Learning about Nunavut - Mining Arctic Gold

Sabina Gold & Silver Corp. TSX: SBB

Feb 03, 2011 14:00 ET

Sabina Gold & Silver Opens Nunavut Camp for Aggressive 2011 Exploration Program

Goose Camp Open With Plans to Have Six Drill Rigs Turning by Mid-March

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 3, 2011) - Sabina Gold & Silver Corp. (TSX:SBB) is pleased to outline the objectives of its 2011exploration program and budget for its Nunavut projects. The Goose Camp is now open and being provisioned with drilling scheduled to commence in the next few weeks, approximately six weeks earlier than 2010. By the middle of March, six core drills will be operating at the Goose property with an additional two running at Hackett River by quarter end.

"We are very excited about the aggressive program that we have planned for 2011 to follow up on the tremendous success we had in 2010," said Tony Walsh, President & CEO. "While our resource calculations continue on the new Llama and Umwelt discoveries as well as the Goose deposit, our exploration team is ready to get started on our largest campaign ever. The 2011 program will focus on extending our new gold discoveries on the Goose claim block as well as applying our exploration tool box to look for new gold discoveries on the other Back River and Wishbone targets. Initial drilling should commence on or about March 1 at Goose. Once the Goose camp becomes operational, efforts will shift to opening the Hackett Camp."

Sabina ended 2010 with a solid cash position of approximately $83 million. In 2011, the Company plans to spend approximately $52 million on its exploration programs and G&A.

Of this, approximately $47 million has been slated for work on the Company's Nunavut properties with the following allocations:

• 70% of the budget on Back River.
  • 70% of the work will focus on advancing the existing Back River deposits including resource updates and a Preliminary Economic Assessment.
  • 30% of the work will focus on looking for new gold discoveries.

• 25% of the budget on Hackett River.
  • 70% of the work will focus on enhancing economics by conversion of material and increasing resources in the current pit shells.
  • 30% of the work will focus on looking for new discoveries outside of existing deposits to increase project through put.

• 5% of the budget will be focussed on looking for new gold discoveries on the Wishbone Greenstone Belt.

Final programs and budgets are being compiled and are still subject to board approval.

Camps at Goose and Hackett River will be provisioned with additional consumables to enable aggressive follow-up drilling on positive results. Two new diamond drills will be mobilized to the properties to bring the total to eight drills, with an eventual six drills testing existing discoveries and new gold targets at Back River and two drills at Hackett River. During the summer, one of the Hackett River drills will be mobilized to the south end of the Wishbone Greenstone belt to test for gold targets there.

In addition, to capitalize on the synergies these projects offer during the exploration phase, a 100km long winter road is currently being constructed to connect the Goose Lake camp with the Hackett River camp through George Lake. A permanent airstrip at Goose is also being permitted to facilitate larger aircraft, expedite mobilization going forward and potentially extend the drilling season by an additional six weeks.

Back River

The Company's 100% owned Back River gold project was acquired in 2009 and contains National Instrument 43-101 ("NI 43-101") compliant indicated resource of 3.4 million tonnes at 10.9 g/t Au for 1.19 million ounces gold and an additional inferred resource of 3.6 million tonnes at 10.2 g/t Au for 1.16 million ounces gold. These resources were calculated in 2007 and are split approximately evenly between the George claim block to the north and the Goose claim block to the south.

Back River offers the opportunity for Sabina to become a mid-tier gold producer. The Company has been targeting a notional minimum gold production profile of 200,000 ounces per year for a minimum of 10 years.

Prior to moving towards scoping or economic studies, the Company's 2010 objective was to increase the global resource at Back River by an additional 700,000 ounces. With this target in mind, the Company's primary focus at Back River has been at the Goose claims block where gold is hosted within wide units of folded iron formation resulting in thick, shallow gold targets, potentially amenable to open pit extraction.

To assess these targets, Sabina's exploration team has developed an exploration "tool box". This tool box is based on (among other things) interpreting geological and geophysical signatures used to identify areas on the iron formation that have been altered by high temperature geological events.

This set of exploration assumptions worked well for the team in 2009 and 2010. Within six months of field work, three new gold discoveries were made on the Goose block, two of which are significant: Llama and Umwelt. These two deposits remain open and are priority targets for further drilling in 2011.

Sabina's internal work on the Llama and Umwelt deposits has been generated and delivered to Scott Wilson / Roscoe Postle Associates (SW / RPA) to generate NI 43-101 compliant resources.

Once SW / RPA have completed the resource work on Llama and Umwelt, they will begin work transitioning the Goose deposit model and resource from underground to open pit. The Company has been by advised by SW / RPA that all three studies should be complete in early Q2 of 2011.

The success of the 2010 campaign has led management to believe that the additional resources from the new deposits at Llama and Umwelt as well as the remodelling of the Goose deposit will exceed the 2010 goal of adding 700,000 ounces of gold to the global resource.

Results will be announced as soon as they are complete at which point the Company will move to a scoping study on the project in H2 2011.

