Back River steps forward
Sabina Gold and Silver to pay into KIA trust fund
Walter Strong
Northern News Services
Published Monday, May 5, 2014
KITIKMEOT
Last week, the Sabina Gold and Silver Corporation announced that it had reached two funding arrangements with the Kitikmeot Inuit Association (KIA) regarding two separate Nunavut mining projects the company is involved with.
A Boeing 737 flies over Sabina's Back River gold project Goose camp. The company is at an advanced stage of exploration in the region, and has signed a royalty agreement with the Kitikmeot Inuit Association regarding the company's interest in the Hackett River silver deposit. - photo courtesy of Sabina Gold and Silver Corp. |
Sabina is involved in two projects in Nunavut with retained rights to silver royalties at the proposed Hackett River mine and with 100 per cent ownership of the Back River project.
The KIA, representing the Kitikmeot Inuit of Nunavut, is both a participant in Nunavut Impact Review Board environmental assessments and the representative of beneficiaries under the Nunavut Land Claims Act.
The company sold its Hackett River project to Glencore Canada Plc. (then Xstrata Zinc) for $50 million in cash, rights to a percentage of eventual silver production at the mine and the right to a commercial agreement on the use of roads Glencore might build related to Hackett River.
Sabina has agreed to pay three per cent of any net profits from those retained silver royalties into a trust fund set aside for the KIA.
Funds contributed to the trust are to be used to provide benefits to the Kitikmeot region.
Sabina has already contributed $1.4 million to an existing KIA community development fund.
Sabina also agreed to help fund the KIA's involvement in ongoing environmental assessments of its Back River project under a capacity agreement.
When contacted for details regarding how the KIA has used the $1.4 million contributed to the unnamed development fund, it declined to comment.
Sabina also declined to comment on the value of its contribution to the KIA for environmental assessment processes.
"(The) KIA has no comment as the information is confidential between the parties," stated Kitikmeot Inuit Development executive director Paul Emingak in an email to Nunavut News/North.
Sabina's Back River project is at an advanced stage of mineral exploration and is in the early stages of phase-two screening under a Nunavut Impact Review Board three stage environmental review process.
The Back River project is located 80 km south of Bathurst Inlet.
Sabina expects to submit a final environmental impact statement by early 2015 with mine production beginning as early as mid to late 2018.
According to Sabina VP of communications, Nicole Hoeller, the company has spent about $300 million on exploration, deposit appraisal and acquisition costs. Total capital cost for the project is estimated at $605
million.
The company has budgeted $19 million for further drilling and other project-site related costs in 2014.
