KITIKMEOT
Sabina Gold and Silver have released a report about its feasibility study of its Back River Gold Project, projecting a mine-life of 10 years and production estimated at 350,000 ounces of gold per year.

An aerial view of Sabina Gold and Silver Corp.'s Goose Lake Camp serving their Back River gold project, located about 375 km southeast of Cambridge Bay. Sabina recently released their feasibility study, which estimated a newer, longer mine-life of 10 years and a net present value of $539 million. - photo courtesy of Sabina Gold and Silver Corp.

"A project like that will bring training opportunities for locals," Chris West, executive director of the Baffin Regional Chamber of Commerce told News/North, calling it a great opportunity for the Kitikmeot region and the territory as a whole. "The company needs to look at what they need for employees and contribute to training them as well."

The feasibility story for the project, located in the west Kitikmeot region of Nunavut and approximately 75 km from tidewater at Bathurst Inlet, was started last June.

Even with an estimated gold price of $1,200 (USD) per ounce of gold and an exchange rate of 0.87 (for U.S. to Canadian dollars), the finances for the project certainly look positive.

Some of the highlights from the feasibility study include an estimated a post-tax internal rate of return of 21.7 per cent and net present value of $539 million. Sabina also said the project could generate a post-tax net cash flow of $914 million on gross revenues of $4.5 billion, with a payback period of 2.2 years from its start of operations to end of life.

With a processing rate of 6,000 tonnes per day, the gold mine could produce an average of 346,000 ounces of gold, with an average production of 413,000 ounces of gold in the first four years.

The majority of the production would be through an open pit process.

The feasibility study estimated that initial capital required for Back Gold would be $695 million and sustaining capital would be $529 million, including closure. A total of 19.8 million tonnes of ore could be milled at the Back Gold mine over 10 years, with an average grade of 5.70 grams per tonne of gold, and an estimated recovery rate of 93 per cent.

West raised the issue of devolution and how the territory is trying to take control of its own resources.

"Development needs to be looked at with that in mind," he said.

Also, with the expected life a mine for the project being 10 years, West said that Back Gold could be an opportunity for many people to achieve steady employment.

When it comes the number of jobs being created as a result of the project, West said the normal process would involve an Inuit impact and benefit agreement that would likely involve the Kitikmeot Inuit Association.

"Any project like that would involve the locals."

He cited a recent Statistics Canada report that said employment was down. "A lot of these opportunities right now are seasonal," he said, citing Baffinland and Peregrine Exploration's severely reduced staff over the winter.

"It's certainly shows that there's interest in developing the resources of the territory."

West acknowledged there have been complaints regarding the territory's regulatory process for new developments. However, he said strong policies needed to be in place so that people in the area are given opportunities and the environment is protected.

And when it came to financing, West wasn't concerned about Sabina being able to find investors for the necessary capital. "If the quality is there, and the materials they're after is there, money will come," he said.

At press time, officials at Sabina and the Kitikmeot Inuit Association could not be reached for comment.

We welcome your opinions. Click here to e-mail a letter to the editor.