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

Sabina Gold & Silver Corp. Feb. 8 announced it has finalized a US$520 million financing package to fund construction and development of the Goose Mine on the company's Back River gold project in Nunavut, Canada.

"This is a major milestone for Sabina," said Sabina Gold President and CEO Bruce McLeod.

A feasibility study that was updated in 2021 contemplates mining 18.7 million metric tons of ore from the Goose Mine averaging 6 g/t gold. At a recovery rate of 93.4%, this operation is expected to produce a total of 3.34 million ounces of gold over the 15-year mine life, or an average of approximately 223,000 oz annually.

To fund the estimated US$466 million of capital expenditures needed to develop this operation, Sabina has worked out a construction finance package with Orion Mine Finance and Wheaton Precious Metals Corp.

This package includes:

• A US$225 million senior secured debt facility with Orion.

• A US$75 million gold prepay facility with Orion.

• A US$125 million gold stream arrangement with Wheaton.

• A US$95 million private placement of Sabina shares with both Orion and Wheaton.

"We are proud to welcome Orion and Wheaton as significant Sabina equity holders. Their participation in financing the Goose Mine validates the sound exploration, engineering, environmental and community work we have done on the project and supports our approach to development of this prolific gold district," said McLeod. "We appreciate the diligence and professionalism both parties brought to the process and are satisfied that we have concluded a financing package on very acceptable terms."

Under the private placement, to be carried out in three tranches before mid-2022, Orion has subscribed for approximately 72.73 million Sabina shares, and Wheaton has subscribed for roughly 19.4 million shares. The per-share price for both financiers is C$1.30.

Zhaojin International Mining Company Ltd., which has the right to maintain its 9.9% interest in Sabina, has 10 business days to advise if it will participate in the private placement.

If Zhaojin maintains its ownership at 9.9%, Orion will own approximately 15.9% and (Wheaton will own approximately 6.8% of Sabina following the closing of all tranches of private placement.

Sabina Gold & Silver Corp.

The shop and other surface facilities at the Umwelt exploration ramp at the Goose gold mine project.

Prior to the advance of funding under the debt facilities and streaming agreement with Orion and Wheaton, Sabina must fund at least US$105 million in additional third-party equity investment and repay a US$20 million bridge loan from Sprott Capital Partners.

With the mine building financing agreements in place, Sabina is finalizing its 2022 work programs and budgets with the goal of pouring the first gold bar at the Goose Mine in the first quarter of 2025.

"The completion of this milestone sets Sabina apart from other developers: we have a financed, fully permitted, significantly advanced, high-grade gold project in a tier one mining jurisdiction. The Goose Mine is the first mine on the 80-kilometer (50 miles) Back River Gold District," said McLeod. "With the George property as the next obvious focus for exploration and development, the Back River Gold District stands to deliver significant opportunities and value creation for all our stakeholders as a multi-generational mining district."

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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