Sabina Gold & Silver Corp.
TSX : SBB

Sabina Gold & Silver Corp.

December 02, 2009 08:31 ET

Sabina Announces Positive Results at Hackett & Wishbone

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 2, 2009) -

New mineralization intersected near Hackett deposits

Strong mineralization extended at May Zone

High-grade surface samples up to 5,160 g/t silver and 30.3 g/t gold at Watson Lake

Sabina Gold & Silver Corp. (TSX:SBB) announced today further favourable results from the 2009 summer exploration and drilling campaign on its 100% owned Hackett River and Wishbone projects in Nunavut, Canada.

HACKETT RIVER

Hackett River is one of the largest undeveloped silver-zinc volcanic massive sulphide ("VMS") deposits of its type in the world with indicated resources totalling 43 million tonnes grading 144 g/t silver, 4.65% zinc, 0.42% copper, 0.64% lead and 0.30 g/t gold and an additional inferred open resource totalling 14.6 million tonnes grading 136 g/t silver, 4.46% zinc, 0.31% copper, 0.57% lead and 0.31 g/t gold.

A preliminary economic assessment ("PEA") was reported on November 12, 2009 which outlined a robust project that would generate $1.8 billion of net free cash-flow and have a NPV of $975 million and an IRR of 25.9% using a 5% discount rate. At a 10% discount rate, a NPV of $523 million would be achieved (all pre-tax and in Canadian dollars). The project would have a 16 year mine life and would produce an average of 13.6 million ounces of silver per year in the first 10 years of production along with significant base metals.

"Our exploration success continues on the Hackett River and nearby Wishbone projects. This summer's drilling near the edges and outer limits of proposed open pits intersected considerable significant mineralization which provides the opportunity to either expand the current pit shells or reduce ore to waste ratios. The new May discovery is expanding and the high grade surface samples from the nearby Watson Lake area show that although Hackett River has reached the critical mass needed to sustain a large mining project in the Arctic, we believe that there is still significant opportunity to both improve and grow the resources," said John Wakeford Sr. VP Corporate Development.

DRILLING RESULTS

A total of 12,590 metres were drilled over a two phase campaign at Hackett River which was completed on September 15, 2009. Initial results were released on September 24, 2009 and this release summarizes the remaining holes drilled in 2009.

Main Zone West Extension

The northern extension of the Main Zone West deposit is high-grade, near surface and incompletely drilled. Mineralization recently encountered in this area includes SHR-09-39 (288 g/t Ag, 8.28% Zn, 0.90% Cu, 1.41% Pb, 1.29 g/t Au over 20.10 m; (see September 24, 2009 Press Release).

Three additional holes drilled in this area during 2009 encountered widespread copper stringer mineralization, including SHR-09-41 which intersected chalcopyrite stringers over a 204.3 m interval, including intervals highlighted below:

MAIN ZONE WEST
HoleFromToIntervalAgZnCuPbAu
Number(m)(m)(m)(g/t)(%)(%)(%)(g/t)
SHR-09-412.0531.2529.2060.050.760.010.01
incl.30.7531.250.50560.328.050.010.30
and49.3057.808.5070.021.020.000.01
incl.55.8556.300.45470.028.510.000.04

The precise extent, orientation and grade of the copper stringer mineralization has not yet been fully determined but the results to-date indicate that significant copper stringer mineralization occurs well to the north of the currently proposed open pit outlines.

East Cleaver

A single hole SHR-09-31 was drilled along with SHR-09-30 (see September 24, 2009 Press Release) to test down dip of historical hole ECL-94-01A, which encountered numerous mineralized intercepts within the proposed pit shell but which are not included in the defined resource. Hole SHR-09-31 intersected significant mineralization within the current East Cleaver pit shells which offers possibilities to reduce the ore to waste ratio and possibly expand the current pit limits.

