Sabina Silver Corporation

Sabina Silver Corporation

April 27, 2009 20:15 ET

Sabina Silver Announces 2008 Year End Financial Results-Reports on Company Strategy

$39.4 million at December 31, 2008 in cash and marketable securities

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 27, 2009) - Sabina Silver Corporation (the "Company") (TSX VENTURE:SBB) reported today the financial results for the year ended December 31, 2008 and a summary of 2008 Company events.

The year 2008 was one of change and growth at Sabina Silver. While many companies struggled to survive the global economic crisis, Sabina was actively building a strategy to set the course for growth.

"We are very much looking forward to what the rest of 2009 brings," said Tony Walsh, President & CEO. "Although Hackett River has reached a critical mass sufficient to support infrastructure on a standalone basis, Sabina as a company needs to build the critical mass to be able to obtain the resources to finance, build and operate the project. We have not fully exploited the exploration potential that Hackett can provide and have new exploration opportunities at Back River & Wishbone. We believe the systematic growth of our Company's value can be driven by exploration success at Hackett and Back River."

The Company plans to maintain a strong balance sheet and continues to look for other accretive precious metals acquisitions in Canada.

Hackett River Project

With the addition of new management, a fresh review was done of the Hackett River Project in the fall of 2008. The results of this review were exciting and demonstrated significant exploration potential at the project. Management believes that Hackett River is evolving into a very significant VMS deposit and that there are opportunities not only to increase the size of the project, but also to discover higher value mineralization such as more copper, gold and silver. During the review, several high priority targets were identified, with potential to find extensions to existing deposits and perhaps discoveries of new near surface deposits. A drilling campaign to test some of these priority targets is currently underway.

During 2008, the Company continued pre-feasibility work for Hackett River. A significant component of this work included a new mineral resource estimate for the project. Although little drilling was done in 2008, the result of the new estimate, announced on March 11, 2009 revealed a larger improved and more robust resource. The new resource reported increases of 3% more silver, 10% more zinc and 34% more copper. In particular, the open pit portion of the resource increased by 40% with no significant change in grade.

The new modeling completed not only indicates that the existing resource is more robust than originally interpreted, but also confirms our assessment that there is significant potential to add higher value mineralization to the resource base. Detailed modeling of all the deposits has also clarified metal zoning and "hot spots" leading to high potential exploration targets. From a project economics perspective, the opportunity to open pit mine the higher grade mineralization first could have substantial impacts on the project reducing mining costs as well as the initial capital payback period. Also, the bulk of the existing resource is within the first 400 meters of surface, providing the opportunity to open pit all deposits, and perhaps allowing the project to defer or eliminate any underground capital required.

The Company is in the process of reviewing the results of the new mineral resource estimate, metallurgical recoveries and other ongoing development related studies to determine the appropriate path going forward, taking into consideration the improved geological model and the significant positive changes and opportunities identified in the resource estimate.

Back River Transaction

The proposed Back River acquisition from Dundee Precious Metals, announced on March 30, 2009, was the culmination of work done in 2008 to fulfill the corporate strategy to acquire accretive, synergistic precious metals assets in Canada.

The Back River Assets consist of two main components, the original Back River property hosting the George and Goose Lake iron formation hosted gold deposits and a recent new project area, the Wishbone Project. The Back River gold deposits are proximal to Hackett River, with George Lake being approximately 40 km to the south east. The Wishbone property covers a large portion of the Hackett River Greenstone Belt ("HRGB") and hosts Sabina's Hackett River Project as well as other smaller base and precious metal deposits. The combined properties total approximately 3,000 square km and cover a largely unexplored highly prospective greenstone belt.

More Precious Metals

The assets that add immediate tangible value in this transaction are the George and Goose Lake banded iron formation gold deposits which host 3.4 million tonnes grading 10.9 g/t for a total of 1.2 million indicated ounces of gold and 3.5 million tonnes grading 10.2 g/t for a total of 1.1 million inferred ounces of gold. This year's exploration program at Back River would focus on the Goose claim group and include drill testing of favourable sequences of folded iron formation near the Goose gold deposit. The objective of this program will be to identify potential to increase the gold resource in the Goose area.

