Sabina Gold & Silver Corp.

Transcription

1 Sabina Gold & Silver Corp. Creating precious metals opportunities in the Canadian North November 2011 Hackett River Camp, looking to west 1

2 Forward Looking Statements This presentation includes certain "forward looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization, mineral resources or reserves, exploration results and future plans and objectives of Sabina Gold & Silver Corp. are forward looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. 2

3 Sabina Gold & Silver Corp. is on track to become a mid-tier gold producer with significant metals upside The Company owns a highly prospective land package in one of the world s newest and politically stable mining jurisdictions - Nunavut, Canada Sabina s major assets include: the world-class and the Back River Gold Project, and the Wishbone Greenstone Belt gold claims, all in Nunavut A silver royalty on Hackett River silver production from Xstrata Zinc 22.5% of first 190 m oz produced and 12.4% thereafter exploration properties in Ontario and Manitoba

4 OPENING A MINING REGION IN CANADA Management experienced in the Canadian North Nunavut =Pro-mining/certainty of tenure MOU signed with KIA in Sep/11 Arctic a priority to CDN Gov t. Infrastructure a key objective Sabina land package has infrastructure access by tide water and land Hackett River and certain wishbone claims sold to Xstrata Zinc Canada silver production right retained. Infrastructure development could open the district for mining giving Sabina enhanced logistics in the region. Hackett River Silver Rich VMS Project Wishbone Greenstone Belt Back River Gold Project

5 When purchased in 2009 Initial goal to become 200K oz/year gold producer for 10 years, open pit if possible BACK RIVER GOLD PROJECT camp at Goose, 9 drills on site, 86km of drilling completed 3 resource updates in 2011 alone increasing global resources to 6 million ounces Success driven by development of Exploration Tool Box 5

6 TOOL BOX ASSUMPTIONS Destroyed Magnetic Character Intact Strong Conductivity Weak High Resistivity Low Thick Host Thickness Thin Strong Host Folding Weak Complex Complexity Simple 6

7 BACK RIVER PROJECT GOOSE CLAIM BLOCK TARGETS New discoveries open along strike and to depth 2 new discoveries along trend Goose Camp and Goose Neck All targets proximal to each other

8 Opportunities for more discoveries driven by application of Tool Box Assumptions Back River made up of a series of 7 claim blocks Existing resource on George and Goose Claim blocks discoveries made on Goose Claim block Potential on other claim blocks to find other deposits utilizing exploration Tool Box. seven new discoveries made in 2011 further work to evaluate discoveries in progress Known gold occurrences 8

9 2010/2011 Discoveries at Goose claim block New zones are analogous to Goose Lake mineralization 5 km area Significant ounces added at Umwelt (2011) and Llama and Umwelt (2010) Goose open pit resource completed added 360,000 oz Two news discoveries being evaluated for large open pit material PEA Underway expected at the end of Q1,

10 LLAMA 2010 Discovery Llama 2011 Drilling extension 2010 Resource: 562k oz at 9.4 g/t (indicated) 180k oz at 5.7 g/t (inferred) 700 m strike length with holes as deep as 250 m Open at depth, to the South and Possibly to the North High grade hole 41 returns g/t Au over 20 m Hole 31 returns g/t Au over 22 m 10

11 UMWELT 2010 Discovery 2010 established strike length of 750 m 2011 drilling doubled size now 1.15km along strike and 1.5 km down plunge Completely open Resource significantly increased. Open pit resource of 1.03 million oz Au at 4.61 g/t (indicated) and 150k oz Au at 4 g/t (inferred) and underground resource of 752k oz Au at 5.31 g/t (indicated) and 665k oz at 4.78 g/t (inferred) Still open new Good Grade Good Width Zone (G2 Zone) encountered at depth Resource update as part of PEA 11

12 UMWELT 12

13 GOOSE DEPOSIT PLANS Tested undrilled areas of internal open pit scenario Hole 11GSE002 (Goose) returns g/t Au over 27.2m including g/t Au over 4.1m. New Goose open pit model completed September 13

