Sabina off to busy 2011 in Nunavut

Vancouver – Sabina Gold and Silver (SBB-T) has released an updated resource for its Back River gold project in Nunavut just as it embarks on an extensive drill program in the area.

Back River already had resource from the established Goose and George deposits, with 3.4 million indicated tonnes grading 10.9 grams gold per tonne for 1.2 million oz., plus 3.6 million inferred tonnes grading 10.2 grams gold for a further 1.2 million oz.

The new resource adds the Llama and Umwelt zones that are 5 km and 3.5 km northwest of the Goose deposit. Llama adds 1.9 million indicated tonnes grading 9.4 grams gold for 562,000 oz., plus 980,000 inferred tonnes grading 5.7 grams gold for 180,000 oz. Umwelt adds 4.6 million tonnes grading 6 grams gold for 900,000 oz., plus 1.1 million inferred tonnes grading 6.4 grams gold for 221,000 oz.

All together, Back River’s resource now stands at 9.9 million indicated tonnes grading 8.33 grams gold for 2.7 million contained oz., plus 5.6 million inferred tonnes grading 8.65 grams gold for 1.6 million oz.

The company still sees lots of room for growth at Back River and is starting on a $29-million, 68,000-metre drill program at the project. Sabina’s exploration at Back River will concentrate 70% of funds on expanding the Llama, Unwelt, Goose deposits, while also targeting the Echo zone and exploring for new deposits on the Goose block and elsewhere at Back River.

Also in Nunavut, Sabina plans to spend $10 million drilling 15,000 metres at its established Hackett River project and $7 million drilling 7,500 metres on prospects within the greater Wishbone project.

At Hackett River the company will be spending 70% of the money looking to shore up the existing resource and 30% looking for new discoveries. The project already hosts 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 in a combined open pit and underground resource. The Inferred resource stands at 16 million tonnes grading 3.53% zinc, 110.6 grams silver, 0.24% copper, 0.46% lead and 0.25 gram gold.

At Wishbone the company will be following up on a number of volcanogenic-associated massive sulphide and gold targets that lie within a 150 km long and 30 km wide greenstone belt. Hackett River falls within the northern tip of the company’s holdings on the belt.

The company ended 2010 with $83 million in cash, but still thought it prudent to raise a further $97.5 million in a recently-closed financing. Sabina issued 9.1 million common shares at $5.50 and 6.1 million flow-through shares at $6.60, plus an overallotment of 1.4 million shares at $5.50. The company now has 159 million shares outstanding.

Sabina president and chief executive Tony Walsh stated that the financing provides the company with more options for its Back River and Hackett projects. On the advanced Hackett project, for which Sabina is actively looking for a partner, Walsh stated that the financing will allow the company to accelerate development and de-risk the project.

Sabina’s share price dropped 12¢ or 2% on the day the resource estimate was released to close at $6.02. The company was trading at a 52-week low of $1.13 a year ago and climbed fairly steadily to its 52-week trading high of $6.63 in early March.