From Northern Miner https://www.northernminer.com/news/sabina-finds-deeper-mineralization-back-river-nunavut/1003787162/
Sabina finds deeper mineralization at Back River in Nunavut
Sabina Gold and Silver’s Back River project in southwestern Nunavut. Credit: Sabina Gold and Silver. Posted By: Trish Saywell June 14, 2017
Drilling during Sabina Gold and Silver’s (TSX: SBB) spring exploration program has extended mineralization 300 metres down plunge of the Back River project’s existing resources in southwestern Nunavut.
Drill hole 17GSE513 stepped out about 300 metres down plunge of the existing resource structure at the project’s Llama deposit and intersected 48 metres of altered and mineralized iron formation that included an intercept of 6.52 grams gold over 8.3 metres from a depth of 618.90 metres. Another hole, 17GSE512, cut 6.30 grams gold over 2.65 metres from a depth of 603.5 metres.
“Results bode well for future resource growth,” Andrew Kaip of BMO Capital Markets wrote in a research note. “We continue to believe that the Back River project represents an attractive feasibility study stage project, at an advanced stage of permitting, in a safe jurisdiction, and with a large reserve base containing above-average grade.”
The Llama deposit remains open and currently hosts 3.56 million tonnes grading 6.50 grams gold for 743,000 measured and indicated ounces of gold and 295,000 tonnes grading 6.77 grams gold for 64,000 inferred ounces of gold.
Sabina says it believes that Llama, which has now been intersected to a vertical depth of about 550 metres, is analogous to other iron formation deposits around the world, including Goldcorp’s (TSX:G: NYSE: GG) Musselwhite complex, where mining continues along structures that are well in excess of 1,000 metres and still remain open.
Sabina is also certain that Back River’s Umwelt Vault Zone is analogous to other iron formation deposits. As part of the spring exploration campaign, drill results released in May included an intersection in hole 17GSE511B of 16.86 grams gold over 13.5 metres from 734 metres, including 27.11 grams gold over 7.95 metres from 736.75 metres. The strongly mineralized zone was intersected at a vertical depth of 675 metres and is open to the east and in the down dip direction.
Bruce McLeod, Sabina’s president and CEO, said in prepared remarks that the company believes there is potential at the Umwelt Vault zone “to grow a high-grade portion of the deposit with grades that are two to three times our resource average.”
The Umwelt deposit hosts 9.05 million tonnes grading 6.90 grams gold for 2.03 million measured and indicated ounces of gold, as well as 1.91 million tonnes of 11.01 grams gold for 676,000 inferred ounces of gold.
Portions of these resources are included in the current feasibility study for both open pit and underground development.
In total the spring program consisted of five drill holes in 2,700 metres.
The company plans to examine these targets further in its summer exploration program, which is expected to kick off in late summer or early fall. The program will consist of at least 4,000 metres of drilling, along with geologic mapping, as well as till and rock sampling.
A feasibility study on the 100%-owned project completed in September 2015 envisioned a mining operation with the potential to produce about 200,000 oz. gold a year for 11 years with a payback of the initial $415 million in capex in just under three years. At a US$1,150 per oz. gold price, and a 0.80 exchange rate, the study forecast a potential after tax internal rate of return of about 24.2%.
Back River is currently in the environmental assessment process, and final public hearings with the Nunavut Impact Review Board were held from May 31 to June 3.
BMO’s Kaip expects the NIRB will issue its findings by the end of July.
The company acquired the project in late 2009 and, after discovering a series of gold deposits in banded iron formation during 2010 and 2011, decided to advance the project towards development.
The project is about 75 km southwest of Bathurst Inlet and 520 km northeast of Yellowknife, in the Northwest Territories.
Back River is also about 50 km southeast of Glencore’s (LSE: GLEN) Hackett River silver-zinc project, on which it holds a silver royalty. Sabina’s royalty is 22.5% of the first 190 million ounces of silver produced and 12.5% of all silver produced thereafter.
BMO’s Kaip has a target price of $2.40 per share.
At press time in Toronto, the company was trading at $1.80 per share within a 52-week range of 84¢ (December 2016) and $2.00 (May 2017).