Sabina moves closer to kick-starting western Nunavut gold mine

·3 min read
An aerial view of Sabina Gold and Silver Corp.'s Goose mine, in western Nunavut. The mine could be producing gold as soon as 2025.  (Sabina Gold and Silver Corp.  - image credit)
An aerial view of Sabina Gold and Silver Corp.'s Goose mine, in western Nunavut. The mine could be producing gold as soon as 2025. (Sabina Gold and Silver Corp. - image credit)

By 2025, Nunavut's Kitikmeot region could see a new gold mine enter into production, Sabina Gold and Silver Corp.'s Goose gold mine.

The company has been working toward opening a mine in its Back River project for at least a decade.

Sabina plans to make the decision soon about advancing its project to production, said company vice-president Nicole Hoeller.

"We wanted to have our financing in place before," Hoeller said.

Investors in the Goose project include China's fourth largest gold producer Zhaojin International Mining Co., Ltd.

Zhaojin first invested about $66 million in Sabina in 2018 for a 9.9 per cent partnership agreement that also gave Zhaojin a seat on Sabina's board.

To keep its participation in Sabina at 9.9 per cent, Zhaojin has continued to invest in Sabina as the company has looked for more money and issued more shares to finance its mine.

The most recent amount received by Sabina from Zhaojin was $12 million, announced June 13.

Sabina Gold and Silver
Sabina Gold and Silver

Hoeller said Zhaojin sees Sabina as an investment opportunity.

"Zhaojin is an investor. They want us to succeed and they want to make money on their investment," Hoeller said.

Zhaojin has invested a total of $108 million in Sabina since its initial investment in 2018, Hoeller said.

Hoeller said Zhaojin's involvement can't be compared to the proposed purchase in 2020 of TMAC Resources Inc.'s Hope Bay mine, also in the Kitikmeot region, by the Shandong Gold Mining, a state-owned Chinese mining company.

Ottawa blocked that takeover in December 2020 after a national security review.

Other Sabina investors include Orion Mine Finance and Wheaton Precious Metals in a financing package of $520 million US for Sabina announced in February.

As part of this package, Wheaton agreed to pay Sabina $125 million US in four equal instalments during the construction of the Goose mine project in exchange for a percentage of the gold that will eventually be produced there.

Since February, Sabina has raised more than $800 million, which includes the $610 million capital cost of the Goose mine construction.

'Things are moving ahead quickly'

After the production decision is announced, the construction of the Goose mine is expected to take roughly two years.

This season, Sabina wants to continue to "de-risk" the Goose project by careful planning and adding even more confirmed gold reserves, Hoeller said.

There are about 85 to 90 workers now at the Goose site and another 15 to 20 at the marine laydown area on Bathurst Inlet, she said.

About 15 to 20 per cent of those employed at the site are Inuit, she said.

Overall, since February, Sabina has expanded its workforce from 26 to 136.

"We're building, we're recruiting," Hoeller said. "Things are moving ahead very quickly."

The mine is located about 400 kilometres south of Cambridge Bay and lies 172 kilometres via a winter ice road from its marine laydown facility in Bathurst Inlet.

Sabina's mine project has received all major regulator permits and authorizations for its eventual construction and operations.

The company has already signed a 20-year renewable land use agreement with the Kitikmeot Inuit Association.

It has also signed an Inuit Impact and Benefits agreement that provides Inuit in the Kitikmeot region with financial and socio-economic benefits.

These include training, jobs, share ownership in Sabina and a one per cent net smelter royalty on future production from the Goose gold mine.

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