Sabina Gold & Silver (SBB-T) cash and cash equivalents and short-term investments of $27.9 million at March 31, 2015
May 7, '15 - NR
"It has been a busy year to date for the Company," said Bruce McLeod, President & CEO "We are anticipating the imminent release of the Back River Feasibility Study ("FS"); we have completed a field program at Goose to support our Final Environmental Impact Statement ("FEIS"); we have implemented significant cost cutting measures within the Company to minimize impacts on our existing treasury and we are gearing up for our Annual General Meeting of Shareholders to be held in early June. We are very much looking forward to announcing the results of a detailed FS on Back River as well as providing updates on other studies and permitting through the remainder of the year."
"We recognize that projects are not just about economics, they have to be financeable for companies like Sabina in these weak capital markets without being overly dilutive to the shareholders. One of the unique features of the Back River Project is the multitude of high grade open pit and underground deposits. This offers the opportunity to selectively mine and process higher grade zones through utilization of a higher cut-off grade. With this in mind, in addition to work for the FS, the Company is evaluating opportunities for a smaller start-up, less capital intensive mine at the Goose property as contemplated in the FS. The results of this evaluation will enable Sabina to consider two opportunities: a FS on a +5000 tpd operation at Back River, and a potentially smaller tonnage lower capex scenario, that may be more easily financeable by Sabina in this capital markets environment." said McLeod.
Q1 Highlights
The Company had cash and cash equivalents and short-term investments of $27.9 million at March 31, 2015.
In February, 2015, the Company appointed Mr. Bruce McLeod as President & CEO effective February 16, 2015, following the retirement of Mr. Rob Pease.
In January, 2015, the Company received the Pre-Hearing Conference Decision document from Nunavut Impact Review Board ('NIRB') regarding the technical review of the Back River Draft Environmental Impact Statement. The NIRB report summarizes the collaboration and discussion with all participants on subjects such as caribou, marine/shipping, socio economic effects, tailing storage, among others and the commitments made by the Company to incorporate further data, reasonable mitigation measures, and preferred processes into the Project and its final EIS ("FEIS"). The Company has started work on its FEIS and expects it to be completed and submitted before in the fourth quarter, 2015.
In March, 2015, the Company opened its camp at Back River in order to complete an approximately six-week field program at the Goose property. The program, completed at the end of April, primarily consisted of geo-technical drilling and environmental baseline work to support the FEIS.
During the quarter, the Company continued to advance the Back River FS; work focused on:
The impact of an increased resource on the Project as it relates to mine life;
The impact of significant conversion of inferred resources to measured and indicated, particularly in the underground resource as it relates to development efficiencies and cost reductions;
The impact of increased recoveries (88.0% in the PFS to an anticipated 93.9%);
More efficient tailings and waste rock management facilities;
Increasing through put by approximately 20% from the 5,000 tpd in the PFS; and
The impact of an improved understanding of how the less densely drilled deeper portion of the current inferred resource could provide opportunity for longer term production; and other opportunities.
In March, 2015, the Company initiated a scoping level study on Back River to consider alternative mining and milling scenarios which could significantly decrease construction capital requirements by increasing cut-off grade and decreasing annual production rate while maintaining or improving return on investment.
In the quarter, the Company focused on a number of cost saving initiatives, including staff reductions and a 50% reduction of directors' fees.
Financial Results
For the quarter ended March 31, 2015, the Company reported a net loss of $1.5 million, favourable by $0.1 million compared to Q1 2014. Operating expenses in Q1 2015 were $2.0 million, lower than the comparable period in 2014 by $0.1 million (discussed below). Deferred income tax recovery was $0.4 million in Q1 2015, favourable by $0.1 million compared to Q1 2014, largely due to higher net tax loss in the period. Offsetting, interest income was $0.1 million, lower by $0.1 million due to lower cash balances.
The decrease in operating expenses in Q1 2015 resulted from the reduction of share-based payments due to a decrease in option value, reduced travel activity, reduced financial advisory and human resources related services, reduced directors' fees, share listing and filing fees and attendance at investor conferences.
Partially offsetting and included in salaries and severances in the period was severances of $0.5 million incurred for termination benefits in Q1, 2015 compared to severances of $0.1 million in Q1, 2014. Excluding severances, salaries were lower in Q1, 2015 than in the comparable period in 2014 by $87 thousand due to staffing reductions.
The primary costs incurred by the Company are associated with exploration and evaluation of its mineral properties and are deferred until the properties are placed into production, sold or abandoned. In Q1 2015, total deferred exploration and evaluation expenditures were $5.1 million compared to $3.9 million in 2014. The increase of $1.2 million was primarily the result of significantly increased economic assessment at Back River in 2015 compared to 2014. In Q1 2015, the Company worked to complete the FS on Back River; in the comparable period of 2014, the economic assessment activities were focused on various optimization studies in preparation for commencing the FEIS in Q3, 2014.
For the full March 31, 2014 yearend financial statements and Management's Discussion and Analysis, please see the Company website at www.sabinagoldsilver.com or retrieve them from www.sedar.com.
2015 Budget
Management and the Board have been focused on developing a "fit for purpose" organization that enables the Company to achieve its current initiatives and preserve its treasury as much as possible during these challenging markets. Already significant cost cutting measures have been made, including staff reductions of approximately 30% and the Board of Directors implementing a 50% reduction in Director fees while the Board undergoes a composition and compensation evaluation.
The 2015 budget delivers
Completion of feasibility and trade off studies; Completion of a technical review of the draft EIS and submission of a FEIS;
Modest field programs in winter and summer at Back River;
Continued community relations efforts;
Marketing and G&A.
The Company anticipates spending approximately $17 million in 2015 and expects to end the year with $16 million.
The Company's Annual General Meeting of Shareholders will be held at 10:00 am Pacific Time on June 11, 2015 at the Company's offices at 930 West First Street, #202, North Vancouver, BC.
SABINA GOLD & SILVER CORP
Sabina Gold & Silver Corp. is an emerging gold developer with district scale, world class assets in one of the world's newest, most politically stable mining jurisdictions: Nunavut, Canada.
Sabina's primary assets, all located in Nunavut, consist of: the Back River Gold Project, currently in the pre-feasibility and permitting phase and the Hackett River Silver Royalty, a silver production royalty on Glencore's Zinc's Hackett River project comprising 22.5% of the first 190 million ounces produced and 12.5% of all the silver produced thereafter. Sabina also holds grass roots exploration properties in Nunavut and Ontario.
All news releases and further information can be found on the Company's website at www.sabinagoldsilver.com or on SEDAR at www.sedar.com. All technical reports have been filed on www.sedar.com
For further information please contact:
Nicole Hoeller, Vice-President, Communications:
1 888 648-4218
nhoeller@sabinagoldsilver.com |
