Sabina doubles gold estimate on Kitikmeot property

Sabina’s properties are located south of Bathurst Inlet in Nunavut’s Kitikmeot region. (FILE IMAGE)

Sabina Gold and Silver Corp. had good news to share Nov. 21.

The amount of gold at its Back River property in Nunavut’s Kitikmeot region is much larger than previously estimated: about four to six million ounces.

That new figure more than doubles an earlier estimate of the property’s resources, Rob Pease, the company’s chief executive officer, confirmed in a news release.

Sabina now plans to fast-track its preliminary economic assessment of the Back River gold mine project for early 2012.

This year, Sabina spent about $30 million on Back River and $10 million on its Wishbone gold property.

Sabina said it intends “to continue aggressive and disciplined exploration in 2012 on the Nunavut properties.”

Earlier this year, Sabina announced the completion of the sale of Hackett River and other claims to Xstrata Zinc Canada Division.

For that, Sabina received $50 million cash and a silver royalty on Xstrata’s Hackett River silver production.

As a result of that deal, Sabina said it expects to finish 2011 with approximately $160 million in the bank, with no debt.

Sabina and the KIA announced last month that they have entered into a Memorandum of Understanding to create a development trust.

This will see Sabina pay about $1.4 million to an existing KIA fund that supports development and community projects in the Kitikmeot.

In a previous deal signed with the Nunavut Resources Corp., Sabina said it would give the group up to $2 million as “seed funding” to develop a work plan for joint infrastructure projects in the Kitikmeot.

With Xstrata in the picture, that deal, which is still on the table, could lead to a modified, scaled-down version of Bathurst Inlet port and road project or a better airstrip so that Sabina can get its gold-rich deposits into production more quickly and economically.