Sabina discovers another zone at Back River

Vancouver – Sabina Gold and Silver (SBB-T) has hit a third new mineralized zone at its Back River gold project as it continues to release encouraging results from the second discovery.

The newest target is Umwelt Lake, sitting 1.3 km south of the Llama Lake zone that was discovered earlier this year. Both are found on the company’s wholly-owned project in southwest Nunavut, roughly 520 km northeast of Yellowknife.

At Umwelt lake, hole 66 cut 14 metres carrying 5.6 grams gold per tonne from 275 metres depth, including 3 metres grading 20.42 grams gold. Collared 60 metres above it on the same section, hole 69 hit 10.9 metres grading 11.32 grams gold from 76 metres, and then a further 5.3 metres averaging 9.15 grams gold from 227 metres downhole.

Assays are still pending for the upper zone of hole 66 and two further stepout holes, collared 100 metres north and south of discovery hole 66. The company describes the new zone as having a similar geophysical signature to both the Llama and Goose mineralized zones.

“This is the third new discovery at Goose Lake in five months of field work including two in the last eight weeks,” said Tony Walsh, president and chief executive of Sabina in a statement. “With increased funding for work on Back River this year we hope to continue to push this project forward.”

Meanwhile, the latest drill results from the Llama Lake zone continue to show high grade gold intercepts over significant widths, extending known mineralization by 100 metres to 425 metres in length.

Hole 65 in the upper east zone hit 6 metres grading 14.65 grams gold from 18 metres. Hole 63, in the lower west zone cut 13 metres averaging 18.66 grams gold. Hole 62, covering both zones, cut 7.4 metres grading 2.96 grams gold from 66 metres depth and 7.2 metres carrying 11.36 grams gold from 108 metres. Hole 34, also covering both zones, cut 6 metres grading 21.98 grams gold from 44 metres, then 10 metres averaging 6.08 grams gold from 159 metres.

Earlier in June the company released further results from Llama Lake, including 20 metres grading 25.43 grams gold from 232 metres in hole 41. Other results included 7.5 metres grading 25.68 grams gold, 40.4 metres carrying 6.72 grams gold and 12.6 metres averaging 14.59 grams gold.

“Llama Lake could very well shift the centre of gravity at Back River from the Goose deposit,” said Walsh. “We continue to be excited about the potential of this new discovery to add to the critical mass of ounces we believe we need to advance the project to economic studies.”

The Goose Lake zone hosts a resource estimate of 1.6 million indicated tonnes grading 11.9 grams gold and 1 million inferred tonnes grading 9.2 grams gold. The deposit lies within a thick, folded iron formation with a shallow plunging gold hinge.

Sabina recently added $2.5 million to the $10 million 2010 exploration budget at Back River that should add another 10,000 metres of drilling to the 20,000 metres already planned. Following the spring melt in July the company will be concentrating all four rigs on the Llama structure from land.

The company also plans to drill the Echo zone, discovered late last year, with the goal of establishing a resource on it by the end of this year.

Sabina continues to explore its Hackett River silver-zinc project, 50 km northwest of Back River. The latest results from Hackett River include 24.9 metres grading 175 grams silver per tonne, 0.22% copper, 5.41% zinc, 0.91% lead and 0.13 gram gold from 28 metres depth and 26 metres averaging 107 grams silver, 0.11% copper, 4.6% zinc, 0.52% lead and 0.56 gram gold from 241 metres downhole.

The company is working to expand the already established combined open-pit and underground resource at Hackett River of 43.6 million indicated tonnes grading 4.15% zinc, 128.75 grams silver per tonne, 0.35% copper, 0.58% lead and 0.27 gram gold and 16 million inferred tonnes grading 3.53% zinc, 110.6 grams silver, 0.24% copper, 0.46% lead and 0.25 gram gold.

In early June the company completed a $15.9-million flow-through financing. The brokered private placement had 7.5 million shares issued at a price of $2 per share, while a further 450,000 shares were sold on a non-brokered basis on the same terms.

Sabina’s stock price rose 13¢ or 5.8% to close at $2.39 on the latest news. The company’s stock price has jumped about a dollar in the past two months and risen from a 52-week low of 77¢ in early October. The company has 122 million shares outstanding.