Sabina shaves expenses to cut losses in 2014

Kelly Sexsmith of Sabina Gold and Silver Corp. speaks about her company’s plans for the Back River gold project south of Bathurst Inlet in Nunavut’s Kitikmeot region during Nunavut Impact Review Board meetings Nov. 13 in Cambridge Bay. (PHOTO BY RED SUN PRODUCTIONS)

Sabina Gold and Silver Corp. had some mixed financial news to share in a Nov. 14 news release, as government officials and representatives from Inuit organizations continue to discuss the company’s Back River gold project at a Nunavut Impact Review Board technical meeting in Cambridge Bay this week.

The news is good and bad: for the quarter that ended Sept. 30, Sabina reported a net loss of $500,000 — but this was substantially less than its loss of $4.1 million for the same period in 2013.

And for the nine months which ended Sept. 30, Sabina reported a net loss of $2.9 million — but, again, that was less than the loss of $9.3 million for the same period in 2013.

Despite the half-million-dollar loss in the three months of July, August and September, Rob Pease, Sabina’s president and CEO, called the period “a productive quarter for the company” in the Nov. 14 news release.

That news release said the company:

• continued to see progress in the environmental assessment and permitting process on Back River, which would include six open-pit mining areas and one underground mine;

• submitted responses to information requests on its draft environmental impact statement; and,

• launched work on its Back River feasibility study.

“Our studies for the Back River FS [feasibility study] are very much on track. While final results and economics for the FS are not expected to be completed until the first half of next year, we are very encouraged by our progress so far and believe, based on the additional information we now have, that Back River is going to be a compelling project,” Pease said.

“We are also very fortunate to have what we believe is the best Arctic team in Canada working on the project. Our consultants all have significant northern experience in design, construction, operations and permitting which will bring relevant hands-on credibility to the FS.”

As for how much the mine complex would earn or cost to build, that’s uncertain: the company news release says “project economics are not yet available.”

Information in the release shows the company has been cutting costs by lowering operating expenses through “reductions in manpower” — that is, job-cutting — which resulted in reduced salary expenses, lower travel and professional services, and lower stock-based payments, the release said.

Sabina expects to end the year with about $31 million in cash — and will need a positive feasibility study to leverage the money needed to build the mine, which would also require costly infrastructure including several roads, an improved airstrip and Bathurst Inlet shipping area or “marine laydown area.”

Meanwhile, the price of gold is down: gold was selling at $1,163 on Nov. 13, down from a $1,238 a month ago, and a high of $1,908 in 2011 — a decrease that will affect the mine’s economics.