VANCOUVER, British Columbia and CAMBRIDGE BAY, Nunavut, Oct. 18, 2017 (GLOBE NEWSWIRE) -- Sabina Gold & Silver Corp. (SBB-T) (“Sabina”) and the Kitikmeot Inuit Association (“KIA”) announced today the execution of a binding term sheet setting forth the principle terms that are to be included in a definitive Framework Agreement (“FA”). The FA, upon completion, would be a comprehensive agreement which would set out rights and obligations with respect to surface land access on Inuit owned land and will include an Inuit Impact and Benefits Agreement (“IIBA”) among other obligations required by the Nunavut Agreement.
“On behalf of the KIA Board, I am pleased to announce the signing of this binding term sheet,” said Stanley Anablak, President of the KIA. “We believe we have negotiated terms that focus on the interests of Inuit of the Kitikmeot Region providing them with training, employment, business opportunities and direct economic benefits from the Back River Project. Throughout our negotiations KIA’s primary concern was including appropriate measures in the term sheet to conserve the land, water and wildlife while advancing socio-economic development for the region. We have made significant advancements in both socio-economic and caribou mitigation concerns. We thank the Sabina team for their effort and commitment to complete the term sheet and look forward to completing the definitive agreements in the coming months."
Bruce McLeod, President & CEO of Sabina commented, “The FA terms have been negotiated in good faith with a result that benefits both Sabina and all of our Nunavut stakeholders. We appreciate the considerable effort by the KIA throughout the process and are looking forward to working with the KIA upon completion of the FA to implement the initiatives contemplated by the FA. We believe the FA terms demonstrate our genuine long-term commitment to the Inuit of the Kitikmeot Region and Nunavut, and that our already strong partnerships in the region will be made stronger.”
The FA, when completed, would have a maximum term of 20 years and would include among others, the following key provisions and agreements:
- Land use licenses which would permit Sabina to conduct non-exclusive exploration work at Back River;
- Advanced exploration leases permitting various advanced exploration and pre-production activities at Back River;
- Commercial leases authorizing the development of mines and related operations and closure activities at the Goose Property;
- A 1% net smelter return royalty paid to the KIA on production at Back River on the properties that are subject to a commercial lease;
- A grant of 6.7 million Sabina shares to the KIA upon the effective date of the IIBA
- An IIBA setting out commitments associated with Inuit employment, training and education, Kitikmeot business opportunities, formation of an Inuit Environmental Advisory Committee and investments in community infrastructure projects with the objective of supporting regional wealth creation initiatives within Kitikmeot communities;
- An initial investment of $4 million in regional wealth creation initiatives in the Kitikmeot, $2 million of which could occur following execution of definitive agreements, and the remainder no later than upon a production decision, with additional payments commencing the third year following commercial production if Sabina-related employment targets are not achieved. The purpose of the regional wealth creation initiative is to create new long term operating jobs outside of the mine to expand and diversify the Kitikmeot economy;
- An annual payment to the KIA of up to $1 million to cover KIA's cost of implementing the FA; and
- Water and wildlife compensation agreements including additional payments if Sabina fails to implement caribou mitigation commitments regarding calving and post-calving periods made to the Nunavut Impact Review Board.
Under the binding term sheet, the parties have agreed to negotiate in good faith towards completing the FA and the other definitive agreements contemplated in the term sheet. The transactions contemplated in the term sheet are subject to the completion of the FA and such definitive agreements. Work is ongoing on the FA and definitive agreements, which are targeted to be completed by early in 2018. The term sheet and the FA, involving the issuance of 6.7 million Sabina shares to the KIA, are subject to any necessary regulatory and Toronto Stock Exchange approval.
The Kitikmeot Inuit Association
The Kitikmeot Inuit Association (KIA) was incorporated in 1976 to represent and promote the interests of the Kitikmeot Inuit. The KIA is a democratically elected not-for-profit society.
