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

By Shane Lasley
Mining News 

Sabina greenlights Goose gold mine

September 7, 2022 - North of 60 Mining News

 

Last updated 9/15/2022 at 3:23pm

Sandvik equipment advances underground development at Goose gold mine.

Sabina Gold & Silver Corp.

Sabina has completed significant predevelopment activities at Goose, including the advancement of an underground ramp to the first ore access sublevel at the gold mine in Nunavut.

Board okays 3.3M oz Nunavut mine, first gold pour slated for 2025

It's official, Sabina Gold & Silver Corp. is moving forward with the development of the Goose Mine on the company's Back River gold project in Nunavut, Canada.

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

A feasibility study that was updated in 2021 envisions a mine at the Goose deposit that will produce 3.34 million ounces of gold over an initial 15 years of operation, or an average of approximately 223,000 oz annually.

While Sabina has made large strides in carrying out predevelopment activities to de-risk the project, including underground development, the company had not formally announced the decision to advance the Goose Mine outlined in the feasibility study to development.

With all predevelopment activities complete, major equipment and materials either delivered or ordered, and a financing package in place, the Sabina board has made the formal decision to begin full-scale production at Goose next year with the goal of pouring the first gold at the mine in 2025.

"We are excited to formally commit to becoming a significant Canadian gold producer," said McLeod.

Early mining underway

According to a 2020 calculation, Back River hosts 33.45 million metric tons of measured and indicated resources averaging 5.88 grams per metric ton (6.32 million oz) gold; and 13.79 million metric tons of inferred resource averaging 6.44 g/t (2.86 million oz) gold.

The updated feasibility study based on this resource details plans for an initial 3,000-metric-ton-per-day mill ramping up to 4,000 metric tons per day by the end of the second year. During the first five years, this operation is forecast to produce an average of roughly 287,000 oz of gold annually.

Over the entire 15 years of mining contemplated in the study, the Goose Mine is slated to process 18.7 million metric tons of ore averaging 6 g/t gold. At a recovery rate of 93.4%, this operation is expected to produce a total of 3.34 million oz of gold.

Sabina has received all requisite local, territorial, and federal permits and authorizations for the Goose Mine.

Over the course of 2021, Sabina made significant progress on de-risking the mine detailed in the updated feasibility study.

This includes the establishment of a decline that provides a platform for underground exploration at Umwelt, which hosts much of the gold resources at Goose. Sabina says this underground ramp has been advanced to the first ore access sublevel and will be sufficiently completed to enable underground drilling before the end of the year.

As underground development advances, surface crews are beginning to strip waste material off the Echo open pit. Echo will be mined ahead of production to provide initial tailings storage at Goose. The early mining of both the Echo and Umwelt pits will provide roughly two years' worth of stockpiled ore for the mill before processing even gets started.

Staying ahead of inflation

In February, Sabina finalized a US$520 million (C$800 million) financing package to fund construction and development of the Goose Mine and the Bathurst Inlet port, where all the equipment and supplies to support the operation are delivered.

Of the C$610 million of capital expenditures estimated to develop the mine, approximately C$218 million goes toward direct equipment and materials purchases.

Sabina says it has procured, or has committed agreements to acquire, just over 75% of these purchases. As a result, the company purchased much of the equipment and supplies needed for Goose Mine ahead of recent rises in the prices for goods.

Reconciliation on purchases has seen an average overall inflationary escalation of 14% since March of 2021, with a 20% escalation on the purchases made in 2022. Sabina says it is monitoring with a strategy of pre-planning and accelerating purchases to reduce exposure to inflationary impacts. Efforts now focus on securing the remaining 25% of materials required.

"(W)e are fortunate that our strategy of pre-planning and accelerating procurement efforts has reduced our exposure to inflationary impacts and supply chain issues, and we are sufficiently funded for construction," McLeod said.

To make room for all the supplies being shipped to the arctic port during the summer delivery season, crews have expanded the lay-down area at Bathurst Inlet by 25,000 square meters. Most of the fuel, equipment and supplies stored there will be delivered to Goose over a roughly 170-kilometer- (105 miles) long ice road.

First ship departs Bathurst Inlet port on north shores of Nunavut on Sept. 6.

Sabina Gold & Silver Corp.

A ship departs the Bathurst Inlet port after delivering roughly C$67.5 million of equipment and supplies for Sabina's Goose gold mine in northern Nunavut, Canada.

To help lower future power costs, as well as reduce the need to deliver diesel to the northern Canada mine, Sabina has applied for permits to develop the Back River Alternate Energy Center.

If approved, this proposal would allow Sabina to install up to 13 wind turbines, each able to generate up to 4.5 megawatts of electricity, a solar panel array with a power capacity of approximately 5 MW, and a 50 megawatt-hour battery storage system.

In addition to saving money and lowering the number of ships and ice road trips needed to deliver fuel, the alternative energy center would significantly reduce greenhouse gas emissions from Goose and other mines developed across the district-scale Back River gold project.

"This is an exciting time for the company as we move to develop what we believe will be the first mine on this prolific gold district," McLeod said.

Author Bio

Shane Lasley, Publisher

Over his more than 14 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.

Email: [email protected]
Phone: (907) 726-1095
https://www.linkedin.com/in/shane-lasley-ab073b12/

 

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