RE: RE: Wow...Excerpts from SBB's June 2, 2011 NR:
"Definitive agreement signed to sell Hackett River and part of Wishbone for $50 million cash and reservation of a silver production royalty equal to 22.5% of first 190 million ounces of Silver product and 12.5% thereafter- "
"Sabina Gold & Silver Corp. is pleased to announce that it has entered into a definitive agreement (the "Agreement") to sell its 100% owned Hackett River property and certain claims on the Wishbone Greenstone belt (the "Properties") to Xstrata Canada Corporation, Xstrata Zinc Canada Division ("Xstrata")."
“Under the terms of the Agreement, Xstrata has agreed to pay cash consideration of $50 million. Sabina will reserve a silver production royalty equal to 22.5% of the first 190 million ounces of payable silver from the current resource at Hackett River and other properties and 12.5% of all payable silver from the Properties thereafter at no future cost to Sabina. Additionally, Xstrata has agreed to incur not less than $50 million on exploration and other expenditures on the Properties over a four year period in order to advance the Properties and complete a National Instrument 43-101 compliant feasibility study. Sabina will retain Wishbone claims at the south- east of Hackett River covering geological units which are similar to Back River and are potential gold targets.”
“With a large, well respected mining group like Xstrata taking over the reins at Hackett, Sabina shareholders as well as the stakeholders in Nunavut have an improved opportunity to realize value sooner. Based on our 2009 PEA, 22.5% of 190 million ounces of silver over 16 years at Hackett is approximately 2.7 million ounces annually. At today's ratio of 40 ounces of silver to one ounce of gold, Hackett silver production alone could add approximately 70,000 ounces of gold equivalent to Sabina's production profile annually at no cost. This transaction allows us to focus on bringing Back River into production, while retaining our leverage to the considerable silver at Hackett River and the exploration upside of both Hackett and the associated Wishbone claims," he said.”
“Xstrata, the world's largest zinc producer, provides a higher level of confidence that Hackett will be developed and become a producing mine in an earlier timeframe while at the same time continuing to explore the Properties. In addition to potential gold equivalent ounces from Hackett and Wishbone, Sabina operations could be further enhanced by the use of infrastructure built for Hackett by Xstrata.”
“Xstrata Zinc Canada Chief Operating Officer Manuel Alvarez commented: "This transaction, added to the extension of the life of our Brunswick Mine and the development of the Bracemac- McLeod Mine, is consistent with our strategy of increasing the life of Xstrata Zinc's operations in Canada and demonstrates Xstrata Zinc's commitment to a growing presence in the country. We now look forward to working with local stakeholders in Nunavut in the coming years as this project moves forward."