Madsen property as a good opportunity for future discoveries in this prolific mining district," said Rob Pease, President and CEO of Sabina "however, given the volatile markets and decreasing accessibility to capital, Sabina decided to sell this non-core asset to Laurentian to remain levered to future discoveries in the region. Additionally, the Laurentian land package offers other high quality opportunities for discoveries and potential near term production outside of Sabina's existing Red Lake properties. We view this transaction as a win/win for both Sabina and Laurentian shareholders."
In consideration for the asset, Sabina will receive 6.5 million shares in Laurentian, representing approximately 6.3% of the total issued and outstanding shares of Laurentian. Sabina will also receive a participation right to maintain its holdings in Laurentian in future financings (until the earlier of 24 months or Sabina ceases to hold at least 3.5% of the shares of Laurentian).
The shares are subject to a four month hold and the closing of the transaction is subject to receipt of all required regulatory, exchange and third party approvals and consents.
Laurentian Gold Fields
Laurentian is a junior resource company that has recently consolidated a large strategic land position (5,000 hectares) in the historically high grade and high margin Madsen trend in Red Lake, Ontario.
The consolidation of the Newman-Madsen Property and the Madsen Gold Project, that was also recently acquired by Laurentian, into one contiguous land package expands the Laurentian's access to prospective horizons along the Madsen Mine Trend by more than two kilometres, and provides exposure to prospective structural horizons associated with the Buffalo and Laverty deposits.
The Madsen Mine Trend lies along the Balmer and Confederation unconformity, and is the key structural break that hosts the past producing Madsen and Starratt-Olsen gold deposits. Mineralization has been previously identified at Newman-Madsen along the structural break, with wide spaced drilling in 2010.
Laurentian is run by a proven management team (with the intention of appointing Rob Pease to its Board of Directors) with technical and practical expertise in Red Lake and has the singular focus to explore the prospective trend. To facilitate this exploration, Laurentian recently completed a financing and will have cash and working capital of approximately $11.5 million; all to be spent on progressing this highly prospective trend.
Mr. Angus Campbell, P. Geo. and Vice-President, Exploration 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 release for the Back River Project and has approved its dissemination.
SABINA GOLD & SILVER CORP
Sabina Gold & Silver Corp. is an emerging gold developer with district scale, world class assets in one of the world's newest, most politically stable mining jurisdictions: Nunavut, Canada.
Sabina's primary assets, all located in Nunavut, consist of: the Back River Gold Project, currently in the pre-feasibility and permitting phase; the Wishbone Claims, a vastly prospective grass roots project; and the Hackett River Silver Royalty, a silver production royalty on Glencore's Zinc's Hackett River project comprising 22.5% of the first 190 million ounces produced and 12.5% of all the silver produced thereafter. The Company ended 2013 with approximately $58 million in cash.
All news releases and further information can be found on the Company's website at www.sabinagoldsilver.com or on SEDAR at www.sedar.com.
All technical reports have been filed on www.sedar.com.