Tectonic Metals gets funding for gold exploration in Alaska
The company's Flat gold project is located 40 km north of the giant Donlin gold project.
Canada’s Sabina Gold & Silver Corp said on Thursday it would sell its Hackett River property and certain claims on the Wishbone Greenstone Belt in Nunavut, Canada to Xstrata Zinc Canada for C$50m (US$51m) in cash.
As part of the deal Sabina will reserve a silver production royalty equal to 22.5% of the first 190m ounces of payable silver from the current resource at Hackett River and other properties and 12.5% of all payable silver from the properties thereafter at no future cost to Sabina.
Additionally, Xstrata has agreed to incur not less than $50m on exploration and other expenditures on the Properties over a four year period in order to advance the Properties and complete a National Instrument 43-101 compliant feasibility study. Sabina will retain Wishbone claims at the south- east of Hackett River covering geological units which are similar to Back River and are potential gold targets.
Shares of Sabina rose by as much as 4.76% to over $7.00 on the Toronto Stock Exchange early in the trading day before pulling back to C$6.85 by noon. The company has a market capitalization of just over $1bn.
Said Tony Walsh, President & CEO: “Our goal is to become a mid-tier gold company producing between 300k – 400k ounces of gold per year from Back River, a project scope we believe we can expedite.
With a large, well respected mining group like Xstrata taking over the reins at Hackett, Sabina shareholders as well as the stakeholders in Nunavut have an improved opportunity to realize value sooner. Based on our 2009 PEA, 22.5% of 190 million ounces of silver over 16 years at Hackett is approximately 2.7 million ounces annually.
At today’s ratio of 40 ounces of silver to one ounce of gold, Hackett silver production alone could add approximately 70,000 ounces of gold equivalent to Sabina’s production profile annually at no cost. This transaction allows us to focus on bringing Back River into production, while retaining our leverage to the considerable silver at Hackett River and the exploration upside of both Hackett and the associated Wishbone claims.”
For the full press release click here.
Map of Nunavut properties courtesy of the company.
