Zhaojin closes $66.1M investment in Sabina Gold & Silver

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By Ted Liu

Sabina Gold & Silver Corp (TSX: SBB) completed investment by Zhaojin International Mining Co., Ltd. by way of private placement of 24,930,000 common shares at $2.65 per share for approximately $66,100,000.

Zhaojin International, a subsidiary of Zhaoyuan, Shandong based Zhaojin Mining Industry Co. Ltd. (招金矿业股份有限公司, SEHK: 1818), now owns approximately 9.9% of the issued and outstanding common shares of Sabina Gold & Silver on a non-diluted basis.

photo credit: Sabina Gold & Silver Corp.

News Release


Vancouver, BC – Sabina Gold & Silver Corp (SBB.T), (“Sabina” or the “Company”) is pleased to announce the closing of the investment by Zhaojin International Mining Co., Ltd. (“Zhaojin International”) to purchase 24,930,000 common shares of the Company at a price of $2.65 per share for a total investment of approximately $66,100,000 in a private placement (the “Financing”) has closed. Zhaojin International now owns approximately 9.9% of the Company’s issued and outstanding common shares on a non-diluted basis.

Zhaojin International is a subsidiary of Zhaojin Mining Industry Co. Ltd. (“Zhaojin”), which is a leading Chinese gold producer and one of China’s largest gold smelting companies.

“We are pleased to welcome Zhaojin as a new shareholder to the Company. As experienced gold miners, we also look forward to their technical input as we advance the Back River Gold Project (“Back River” or the “Project”). This investment by Zhaojin is a significant step towards the equity requirements to fund the Project. We are very pleased with our new financial partnership and look forward to advancing Back River towards production.” said Bruce McLeod, President and CEO.

Development activities for 2018 will focus on continuing to de-risk the Project by:
 completing pre-construction earthworks;
 early procurement commitments;
 logistical improvements, including air and sea mobilization; and
 building the Project execution team.

Additionally, the Company plans on a significant exploration program to follow up on 2017 successes and to assess new targets. 2018 key exploration objectives are focussed on:
 optimizing and expanding the Vault zone;
 continuing to define the continuity and extension at Llama;
 continuing to drill test the concept of the deeper iron formation at Llama and Umwelt;
 continuing Echo step out drilling and scoping of resource expansion potential;
 testing the Goose Main Trend extension; and
 developing drilling approach for targets on the George and Boulder claim blocks.

The Company plans to mobilize crews and equipment for the 2018 winter exploration campaign at the end of February 2018. Activities and budgets for 2018 will be announced mid-February 2018.

In connection with the financing, Sprott Asia acted as advisor on the transaction, BMO Capital Markets acted as financial advisor and Gowling WLG was retained as legal advisor for Sabina.

Zhaojin International Mining Co., Ltd.

Zhaojin International Mining Co., Ltd. is a subsidiary of Zhaojin Mining Industry Co. Ltd., which is a leading Chinese gold producer and one of China’s largest gold smelting companies. They operate across the full production chain, integrating exploration, mining, mineral processing, smelting and marketing. With more than 60 years of gold mining operations they are one of the world’s lowest cost producers. Since its listing on the Hong Kong Stock Exchange in 2006, Zhaojin has grown into one of China’s largest gold miners with annual gold production of 655k ounces of gold per year and reserves of 13.6 million ounces of gold. Currently they are working on developing the world’s largest single ore body gold deposit, the Haiyu deposit in East Asia.

Zhaojin’s plans are to double their production base within the next five to ten years through investments in international operations.

Sabina Gold & Silver Corp.

Sabina Gold & Silver Corp. is a well-financed, 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 “Study”). At a US$1,150 gold price and a 0.80 (US$:C$) exchange rate, the Study delivers a potential after tax internal rate of return of approximately 24.2% with an initial CAPEX of $415 million.

The Project received its final Project Certificate on December 19, 2017. The Project is now in the final regulatory and licensing phase.

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.

The Company now has approximately C$93 million in cash and equivalents.

For further information please contact:
Nicole Hoeller, Vice-President, Communications: 1 888 648-4218

All news releases and further information can be found on the Company’s website at www.sabinagoldsilver.com or on SEDAR at www.sedar.com. All technical reports have been filed on www.sedar.com

Bruce McLeod, President & CEO
1800-555 Burrard Street, Two Bentall Centre
Vancouver, BC V7X 1M7
Tel 604 998-4175 Fax 604 998-1051