Sabina Silver Corporation

Sabina Silver Corporation

August 14, 2009 17:15 ET

Sabina Silver Announces Q2 2009 Financial Results

Drilling continues at Hackett & Back River project-results expected soon

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 14, 2009) - Sabina Silver Corporation (the "Company") (TSX VENTURE:SBB) reported today the financial results for the quarter ended June 30, 2009.

The first half of 2009 culminated in the accomplishment of a number of Company initiatives.

Hackett River

During the first half, the Company announced an updated mineral resource estimate for the Hackett River Project. The updated mineral resource returned significant improvements over the previous estimate announced in 2007. In conjunction with ongoing resource work related to the pre-feasibility study ("PFS"), metallurgical studies were also conducted. The more comprehensive testing undertaken for metallurgical testing has returned significantly better recoveries, particularly for silver. As with the mineral resource estimate 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.

Based on the positive results from the resource and metallurgical studies, the opportunities identified from the new generated resource model and the significant exploration potential identified at Hackett in the fall of 2008, the Company reported that it has engaged PEG Mining Consultants ("PEG") to undertake an update to the initial Preliminary Economic Assessment on the project (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.

Although already one of the largest undeveloped projects of its type in the world, significant exploration potential still exists at Hackett River. Current exploration work at Hackett River is focussed on identifying higher grade near surface mineralization with targets testing the expansion of existing deposits as well as looking for new discoveries on the project.

Back River

At the Company's AGM held on June 4, 2009, shareholders voted overwhelmingly in favour of the acquisition of the Back River assets from Dundee Precious Metals. This acquisition has significantly increased the precious metals component of Sabina's resource base. The Company now controls 205 million indicated and an additional 64 million inferred ounces of silver along with 1.2 million indicated ounces of gold and an additional 1.1 million inferred ounces of gold. These gold ounces are located in close proximity to the contemplated Hackett River infrastructure and both projects will benefit from logistical, exploration and management synergies.

Exploration at Back River is concentrated at the Goose Lake deposit where the primary focus is to test several prospective targets proximal to the existing resource.

Financing Activities

Also during the second quarter the Company completed an equity financing for proceeds of $18 million. This financing replenishes Sabina's treasury after the costs of the Back River acquisition and enables the Company to work on the Back River projects right away as well as push forward with more work at Hackett River.

Corporate Development

Management continues to pursue the acquisition of value added assets with a focus on advanced exploration precious metals projects that would diversify our geographical asset base.

Exploration Update

Aggressive summer drilling campaigns at Hackett River and Back River are underway and will continue until mid-September of this year. Drilling is progressing well with approximately 30 holes completed testing priority exploration and resource expansion targets at both Hackett River and the Goose Lake area. Assay results are expected within the next two to three weeks and will be reported once compiled.

"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 leverage the exploration potential that Hackett can provide and have new exploration opportunities at Back River & Wishbone. Management believes the systematic growth of our Company's value can be driven by exploration success at Hackett and Back River as well as by continuing to demonstrate the world class nature of the Hackett River project."

Financial Results

For the three and six month periods ended June 30, 2009, the Company reported net losses of $1.5 million and $1.9 million respectively compared to $7,000 and $0.4 million in the corresponding periods of 2008. The loss for the six month period in 2009 was $1.5 million higher due largely to higher operating expenses, higher stock-based compensation and lower interest income, partially offset by a higher unrealized gain on held for trading investments.

The company had cash and short term investments of $38.3 million at June 30, 2009 compared to cash and short term investments of $35.0 million at December 31, 2008. Additionally the company holds Canadian equities with an estimated market value of $7.3 million at June 30, 2009 compared to an estimated market value of $4.5 million at December 31, 2008.

For the full June 30, 2009 financial statements and Management's Discussion and Analysis, please see the Company website at

Quality Assurance

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

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. Mr. John Wakeford, P.Geo. and a Qualified Person in accordance with NI 43-101 has reviewed the resources referred to above and attached 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 $45.7 million in cash and marketable securities at June 30, 2009. 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 the work at Hackett River and the Back River assets 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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