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August 7, 2014
$45.6 million at June 30, 2014 in cash and equivalents All Directors Re-Elected during the Quarter
VANCOUVER — Sabina Gold & Silver Corp. (the “Company”) (SBB — TSX) reported today the financial results for the quarter ended June 30, 2014.
Q2 2014 Highlights:
“Q2 has been a productive quarter for the Company,” said Rob Pease, President & CEO, “We were successful on a number of fronts, demonstrating the continuity and expansion potential at Echo, finalizing some very important agreements with the KIA and completing metallurgical testing that has the opportunity to enhance project economics. We look forward to a busy Q3 as we launch into our FS. We are very pleased with our team of consultants, all of which have substantial Arctic experience. Work completed to-date continues to demonstrate the potential for Back River to become a meaningful gold producer.”
For the quarter ended June 30, 2014, the Company reported a net loss of $0.8 million compared to a net loss of $1.6 million in the same period in 2013. The difference between the periods was mainly the result of a favourable variance on deferred income tax; in Q1 2014, the Company recorded a deferred income tax recovery of $0.9 million compared to deferred income tax expense of $1.0 million in Q2 2013. This favourable variance of $1.9 million was partially offset by a loss of $0.8 million on the disposition of its Newman-Madsen mineral property and lower net finance income.
For the six months ended June 30, 2014, the Company had a net loss of $2.4 million compared to a net loss of $5.3 million in the same period in 2013. The difference between the periods was as noted above and due to lower stock-based payments in 2014.
For the three and six month periods in 2014, operating expenses were $1.1 million and $3.2 million respectively (excluding the loss on disposition of mineral property), compared to $1.3 million and $5.1 million in the same periods of 2013. Lower operating expenses in 2014 relative to the comparative periods, ($0.2 million in Q2 and $1.9 million for the year-to-date) resulted primarily from reductions in manpower which reduced salary expenses and lower stock-based payments.
For the three and six month periods in 2014, net finance income was $0.2 million and $0.4 million respectively, compared to $0.7 million and $1.5 million in the same periods in 2013. The decrease was the result of lower interest income and amortization of flow-through premium. Interest income was lower due to the reduced average cash and short term investment balances. Amortization of flow-through share premium was nil in 2014 compared to $0.6 million in 2013. The Company has not completed any flow-through share financings in 2014.
In Q2 2014, total deferred exploration and evaluation expenditures were $10.0 million compared to $26.1 million in Q2 2013 (note 7 of 2014 Q2 financial statements). For the six month period in 2014, total deferred exploration and evaluation expenditures were $13.7 million compared to $40.2 million in in the same period of 2013. The decrease in 2014 was primarily the result of significantly reduced drilling activity at Back River and decreased environmental and economic assessment expenditures compared to 2013.
The Company has re-forecast its budget for 2014 and now expects to end the year with approximately $30 million in cash. This is lower than previously forecast, however is primarily a timing difference related to FS and environmental assessment efforts in 2015. The Company’s guidance for cash at the end of 2015 is approximately $23 million, including costs to complete the FS and the environmental review process; excluding any additional exploration activities that may be planned for 2015.
For the full June 30, 2014 interim financial statements and Management’s Discussion and Analysis, please see the Company website at www.sabinagoldsilver.com.
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