Sabina gets good news about economics of its western Nunavut gold project
“We believe Back River is a world-class gold project”
Sabina Gold and Silver Corp.’s preliminary economic assessment for its 100 per cent-owned Back River gold mine project shows there’s at least $1.1 billion worth of gold on the western Nunavut property.
The conclusions and recommendations of the preliminary economic assessment show the project “may be economically viable and the company should proceed to a pre-feasibility study,” Sabina said in a May 29 news release.
The mine, located 75 km from Bathurst Inlet, could start operation by 2016 or 2017.
Sabina purchased the Back River project in late 2009, and by 2011, had increased the mineral resource estimate enough to consider moving the project towards development.
The preliminary economic assessment looked at a scenario which would see open-pit and underground mines produce ore from Llama, Umwelt, Goose and George deposits, which would be brought to a centralized, 5,000 tonne per day processing facility located near the Umwelt deposit.
Gold production is projected to average about 300,000 ounces per year over 12.3 years, for total production of 3,677,000 ounces of gold.
The mill, which could cost $450 million to build, would process 20.7 million tonnes of rock over its estimated lifetime.
The assessment’s evaluation of infrastructure needs at Back River assumes a standalone project and didn’t take into account the benefits from the proposed revival Bathurst Inlet Road and Port project currently being proposed by Xstrata Zinc Canada and Sabina.
At the very least, the project would need port facilities and laydown areas at Bathurst Inlet to allow for resupply via annual sealift, Sabina said.
Buildings and a small camp there would provide fuel storage, among other things, and an annual ice road would bring supplies to the mine site.
All roads at the Goose and George facilities, including roads to the waste rock dumps and tailings facility, would be permanent all-weather roads.
An all-weather airstrip and control tower, capable of servicing Hercules C-130 freight aircraft, as well as Boeing 737-combi jets, would be built about five kilometres south of the mine project’s main facilities.
“The results of the PEA demonstrate how valuable good grade is to a project, particularly in remote locations. We believe Back River is a world-class gold project. The high-grade and continuity of the deposits provide us with the flexibility to design and build a mid-tier gold mine with attractive operating costs for a modest up-front capital commitment,” said Sabina’s president and chief executive officer, Rob Pease.
Sabina’s 2012 drilling program wants to increase the known mineral resources.