North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Sabina Gold & Silver Corp. Nov. 15 announced receipt of Type A Water License for Back River, the final major license needed to begin developing a gold mine project in Nunavut.

According to a 2015 feasibility study, the 3,000-metric-ton-per-day mine operation being considered for Goose, one of seven properties that make up the larger Back River project, that would average 198,100 ounces of gold per year over an 11.8-year mine life at a cost of US$534 per ounce.

The mine would deliver a rapid payback of 2.9 years and an after-tax internal rate of return of about 24.2 percent with initial capital expenditures of C$415 million, according to the study.

Sabina said the issuance of the Type A Water License represents a key step in the environmental permitting process and will enable activities at site including mine construction and operations and sets the closure bonding amounts for the project moving forward.

The Type A Water License covers the development detailed in the feasibility study, which includes open-pit mines at three deposits – Unwelt, Llama and Goose – as well as underground development to reach the deeper portions of Unwelt. The license also allows Sabina to carry out underground development at Llama and Goose Main, as well as develop an open pit mine at the Echo in the future.

Earlier this year, Sabina signed a 20-year benefit and land tenure agreement with the Kitikmeot Inuit Association that provide surface land access on Inuit-owned land on the Back River property. These pacts provide financial and socioeconomic benefits to the local Inuit, including training, jobs, initiatives to create additional opportunities outside of the mining industry as well as an ownership stake in Sabina and a 1 percent net smelter royalty on future production from the gold operation proposed for the Goose property.

"The issuance of the Type A Water License is the culmination of significant work completed during the environmental assessment and permitting process, as well as the negotiation of long-term land tenure with the Kitikmeot Inuit Association," said Sabina Gold President and CEO Bruce McLeod. "We appreciate the professional approach of the Nunavut Water Board during the licensing process, as well as the support for the project from our other stakeholders in the Kitikmeot. While a rigorous process, the receipt of this last major license demonstrates the responsible mining friendly jurisdiction in which we work."

–SHANE LASLEY