Mining News: Northern Neighbors: Sabina publishes Back River feasibility

Sabina Gold & Silver Corp. June 22 published on SEDAR a feasibility study for its Back River gold project in Nunavut. Highlights from the feasibility study were originally released by the company in May. The technical report describes a 6,000-metric-ton-per-day mill producing an average of around 346,000 ounces of gold annually over a 10-year mine life. The ore would come from a combination of open pit and underground mining, with the bulk of the material coming from the open pit. The mine described in the study is expected to mill some 19.8 million metric tons of ore at an average grade of 5.7 grams of gold per metric ton and metallurgical recoveries of 93 percent. The per-ounce cost of producing the gold is estimated to be US$535 and all-in cost, including sustaining capital, is expected to total US$648/oz of gold produced. The feasibility study estimates that such a mine at the Back River project could generate a post-tax internal rate of return of 21.7 percent and net present value (at 5 percent discount rate) of C$539 million. The mine is expected to generate post-tax net cash flow of C$914 million over its 10-year life with a payback period of 2.2 years. A US$1,200 gold price and US-Canadian exchange rate of 0.87 were used for the study. “The FS demonstrates the opportunity for Back River to become a significant gold producer using conservative assumptions, generating robust economics in one of the better mining jurisdictions in the world,” said Bruce McLeod, President & CEO. “The high-grade nature of the deposits provide scalable opportunities that could enable us to develop the project in a manner that works in the current challenging capital markets environment, and we are continuing to assess these options. Meanwhile, we are also de-risking Back River by moving the project forward through the environmental assessment process and aim to have our final environmental impact statement filed by the fourth quarter this year.”

- Shane Lasley