Sabina Gold boosts resources at Back River

A new resource estimate by Sabina Gold & Silver (SBB-T) at its Back River gold project in Nunavut has the company’s share price moving in the right direction.

The estimate’s release helped lift the company’s share price by 14%, or 50¢, to $4.11 since announcing the news on Nov. 21.

The positive re-evaluation comes after the company more than doubled its resources after two drilling campaigns this year.

While Back River is made up of three deposits – Umwelt, Goose and Llama – the bulk of the increase in resources came from Umwelt, where resources are divided between the inside and outside of the Whittle shell.

Inside the Whittle shell, using a cut-off of 1 gram per tonne, indicated resources stand at 6.5 million tonnes grading 4.89 grams gold for 1.026 million oz. gold, while inferred resources come in at 1.2 million tonnes grading 4 grams gold for 149,300 oz. gold.

Outside the Whittle shell using a cut-off of 2 grams per tonne, indicated resources come in at 4.4 million tonnes grading 5.31 grams gold for 751,900 oz. gold, while inferred resources come in at 4.3 million tonnes grading 4.78 grams gold for 665,100 oz. gold.

“Given that there is a limited window for drilling in Nunavut, this success speaks to the prospectivity of the Back River project, as well as to the skill and innovation of our exploration team,” Rob Pease, Sabina’s president and chief executive, said in a statement.

Pease also added that discovery costs at Back River come in at just $13 per resource oz.

The company is pushing ahead with the project’s preliminary economic assessment, which it expects to complete by March.

Back River has had three resource updates this year.

Sabina said drilling at Llama extended the deposit, but that the structure’s complex nature, combined with immaterial ounces added, affected its decision to avoid updating its resource calculation.

Back River’s resources stand at 22.3 million tonnes of indicated resources, with an average grade of 5.62 grams gold for 4.03 million oz. gold. The resources contain both open-pit and underground ore.

Combined underground and open-pit inferred resources are at 10.03 million tonnes grading 6.23 grams gold.

The company intends to continue aggressive and disciplined exploration in 2012 on the Nunavut properties to further expand resources, drill test new discoveries and continue exploration for new prospects.