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| February 25, 2010 --- Vol. 04, No. 08 | February 2010
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Nunavut
POLYMETALLIC – Sabina Gold & Silver Corp. Feb. 25 outlined plans for a 2010 exploration program and budget for its Nunavut precious metals projects. Camps are currently being opened and provisioned with drilling scheduled to begin on or about March 15. Sabina said it is an emerging precious metals company with district scale, undeveloped assets in one of the world’s newest, most politically stable mining jurisdictions: Nunavut, Canada. The properties cover the 3,000-square-kilometer, or 1,158-square-mile, Wishbone Greenstone Belt (which hosts the world-class Hackett River Silver Project) and the proximal Back River gold project. The Wishbone Greenstone Belt is a little smaller than the state of Rhode Island. Hackett River is one of the largest undeveloped silver-zinc volcanic massive sulphide deposits in the world with indicated resources totaling 43.3 million metric tons grading 4.65 percent zinc, 144 grams per metric ton silver, 0.42 percent copper, 0.64 percent lead and 0.30 g/t gold. An additional inferred resource totaling 14.6 million metric tons with grades of 4.46 percent zinc, 136 g/t silver, 0.31 percent copper, 0.57 percent lead and 0.31 g/t gold is also contained at Hackett River. The deposit is precious metals rich with about 45 percent of the value of the resource in silver. In late 2009, an updated preliminary economic assessment was completed on the project. The PEA envisions that Hackett River can generate C$1.8 billion in free cash flow, an NPV of C$975 million (5 percent discount) and an internal rate of return of 25.9 percent by producing three payable concentrates over a 16-year mine life. “The Hackett River PEA identified an already robust project that is more than able to sustain the large infrastructure capital required to become an economic mine,” said Tony Walsh, Sabina’s president and CEO. “Our previous experience in the Canadian north has taught us that size and throughput is key. While the deposits at Hackett River are all open to depth and are expected to transition to underground at some point in their mine life, the focus is on finding more near-surface, higher value mineralization to extend the open pit life of the operation and defer the underground development until the project can fund these costs from cash flow. After our very successful 2009 season, we are excited about the aggressive program that we have planned for 2010 and expect to start receiving results mid to late April.” Sabina is planning to drill about 18,000 meters at Hackett River with a budget of about C$10 million. The budget also includes associated geophysical programs, field mapping and prospecting. A small airborne survey will be completed in conjunction with a selected portion of the Wishbone project. At Wishbone, the company plans to drill about 8,300 meters on the property with a budget of some C$5 million. The 2010 program also will include a significant field component consisting of mapping, prospecting and ground geophysics targeting both gold and VMS type targets. An airborne survey will test high priority unexplored areas to the north and west of the May-Watson area. At the Back River project, Sabina aims to increase the resource by about 750,000 ounces of close-to-surface high-grade gold prior to embarking upon development studies. The best opportunity to accomplish this is at the Goose Lake project area where a new discovery was made in 2009. A total of 20,000 meters of drilling has been planned at Back River with a budget of C$10 million.
FINANCE – Kivalliq Energy Corp. Feb. 24 said it closed a non-brokered, private placement offering of 10 million units at a price of C20 cents per unit, for total gross proceeds of C$2 million. Each unit consists of one common share and one common share purchase warrant. Each share purchase warrant will entitle the holder to purchase one common share at a price of C35 cents for a period of two years. Lumina Capital Limited Partnership, an investment partnership held principally by Vancouver mining entrepreneur Ross Beaty, purchased C$500,000 of the total offering. The proceeds from this financing will be used to explore and develop Kivalliq’s high-grade Lac Cinquante uranium deposit, located within the Angilak Project in Nunavut, and for general working capital purposes. “This financing allows for a planned commencement date of early April for the first phase of the 2010 drill program at Lac Cinquante,” said Kivalliq’s President and CEO, John Robins. “Lumina Capital’s financial support and involvement has increased the company’s profile and greatly accelerated the project exploration timeline.” Upon closing of the financing and if it were to exercise its warrants, Lumina Capital will own about 9.9 percent of Kivalliq’s shares on a fully diluted basis. Directors and officers of Kivalliq purchased 135,000 units of the financing. The units will be subject to a four- month resale restriction that expires June 23.
FINANCE - Stornoway Diamond Corp. Feb. 23 said it closed an equity financing previously announced on Feb. 3, in which it sold 23 million common shares at a price of C50 cents per share for gross proceeds of C$11.5 million. The transaction, which was not offered in the United States, was completed by a syndicate of underwriters led by Canaccord Financial Ltd. Stornoway granted the underwriters an over-allotment option, exercisable in whole or in part at the sole discretion of the underwriters at any time prior to the 30th day following the close of the offering, to purchase up to an additional 3.45 million common shares at a price of C50 cents per share. Stornoway said it intends to use the net proceeds of the offering to complete a bankable feasibility study and conduct exploration activities on its Renard diamond project in Quebec, and for general working capital purposes. The junior is also exploring several diamond properties in Nunavut.
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