Sabina Gold & Silver Corp (SBB.T) (Sabina or the Company) is pleased to announce that it has acquired Premier Gold Mines Ltd's (Premier) 50% joint venture interest in the Newman-Madsen Project (the Property) in Red Lake, Ontario, Canada.
On January 16, 2012, under the terms of a 50/50 joint venture agreement dated June 8, 2010, the Company completed a purchase agreement to acquire Premier's interest in Newman-Madsen for a cash payment of $500,000 and a 0.5% net smelter return royalty on the Property.
We have always believed the Newman-Madsen property to be very prospective, given its favourable location within the Red Lake belt. There are opportunities for discoveries on three different trends on the property and encouraging exploration results to date. Said Rob Pease, President & CEO We are looking forward to applying our exploration tool box to these trends and anticipate beginning work on the property early during the first quarter.
The Company has paid a deposit of $50,000 which will be held in escrow and will be applied to the cash portion of the purchase price upon the successful transfer of the mineral claims and other normal course terms and conditions. The transfer is expected to be completed no later than February 16, 2012.
The Newman-Madsen property is comprised of 46 patented mining claims located in the Red Lake Mining Division of Ontario, 3.5 km southwest of the Town of Red Lake and 4.5 km northeast of Claude Resources Ltd's Madsen Mine. Eight of these claims are currently under option to Mega Precious Metals (East My Ritt Option).
The property is underlain by Archean rocks of the Red Lake greenstone belt and straddles the boundary between the Mesoarchean Balmer assemblage in the northern portion of the property and the Neoarchean Confederation assemblage to the south. These two assemblages are separated by a regional unconformity which has been identified in close proximity to numerous high grade gold deposits in the Red Lake area, including the Madsen, Campbell and Red Lake mines. Gold mineralization in the Red Lake belt is generally found within the older Balmer assemblage rocks often localized along discrete structures and in close proximity to the regional Mesoarchean / Neoarchean unconformity. Deposits found near the contact between tholeittic basalts and komatiitic basalts typically exhibit very high grades. Only very limited shallow drilling has been conducted on the property and three highly prospective trends are present. From south to north these are: the Madsen Mine trend, the Buffalo trend and the Laverty trend.
Madsen Mine Trend
The Madsen trend lies along the Balmer / Confederation unconformity which to the southwest hosts the historical Madsen and Starret-Olson gold deposits. This horizon has not been thoroughly explored on the Newman-Madsen property below a depth of 150 m. In 2010, drilling by the Newman-Madsen Joint Venture targeted this horizon at approximately 400 m depth with a tier of widely spaced holes. Hole NM-10-02 intersected 43.51 g/t Au over 0.65 m. Follow up of this intersection is warranted and will be included in a future program.
Western Buffalo Trend
The Western Buffalo trend comprises a series of arsenic in soil geochemical anomalies that are coincident with the projected extension of a gold bearing structural horizon interpreted to be related to the Buffalo Mine and the Buffalo West deposit that was recently discovered by Mega Precious Metals on the adjacent East My Ritt property. Historical drilling along this trend intersected 9.24 g/t Au over 3.55 m in hole RLK03-01 at the intrusive / basalt contact.
Laverty Trend - North Coin Lake
The North Coin Lake area of the property consists of a complexly folded mafic and ultramafic sequence that is located along trend of the Laverty Main deposit of Mega Precious Metals. The area is highly prospective for Red Lake Mine High-Grade Zone gold style mineralization.
2012 Exploration Program
Sabina has allocated a budget of $ 1.0 million for exploration on Newman-Madsen in 2012. This budget is designed to cover the cost of a 4,500 m drill program, a property wide magnetic and EM survey and field sampling. Work will initially focus on first pass drill testing of the Buffalo and Laverty trending structures where they cross out of the Dome Stock and into the favourable mafic / ultramafic Balmer age volcanics that underlie much of the property. Work is expected to begin in early 2012.
SABINA GOLD & SILVER CORP
Sabina Gold & Silver Corp. is an emerging precious metals company with district scale, world class undeveloped assets in one of the world's newest, most politically stable mining jurisdictions: Nunavut, Canada.
Sabina's primary properties consist of the Back River Gold Project as well as the Wishbone Claims, a vastly prospective grass roots project and the Hackett River silver royalty all located in Nunavut. The Company has announced the completion of the sale of Hackett River and certain claims in the Wishbone greenstone belt to Xstrata Zinc Canada Division (Xstrata) for which the Company received $50 m cash and a silver royalty on Xstrata's Hackett River silver production of 22.5% of the first 190 million ounces produced and 12.5% of all silver produced thereafter
Mr. Peter Manojlovic, P. Geo, and Vice-President, Exploration of Sabina Gold & Silver Corp is a Qualified Person under the terms of NI43-101 and has reviewed the technical content of this press release and approved its dissemination.
For further information please contact:
Nicole Hoeller, Vice-President, IR:1 888 email@example.com
Forward Looking Statements
Statements relating to future operations at the Hackett River Project and future metals prices are forward-looking statements within the meaning of securities legislation of certain Provinces in Canada. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words expects, plans, anticipates, believes, intends, estimates, 'projects, potential and similar expressions, or that events or conditions will, would, may, could or should occur. Information inferred from the interpretation of drilling results may also be deemed to be forward looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed. These forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation: risks related to fluctuations in metal prices; uncertainties related to raising sufficient financing to fund the planned work in a timely manner and on acceptable terms; changes in planned work resulting from weather, logistical, technical or other factors; the possibility that results of work will not fulfill expectations and realize the perceived potential of the Company's properties; risk of accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in the work program; the risk of environmental contamination or damage resulting from Sabina's operations and other risks and uncertainties, including those described in Sabina's Annual Report for the year ended December 31, 2010.
Forward-looking statements are based on the beliefs, estimates and opinions of Sabina's management on the date the statements are made. Sabina undertakes no obligation to update these forward-looking statements should management's beliefs, estimates or opinions, or other factors, change.
This news release has been authorized by the undersigned on behalf of Sabina Gold & Silver Corp.
Robert Pease, President & CEO930 West 1st Street, Suite 202North Vancouver, BC V7P 3N4Tel 604 998-4175 Fax 604 998-1051http://www.sabinagoldsilver.com