EAST CLEAVER
HoleFromToIntervalAgZnCuPbAu
Number(m)(m)(m)(g/t)(%)(%)(%)(g/t)
SHR-09-31188.50210.5022.00362.010.020.570.31
incl.199.50209.009.50323.560.030.890.38
incl.201.85203.001.15277.420.080.851.11
and233.60235.251.655630.080.010.570.89

East Cleaver Area Regional Targets

The area immediately to the west of the East Cleaver deposit is underlain by an extensive 1,500 m by 500m chalcopyrite stringer-bearing hydrothermal alteration zone. A major focus of the 2009 summer program was to drill test previously untested geophysical anomalies associated with this alteration zone in the Cleaver Lake – Flying Horse Lake area. A total of 13 out of 17 holes drilled in this 500 m by 500 m area intersected massive or semi-massive sulphides containing pyrite, pyrrhotite, sphalerite, galena and chalcopyrite. Highlights include:

EAST CLEAVER REGIONAL MASSIVE SULPHIDE INTERCEPTS
HoleFromToIntervalAgZnCuPbAu
Number(m)(m)(m)(g/t)(%)(%)(%)(g/t)
SHR-09-3415.9729.9213.95471.950.520.320.30
including17.0019.102.101422.581.790.321.60
and227.92230.732.811571.693.360.020.20
SHR-09-4089.4094.104.701544.470.100.770.07
SHR-09-4892.9594.901.951145.580.051.550.06
SHR-09-5097.40100.162.76408.560.170.140.02
SHR-09-56233.25235.652.401995.870.100.970.07

The alteration associated with the mineralization contains numerous thick individual chalcopyrite stringers including:

EAST CLEAVER REGIONAL COPPER STRINGER INTERCEPTS
HoleFromToIntervalAgZnCuPbAu
Number(m)(m)(m)(g/t)(%)(%)(%)(g/t)
SHR-09-4682.9084.251.35420.191.910.070.50
SHR-09-5241.9542.500.551940.623.670.010.88
SHR-09-5474.2077.353.15420.221.420.010.07
 Including95.4095.900.502161.405.050.390.21
SHR-09-5566.6567.600.951250.244.240.010.36

A number of additional untested EM targets remain in this area and the zones are open to depth.

WISHBONE PROJECT

The Wishbone project, comprised of a series of 95 mining claims, covers a district-scale land package over the highly prospective extension of the Hackett River Greenstone Belt. The Belt includes Sabina's 100% owned Hackett River project and extends 150 km to the south. It has received minimal historical exploration work; however the southern portion of the property (which includes the Yava and Musk VMS deposits owned by other parties) was covered by a 12,350 line km VTEM survey flown in 2008. This survey identified a multitude of anomalies interpreted to represent potential targets for precious metals, VMS and diamonds. A total of 1,979 m of drilling in 14 holes was completed in 2009 on the Wishbone project.

May Zone Discovery

The May Zone discovery (see October 13, 2009 Press Release) is the result of Sabina's first drilling effort on the Wishbone project and targeted a combination of its geological similarity to the nearby Hackett River deposits, favourable alteration, and a narrow high grade zinc intersection in a single nearby historical drill hole. Airborne anomalies indicate the May zone may extend for 2,000 meters of which the northernmost 600m has been initially tested.

The May Zone is located approximately 15 km to the east of the Hackett River deposits and occurs within similar volcanic stratigraphy. The zone has been traced down to a depth of 100 m defining a structure that dips shallowly to the south at approximately 15 degrees where it remains open. A cordierite – anthophyllite alteration zone associated with the May Zone has been traced over a 3 km by 1 km area to the southwest.

Results have been returned for the final 7 of the 14 holes drilled on this target and new near surface intercepts include (see October 13, 2009 release for initial results):

MAY ZONE
HoleFromToIntervalAgZnCuPbAu
Number(m)(m)(m)(g/t)(%)(%)(%)(g/t)
SWB-09-1296.9697.680.72115.540.310.210.02
Including99.00100.101.1092.780.590.010.04
Including104.15104.900.75210.881.500.000.10
Including107.05109.102.05210.122.750.021.69
Including111.40112.220.82160.312.450.000.16
SWB-09-14104.40107.252.855410.620.290.670.09
Including109.00110.651.6517917.802.380.840.04

The May Zone is a shallow open pit target that offers an opportunity for an additional mining source for the proposed Hackett River mill. The deposit occurs directly along one of the proposed port roads being considered in scoping studies and is open to the south. In addition, there are a number of other similar targets in the immediate area.