14 Updated Back River Global Resource Classification Location Tonnes Au (g/t) Ounces Au Open Pit Indicated Goose 7,697, ,101,000 Llama 1,860, ,000 Umwelt 6,532, ,026,023 Total Open Pit Indicated 16,089, ,689,023 Underground Indicated Umwelt 4,407, ,900 George 1,838, ,000 Total Underground Indicated 6,245, ,341,900 Total Indicated OP + UG 22,334, ,030,923 Open Pit Inferred Goose 436, ,000 Llama 981, ,000 Umwelt 1,160, ,300 Total Open Pit Inferred 2,577, ,300 Underground Inferred Goose 570, ,000 Umwelt 4,328, ,100 George 2,563, ,000 Total Underground Inferred 7,461, ,637,100 Total Inferred OP + UG 10,038, ,016, CIMM definition standards were followed for Mineral Resources The Qualified Person for the Goose and Llama Mineral Resource estimate is Patti Nakai-Lajoie, P. Geo., RPA The Qualified Person for the Umwelt resource estimate is Wayne Barnett, Pr.Sci.Nat, SRK Consulting (Canada) Inc The Qualified Person for the George resource estimate is Doug Cater, P. Geo, Project Manager, Sabina Gold & Silver Corp. Mineral Resources for Goose and Llama are estimated at a pit discard cut-off grade of 0.76 g/t Au and 90% recovery at an average long term gold price of US$1200 per ounce. Pit optimizations were used to constrain the resources. The Umwelt drill hole database contains 120 surface diamond drill holes at approximate spacings of 25m, 50m and 100m. Mineral resources for Umwelt are estimated at a pit discard cut-off grade of 0.53g/t Au using an average long term gold price of US$1360 per ounce. Resources outside of the pit are estimated using a cut-off grade of 1.75 g/t Au. Numbers may not add due to rounding.

15 Updated Back River Global Resource 15 Significant ounces added year over year

16 BACK RIVER GOLD 2011/2012 PLANS 70% of entire exploration budget spent on Back River in $37 million PEA in Q1, 2012 Base line and environmental work to proceed with scoping study and preliminary project description for completion in Q Utilizing exploration tool box identify other god targets on Back River and Wishbone claim blocks Aggressive 2011 program expanded current resources and made 5 new discoveries. Approximately 86,000 meters drilled - 70% ($26m) on advancing existing deposits and 30% ($11m) on looking for new discoveries

17 WISHBONE PROJECT - GREENSTONE BELT Exploration Tool Box identified altered iron formations on belt for potential new gold discoveries Sabina retains Gold target similar in geology to Back River south east of belt 3 news discoveries made and assays still pending on some targets Claims expanded due to positive results 2011 drilled 13,000 spent $10 million on gold targets 17

18 COOK LAKE MANITOBA Plan to spend approximately $1m on drilling and assessment work in

19 RED LAKE - NEWMAN-MADSEN 50/50 JV with Premier Gold Planning on spending $1m in 2012 Focus is to determine extension on Madsen mine geology - geology hosting Claude s Madsen & Redaurum projects Looking for mafic/ultramafic stratigraphy north on the property 19

20 Tonnes ( millions) HACKETT RIVER IN TOP 10 AND GROWING PRECIOUS METALS BASE METALS 100 PEA mineable resource Data source: Galley et al., Mineral deposits of Canada, 2007 and selected company websites Metal distribution using 2009 PEA metal prices in USD, $2.09 Cu, $0.88 Zn, $0.61 Pb, $13.20 Ag, $880 Au. 20

