Sabina Gold & Silver Corp. has reported the results of a feasibility study of its 100% owned Back River gold project in Nunavut, Canada. The project is located in the West Kitikmeot region of Nunavut, approximately 75 km from tide water at Bathurst Inlet and 520 km northeast of Yellowknife, Northwest Territories.
The Back River project is made up of a series of five claim blocks of which only two, Goose and George, have been the primary focus of exploration and resource development to date. The two sites are separated by a distance of about 50 km. Each site has four mineable deposits, with the majority of the mineral resources and reserves located at Goose.
The project is based on conventional open-pit and underground mining operations that feed a 6,000-mt/d, whole-ore leach processing plant located at Goose. Production would average about 346,000 oz/y of gold as doré bullion over a 10-year mine life, with the majority of reserves being mined from open pits.
A total of 19.8 million mt of ore would be processed over 10 years at a life-of-mine average grade of 5.70 g/mt gold and metallurgical recoveries of 93%. The strip ratio in the open pits would be 7.2:1.
Initial capital expenditure to develop the Back River project is estimated at C$695 million. Life-of-mine all-in sustaining cash costs of production are estimated at $671/oz, including sustaining capital.
Delivery of materials and supplies to the remote mine site is seen as a two-step process. Supplies would first be delivered by ships to a laydown area at Bathurst Inlet during the two months of open water in August and September. They would be stored at Bathurst Inlet until a winter ice road to the mine sites becomes operational between January and April.
An airstrip at the Goose site would provide for delivery of passengers and select equipment and materials.
The Bathurst Inlet laydown area, Goose, and George sites would each have bulk fuel storage tanks, laydown yards, diesel power plants, maintenance shops, accommodation camps, water and domestic waste management facilities, and satellite communications. Because access to the sites would be seasonal, the types and capacities of the project infrastructure would be able to store and transport the required yearly quantities of equipment, materials, and supplies.
Sabina Gold & Silver CEO Bruce McLeod said, “Back River offers a rare opportunity for significant high-grade gold production by both open-pit and underground operations in one of the world’s safest mining jurisdictions…At a $1,200 gold price and a 0.87 exchange rate, the feasibility study delivers a potential after-tax internal rate of return of approximately 22% with an initial capex of C$695 million.”
McLeod also noted that the project offers the opportunity to start smaller, with production possibly in a range of 150,000 to 200,000 for 10 years and an initial capex of about C$300 million.
JDS Energy & Mining Inc. led the Back River project feasibility study, with participation by Hatch Ltd., SRK Consulting (Canada), AMC Mining Consultants (Canada), and Knight Piésold.