NEWS RELEASE: SABINA GOLD & SILVER ANNOUNCES 9.9% STRATEGIC INVESTMENT BY ZHAOJIN INTERNATIONAL MINING CO., LTD.(December 19, 2017)

http://www.sabinagoldsilver.com/

Vancouver, BC – Sabina Gold & Silver Corp (SBB.T), (“Sabina” or the “Company”) is pleased to announce that Zhaojin International Mining Co., Ltd. (“Zhaojin International”) has agreed to purchase 24,930,000 common shares of the Company at a price of $2.65 per share for a total investment of approximately $66,100,000 in a private placement (the “Financing”).

Upon completion of the Financing, Zhaojin International will own approximately 9.9% of the Company’s issued and outstanding common shares on a non-diluted basis. Zhaojin International is a subsidiary of Zhaojin Mining Industry Co. Ltd. (“Zhaojin”), which is a leading Chinese gold producer and one of China’s largest gold smelting companies.

“We are very excited to welcome Zhaojin, a leading Chinese gold producer, as a strategic investor. Zhaojin’s investment represents a significant milestone for Sabina and is a strong endorsement of the work completed to date at our world class Back River project. This financing with Zhaojin provides Sabina with a cornerstone investor that has financial and technical resources to assist us in advancing the project to production.

With this capital in hand, we are currently working on finalizing plans and budgets for 2018 which will focus on de-risking the project with initial pre-construction activities as well as furthering exploration activities.” said Bruce McLeod, President and CEO.

In connection with the Financing, Sabina and Zhaojin International have signed a Shareholder Agreement which includes the following provisions:

  • A standstill in effect for four years from the closing date of the Financing;
  • A 12 month lock up on share dispositions;
  • Zhaojin International will have an option to increase its shareholding to up to 19.9% of the common shares of the Company by a grant of participation rights in future financings (up to 33% per financing), subject to certain terms and conditions, including the receipt of shareholder approval of Zhaojin, if required, and the receipt of regulatory and Sabina’s Board’s approval;
  • Zhaojin International will have the right to nominate one director to Sabina’s board at 9.9% ownership and shall have the right to appoint a second director should its equity position increase to 19.9%;
  • A voting arrangement whereby Zhaojin International will exercise all of its votes associated with its common shares in support of matters proposed by Sabina’s Board of Directors to shareholders of the Company (other than certain identified matters) for four years after the closing date of the Financing.

In connection with the financing, Sprott Asia acted as advisor on the transaction, BMO Capital Markets acted as financial advisor and Gowling WLG was retained as legal advisor for Sabina.

The Financing is subject to regulatory and other customary approvals.

Zhaojin International Mining Co., Ltd.

Zhaojin International Mining Co., Ltd. is a subsidiary of Zhaojin Mining Industry Co. Ltd., which is a leading Chinese gold producer and one of China’s largest gold smelting companies. They operate across the full production chain, integrating exploration, mining, mineral processing, smelting and marketing. With more than 60 years of gold mining operations they are one of the world’s lowest cost producers. Since its listing on the Hong Kong Stock Exchange in 2006, Zhaojin has grown into one of China’s largest gold miners with annual gold production of 655k ounces of gold per year and reserves of 13.6 million ounces of gold. Currently they are working on developing the world’s largest single ore body gold deposit, the Haiyu deposit in East Asia. Zhaojin’s plans are to double their production base within the next five to ten years through investments in international operations.

Sabina Gold & Silver Corp.

Sabina Gold & Silver Corp. is a well-financed, emerging precious metals company with district scale, advanced, high grade gold assets in one of the world’s newest, politically stable mining jurisdictions: Nunavut, Canada.

Sabina released a Feasibility Study on its 100% owned Back River Gold Project which presents a project that has been designed on a fit-for purpose basis, with the potential to produce ~200,000 ounces a year for ~11 years with a rapid payback of 2.9 years (see “Technical Report for the Initial Project Feasibility Study on the Back River Gold Property, Nunavut, Canada” dated October 28, 2015). At a US$1,150 gold price and a 0.80 (US$:C$) exchange rate, the Study delivers a potential after tax internal rate of return of approximately 24.2% with an initial CAPEX of $415 million.

In addition to Back River, Sabina also owns a significant silver royalty on Glencore’s Hackett River Project. The silver royalty on Hackett River’s silver production is comprised of 22.5% of the first 190 million ounces produced and 12.5% of all silver produced thereafter.

The Company had approximately C$38 million in cash and equivalents on September 30, 2017.

For further information please contact:

Nicole Hoeller, Vice-President, Communications: 1 888 648-4218
[email protected]

For the original source of this news release: http://www.sabinagoldsilver.com/news/sabina-gold-and-silver-announces-9-9-strategic-investment-by-zhaojin-international-mining-co-ltd

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