21 HACKETT RIVER 2009 MINERAL RESOURCE Indicated 43,340,000 tonnes Inferred 14,620,000 tonnes Metal Grade Product Metal Grade Product Ag 144 g/t 200,480,000 ounces Ag 136 g/t 64,020,000 ounces Zn 4.65 % 2,016,000 tonnes Zn 4.46 % 652,000 tonnes Cu 0.42 % 180,000 tonnes Cu 0.31 % 46,000 tonnes Pb 0.64 % 278,000 tonnes Pb 0.57 % 84,000 tonnes Au 0.30 g/t 419,000 ounces Au 0.31 g/t 144,000 ounces Good recoveries and three clean concentrates: Zn, Cu-Ag- Au, & Pb-Ag Conservative long range prices used ($2.09 Cu, $0.88 Zn, $13.20 Ag) The mineral resource estimate for Hackett River was prepared as part of the Preliminary Economic Assessment (PEA) update by Gordon Zurowski, P.Eng., Principal Mine Engineer of PEG Mining Consultants Inc. CIM Definition Standards (2005) have been used in defining the mineral resource categories. Project Management of the PEA study was conducted by Eric Harkonen, P.Eng. and Principal Project Manager/Mine Engineer of PEG Mining Consultants Inc. Both individuals are qualified persons as defined by NI

22 Payable Silver Production (MM oz) Total Cash Costs net of byproduct credits (US$/oz) Total Cash Costs for Payable Silver Production net of byproduct credits Sabina silver product at no cost E 2018E 2020E 2022E 2024E 2026E 2028E 2030E Payable Silver Total Cash Costs for Silver (net of by-product credits) On a by-product net smelter basis, total cash costs per oz of silver production is expected to average minus US$4.06/oz over the first five years, and minus US$1.19/oz over the life of the mine (Figure 11). Source: Company reports, Dundee Securities estimates 22

23 SALE OF HACKETT RIVER TO XSTRATA ZINC CANADA The value created for Sabina shareholders from this transaction includes: Significant cash flow at no cost from silver royalty. 22.5% x 190 million ounces of silver = ~3 million ounces of silver per year, plus 12.5% x actual LOM silver production from new silver discoveries Silver royalty provides significant leverage to future increases in silver price; Ability to leverage the silver royalty to pay for construction of Back River either through sale or pledge against debt, mitigating against future dilution; Xstrata Zinc, the world s largest zinc producer, presents the potential for increased production at Hackett River and an accelerated development timeline; Sabina has the right to use infrastructure built by Xstrata for Hackett on commercial terms which could enhance and de-risk our gold project at Back River. 23

24 CORPORATE SUMMARY Sabina Gold & Silver Corp. Listed exchange Market capitalization (approx) Shares outstanding Fully diluted Year end cash balance est. Debt Trading symbol: SBB Toronto C$650m 160 million 185 million $160 million None 52 week trading range $2.57 to $7.63 November 2011 $

25 NEAR TERM CORPORATE PLAN - SUMMARY Three resource estimates in 2011 adding approximately 4 million ounces to global resource at Back River 9 new discovery targets found (7 on Back River and 2 on Wishbone) in Discoveries currently being evaluated to for large open pit potential SRK PEA study anticipated at the end of Q1, 2012 Hackett River sale added value through cash and continued leverage to silver. Xstrata to commence work on Hackett River in early 2012 Treasury year end forecast C$160 million Mgmt/people + Exploration success + strong treasury + excellent land position = Sabina Gold & Silver Corp. 25

26 RED LAKE - NEWMAN-MADSEN GOLDEN SIDEWALK 100% SABINA REDAURUM (Sabina 20% carried interest) Red Lake Camp >23 Million Oz Au Produced SKINNER 100% SABINA NEWMAN- MADSEN 50/50 with Premier Gold Mines Inc. Work completed in 2011 being assessed to determine next targets 26

27 SALE OF HACKETT RIVER TO XSTRATA ZINC CANADA Terms: Sale of Hackett River and 70% of retained Wishbone claims $50 million up front cash payment 22.5% of first 190 million ounces of silver product 12.5% of all silver product thereafter Use of Xstrata/Hackett infrastructure on commercially competitive terms Xstrata to spend $50 million on feasibility study work by 4 th anniversary of closing date. If no FS completed, Xstrata to spend $10 million per year for another 3 years or elect to pay Sabina short fall if expenditures not met If on year 7 no production decision Sabina can buy back for 100% of Xstrata Feasibility study expenditures Xstrata could elect to pay $75 million over 3 years as advance royalty payments 27