Hackett River drill results boost Sabina

Vancouver – Results trickling in from Sabina Silver‘s (SBB-V) 2007 drilling campaign at Hackett River, near Nunavut in Canada’s Northwest Territories, were enough to give the sliding junior a boost on Sept 4th.

One of the hottest holes this year, number 41, intersected 57.2 metres of 16.78% zinc and 140 grams silver per tonne from surface in the Main Zone West, which is where the starter pit is planned. Hole 37, a step out hole in the Boot Lake Deep deposit area, also returned strong grades: 10.1% zinc and 317 grams silver over 30 metres starting at a vertical depth of 620 metres, confirming that mineralization continues below 600 metres.

The news pushed Sabina’s share price up 24 cents or 13.8% to close at $1.98 on Sept 4th trading. The increase was in contrast to the slump Sabina’s been in since early August when it announced a new president and CEO, followed by a rough week in the junior markets. The stock has a 52-week trading range of $1.10 to $3.66.

New president and CEO Albert Brantley, formerly the chief operating officer and development officer for Oceana Gold (OGC-T, OGC-N, OGC-A), replaced former president Abraham Drost and former CEO William Cummins. While at Oceana, Brantley led development of new mines in Australia and exploration projects in the Philippines.

The current 17,000-metre drill program is primarily focused on infill drilling to increase confidence in the mineral resource estimate, as well as testing a variety of targets identified in the March preliminary economic assessment (PEA).

The PEA envisioned a Hackett River mine plan with average annual production of 147,300 tonnes zinc, 12.4 million oz. silver, 9,400 tonnes copper, 16,800 tonnes lead, and 17,200 oz. gold over an estimated mine life of 13.6 years.

Net present value is tagged at $345 million at an 8% discount rate and a 20.6% pre-tax internal rate of return, giving a 3-year payback period. The mine plan foresees open pit operations on the Main zone and East Cleaver deposits and underground development on the Boot Lake deposit both feeding a 10,000-tonne per day mill.

A month after the positive PEA the company closed a $30-million financing through a bought deal private placement of 10 million units for $3 apeice. Each unit consisted of one share of Sabina and half a purchase warrant, exercisable for 3 years. The proceeds are being used to advance Hackett River towards permitting, feasibility, and ultimately production.

Sabina acquired Hackett River in early-2004 from Teck Cominco (TCK.B-T, TCK-N) predecessor Cominco and from Etruscan Resources (EET-T, ETRUF-O) that holds a 10% net profits interest capped at $2 million.


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