Press Release
May 16, 2022
VANCOUVER –Sabina Gold & Silver Corp. (“Sabina”) or (the “Company”) (SBB – TSX/ SGSVF – OTCQX) provides an update on advancements of the Goose Mine development at the Company’s 100% owned Back River Gold District in Nunavut, Canada. The Goose Mine is the Company’s first mine on the 80 km long Back River Gold District, a multi-generational mining district already with a high-grade world class gold endowment.
The first quarter of 2022 culminated in one of the most important milestones for the Company to date. Debt, streaming and equity financings were completed with a total of over C$800 million arranged, well in excess of the requirements of the 2021 Updated Feasibility Study (“UFS”).
More importantly, with financing in hand, pre-construction, logistical and procurement activities have accelerated. In anticipation of the financing, Sabina had prepared tender documents and purchase orders which enabled the Company to quickly procure critical components necessary for this year’s sealift.
The UFS CAPEX estimate was C$610 million. Of that, approximately C$218 million was identified as direct equipment and materials purchases. Since last year, Sabina has procured, or has committed agreements to procure, just over 70% of all direct purchases identified in the UFS. Reconciliation on purchases have seen an average overall inflationary escalation of 14% since March of 2021, with a 20% escalation on the purchases made in 2022. Efforts now focus on securing the remaining 30% (C$62 million) of materials and equipment.
Earthworks at the plant site are ~67% complete, which reflects an overall Project civil works completion rate of ~40%. To date, the Project is trending an ~10% quantity reduction from UFS estimates.
“Inflation and global supply chain issues have impacted all new capital investment projects and Sabina continues to monitor these potential impacts as we develop the Goose Mine,” said Bruce McLeod, President & CEO. “We are fortunate that our strategy of pre-planning and accelerating procurement efforts has reduced our exposure to inflationary impacts.”
Advancement Highlights and Schedule and Cost De-risking Events
Engineering
Procurement
Approximately C$157 million of C$218 million (72%) of materials and equipment required for the project (per UFS) has already been procured.
Purchased or committed items include:
Sabina has approximately C$62 million remaining to be spent on procurement (based on the UFS) which will have exposure to the current inflationary environment. These items include:
Supply chain and Sealift
Supply chain resilience will continue to require expertise, novel solutions and strong collaboration among Sabina and its suppliers. Key strategies include diversification of suppliers, monitoring production capabilities and transportation processes, as well as finding alternative materials and nontraditional partnerships. To this end, Sabina has implemented the following:
Although supply chain issues have impacted delivery dates, through advance planning, all major equipment required is anticipated to arrive in time for this year’s sealift.
Civil Works & Logistics
Considerable pre-development activities have already been completed at the Goose and Port sites. This work includes:
With surface construction season commencing, Sabina is preparing to mobilize crews to further advance civil works on site. Budgeting and scheduling is nearing completion and will be announced in the coming weeks.
Planning is well underway for the marshalling of procured equipment and supplies, at both East and West transport locations, for the 2022 sealift campaign in the late summer of this year.
SABINA GOLD & SILVER CORP
Sabina Gold & Silver Corp. is an emerging gold mining company that owns 100% of the district scale, advanced, high grade Back River Gold District in Nunavut, Canada.
Sabina filed an Updated Feasibility Study (the “UFS”) on its first mine on the district, the Goose Mine, which presents a project that will produce ~223,000 ounces of gold a year (first five years average of 287,000 ounces a year with peak production of 312,000 ounces in year three) for ~15 years with a rapid payback of 2.3 years, with a post-tax IRR of ~28% and NPV5% of C$1.1B at a gold price of $1,600 USD. See “National Instrument (NI) 43-101 Technical Report – 2021 Updated Feasibility Study for the Goose Project at the Back River Gold District, Nunavut, Canada” dated March 3, 2021.
The Project has received all major permits and authorizations for construction and operations.
The Company has arranged a comprehensive project financing package comprised of:
The Company is also very committed to its Inuit stakeholders, with Inuit employment and opportunities a focus. The Company has signed a 20-year renewable land use agreement with the Kitikmeot Inuit Association and has committed to various sustainability initiatives under the agreement.
The Company continues to advance exploration and project optimization, including advancing the planned plant expansion to 4,000 tpd from Year two to initial startup.
All news releases and further information can be found on the Company’s website at www.sabinagoldsilver.com or on SEDAR at www.sedar.com. All technical reports have been filed on www.sedar.com
For further information please contact:
Nicole Hoeller, Vice-President, Communications: 1 888 648-4218 nhoeller@sabinagoldsilver.com
IBF4