Sabina gets final project certificate, major investment for Nunavut gold mine
Formal approval comes day after company announced it had secured a $66M investment
A day after Sabina Gold and Silver announced it had secured a $66 million investment from a Chinese backer, the company was able to report it had received its final project certificate from the Nunavut Impact Review Board for its Back River gold mine project.
On Monday, Sabina announced Zhaojin International Mining was investing in the project through a share purchase. Once the deal is complete, the Chinese company will hold 9.9 per cent of the company, with the option to increase that holding to 19.9 per cent through future financing.
With the final project certificate in hand, the only regulatory permits remaining are two water licenses for mine construction and operation, and other less significant permits.
With $38 million in cash and equivalents on hand and $66 million coming from Zhaojin, the company still has some work to do in financial markets. Sabina pegs capital expenditures to build the mine at $415 million.
But Nicole Hoeller, Sabina Gold vice president of communications, said the company is in a solid financial position.
A chance to be 'opportunistic'
"One of the things about this investment with Zhaojin is it allows us to be opportunistic," Hoeller said.
"We're not behind the eight ball, we don't have to go out there and raise money at a discount or in weak markets. If a [financing] window opens in January we'll get going then, but if it doesn't open until September, we'll wait."
Hoeller said independent financial advisor Cutfield Freeman determined the mine could carry a debt of about $250 million USD, although the company would prefer not to leverage the project that heavily.
In the meantime Hoeller said the company will continue with exploration projects near the main Back River property, which have a good chance of increasing the project's investor profile.
"We've had good exploration success this year with two new zones," she said. "We will focus on the Vault Zone which is outside the current mine plan."
Sabina is the 100 per cent owner of the Back River Gold mine project, located approximately 400 kilometres southwest of Cambridge Bay, Nunavut. Zhaojin International Mining is a subsidiary of Chinese mining company Zhaojin Mining Industry Co. Ltd.
On Thursday, Sabina Gold and Silver stock (TSX:SBB) was listed at $2.33 on the Toronto Stock Exchange.