Control of a Prospective Canadian Greenstone Belt

The Wishbone Project is a large early stage exploration play. It consists of staked claims and prospecting permits covering the known extents of the HRGB. The claims and permits extend for nearly 150 kilometres north to south and up to 50 kilometres east to west. The Wishbone Project gives Sabina years of prospective exploration targets providing opportunities to create leverage and value while more advanced projects are pushed towards fruition. The Wishbone targets also create opportunities for the development of satellite mill feed for the anticipated Hackett River mill.

Regional Influence

Of intrinsic value are the opportunities that exist for Sabina on a regional basis. Hackett River has amassed the size to exist as a stand-alone project, including supporting the cost of a dedicated road and deep water port if required. However, the acquisition of the Back River Assets could enable these large fixed costs to be spread over a larger and higher value resource base. Further, the established infrastructure at Hackett River could become an economic driver for the region and the territory.

Sabina has agreed to acquire the Back River Assets for the following consideration:

(i) At closing, $7.0 million in cash and 17 million common shares (approximately 18.8% of the number of outstanding common shares post-transaction);

(ii) 5 million Series A Special Warrants; and,

(iii) 5 million Series B Special Warrants.

The Special Warrants are exercisable to receive one common share and one-half of one common share purchase warrant. The Series A Special Warrants are to be exercisable upon a decision to proceed to a feasibility study or proceed to production on the Back River Assets and in consideration of other events. The Series B Special Warrants are to be issued upon a positive production decision on the Back River Assets.

The Company will be seeking shareholder approval for the transaction at its upcoming Annual General and Special Meeting which will be held on June 4, 2009 in Vancouver, BC.

Financial Results

For the year ended December 31, 2008, the Company reported a net loss of $3.1 million compared to earnings of $3.5 million during the same period in 2007. Included in the earnings in 2007 was a gain of $5.2 million on the sale of certain equity investments. Excluding this gain the loss for 2007 was $1.7 million. The loss in 2008 was higher by $1.4 million due primarily to unrealized losses on held-for-trading investments offset by lower operating expenses and higher future income tax recovery.

The Company had cash and short term investments of $34.9 million at December 31, 2008 compared to cash and short term investments of $43.9 million at December 31, 2007. Additionally the Company holds Canadian equities with an estimated market value of $4.5 million at December 31, 2008.

The Company has restated stock-based compensation in prior periods to correct an error in the calculation of historical volatility, expected lives and interest rates used to estimate the fair value of options granted. The most significant change resulted from the correction to expected volatility. The Company has used an average volatility of 73% (rather than 37% previously used) in its Black-Scholes calculation of the fair value of stock options granted in prior periods. As a result, stock-based compensation in prior periods was increased by $1.2 million (of which $0.2 million was included in deferred exploration costs) and future income tax liability was increased by $0.14 million. For more information on the restatement, see note 2 (p) of the 2008 annual financial statements.

For the full December 31, 2008 financial statements and Management's Discussion and Analysis, please see the Company website at

Quality Assurance

Mr. John Wakeford, P.Geo. and a Qualified Person in accordance with NI 43-101 has reviewed the contents of the news release and has approved such dissemination. The Hackett River mineral resource estimate was prepared by Mr. Albert Chong, P.Geo., Senior Geologist of AMEC Americas Limited. 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. The Hackett River resource estimate was announced on March 11, 2009. Mineral resources for Goose Lake and George Lake were generated by RSG Global Consulting Pty Ltd (Coffey Mining) in September 2007, and are posted on

SABINA SILVER CORPORATION is a Canadian public mineral exploration and development company with assets at the Hackett River silver-zinc project in Nunavut and several projects in the Red Lake gold camp. The Company is well capitalized with approximately $40 million in cash and marketable securities at December 31, 2008. The strategy to grow the company focuses on two mandates: 1) to continue to focus on enormous exploration and development potential of Hackett River Silver-Zinc project; and 2) Maintain strong balance sheet to acquire accretive precious metals assets.

Forward Looking Statements

Statements relating to permitting, feasibility and exploration work at the Hackett River project and the Back River Acquisition 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 and information concerning mineral resource estimates 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 gold 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; uncertainties involved in the estimation of metal reserves and resources; the possibility that required permits may not be obtained on a timely manner or at all; the possibility that capital and operating costs may be higher than currently estimated and may preclude commercial development or render operations uneconomic; the possibility that the estimated recovery rates may not be achieved; 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 and CEO

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