Sabina Silver Corporation

Sabina Silver Corporation

August 06, 2009 09:19 ET

Sabina Silver Announces Significantly Improved Recoveries From Hackett River Metallurgical Results

More comprehensive testing results in higher recoveries for silver, zinc, lead and gold Summer Campaign underway at Back River and Hackett River Projects

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 6, 2009) - Sabina Silver Corporation (TSX VENTURE:SBB) announced today the results of the updated metallurgical report on Hackett River (the "Report"), completed by AMEC Americas Ltd. as part of the pre-feasibility work for the project. The Report extends the metallurgical knowledge from the preliminary economic assessment ("PEA") completed by Wardrop in 2007.

Hackett River is one of the largest undeveloped Volcanic Massive Sulphide ("VMS") camps of its type in the world and exhibits many geological similarities to the long producing prolific VMS camps such as Flin Flon and Noranda. After the release of a positive PEA on the Hackett River project in March of 2007, Sabina Silver engaged AMEC Americas Ltd. ("AMEC") to conduct a Pre-feasibility Study ("PFS") on the project. As part of the study, a new mineral resource estimate was prepared and further metallurgical testing was undertaken.

Metallurgical Results

The metallurgical test work was performed at SGS Lakefield Research Limited (SGS) under the direction of AMEC and included work on mineralogy, grindability studies, and floatation process development.

Samples and tests recovered as part of the SGS studies differed from the PEA tests in that a better representative sample was used and tests conducted were more extensive compared to the tests conducted in the PEA. Also the metallurgical flow sheet is slightly different between the two reports.

Overall, when compared to the Wardrop PEA, recoveries are;

- Silver increased by 7% (72% to 76.8%)

- Zinc increased by 2% (89.6% to 91.7%)

- Lead increased by 21% (70.0% to 84.9%)

- Copper decreased by 7% (80.0% to 74.7%)

- Gold increased by at least 20% (50% to greater than 60%)

Although the grades indicated for copper are lower (see table below), the concentrate grade still represents a saleable product and is not expected to penalize production.

"We are very pleased with the results of the recent metallurgical work on Hackett River," said Tony Walsh, President & CEO. "The more comprehensive testing undertaken for this work has returned significantly better recoveries, particularly for silver. As with the recently released mineral resource which identified increases in grade, tonnage and open pit material, these studies continue to demonstrate the quality and robust nature of the Hackett River deposits."

The studies indicate that three concentrate steams would be generated with recoveries as outlined below:

Metal Recoveries Wardrop AMEC
Cu% Pb% Zn% Ag% Cu% Pb% Zn% Ag%
Cu Concentrate 80.0 60.0 74.7 34.7
Pb Concentrate 70.0 12.0 84.9 42.1
Zn Concentrate 89.6 6.3 91.7 4.5
Ag Recovery (CU + PB Con) 72.0 76.8

Concentrate Grade Wardrop AMEC
Cu% Pb% Zn% Cu% Pb% Zn%
Cu Concentrate 31.0 1.96 1.27 23.5 1.9 6.7
Pb Concentrate 1.4 60.0 4.0 1.7 51.4 4.2
Zn Concentrate 0.21 0.35 54.5 0.1 0.1 56.0

Metallurgical Test Work Description

The flotation tests were in the form of locked-cycle tests which experimentally simulate a continuous flotation circuit. The tests were conducted on seven composites of material from the Hackett River deposits. Three composites were from the Main zone and two composites each from the Boot Zone, and the East Cleaver Zone. The samples consisted of the three major types of mineralization at the Hackett River Project: Massive Sulphides of greater than 20% sulphides, Semi-massive sulphides with less than 20% sulphides, and footwall stringer mineralization.

Two methods of mineral separation were extensively assessed during the test work. One method was sequential separation of Copper/Lead/Zinc (Sequential), the other was a Bulk Copper/Lead floatation followed by Zinc flotation (Bulk). The Bulk method produced the best overall results corroborating the findings of the PEA.

The Gold recovery reporting to the copper concentrate has increased over the PEA to greater than 60%. The Gold content in the Lead concentrate is less than 1 g/t. ICP (Inductively Coupled Argon Plasma Optical Emission Spectrometer) analysis of the test concentrates indicated low levels of impurities.

Grindability test results indicate the composites are relatively soft. The abrasion test on the composites indicates the composites averaged a higher Abrasion Index. Also, 52 variable samples were used for Sag power index and modified ball mill Work index tests. These tests indicate a wide range of material values from very soft to very hard.

The information from the report will be used to provide a foundation for further metallurgical test work supporting the design of the mine in the future.

Pre-Feasibility Update

The PFS commenced in 2007 has been significantly delayed, in part due to human resources constraints, and in part due to insufficient technical information on the project.

As an initial part of the PFS, AMEC completed and the Company filed an updated 43-101 Mineral Resource Estimate in April of 2009. The updated resource represented an improvement over the previous estimate and included improved recoveries resulting from metallurgical studies which were completed under the supervision of AMEC as part of the work to prepare for the PFS as outlined above.

Based on the positive results from the resource and metallurgical studies, the opportunities identified from the new AMEC generated resource model and the significant exploration potential identified at Hackett in the fall of 2008, the Company has recently decided to delay commencing the engineering work that would form part of the PFS.

Work has not stopped, however. The Company has engaged PEG Mining Consultants ("PEG") to undertake an update to the PEA to provide insight to management on how best to proceed with the PFS. This updated PEA would incorporate the new resource model and improved recoveries as well as examine increased production rates, methods of mining and infrastructure.

Upon completion of the PEG update, further PFS work will be re-assessed to determine if any changes should be made to the scope of the mine design or if further collection of technical data is required.

Quality Assurance

Mr. John Wakeford, P.Geo. and a Qualified Person in accordance with NI 43-101 has reviewed the results referred to above and has approved their dissemination.

SABINA SILVER CORPORATION is a Canadian public mineral exploration and development company with assets at the Hackett River silver-zinc and the recently acquired Back River gold project and Wishbone claims in Nunavut along with several projects in the Red Lake gold camp. The Company is well capitalized with approximately $40 million in cash and marketable securities at March 31, 2009 (not including the proceeds raised in the brokered and non-brokered financings). The strategy to grow the company focuses on two mandates: 1) to continue to focus on enormous exploration and development potential of the Hackett River silver-zinc and Back River gold projects; and 2) maintain a strong balance sheet to acquire accretive precious metals assets.

Forward Looking Statements

Statements relating to exploration, resources, metallurgical results, pre-feasibility, development and production and the expected results of this work are forward-looking statements within the meaning of securities legislation of certain Provinces in Canada. 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 Silver Corporation.

Tony Walsh, President & CEO

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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