Sabina Silver Announces Closing of Back River Transaction
Date : 06/10/2009 @ 9:00AM
Source : MarketWire
Stock : Sabina Silver Corporation (SBB)
Quote : 1.07 0.0 (0.00%) @ 7:49AM
Sabina Silver Announces Closing of Back River Transaction
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 06/10/09 -- Sabina Silver Corporation (the "Company") (TSX VENTURE: SBB) announced today that the previously announced Back River asset purchase from Dundee Precious Metals ("DPM") has been completed.
"I am happy to report on the closing of what I believe is a great value creating transaction for Sabina shareholders," said Tony Walsh, President & CEO. "The Back River assets present significant exploration opportunities and we are excited to get working on the property. Currently, we are gearing up to start drilling on Goose Lake in mid-July and are finalizing plans for work on the Wishbone properties."
Pursuant to the transaction, in exchange for the Back River Project, the Company issued:
- Cdn$7 million in cash;
- 17,000,000 Sabina common shares;
- 5,000,000 Class A Unit Warrants; and
- 5,000,000 Class B Unit Warrants
Each of the Unit Warrants ("Units") is exercisable for one common share and one-half of one common share purchase warrant ("Warrant") of Sabina. The Class A Unit Warrants will be automatically exercised upon a decision to proceed to a feasibility study or proceed to production on the Back River project and in certain other events. The Class B Unit Warrants will be automatically exercised upon a positive production decision with respect to the project. Each whole Warrant, if issued, will be exercisable for five years from the date of closing, to purchase one Sabina common share at a price of Cdn$1.07 per Sabina common share.
As a result of the transaction, without giving effect to the exercise of the Special Warrants, DPM holds 18.8% of Sabina's outstanding common shares.
In conjunction with the transaction, David Fennell and Jonathan Goodman have been appointed to the Board of Directors.
Work Planned on the Back River Projects
The Back River Assets consist of two main components, the original Back River property hosting the George and Goose Lake gold deposits and a recent new project area, the Wishbone Project. The Back River gold deposits contain a resource of 1.19 million indicated ounces of gold and 1.16 million inferred ounces of gold at an average grade of 10 grams per tonne and are proximal to Hackett River, with George Lake being approximately 40 km to the south east. The Wishbone property covers a large portion of the Hackett River Greenstone Belt and hosts Sabina's Hackett River Project as well as other smaller base and precious metal deposits. The combined properties total approximately 3,000 square km and cover a largely unexplored highly prospective greenstone belt.
Back River Exploration
Work at Back River will focus on the Goose Lake deposit which currently hosts 603,000 indicated ounces of gold at 11.9 g/t and 295,000 inferred ounces at 9.2 g/t.
Management has identified Goose Lake as the immediate exploration target. The current resource lies within a thick folded iron formation with a shallow plunging fold hinge. This makes Goose Lake deposit a favourable target for open pit development.
The Goose camp was opened earlier this winter and a resupply program of fuel and drilling supplies was completed to support a two drill program this summer.
The exploration objectives for the Back River project in 2009 can be summarized as follows:
- To conduct a short IP or ground based geological survey to better define the target locations and orientations prior to diamond drilling.
- To conduct a total of 5000 to 6000 metres of diamond drilling at the Goose Lake deposit, focusing on priority targets outside the current deposit area.
- A budget of $3.23 million has been planned for Goose Lake target drilling.
The drill targets identified include the following:
The Goose Neck target is located 1.9 km west of the Goose Lake deposit. This target consists of a strong geochemical anomaly, and the geophysical signature indicates the presence of thick folded iron formation. A single historical diamond drill hole (93GO-037) returned assays of 4m grading 5.73 g/t au.
The Washout is a priority target and is located approximately 1 km west of the Goose Lake deposit. Geologically this target consists of a broad folded section of demagnetized iron formation which is near a large felsic intrusive. It is interpreted that the large intrusive acted as a heat source and hydrothermal fluids have altered the iron formation significantly thereby creating potential for gold deposition in this large area. A ground induced polarization survey will be completed to refine the 2009 diamond drill targets.
The Llama/Jackaroo area is located approximately 6 kilometers northwest of the Goose deposit and consists of an area of complex folded iron formation units that have been cut by felsic intrusive units. There is no previous drilling in the key target area. Prospecting and detailed mapping will be completed prior to drill testing.
An initial budget of $750,000 has been set for the summer exploration program for the Wishbone project to explore for both gold deposits and base metal rich volcanic massive sulphide (VMS) deposits. The Wishbone project covers a VMS district-scale land package over the highly prospective extension of the Hackett River Greenstone belt outside of the main Hackett River deposit area. It has received minimal historical exploration work and hosts two other VMS deposits; Savant Exploration's Yava and Xstrata's Musk VMS deposits. In 2008, a 12,350 line km VTEM survey was completed by DPM over the southern portion of the property. This survey successfully defined at least 200 prospective EM anomalies. Work will focus on following-up these anomalies and will include 1,200 m of diamond drilling. The initial priority will be given to gold and VMS targets that are proximal to Hackett River to best impact possible synergies with Hackett. In addition, an evaluation will begin on the large block of claims to the north of Hackett River where favourable hydrothermal alteration has been previously identified in regional mapping.
Mineral resources for Goose Lake and George Lake were generated by RSG Global Consulting Pty Ltd (Coffey Mining) in September 2007, and are posted on www.sedar.com. Mr. John Wakeford, P.Geo. and a Qualified Person in accordance with NI 43-101 has reviewed the resources referred to above and has approved their dissemination.
SABINA SILVER CORPORATION is a Canadian public mineral exploration and development company with assets at the Hackett River silver-zinc project in Nunavut and several projects in the Red Lake gold camp. The Company is well capitalized with approximately $40 million in cash and marketable securities at March 31, 2009. The strategy to grow the company focuses on two mandates: 1) to continue to focus on enormous exploration and development potential of the Hackett River silver-zinc and Back River gold projects; and 2) maintain a strong balance sheet to acquire accretive precious metals assets.
Forward Looking Statements
Statements relating to the Back River Acquisition and the expected results of this transaction are forward-looking statements within the meaning of securities legislation of certain Provinces in Canada. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", 'projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Information inferred from the interpretation of drilling results and information concerning mineral resource estimates may also be deemed to be forward looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed. These forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation: risks related to fluctuations in gold prices; uncertainties related to raising sufficient financing to fund the planned work in a timely manner and on acceptable terms; changes in planned work resulting from weather, logistical, technical or other factors; the possibility that results of work will not fulfill expectations and realize the perceived potential of the Company's properties; uncertainties involved in the estimation of metal reserves and resources; the possibility that required permits may not be obtained in a timely manner or at all; the possibility that capital and operating costs may be higher than currently estimated and may preclude commercial development or render operations uneconomic; the possibility that the estimated recovery rates may not be achieved; risk of accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in the work program; the risk of environmental contamination or damage resulting from Sabina's operations and other risks and uncertainties, including those described in Sabina's Annual Report for the year ended December 31, 2008.
Forward-looking statements are based on the beliefs, estimates and opinions of Sabina's management on the date the statements are made. Sabina undertakes no obligation to update these forward-looking statements should management's beliefs, estimates or opinions, or other factors, change.
This news release has been authorized by the undersigned on behalf of Sabina Silver Corporation.
Tony Walsh, President and CEO
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Sabina Silver Corporation
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