Sabina raises $20 million more for Nunavut gold project

This map shows the location of Sabina Gold and Silver’s Back River project. (FILE IMAGE)

Sabina Gold and Silver Corp. announced May 29 that it’s raised $20 million by selling up to 14,385,724 shares at $1.40 per share to an unnamed investor.

The proceeds from the sale will be used to carry out additional exploration on the company’s Back River gold project in Nunavut’s Kitikmeot region.

Sabina had already earmarked $60 million for exploration at Back River in 2013.

“This year is another significant spend for the company,” said Rob Pease, Sabina’s president and chief executive officer. “This infusion of flow-through dollars enables us to continue to aggressively drill at Back River and end the year in an even stronger cash position than previously anticipated. In a market where access to capital is increasingly harder to come by and cash is king, we believe this private placement demonstrates confidence in our project and our company.”

Sabina said Back River has reached the “critical mass of ounces” to push the project towards production, but the company said ongoing exploration work at Back River will “de-risk the project” and add “significant value” to the company.

Sabina said the money will allow exploration to continue longer into the 2013 season.

Last month, Sabina said drilling at its Back River project was “going very well.”

Sabina said plans for 2013 include the completion of a pre-feasibility study for the Back River project and the filing of a draft environmental impact statement by the end of the year.

Sabina, aiming for a 2016 start-up, said at the 2013 Nunavut Mining Symposium in Iqaluit that it planned to spend more than $60 million in 2013 on Back River, which includes eight mineral deposits in areas referred to as the Goose and George properties.

The Back River gold mine, which would take two years to build, operate for 10 to 15 years, and then take five years to close down, would hire 1,600 workers during the construction phase and 900 during the mine’s operations.

The project, which would produce 300,000 to 400,000 ounces of gold a year, would also include open-pit and underground mines.

And it would also need a port infrastructure and roads, like the Bathurst port and road, which Sabina has promoted with Xstrata Zinc.