In a release, Sabina said the modified engineering, procurement and construction management (EPCM) contract will provide complete detail engineering in a reimbursable cost model.
“Detail engineering will provide definitive material requirements per AACE class II standards (up to 70% project definition) and will result in development of procurement packages and delivery of issued for construction drawings,” the company said. “This approach de-risks the engineering aspect, better defines the execution plan and provides greater certainty of procurement and construction costs. With these details in hand, Sabina will solicit fixed price construction bids for the plant, including performance guarantees.”
Sabina president and CEO Bruce McLeod added that given the global supply chain volatility due to the COVID-19 pandemic, the company expects the revised delivery approach to provide more certainty around project costs and deliverables.
Sabina has also chosen FLSmidth to provide equipment for the plant; the two are working on a definitive pricing model that includes a performance guarantee for the plant. A contract for the design of a 15-MW power plant is also expected before year end.
The company has received all major permits needed for construction and operation of Back River.
In the third quarter, the company began pre-construction activities at the Goose property at Back River, including extension of the permanent air strip at Goose, construction of a road network, and starting the box cut to prepare for the construction of an underground exploration decline in 2021.
It also completed 8,095 metres of drilling, targeting additional high-grade potential at Umwelt, infill and plunge extension at Llama and other new exploration targets within the Goose property gold complex.
Drilling was successful in highlighting a 300-metre plunge extent (the V2 zone) below the current limits of the planned open pit with exceptional widths of strong gold mineralization averaging 2 to 3 times the current underground reserve grade. Highlights of drilling included 32.2 metres of 19.89 g/t gold in hole 20GSE575C and 20.6 metres of 16.59 g/t gold in hole 20GSE581.
An updated feasibility study for Back River’s Goose property is expected to be completed in the first quarter of 2021. The updated study will include revisions to the mine schedule to bring high-grade ore from the Umwelt deposit into the beginning of the mine life, and update the project capex and economics. The company expects the revised mine plan will increase total gold production, mine life and increase production in the first several years of the operation.
Sabina’s previous 2015 feasibility, based on a US$1,150 per oz. gold price, outlined a $415-million open pit and underground project that would produce 200,000 oz. gold annually for 12 years.
The high-grade project hosts combined open pit and underground proven reserves of 7 million tonnes grading 5.98 g/t gold for 1.4 million oz. and probable reserves of 5.4 million tonnes grading 6.72 g/t gold for 1.2 million oz.
Sabina finished the third quarter with $64.8 million in cash and equivalents. For more information, visit www.sabinagoldsilver.com.
