Sabina Gold & Silver Corp (SBB)

[Picassa]

1. 5. Sabina Gold and Silver Corp. (TSX:SBB)

Sabina has been focused for years on the Hackett River project in Nunavut in the Canadian arctic, and was one of the first companies exploring for precious metals there. Hackett River (contained in the greenstone belt) is already one of the largest undeveloped deposits of its type in the world (volcanogenic massive sulphide (“VMS”)) and is analogous to the Kidd Creek and Noranda deposits which have been prolific large producers for decades and have supported considerable infrastructure. Indeed these deposits have been catalysts for development in their regions.’

Hackett River is also economically robust. In a 43-101 preliminary economic assessment (“PEA”) completed by PEG Mining Consultants, and filed in December 2009, the project generates $1.8 billion in net cash flow, and a 25.9% IRR. The Project would produce concentrates containing 182.8 million ounces of silver, 4.8 billion lbs of zinc, 311 million lbs of copper and 300,000 ounces of gold, over 16 years, to ship to eastern and western markets.

But Sabina is a multi-project precious and base metals play really. Its Black River project, containing over 3.4 million ounces of gold in a 43-101 indicated resource, and an additional 3.55 million ounces of gold in the inferred category, makes it an extremely attractive takeout target for senior mining companies in the next phase of the precious metals bull market now underway.