Sabina Gold & Silver Announces Buy Back of the R.A. Olson Consulting Ltd. Royalties on Back River
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 05/30/11 -- Sabina Gold & Silver Corp. (TSX: SBB) is pleased to announce that it has completed the buyback of certain existing royalties on its 100% owned Back River gold and Wishbone projects in Nunavut, Canada.
The Back River mineral claims, consisting of George, Goose, Bath 1, Boulder, Boot Lake, Dell and Needle as well as mineral claims on the Wishbone Greenstone belt were subject to a production royalty to R.A. Olson Consulting Ltd ('RAOCL'). The royalty required payment of 1.5% of the value of minerals mined until the royalty payments aggregated $5 million after which the royalty decreased to 0.75%. These RAOCL royalties and other associated rights have been purchased by Sabina.
The exploration success on Back River in 2010 firmly set Sabina on a course to become a mid-tier gold producer and as a result the Company has made efforts to remove outstanding royalties and rights to other parties on the properties.
'We are aggressively striving towards putting Back River in to production,' said Tony Walsh, President & CEO. 'Resolving these historic rights and royalties on Back River and on Wishbone paves a clearer way forward for us. After last year's program, we are close to achieving the critical mass of gold ounces required to head down the development path and we are also excited about the significant opportunities to continue to add ounces this year and in the future,' he said.
The buyback was facilitated by Sabina purchasing all of the issued and outstanding shares of R.A. Olson Consulting Ltd. for C$4.5 million in cash and issuing 750,000 Common Shares of the Company.
2011 Exploration Program
In 2011 the Company plans to do approximately 70,000 metres of drilling on its Back River and Wishbone gold targets.
Currently four drills are active at the Goose claim block working to extend and expand the new Llama and Umwelt deposits. A fifth drill has been mobilized at the Goose claim block and is waiting for a crew. This drill will test some of the other high priority targets on the Goose block identified by the exploration 'Tool Box'.
Two drills are active at the George claim block testing other Tool Box targets for the potential for new discoveries.
In June, a drill from Hackett will be mobilized south on the Wishbone greenstone belt to evaluate potential tool box gold targets in similar geological settings found on the Goose block.
The Company will spend approximately $30 million on gold target exploration alone.
SABINA GOLD & SILVER CORP. is a Canadian public mineral exploration and development company with a view to becoming a mid-tier gold producer. Key assets include the Hackett River silver project, the Back River gold project and the Wishbone grassroots exploration project all in Nunavut. Additionally, the Company has several projects in the Red Lake gold camp and an option on the Cook Lake North & South properties directly adjacent to the recently discovered Lalor deposit in Manitoba.
This news release has been authorized by the undersigned on behalf of Sabina Gold & Silver Corp.
Tony Walsh, President & CEO
Forward Looking Statements
Statements relating to future work at the Back River Project and the Wishbone Greenstone belt 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, 2010.
Contacts:
Sabina Gold & Silver Corp.
Nicole Hoeller
Director, IR
(604) 998-4175 or 1 888 648-4218
nhoeller@sabinagoldsilver.com
www.sabinagoldsilver.com