Thursday 8th December 2016

Resource Clips


North Of 60

Sabina Faces a Huge Challenge in Nunavut

By Ted Niles

The Canadian Arctic contains the largest reserve of unexploited natural resources in the world. But they have remained unexploited for good reasons: savage weather and nominal infrastructure. Even as talk of climbing temperatures and Prime Minister Stephen Harper’s commitment to the region excite interest, the cost of development remains a dauntingly high barrier to entry for such as Sabina Gold & Silver.

In response to this challenge, Sabina announced June 2 that it had sold its Nunavut Hackett River Project and some Wishbone Greenbelt Belt claims to Swiss mining giant Xstrata for $50 million and a silver production royalty equal to 22.5% of the first 190 million ounces of payable silver and 12.5% thereafter. President/CEO Tony Walsh explained that the deal “transforms Sabina into a purely precious metals company… Our goal is to become a mid-tier gold company producing between 300K to 400K ounces of gold per year from Back River, a project scope we believe we can expedite.”

Sabina Faces a Huge Challenge in Nunavut

The Back River gold project, located about 60 kilometres from Hackett River (and 70 kilometres south of the Arctic Circle), consists of seven claim blocks, the most important of which are the Goose Lake and George properties. Since acquiring the project from Dundee Precious Metals in 2009, drilling has focussed largely on Goose, and the discovery of the Llama and Umwelt deposits there have considerably increased the project’s resources. In March 2011 Sabina announced a new resource estimate for Back River of 2.66 million ounces gold indicated—more than doubling the existing indicated resource—and 1.56 million ounces gold inferred.

The objective of Sabina’s 2011 drill campaign is to add at least another 700,000 ounces of gold to the resource. VP Exploration Manojlovic tells Resource Clips, “We’re still drilling up there right now, and we will be until the end of September. We have nine drills currently turning. We have five drills working on the Umwelt itself—we’re expanding that deposit. Last year we drilled about 550 metres at the top end of that deposit, brought it to a resource, and this year we’re drilling to get the additional mineralization to the south. Once we’re done at the end of September, we’ll be working on doing the resource from that 550 metres down to however deep we take it by the end of September. We would hope to get [the updated resource] out by 4Q.”

Umwelt assays reported September 1 include 14.62 grams per tonne gold over 13.9 metres (including 27.56 g/t over 5 metres), 7.32 g/t over 24.4 metres, 5.47 g/t over 29 metres and 7.28 g/t over 18.4 metres. August 25 results included 10.19 g/t over 33 metres (including 27.16 g/t over 9 metres), 5.64 g/t over 6.7 metres, 3.35 g/t over 19.2 metres, 4.79 g/t over 20.8 metres, 15.42 g/t over 6 metres and 13.43 g/t over 24.4 metres (including 72.8 g/t over 3 metres).

We have very high confidence that we will continue to increase resources and bring the project to the mining stage —Peter Manojlovic

Manojlovic comments, “We’re quite excited about the results that we’ve released. Certainly the highlight was the hole that returned 13 g/t over 24 metres. The deposit now extends from, basically, near surface at the north down to about 650 metres at the south end, which is where that hole is. It demonstrates the incredible continuity of the deposit over 1.4 kilometres. The thickness is very consistent as well.”

He continues, “We hope to complete our drilling and get those resources and begin a preliminary economic assessment of the project this fall. We see that as having a high likelihood of being positive. We would progress as rapidly as we can once we reach that stage.”

Sabina believes that Ontario’s Timmins and Kirkland Lake mining districts presented similar challenges to what the Far North faces today, and as awareness of Nunavut increases infrastructure will follow. Prime Minister Harper made a step in this direction August 24 with the investment of $230,000 in the establishment of an Iqaluit office for the Northwest Territories and Nunavut Chamber of Mines. More important, perhaps, is the investment in Nunavut by other miners. Apart from numerous juniors exploring there, majors include Agnico-Eagle—whose Meadowbank gold mine began production June 2011—as well as ArcelorMittal, Areva, Newmont, BHP Billiton and Xstrata.

However, according to an August 31 Reuters story, Agnico-Eagle has invested $1.5 billion in Meadowbank, while “Newmont has spent $2 billion so far on its Hope Bay gold deposits in western Nunavut, and there is no guarantee a mine will ever be built.”

Nevertheless, Manojlovic concludes, “We’re extremely excited about Back River. Sabina has been working on the project for about two years, and in those two years we’ve made a number of new discoveries, the most significant of which are the Umwelt deposit and the Llama deposit. We’ve increased resources there quite substantially, so we have very high confidence that we will continue to increase resources and bring the project to the mining stage.”

Sabina Gold & Silver currently has 160.3 million shares trading at $4.88 for a $782.2 million market cap. Sabina also has three early-stage exploration projects in Ontario’s Red Lake mining district.


One Response to “North Of 60”

  1. Wonderful post, cool page layout, keep up the great work

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