RBC Capital Markets comments on Sabina Gold and SilverAccording to RBC Capital Markets:
Sabina Gold & Silver Corp.
Rating: Sector Perform
Price Target: $0.60
SBB – New Kogoyok discovery shows potential of near surface mining at Back River
Sentiment Indicator: positive
Tuesday, October 13, 2015
Our View: We view the latest drill results as a positive for SBB, with high grade gold assays from a newly identified target near surface at the Goose property. We believe this shows the exploration potential at Back River and reinforces the viability of the new, smaller project plan, which would have a greater focus on open pit mining of the Goose deposits.
New high grade assays from Kogoyok target: Recent exploration at the Goose property returned high grade gold assays at the newly discovered Kogoyok target, located within 2 km of the proposed plant site at Goose and 1.5 km west of the Echo Deposit. The discovery is focused around a 650 m strike length of gold mineralized iron formation stratigraphy, with gold grades including 33.86 g/t Au, 28.10 g/t Au, and 18.23 g/t Au (assay lengths were not released).
Drill results support smaller, open pit focused plan: We view the near surface drill results as helping to support the recently released FS focused on a smaller 3k tpd operation at Back River, which includes open pit mining of 72% of LOM production. However, we view the project as having already proven its wealth of ounces in the ground, with a total resource of 7.2 MMoz. We view financing as the main challenge in progressing towards a construction decision, with an initial capex spend of C$415MM for the smaller operation.