Sabina Gold and Silver is striving to conclude a $500-million financing deal that could soon make the Kitikmeot’s Goose gold project Nunavut’s fifth operating mine.
The company hopes to have terms finalized by January, and Matthew Pickard, Sabina’s vice-president of environment and sustainability, revealed that the prospective investor would be North American-based. That would remove potential obstacles posed by having a Chinese interest as the primary backer of the project.
The federal government prevented a Chinese state-owned company from acquiring TMAC Resources and its Hope Bay gold property in 2020.
Sabina would take on debt, likely offer a share of ownership and possibly make an arrangement whereby the investor could purchase some of the mine’s gold at a predetermined discount price, according to Pickard.
“We’re very happy to get to this point. We still have work to do over the Christmas break and into January, but we’re feeling very confident that early next year we can get more active on site,” he said, acknowledging that finding an investor has taken a couple of years mostly due to concerns over logistics, such as sealift and ice road construction, in a remote part of Canada’s North.
The injection of funding would allow Sabina to begin full-scale construction on the Goose mine in early 2022. Production from the open-pit and underground project, which has a proven resource of nine million ounces of gold, is targeted for late 2024.
Construction is expected to require up to 800 employees, said Pickard.
“We’ll focus on Kitikmeot residents as much as we can and Kitikmeot-qualified businesses wherever we can do contracting,” he said of the local benefits.
The Goose property, located approximately 400 kilometres south of Cambridge Bay, has a projected mine life of 15 years.
Work at the overall Back River project has already been ongoing for 15 years with aspirations of turning the site into multiple mines. Sabina has hopes for the George deposit, about 50 km north of Goose, to reach the volume and economics necessary to turn it into a mine as well. George hosts about two million ounces of gold, but exploration efforts to expand on that resource will likely ramp up in 2022, Pickard said.
Award winners
The Prospectors and Developers Association of Canada (PDAC) recently chose Sabina Gold and Silver as the recipient of its annual Sustainability Award, lauding the junior company for its environmental protection, particularly for caribou, and its community engagement.
“The collaborative process enabled Sabina to create one of the most stringent caribou protection plans in the North,” PDAC stated.
It entails Inuit monitors, halts in blasting when caribou are present, adjustments to helicopter and trucking activity and even a shutdown in most mining activity if caribou are calving or post-calving.
PDAC also credited Sabina for investigating a hybrid wind energy system to offset diesel usage; paying to restore a creek flowing into Bernard Harbour to aid char in spawning; putting $4 million toward long-term employment opportunities in the Kitikmeot outside of mining; donating 80 microscopes to schools in the region and launching a food security program during Covid-19 that allowed employees who were unable to work to purchase $500 in groceries monthly through the Co-op.
“Considerable stakeholder engagement and consultation has resulted in the creation of what we believe are new standards for environmental protection in the North. We couldn’t have achieved this recognition without the hard work and contributions of the Kitikmeot Inuit Association and all the communities of the Kitikmeot region,” said Bruce McLeod, Sabina’s president and CEO.
Stanley Anablak, president of the Kitikmeot Inuit Association, offered congratulations to Sabina on behalf of the the Inuit organization after learning of the award.
“Sabina has worked hard to plan mitigation for their proposed Goose Lake mine so that it will minimize effects on caribou,” Anablak stated. “We also wish them success in completing their financing of the Goose Lake mine at the Back River Project. Once operating as a mine, the Back River Project will provide many socio-economic opportunities and benefits to Inuit of the Kitikmeot region.”