Surface Mapping & Prospecting

Based on recent success at the May Zone surface mapping and prospecting crews shifted to the Watson Lake area approximately 2 kilometres southwest of the May discovery. Samples taken in this area returned values of up to 5,160 g/t Ag and 30.30 g/t Au associated with sulphides within the same altered felsic volcanic unit found at the May Zone. A single historical drillhole completed by Cominco on the south shore of Watson Lake on one of the showings returned 5.1% Zn over 1.5 m.

WATSON LAKE AREA ANOMALOUS GRAB SAMPLES
SampleNorthingEastingAgZnCuPbAu
Number  (g/t)(%)(%)(%)(g/t)
E09013773047124971301018.053.480.000.07
E0901407304715497125515.300.350.010.62
E0901417304717497123514.651.350.000.25
E090162730534949708651605.200.032.2130.30
E0902027305346497090621.700.061.400.18

Quality Assurance

Mr. Peter Manojlovic P.Geo., Chief Geologist, Sabina Gold & Silver Corp. and Qualified Person under the terms of NI43-101 has reviewed the technical content of this press release and approved its dissemination.

The mineral resource estimate for Hackett River was prepared by Mr. Albert Chong, P.Geo., Senior Geologist of AMEC Americas Limited, and can be found on SEDAR at www.sedar.com. Mr. Chong is a qualified person as defined by National Instrument 43-101. CIM Definition Standards (2005) have been used in defining the mineral resource categories.

Project Management of the PEA study was conducted by Eric Harkonen, P.Eng. and Principal Project Manager/Mine Engineer of PEG Mining Consultants Inc. He is a Qualified Person under the terms of NI43-101 and has reviewed the technical content of this press release and approved its dissemination.

SABINA GOLD & SILVER CORP. is a Canadian public mineral exploration and development company with assets at the Hackett River silver-zinc project, Wishbone project and the Back River project all in Nunavut, Canada and several projects in the Red Lake gold camp in Ontario, Canada. The Company had approximately $40 million in cash at November 30, 2009.

Forward Looking Statements

All statements herein relating to the Preliminary economic assessment of the Hackett River Project and its impact on the Back River Project and the Wishbone project are forward-looking statements within the meaning of securities legislation of certain Provinces in Canada. These statements include all matters relating to the economics of the Hackett River Project, including the development of the project, the processing of ore at Hackett River, the infrastructure requirements and commercial sale of proposed concentrates. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will," "would," "may," "could" or "should" occur. Information inferred from the interpretation of drilling results may also be deemed to be forward looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed. These forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation: risks related to fluctuations in metal prices; uncertainties related to raising sufficient financing to fund the planned work in a timely manner and on acceptable terms; changes in planned work resulting from weather, logistical, technical or other factors; the possibility that results of work will not fulfill expectations and realize the perceived potential of the Company's properties; risk of accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in the work program; the risk of environmental contamination or damage resulting from Sabina's operations and other risks and uncertainties, including those described in Sabina's Annual Report for the year ended December 31, 2008.

Forward-looking statements are based on the beliefs, estimates and opinions of Sabina's management on the date the statements are made. Sabina undertakes no obligation to update these forward-looking statements should management's beliefs, estimates or opinions, or other factors, change.

This news release has been authorized by the undersigned on behalf of Sabina Gold & Silver Corp.

John Wakeford, Senior VP Corporate Development

To view the 2009 Hackett River Summer Drill Results, please click on the following link: http://media3.marketwire.com/docs/sbb121t.pdf

To view the maps associated with this press release, please click on the following link: http://media3.marketwire.com/docs/sbb121m.pdf

Contact Information

  • Sabina Gold & Silver Corp.
    John Wakefort
    Senior VP Corporate Development
    1 888 648-4218 or (604) 998-4175
    www.sabinagoldsilver.com