2011 Back River Work Program and Exploration Drilling

The objectives at Back River for 2011 are:

• To complete a NI 43-101 resource calculation on Llama, Umwelt & Goose in the first half of 2011 and to continue to expand resources at Llama, Umwelt, Goose and possibly Echo.
  
• To increase and expand resources at Llama and Umwelt by completing aggressive step out drilling.
  
• To commence and complete a Preliminary Economic Assessment on Back River incorporating resources from Llama, Umwelt, Goose George and possibly Echo during the second half of 2011.
  
• To utilize the newly developed "toolbox" to test priority new exploration targets on the Goose property as well as test similar targets on the four other Back River claim groups with emphasis on the George claim group which contains an existing indicated resource of 1.8 million tonnes grading 10.0 g/t Au for a total of 590,000 ounces and an inferred resource of 2.6 million tonnes grading 10.5 g/t Au for a total of 866,000 ounces.

A 68,000 metre drill program has been designed to facilitate these objectives. Six drills will be operational at Back River and drilling at Goose will commence in the next few weeks with first results anticipated in early April, 2011.

Hackett River

Hackett River is one of the largest undeveloped deposits of its type in the world. The Preliminary Economic Assessment completed in 2009 envisions a large scale project producing three concentrates that would be trucked 70 km to a deep water port and shipped out through the Northwest Passage during the 16 week summer shipping season.

The goal of the 2010 drill program at Hackett River was twofold. The first goal was to investigate and quantify targets which could significantly improve the early years of the project economics by identifying high value mineralization (copper/silver/gold stringer mineralization) located near or within the current open pit shells and reducing the currently contemplated strip ratio. The second objective for 2010 is to identify additional mineralization which could provide Sabina an opportunity to increase project throughput and/or further defer the capital associated with the development of the underground mine at Boot.

During the 2010 work program, Sabina continued to quantify and improve the resources within the pits by converting undrilled material classified as zero grade in the resource model, to potentially economic mineralization as well as adding resources through a new discovery at East Cleaver.

As previously announced, the Company has engaged BMO Capital Markets to solicit investors or partners on the project and to advise the Company in its pursuit of strategic alternatives to accelerate the development of the Project. As part of this initiative, the Company is currently creating new internal geological models for these deposits as well as internal resource calculations to determine the impact of these new discoveries. Once generated, and if material, internal studies will be forwarded to a third party for NI 43-101 validation.

The Objectives for the 2011 work program at Hackett River are:

• To complete an internal resource assessment of the 2009 and 2010 in-pit drilling starting with the Main and East Cleaver deposits.

• To continue to infill drill in the proposed pits in order to convert unclassified material to classified material and in addition to expand the deposits by drilling proximal to the existing pit shells.

• To make new discoveries within the Hackett River claim block outside of the known deposit area.

Approximately 15,000 metres has been planned for drilling at Hackett River with 70% of that drilling focused on enhancing and expanding the existing deposits and 30% focused on looking for new discoveries. Preparations to open Hackett River Camp will begin in mid-February. All plans for Hackett are contingent on the results of the Company's search for a strategic partner on the project.

Wishbone

Objectives for the 2011 program at Wishbone include a shift in focus from VMS targets proximal to the Hackett deposits at the north end of the belt, to iron formation hosted gold targets along the eastern side of the belt where we will begin to apply the knowledge that we have gained at Goose on this extensive area of iron formation.

The Company plans to drill approximately 7,500 meters on the Wishbone property with a budget of approximately $3 million. The 2011 program will also include a significant field component consisting of mapping, prospecting and ground geophysics targeting both gold and higher priority VMS type targets.

Quality Assurance

Mr. Peter Manojlovic, PGeo, and Vice President Exploration of Sabina Gold & Silver Corp. is a Qualified Person under the terms of NI 43-101 and has reviewed the technical content of this press release and approved its dissemination.

Mineral resources for Goose Lake and George Lake were generated by RSG Global Consulting Pty Ltd (Coffey Mining) in September 2007.

The mineral resource estimate for Hackett River was prepared as part of the Preliminary Economic Assessment (PEA) update by Gordon Zurowski, P.Eng., Principal Mine Engineer of PEG Mining Consultants Inc, and can be found on SEDAR at www.sedar.com. Gordon Zurowski is a qualified person as defined by National Instrument (NI) 43-101. CIM Definition Standards (2005) have been used in defining the mineral resource categories.

Project Management of the PEA study was conducted by Eric Harkonen, P.Eng. and Principal Project Manager/Mine Engineer of PEG Mining Consultants Inc. He is a qualified person as defined by NI43-101.

All technical reports have been filed on www.sedar.com.

Forward Looking Statements

Statements relating to future operations at the Hackett River Project, 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, 2009.

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, should change.

This news release has been authorized by the undersigned on behalf of Sabina Gold & Silver Corp.

Tony Walsh, President & CEO

To view the maps accompanying this press release please visit the following link:http://media3.marketwire.com/docs/sabmaps23.pdf