Hackett River, located 45 km west of the Company's Back River gold project in Nunavut, is a silver rich volcanogenic massive sulphide project and is one of the largest undeveloped projects of its type. In 2011, the Company sold Hackett River to Xstrata Canada Corporation, Zinc Canada Division ("Xstrata") which is now Glencore Canada Corporation ("Glencore").
As consideration for the sale, the Company received $50 million in cash and retained a significant silver royalty on Hackett River. Under the terms of the royalty, Sabina is entitled to receive 22.5% of silver production up to the first 190 million ounces produced and 12.5% of all silver produced thereafter at Hackett River. Although Sabina is no longer the owner of Hackett River, it still considers its royalty interest in the project to be a material mineral project for the purposes of NI 43-101.
Sabina is required by Canadian Securities Administrators (CSA) National Instrument 43-101 (NI 43-101) to prepare a Technical Report on the Hackett River Property (the Property) with respect to its royalty on future silver production on the Property. The royalty is a material asset to the Company. To see Sabina's NI 43-101 Technical Report on Hackett River click here.
This mineral resource estimate was completed by Xstrata and disclosed in its R&R Report [its annual report of mineral resources and reserves as at December 31, 2012], which was reported under the JORC code. These have been reviewed by AMC and are stated here in accordance with NI 43-101 thus conforming to the CIM Definition Standards - for Mineral Resources and Mineral Reserves.
The Mineral Resource estimate is listed in Table 1.1.
Table 1.1 Mineral Resource Estimate - Hackett River Deposits
There are no Mineral Reserves defined on the project.
- Source: Xstrata R&R Report (as of December 31, 2012)
- Mineral resources, which are not mineral reserves, demonstrate economic potential, but have yet to demonstrate economic viability.
- Glencore's normal data verification procedures have been employed in connection with the estimations.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. These mineral resource estimates include inferred mineral resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is also no certainty that these inferred mineral resources will be converted to measured and indicated categories through further drilling, or into mineral reserves, once economic considerations are applied.
[Glencore announced an updated mineral resource estimate as of December 31, 2013 on the Hackett River project which was re-published and can be found at http://www.glencorexstrata.com/assets/Investors/GLEN-2014-Resources-Reserves-Report.pdf. Sabina does not consider the change in the mineral resource estimate over 2012 material.]
Mr. Angus Campbell, P. Geo, and Vice-President, Exploration for the Company is a Qualified Person under the terms of National Instrument 43-101 and has reviewed the technical content of this disclosure and approved its dissemination.