Sabina Resources Limited

October 03, 2005 09:00 ET

Sabina Acquires Earn-In Rights To Del Norte Silver-Gold Property In Stewart-Eskay Creek Camp

THUNDER BAY, ONTARIO--(CCNMatthews - Oct. 3, 2005) - SABINA RESOURCES LIMITED (TSX VENTURE:SBB) is pleased to announce that it has negotiated an option to acquire up to 65% of the Del Norte Property and adjoining Midas Property in the prolific Stewart-Eskay Creek mineral belt, held by Teuton Resources Corporation (TSX VENTURE:TUO). Previous work in the current "K" Zone area of interest intersected 18.4 oz/ton silver and .177 oz/ton gold over 33 feet (10m) where exposed on surface and up to 9.09 oz/ton silver and 0.223 oz/t gold over 76.8 feet in drill core (Teuton Resources, October 20, 2004).

Teuton Resources are presently drilling the Del Norte Property. A total of 36 holes totaling 15,800 feet were drilled in 2004. A drill indicated mineralized system is present over a known strikelength of 1.2km. Several additional undrilled surface mineral occurrences alongstrike may extend this to over 2km. The system contains silver-gold bearing lead-zinc mineralization hosted in a near-vertically dipping, quartz-sulfide/sulfosalt vein breccia, with a majority of the intersections containing gold equivalent values greater than 0.40 oz/ton (Teuton Resources, October 20, 2004).

The bulk of historical drilling was concentrated along a mineralized lithic tuff volcanic and black sediment/mudstone contact. The geological environment of mineralization is broadly similar to that of the Eskay Creek Mine. At Eskay Creek, high-grade veins were the focus of exploration prior to the discovery in 1989 of rich deposits of stratiform, sedex gold-silver-base metal mineralization at or near a mudstone-volcanic contact. Sabina believes that the Del Norte Property demonstrates the potential to host similar bonanza silver and gold mineralization. A helicopter-borne magnetic and electromagnetic survey has recently been flown and the results are awaited.

The terms of the option deal to vest a 50% interest in the Property are:

Cash Payments ($C) of:
i) $90,000 cash on signing
ii) $60,000 paid to Teuton on or before June 1, 2006
iii) $90,000 paid to Teuton on or before June 1, 2007

Exploration Expenditures ($C) on the Property of:
i) $500,000 before December 31, 2005
ii) $500,000 before December 31, 2006
iii) $500,000 before December 31, 2007
iv) $1,000,000 before December 31, 2008.

Sabina shall operate and have the right to accelerate expenditures in its sole discretion. Subsequent to earning its 50% interest in the Property, Sabina shall have the right to acquire on 60 day's notice to Teuton an additional 15% interest in the Property from Teuton, by completing a Feasibility Study in relation to the Property. The parties would then proceed on a joint venture basis. Lateegra Resources Corporation (LEG:TSX-V) will retain a 1% NSR in the Del Norte Property on completion of Sabina's initial option.

On completion of the recent sale of its Follansbee Red Lake asset, Sabina will be fully financed with over C$6 million in cash and approximately C$9 million in third party share capital. Sabina has applied to the TSX-Venture Exchange to change the name of the company to Sabina Silver Corporation. In addition to its remaining Red Lake Mining District gold assets, Sabina owns a 100% interest in the Hackett River Project that contains a NI 43-101-compliant indicated resource in access of 140 million ounces of silver, making it one of the largest silver deposits in the Western Hemisphere. Sabina's objective is the addition of shareholder value through prudent financial management, active exploration and project development to production.

The foregoing securities have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state where such offer, solicitation or sale would be unlawful.

This news release includes certain forward-looking statements concerning the future performance of our business, its operations and its financial performance and condition, as well as management's objectives, strategies, beliefs and intentions. Forward-looking statements are frequently identified by such words as "may", "will", "plan", "expect", "anticipate", "estimate", "intend" and similar words referring to future events and results. Forward-looking statements are based on the current opinions and expectations of management. All forward-looking information is inherently uncertain and subject to a variety of assumptions, risks and uncertainties, including the speculative nature of mineral exploration and development, fluctuating commodity prices, competitive risks and the availability of financing, as described in more detail in our recent securities filings available at Actual events or results may differ materially from those projected in the forward looking-statements and we caution against placing undue reliance thereon. Sabina does have an ongoing obligation to disclose material information as it becomes available.

Shares Issued: 36,524,244

The TSX Venture Exchange does not accept responsibility for the accuracy or the adequacy of this release.

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