Sabina Gold & Silver Corp. (SBB-T) announced today the closing of the previously announced bought deal financing.  The Offering was comprised of 18,340,000 common shares of the Company at $1.20 per share as well as an over-allotment for 2,751,000 Common Shares at $1.20 per share (representing 15% of the Common Shares offered pursuant to the Offering) which was exercised in full by the underwriters for total gross proceeds of $25,309,200.

In addition, pursuant to a participation rights notice delivered to Zhaojin International Mining Co., Ltd. Zhaojin has elected to exercise its participation right in relation to the Offering to purchase, by way of private placement, 2,317,443 Common Shares of the Company at C$1.20 per share for total gross proceeds of $2,780,932, to close prior to December 31, 2018.

The purpose and timing of this Offering is to enable Sabina to make financial commitments in 2019 to support activities over the coming months that will maintain the Project’s first gold production schedule.

The net proceeds of the Offering will be used to continue to de-risk the Back River Project by completing the following activities:

• Construction of the winter ice road from the Port at Bathurst Inlet to the Goose Site in early 2019.  Preparation of the winter ice road development started earlier this week with the initial opening of the camps, the building of an air strip in support of a heavy lift cargo campaign in January 2019, and the preparation of the on-site ice road equipment;
• Following construction of the winter ice road, haulage of materials and large construction equipment purchased earlier this year, currently staged at the Port, to the Goose Site;
• High-priority pre-development civil earthworks at the Goose Site; 
• Detailed engineering of the process plant required to secure a fixed price design and construction contract (“EPC”) for the processing plant; and
• Advancement of remaining licenses, and for working capital and general corporate purposes.

These activities further advance the Company’s strategy of balanced approach to advancing Back River in a challenging capital markets environment.  These activities are designed to provide greater certainty on CAPEX components going forward as well as to de-risk critical logistical elements of the project.  These initiatives create value and improve the Project readiness for when the time is right to make a production decision.

“We are pleased with the progress we have made in 2018,” said Bruce McLeod, President & CEO. “This year we have obtained all critical environmental and regulatory authorizations, our land tenure agreement and Inuit Impact and Benefit Agreement with the Kitikmeot Inuit Association, constructed a port facility, made our first sea lift deliveries and made a significant new exploration discovery at Goose with Nuvuyak.

“In addition, independent third-party review of the Project has been completed and we have been presented with favourable terms on a debt package for the Project that does not require streaming or royalties.  But, we do not believe the time is right for making a production decision or for raising the full amount of equity that would be needed to construct the mine.  By completing this financing now, we can execute our planned activities for 2019 and maintain our production schedule for the interim while significantly de-risking the Project over the coming months.   Our approach continues to focus on activities that add value to the Project and to be disciplined and opportunistic in financing a production decision.  We are also very pleased that both our strategic shareholders, Dundee Precious Metals and Zhaojin exercised their participation rights in connection with this financing and are encouraged by their support of the Company’s strategy.”

The Company is currently in the process of finalizing its budget for 2019, including the Project advancement activities described above and will announce the budget once finalized early in the new year.  The Company is also finalizing its exploration plans for 2019 which will include expansion drilling at Nuvuyak and other targets.  The Company expects to end the year with approximately $50 million in cash and short-term investments including the net proceeds of this financing. 

The bought deal Offering was led by BMO Capital Markets and RBC Capital Markets.  The Underwriters received a cash commission of the gross proceeds from this Offering. 

Sabina Gold & Silver Corp

Sabina Gold & Silver Corp. is an emerging precious metals company with district scale, advanced, high grade gold assets in one of the world’s newest, politically stable mining jurisdictions: Nunavut, Canada.

Sabina released a Feasibility Study on its 100% owned Back River Gold Project which presents a project that has been designed on a fit-for purpose basis, with the potential to produce ~200,000 ounces a year for ~11 years with a rapid payback of 2.9 years (see “Technical Report for the Initial Project Feasibility Study on the Back River Gold Property, Nunavut, Canada” dated October 28, 2015). 

The Project received its final Project Certificate on December 19, 2017 and its Type A Water License on November 14, 2018 and is now in receipt of all major authorizations for construction and operations.

In addition to Back River, Sabina also owns a significant silver royalty on Glencore’s Hackett River Project.  The silver royalty on Hackett River’s silver production is comprised of 22.5% of the first 190 million ounces produced and 12.5% of all silver produced thereafter.