KIA's mandate is to “manage Kitikmeot Inuit lands and resources, and to protect and promote the social, cultural, political, environmental and economic well-being of Kitikmeot Inuit”.
KIA owns 92,619 Km2 of surface Inuit Owned Land in the Kitikmeot Region. The Back River Project footprint overlays several parcels of Inuit Owned Land south of Bathurst Inlet. KIA is also designated to implement many rights from the Nunavut Agreement to represent Kitikmeot Inuit related to land management, socio-economic, water, and wildlife matters that are relevant to the Back River Project.
Sabina Gold & Silver Corp
Sabina Gold & Silver Corp. is a well-financed, emerging precious metals company with district scale, advanced, high grade gold assets in one of the world’s newest, politically stable mining jurisdictions: Nunavut, Canada.
Sabina released a Feasibility Study on its 100% owned Back River Gold Project which presents a project that has been designed on a fit-for purpose basis, with the potential to produce ~200,000 ounces a year for ~11 years with a rapid payback of 2.9 years (see “Technical Report for the Initial Project Feasibility Study on the Back River Gold Property, Nunavut, Canada” dated October 28, 2015). At a US$1,150 gold price and a 0.80 (US$:C$) exchange rate, the Study delivers a potential after tax internal rate of return of approximately 24.2% with an initial CAPEX of $415 million.
In addition to Back River, Sabina also owns a significant silver royalty on Glencore’s Hackett River Project. The silver royalty on Hackett River’s silver production is comprised of 22.5% of the first 190 million ounces produced and 12.5% of all silver produced thereafter.
The Company had approximately C$36.6 million in cash and equivalents on June 30, 2017, not including the $6 million flow-through financing completed in September 2017.
For further information please contact:
Paul Emingak, Executive Director, Kitikmeot Inuit Association
(867) 983-2458 execdir@kitia.ca
Nicole Hoeller, Vice-President, Communications, Sabina Gold & Silver Corp:
1 888 648-4218 nhoeller@sabinagoldsilver.com
All Sabina news releases and further information can be found on the website at www.sabinagoldsilver.com, or on SEDAR at www.sedar.com.
Forward Looking Statements
This news release contains “forward-looking information” within the meaning of applicable securities laws (the “forward-looking statements”), including our ability to negotiate and enter into definitive agreements and to complete the transactions contemplated therein. These forward-looking statements are made as of the date of this news release. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated in or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur. While we have based these forward-looking statements on our expectations about future events as at the date that such statements were prepared, the statements are not a guarantee that such future events will occur and are subject to risks, uncertainties, assumptions and other factors which could cause events or outcomes to differ materially from those expressed or implied by such forward-looking statements. Such factors and assumptions include, among others, the effects of general economic conditions, commodity prices, changing foreign exchange rates and actions by government and regulatory authorities and misjudgments in the course of preparing forward-looking statements. In addition, there are known and unknown risk factors which could cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Known risk factors include risks associated with exploration and project development; the need for additional financing; the calculation of mineral resources and reserves; operational risks associated with mining and mineral processing; fluctuations in metal prices; title matters; government regulation; obtaining and renewing necessary licences and permits; environmental liability and insurance; reliance on key personnel; the potential for conflicts of interest among certain of our officers or directors; the absence of dividends; currency fluctuations; labour disputes; competition; dilution; the volatility of the our common share price and volume; future sales of shares by existing shareholders; and other risks and uncertainties, including those relating to the Back River Project and general risks associated with the mineral exploration and development industry described in our Annual Information Form, financial statements and MD&A for the fiscal period ended December 31, 2016 filed with the Canadian Securities Administrators and available at www.sedar.com. Although we have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. We are under no obligation to update or alter any forward-looking statements except as required under applicable securities laws. This news release has been authorized by the undersigned on behalf of Sabina Gold & Silver Corp.
Bruce McLeod, President & CEO
1800-555 Burrard Street, Vancouver, BC V7X 1M9
Tel 604 998-4175 Fax 604 998-1051
http://www.sabinagoldsilver.com