Sabina Gold boosts resources at Back River

A new resource estimate by Sabina Gold & Silver (SBB-T) at its Back River gold project in Nunavut had the company’s share price moving in the right direction.

The release of the estimate helped lift the company’s share price by 14% or 50¢ to $4.11 since announcing the news on Nov. 21.

That positive re-evaluation came thanks to the company more than doubling its resources with just two drilling campaigns over the course of the year.

While Back River is made up of three deposits, Umwelt, Goose and Llama, the bulk of the increase in resources came from Umwelt where resources are divided between inside and outside of the Whittle Shell.

Inside the Whittle Shell, using a 1 gram-per-tonne cut-off, indicated resources now stand at 6.5 million tonnes grading 4.89 grams gold for 1.026 million oz. of gold while inferred resources come in at 1.2 million tonnes grading 4.00 grams gold for 149,300 oz.

Outside the Whittle Shell using a 2 gram-per-tonne cut-off, indicated resources come in at 4.4 million tonnes grading 5.31 grams gold for 751,900 oz. while inferred resources come in at 4.3 million tonnes grading 4.78 grams gold for 665,100 oz.

“Given that there is a limited window for drilling in Nunavut, this success speaks to the prospectivity of the Back River project as well as to the skill and innovation of our exploration team,” Rob Pease, Sabina’s president and chief executive said in a statement.

Pease also added that discovery cost per resource ounce at Back River come in at just $13 per resource ounce.

The company is now pushing ahead on a preliminary economic assessment on the project, which it expects to have done by the end of the first quarter next year.

This is the third Back River resource update in the year.

Sabina said drilling at Llama did extend the deposit but that the complex nature of the structure combined with the ounces added not being material, meant it decided not to update its resource calculation there.

Overall Back River’s resources now stand at 22.3 million tonnes of indicated resources with an average grade of 5.62 grams gold for 4.03 million oz. of gold. Those resources are made up of both open pit and underground ore.

Combined underground and open pit inferred resources now stand at 10.03 million tonnes grading 6.23 grams gold for 2.016 grams gold.

The Company intends to continue aggressive and disciplined exploration in 2012 on the Nunavut properties, with the goal to further expand resources, drill test new discoveries, and continue exploration for new prospects.