NUNAVUT
Xstrata Canada Corporation, the world's largest zinc producer, is now poised to enter the silver market with the acquisition of properties in Nunavut's Kitikmeot region from Sabina Gold and Silver Corporation.

On Thursday, Sabina announced the sale of its Hackett River property and some claims on the Wishbone Greenstone belt. Under the terms of the sales agreement, Xstrata will pay $50 million in cash for the land, located 75 kilometres southwest of Bathurst Inlet, according to a June 2 media release from Sabina. Xstrata has agreed to spend at least $50 million on exploration and other expenditures on the properties over a four-year period, and the company will also complete a feasibility study, the media release said.

Sabina will receive a silver production royalty equivalent to 22.5 per cent of the first 190 million ounces of silver produced at Hackett River and other properties, and 12.5 per cent of silver from the properties afterwards. The company will keep its Wishbone gold claims at the southeast point of Hackett River.

"This transaction solidifies Sabina's precious metals focus and poises the company for a potential re-rating as a gold company," said Tony Walsh, CEO and president of Sabina, in a press release. "Having the strength of a major company like Xstrata in close proximity helps to mitigate against the challenges of mining in the North."

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