KITIKMEOT
The $1.3 million precious metals company Sabina Gold and Silver recently raised is being heralded as good news by the vice-president of communications, but the company is still looking into a smaller version of its Back River Gold Project to help control initial production costs.

A photo of Sabina's Goose Camp, located at its Back River gold project in the Kitikmeot region. The company recently raised $1.3 million in financing from private investors. - photo courtesy of Sabina Gold and Silver Corp.

"The capital requirements for the big project are going to be $700 million," said Nicole Hoeller. "For a company like Sabina, that's going to be very challenging."

Hoeller said the release of its feasibility study of the Back River Gold Project earlier this year was positively received and encouraged the company to keep moving forward.

"That $1 million bolsters to that strength (in our treasury)," she said.

The fundraising was done through a private placement of 2.6 million flow-through common shares priced at 50 cents each. This meant the funds were not raised through the public sale of additional Sabina shares on the Toronto Stock Exchange. These shares were purchased by insiders and employees, a strategy of financing done to reduce overall share dilution. Flow-through shares are a method of financing where Canadian junior mining firms pass exploration expenses onto individual investors, who can then apply them to their own personal incomes and reduce their own taxes.

"We did it at a premium to market," Hoeller said, noting that shares of the company are currently trading around 40 cents per share. "It really sent the message that we really believe in this and are putting our money where our mouths are."

Back River is located in the Kitikmeot region of the territory, situated approximately 75 km from tide water at Bathurst Inlet and made up of a series of five blocks of claimed land. However, only two of them have been the primary focus of Sabina's exploration and resource development to date.

The feasibility study projected Back River would have mine-life of 10 years and a production estimate of 350,000 ounces of gold per year. In a previous interview, Hoeller said when the technical report for the larger version of the Back River project comes out, it will have more details about how they could approach the site on a smaller scale. There will be an additional, separate feasibility study done on the small-scale operation, which Sabina estimated will be released in the fall.

NWT & Nunavut Chamber of Mines executive director Tom Hoefer said with the financial crunch currently affecting many junior mining and exploration companies, Sabina's financing is good news, even with the strong possibility of a much smaller project taking place in the Kitikmeot region.

"I know it takes a lot of work," he said, "There is still some money out there albeit not like there was a few years ago."

Sabina is now doing work to complete its final environmental impact statement through drilling and assessment work, as well as selecting targets on the mineral belt.

"We've really been focusing on trying to prioritize those targets so that when markets turn around we can go in and drill," she said. "We basically want to demonstrate there's a lot of gold in the district. We want to be there for a long time."

Sabina is still currently in the permit and licensing phase. In a previous interview, Hoeller had said the company hopes to be in its final hearings in the first fiscal quarter of next year.

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