KINNGUAK/BATHURST INLET
Exploration projects in Nunavut continue to raise money with the latest announcement from Vancouver-based gold development company Sabina Gold & Silver Corp. that it successfully raised $2.2 million for its Back River Gold Project. Back River is located about 75 kilometres southwest of Bathurst Inlet.
Sabina Gold and Silver Corporation manager of site operations John Laitin at the Yellowknife Inn during this year's Yellowknife Geoscience Forum on Nov. 25. The company recently announced $2.2 million for its Back River Project. - Karen K. Ho/NNSL photo
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Sabina raised the funds through a special type of share designed for junior exploration and mining companies priced at 77 cents each.
"We are excited about the results of this year's exploration work at Back River," president and CEO Bruce McLeod stated in a news release. "With the closing of this financing we can continue to add shareholder value by pursuing further exploration in 2016, particularly at Kogoyok. We are also pleased that we were able to complete the financing at a significant premium. We look forward to reporting continuing advancements on the Back River Gold Project."
Kogoyok is a specific site that Sabina said had "likely the most significant surface discovery on the Back River Gold Project since the early days of prospecting in the '80s," with samples returning gold values as high as 33.86 grams per tonne, 28.10 grams per tonne and 18.23 grams per tonne.
The company said budgets for the Back River Gold Project are currently being finalized and will be released before the end of the year.
In a news release, McLeod said the company's Initial Project Feasibility Study ("3KFS") laid out the path to kickstart production in the Back River District.
"The fourth quarter will focus on progressing the environmental assessment of Back River as we move towards some major permitting milestones in 2016," he said.
While that feasibility study was based on a gold price of US$1,150 per ounce of gold and an exchange rate of 80 cents USD per $1 CDN, Sabina said the Back River Gold Project could still have a processing rate of 3,000 tonnes per day, produce approximately 250,000 ounces of gold per year in years its first eight years and around 200,000 ounces of gold per year during the mine's life.
Other highlights from the study include an estimate of the majority of production at Back River being from the open pit mining method (72 per cent of life of mine); approximately 80 per cent of open pit reserves are in the proven category, the highest level of confidence; and a 11.8 year mine life with average grade of 6.3 grams of gold per tonne.
By comparison, the Con mine near Yellowknife produced an average of 16.1 grams of gold per tonne while it was in operation.
Not all financial results positive
Earlier this month Sabina also reported its the financial results for this year's third quarter, which noted losses greater than the same periods last year.
Notably, the company did report a net loss of $900,000 for the quarter ending on Sept. 30. This was $400,000 more compared to the same period last year. Sabina said the difference was due to a $200,000 loss on its investment into Pure Gold Mining and deferred income tax expenses which were partially offset by lower operating expenses
For the nine months ending Sept. 30, Sabina reported a net loss of $4.9 million as compared to a net loss of $2.9 million for the same period last year.
Future depends on regulations
Manager of site operations John Laitin told News/North that the company is currently going though regulatory requirements with the Nunavut Impact Review Board.
"Until we get that, we can't move forward with our project because it's basically the next gate we have to pass," he said, noting the process takes approximately 90 days. "We have to get a project certificate that we're pretty optimistic with but we won't know until we get that review."
Laitin said the company has worked with a lot of local hires in the territory. However, now it is scaling down its exploration work and moving into development, which includes discussions around developing an Inuit Impact Benefit Agreement with the Kitikmeot Inuit Association.
"That will steer us more towards specifics about how many Northern hires we'll bring in," he said. "That's the next step and that relates back to the project certificate."
Laitin acknowledged that despite the current downturn in commodity prices, Sabina's share price had improved about 70 per cent over the year and called it the best non-producing gold stock on the Toronto Stock Exchange.
"People see us as having good potential," he said. "Compared to our peers, we have done really well."
At the time of press on Nov. 26, shares of Sabina were trading at 61 cents, up one cent from the previous day's closing price.
