Sabina Gold & Silver Corp. [SBB-TSX; SGSVF-OTC; RXC-FSE] said Thursday May 3 it is raising $6 million from a non-brokered private placement flow through financing comprised of 3million flow-through common shares at $2 a share. Proceeds will be used for exploration at the company’s 100%-owned Back River gold project in Nunavut.
“This financing enables us to use flow-through dollars rather than the hard dollars allocated for continued development activities at Back River,” said Sabina President and CEO Bruce McLeod.
“This funding provides for an additional 10,000 metres at Back River to follow up on successes from this year’s spring program as well as last year’s program.”
The company recently commenced a 6,000-metre Phase One spring drill program. That will be followed by another 20,000 metres this summer.
A key focus of the first phase program is to follow up on last year’s success at the Umwelt Vault and Llama Extension targets, where significant mineralized intersections included; 16.86 g/t gold over 13.50 metres in drill hole 17GSE511B at Vault and 9.48 g/t gold over 38.55 metres in drill hole 17GSE516B at Llama Extension.
In addition to the continued drill testing of the main Umwelt and Llama gold structures, drilling will test targets located within significant gold trends where geologic modeling and past work indicates the potential for large scale growth.
These target areas or main trends include: the Goose Main gold trend; the laterally extensive DIF target horizon; and the over two-km long Echo-Kogoyok gold trend. Drilling will also continue to target down-plunge and lateral extensions of the Echo deposit.
“During the 2017 exploration drilling campaign, we had continued success in demonstrating the potential for new discovery and high impact additions to mine life at the Goose project,” said McLeod.
“We have demonstrated that at Llama and Umwelt, the gold structures are robust for greater than two kilometres with potential for continued growth down plunge,” he said.
“It is our belief that we can continue to grow our gold resources by aggressively exploring along our better known gold trends and the newly emerging gold trends that are targeted for priority drilling this year.’’
On Thursday, Sabina Gold shares eased 1.80% or $0.03 to $1.64. The 52-week range is $2.70 and $1.48.
Sabina is well financed and had approximately $94.5 million in cash and equivalents post-closing of a strategic equity investment in January, 2019.
The investor was Zhaojin International Mining Co. Ltd., a leading Chinese gold producer and smelting company, which agreed to invest $66.1 million in the Vancouver company via a private placement of 24.9 million common shares at $2.65 a share. As a result, Zhaojin now owns a 9.9% stake in Sabina.
Sabina holds a 100% interest in the Back River Gold Project, which has the potential to produce 200,000 ounces of gold annually for 11 years, according to the results of a feasibility study that was released in September, 2015.