Sabina reports ‘strong’ drill results from Goose as it advances construction in Nunavut  

Sabina Gold & Silver (TSX: SBB) has reported high-grade results from the final drill holes of the 2022 spring drilling program at the Goose property on its 100%-owned Back River project in Nunavut. 

Highlights from drilling included 45.1 metres grading 12.59 grams gold per tonne starting from 123.6 metres in hole 22GSE607 and 20.4 metres grading 12.64 grams gold starting from 146.4 metres in hole 22GSE611.  

The eight-hole drill program was focused on the V2 Zone at Umwelt to better define continuity within the existing resource envelope near the interface of the planned open pit and upper portions of the underground. Drilling has demonstrated that the higher grade of the V2 zone extends up plunge into the lower portions of the open pit, Sabina said. 

“These results continue to demonstrate the exceptional gold endowment of the Umwelt deposit and its potential for further optimization and growth,” Bruce McLeod, the company’s CEO said in a press release. “With the current advancement of our exploration ramp at Umwelt we expect to be in a position to commence underground exploration drilling later this year.” 

Situated about 520 km northeast of Yellowknife, the Back River project hosts six properties in an 80-km-long belt including Goose, George, Boulder, Boot, Del and Bath, with most work being done at George and Goose. 

According to a 2021 feasibility study, the project is expected to produce an average of 223,000 oz. of gold a year over 15 years, with production averaging 287,000 oz. gold annually for the first five years.  

With an initial capex of $610 million, the project’s after-tax net present value is estimated at $1.1 billion, based on a 5% discount rate and US$1,600 per oz. gold. The internal rate of return was pegged at 27.7%, and the payback period at 2.3 years.  

The project was purchased from Dundee Precious Metals in 2009. 

BMO Capital Markets mining analyst Andrew Mikitchook said that the “strong” drill results would “inform optimizations to the mine plan that could see Sabina access additional high-grade material. 

“Sabina is steadily advancing the development of the Back River project, recently updating the market on procurement/capex and progress on civil works (40% complete),” Mikitchook wrote in a research note to clients on June 2.  

“We expect further construction updates over the coming months, which we anticipate to be the main catalyst for SBB shares as the company builds toward first gold production in 2025.”  

At press time, shares of Sabina Gold & Silver were trading at $1.26, up 12.5¢ or 10.9%, within a 52-week trading range of $1.04 and $1.92.