Sabina Gold & Silver Announces 2009 Year End Financial Results
VANCOUVER, BRITISH COLUMBIA, Mar 30, 2010 (MARKETWIRE via COMTEX News Network) --
Sabina Gold & Silver Corp. (the "Company") (TSX: SBB) reported today the financial results for the year ended December 31, 2009.
The year 2009 was one of change and growth for Sabina. Highlights through the year include:
-- Acquisition of the advanced Back River gold project and Wishbone
greenstone belt. These projects which are proximal to Sabina's Hackett
River silver-zinc project consolidate Sabina's land package in Nunavut,
providing the Company with district scale holdings in one of the world's
safest mining jurisdictions.
-- Completion of an updated improved mineral resource estimate on Hackett
River as well as improved metallurgical recoveries.
-- In late 2009, an updated Preliminary Economic Assessment ("PEA") was
completed on the Hackett River project. The PEA envisions that Hackett
River can generate (pre-income tax) $1.8 billion in free cash flow, an
NPV of $975 million (5% discount) and an IRR of 25.9% by producing three
payable concentrates over a 16 year mine life.
-- Successful exploration at Hackett River which included significant
results on near surface extensions of the known deposits.
-- Despite a limited drilling program, a new discovery was made on each of
the Back River gold project and the Wishbone greenstone belt.
-- Completion of two equity financings for gross proceeds of $26.4 million.
-- Graduation from the Toronto Venture Exchange to the big board of the
-- The sale of the Company's Premier Gold shares for a gain of $6.9
"We are very much looking forward to what 2010 brings," said Tony Walsh, President & CEO. "In 2009, we established a solid foundation on which we can continue to build value. We opened our camps in Nunavut in mid-February, have been drilling at Back River and Hackett and are anticipating our first results in mid to late April," he said. "Based on the opportunities identified on our projects last year, 2010 is the largest program in the Company's history and we look forward to a long fruitful campaign."
The Company maintains a strong balance sheet and continues to look for other accretive precious metals acquisitions in Canada.
Hackett River 2010 Exploration Program
At Hackett River, the Company has budgeted to spend approximately $10 million in 2010, including approximately 18,000 meters of diamond drilling. The goal of the 2010 program is twofold. The first is to investigate and quantify targets which can significantly improve the early years of the project economics by identifying high value mineralization located near or within the current open pit shells. This could also have the additional benefit of reducing the waste to ore ratio. Drilling will target the current proposed open pits at the Main, East Cleaver, Boot Lake and JO Zones. High priority targets include the copper stringer mineralization to the west and north of the Main West deposit and an area immediately to the south of the Boot Lake deposit where strong geophysical anomalies remain untested. The second goal is to identify additional new mineralization which could provide an opportunity to increase project throughput and/or further defer the capital associated with the transition to underground. Drilling will focus on the discovery of new mineralization within the core 5 km by 2 km area of the known deposits. New high potential targets have been defined based on the field work of 2009 and include the West Cleaver area, where gossans with significant base metal values have been outlined, and the Chuck Lake area, where copper-rich alteration was discovered.
Back River 2010 Exploration Program
The Company's near term goal at Back River is to increase the resource by approximately 750,000 ounces of near surface gold mineralization prior to embarking upon development studies. The best opportunity to accomplish this is at the Goose Lake property where a new discovery (Echo Zone) was made in 2009.
The 2010 work program at Back River has three objectives. The primary objective is to complete sufficient drilling to enable a calculation of a mineral resource along the Echo Zone. The second objective is to complete aggressive exploration programs at the Goose property to define new mineralization at selected targets, including the area between the Echo Zone and the Goose deposit, as well as the Jackaroo, Umwelt Lake and Camp Zones. These targets all have the potential to significantly increase the mineral resources of the Goose Lake property.
The third goal at Back River is to continue to advance the conceptual studies of a Goose Lake deposit open pit. Based on initial positive results, plans for 2010 will focus on collecting sufficient data to prepare a proper open pit resource estimate and will require additional sampling of historical drilling, the drilling of key holes in the hinge and footwall portions of the pit and geological modeling. If the resource estimate is positive, Sabina could proceed to a scoping level study towards the end of the year or early 2011.
A total of 20,000 meters of drilling have been planned for Back River with a budget of approximately $10 million.
