NUNAVUT - Vancouver-based Sabina Gold & Silver has sold its Hackett River silver-rich volcanic massive sulphide project in the West Kitikmeot region to Xstrata Zinc for $50 million. The purchaser has agreed to spend at least $50 million on exploration and other expenditures over a four-year period. Sabin has reserved a silver production royalty equal to 22.5% of the first 190 million oz of payable silver and 12.5% thereafter.
Sabina further expects to secure the right to use infrastructure built by Xstrata at Hackett River for Sabina's Back River gold project 15 km away from the Hackett River property.
Flush with cash (as much as $190 million by year-end), Sabina announced that it has entered into a memorandum of understanding with the Kitikmeot Inuit Association (KIA) for the creation of a development trust. Because the mining company has projects on land owned by the Inuit in Nunavut, Sabina will fund the trust either wish cash or shares.
The trust will receive 3% of Sabina's net proceeds from the Hackett River silver royalty. Six trustees (at least one from Sabina) will allocated funds, including a portion to be held until any mine or project closes. The company has agreed to pay $1.4 million to an existing KIA fund before the trust is created.
Both Sabina and the KIA have agreed to work out long term land use agreements for Sabina's Back River and Wishbone properties.
Please see www.SabinaGoldSilver.com.
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