Xstrata Zinc has entered into a binding agreement with Sabina Gold & Silver Corp. to purchase Sabina’s Hackett River property and certain claims on the Wishbone greenstone belt in the western Kitikmeot region of Nunavut, Canada. Exploration drilling at Hackett River is underway and has confirmed an NI 43-101 compliant resource of about 60 million mt of ore containing zinc, silver, copper, lead and gold, with approximately 5.2 million mt of zinc equivalent. The resources occur in four near-surface deposits amenable to open-pit mining. Both properties contain significant additional exploration potential.
Under the terms of the agreement, Xstrata will pay Sabina C$50 million in cash, and Sabina will retain a silver production royalty equal to 22.5% of the first 190 million oz of payable silver from the current resource at Hackett River and other properties and 12.5% of all payable silver from the properties thereafter at no future cost to Sabina. Additionally, Xstrata has agreed to incur not less than $50 million in exploration and other expenditures on the properties over a four-year period and to complete an NI 43-101 compliant feasibility study. Sabina will retain Wishbone claims south-east of Hackett River covering geological units that are potential gold targets.
(www.xstrata.com and www.sabinagoldandsilver.com)