Western Nunavut miner calls feasibility study “very compelling” (Nunatsiaq News – May 21, 2015)


But Sabina Gold and Silver Corp. will look at trimming project costs

“Very compelling” — that’s how Sabina Gold and Silver Corp. describes the results of a new feasibility study for its Back River gold project in western Nunavut.

Bruce McLeod, Sabina’s president and CEO, said in a May 20 news release that the feasibility study “demonstrates the potential of Back River to be a significant Canadian gold producer.” But getting the mine up and running will take deep pockets.

The feasibility study calculated the initial capital cost of the Sabina mine at $695 million, with another $539 million needed to sustain operations.

On the other hand, over the mine’s 10-year proposed lifespan, its gross revenues could reach $4.5 billion. However, Sabina said it recognized that “financing such a project in current market conditions would be challenging.”

So Sabina may look for a “more easily financeable project in the current capital markets environment,” the release said.

Based on a US $1,200-per-ounce gold price and an exchange rate of 0.87 Canadian dollars for one U.S. dollar, the study shows a scenario where the project can produce about 50,000 ounces of gold a year for 10 years with “a rapid payback of 2.2 years of capital costs,” the May 20 release said.

Moreover, the project’s production cost per ounce would be lower than for Agnico Eagle’s Meadowbank gold mine or TMAC’s Hope Bay gold mine project, also in Nunavut’s Kitikmeot region.

Sabina is proposing a gold mine complex on seven properties about 400 kilometres south of Cambridge Bay, south of Bathurst Inlet, that would produce 300,000 to 400,000 ounces of gold per year, possibly starting in 2017.

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