Wishbone 2010 Exploration Program
The May Zone discovery in 2009 is the result of Sabina's first drilling effort on the Wishbone Project. It was targeted based on a combination of its geological similarity to the nearby Hackett River deposits, favourable alteration, a narrow high grade zinc intersection in a nearby historical drill hole and anomalies defined in recent airborne surveys. A total of 1,970 m of drilling was completed in 14 holes at the May prospect and 12 of the 14 holes drilled on this target intersected significant mineralization.
Approximately 8,000 meters at a budget of approximately $5 million has been planned for drilling on the May Zone with a view to obtaining an NI 43-101 compliant resource by the end of 2010.
For the year ended December 31, 2009, the Company reported a net loss of $1.1 million compared to a loss of $3.1 million in 2008. The loss for 2009 was $2.0 million less than in 2008 due to a realized gain on the sale of an investment in Premier Gold shares, partially offset by higher operating expenses, lower interest income and lower future income tax recovery.
Operating expenses in 2009 were $8.2 million compared to $4.8 million in 2008 and included write-downs of mineral properties of $3.3 million ($1.1 million in 2008). In the fourth quarter of 2009 the Company wrote-off its Del Norte property in B.C. and in 2008 wrote-off its Rockstone property in Thunder Bay, Ont. Excluding these write-downs, operating expenses were $4.9 million in 2009 compared to $3.7 million in 2008. Higher costs in 2009 were primarily due to increased salaries, stock based compensation, listing fees, professional services and travel, partially offset by lower office costs and capital taxes. Salaries were higher in 2009 due to the addition of three new staff members and cash bonuses awarded in the year. Stock compensation was higher as a result of more options vesting in 2009 than 2008.
The company had cash and equivalents of $45 million at December 31, 2009 compared to cash equivalents of $35 million at December 31, 2008.
For the full December 31, 2009 financial statements and Management's Discussion and Analysis, please see the Company website at www.sabinagoldsilver.com.
SABINA GOLD & SILVER CORP.
Sabina Gold & Silver Corp. is an emerging precious metals company with district scale, world class undeveloped assets in one of the world's newest, most politically stable mining jurisdictions: Nunavut, Canada.
The properties consist of the Hackett River Silver Project, the Back River Gold Project, both advanced exploration properties, as well as the Wishbone Claims, a vastly prospective grass roots project.
The combined holdings total approximately 3,000 square kilometers and cover the largely unexplored Wishbone Greenstone belt.
Hackett River is one of the largest undeveloped silver - zinc volcanic massive sulphide ("VMS") deposits in the world with indicated resources totaling 43.6 million tonnes with diluted (recovery) grades of 4.15% zinc, 129 g/t silver, 0.35% copper, 0.58% lead and 0.27 g/t gold. An additional inferred open resource totaling 16.0 million tonnes with diluted (recovery) grades of 3.53% zinc, 111 g/t silver, 0.24% copper, 0.46% lead and 0.25 g/t gold is also contained at Hackett River.
The Back River Project is comprised of the George and Goose Lake gold deposits and contain measured & indicated gold resources of 3.4 million tonnes grading 10.9 g/t Au for 1.19 million ounces and inferred resources of 3.6 million tonnes grading 10.2 g/t Au for 1.16 million ounces of gold.
Mr. John Wakeford, PGeo, and Sr. Vice President Corporate Development of Sabina Gold & Silver Corp. is a Qualified Person under the terms of NI43-101 and has reviewed the technical content of this press release and approved its dissemination.
Mineral resources for Goose Lake and George Lake were generated by RSG Global Consulting Pty Ltd. (Coffey Mining) in September 2007.
The mineral resource estimate for Hackett River was prepared as part of the Preliminary Economic Assessment (PEA) update by Gordon Zurowski, P.Eng., Principal Mine Engineer of PEG Mining Consultants Inc, and can be found on SEDAR at www.sedar.com. Gordon Zurowski is a qualified person as defined by National Instrument (NI) 43-101. CIM Definition Standards (2005) have been used in defining the mineral resource categories.
Project Management of the PEA study was conducted by Eric Harkonen, P.Eng. and Principal Project Manager/Mine Engineer of PEG Mining Consultants Inc. He is a qualified person as defined by NI 43-101.
All technical reports have been filed on www.sedar.com.