Acquisition of the Back River Projects

(this information included for year 1 only)
Pursuant to an asset purchase agreement dated March 27, 2009 (as amended, the "Back River Agreement") between the Company and DPM, on June 9, 2009, (the "Closing") the Company acquired the Back River Projects from DPM for the following consideration: (a) $7 million in cash, (b) 17 million common shares ("Common Shares"), (c) Series A special warrants ("Series A Special Warrants") exercisable to acquire, for no additional consideration, 5,000,000 class A units ("Class A Units"), and (d) Series B special warrants ("Series B Special Warrants") exercisable to acquire, for no additional consideration, 5,000,000 class B units ("Class B Units").

The Series A Special Warrants are for a term of 35 years and will be deemed to be exercised at such time as any of the following events shall occur:

1. a positive decision being made by the board of directors of Sabina (or the operator or majority owner of the Back River Project if not the Company) to proceed with the preparation of a feasibility study (as defined in National Instrument 43 101 Standards of Disclosure for Mineral Projects ("NI 43-101")) on all or part of the Back River Project;
   
   
2. a positive decision being made by the board of directors of Sabina (or the operator or majority owner of the Back River Project if not the Company) to bring all or any part of the Back River Project into production;
   
   
3. a consolidation, amalgamation, merger or take over of Sabina with, into or by another body corporate that results in the acquisition of at least 66 2/3 of the outstanding Common Shares for cash consideration or, if for non cash consideration, as long as the acquisition price is at least a 25% premium to the volume weighted average trading price (the "VWAP") of the Common Shares on the TSX Venture Exchange (the "TSXV"), or the Toronto Stock Exchange (the "TSX") if the Common Shares are then trading on the TSX, for the five consecutive trading days ending on the trading day prior to the first public announcement of such consolidation, amalgamation merger or take over; or
   
   
4. the transfer of the undertaking or assets of Sabina as an entirety or substantially as an entirety to another corporation or entity that is subject to shareholder approval of Sabina.

The Series B Special Warrants will be exercisable for a term of 35 years for no additional consideration, at such time as any of the events in paragraph (b), (c) or (d) above occurs.

Each Class A Unit will consist of one Common Share and, if applicable, one half of one class A share purchase warrant ("Class A Unit Warrants"). Each whole Class A Unit Warrant will be exercisable until June 9, 2014 to purchase one Common Share at a price of $1.07 (the "Exercise Price"). Each Class B Unit will consist of one Common Share and, if applicable, one half of one class B share purchase warrant ("Class B Unit Warrants"). Each whole Class B Unit Warrant will be exercisable until June 9, 2014 to purchase one Common Share at the Exercise Price.

Pursuant to the Back River Agreement, DPM and Sabina entered into certain ancillary agreements at Closing.

Technical Information

The following information is summarized from the technical report dated March 6, 2009 entitled "Back River Project, Nunavut Territory, Canada -- National Instrument 43-101 Technical Report" (the "Back River Technical Report") prepared by Coffey Mining Pty ltd. ("Coffey Mining") and filed by the Company on SEDAR on May 15, 2009. Beau Nicholls, B.Sc (Geol), MAIG, Barry Cloutt, BApp Sc (Metallurgy) MAuslMM and Brett Gossage, BApp Sc (Geol), Post Grad Cert (Geostats) M Ausl MM, each a qualified person under NI 43-101, prepared or supervised the preparation of the Back River Technical Report.

The Back River Project consists of 7 properties; Goose Lake, George Lake, Boot Lake, Boulder Pond, Needle Lake, Del Lake and the Bath 1 Claim, which are centred in the southwestern part of Nunavut, Canada. The Back River Project land package is comprised of 44 federal mineral leases and 37 federal mining claims covering approximately 183,239 acres. The Back River Project is situated approximately 520km northeast of Yellowknife, Northwest Territories and 50km southeast of the Hackett River Project.

The following map shows the location of the properties comprising the Back River Project, except for the Needle Lake claim, which is located 60km southwest of the Dell Lake Claim and the Bath I Claim, which is located 70km north of the George Lake property.


+ click on image to view enlarged

Mineralization

Most of the known or observed gold mineralization identified in the Back River Project properties is associated with quartz veins, silicification and shearing. The mineralization occurs within silicified and variably sulphidized iron formation and to a lesser extent sedimentary units that appear to have a spatial association with narrow porphyritic felsic dykes and mudstones. Sulphide minerals observed on the Back River properties include pyrite, arsenopyrite, and pyrrhotite. Sulphide mineralization may be associated with accessory chlorite, carbonate, hornblende and grunerite. Visible gold is locally present, especially when sulphides are greater than 10% and when coarse-grained arsenopyrite is present.

Gold mineralization at the Goose Lake deposit is structurally controlled and is predominantly stratabound. The deposit is located within the Goose Lake Antiform structure, which is situated within a 500+ metre wide corridor of widely spaced, sub parallel north to northeast trending, southeast dipping and normal faults.

The bulk of gold mineralization occurs within the lower iron formation (sulphidized oxide iron formation) which is in contact with the underlying central greywacke. Very minor gold and sulphide mineralization is developed in the upper iron formation. Visible gold is common and mostly occurs as fine grains although larger aggregates of up to several millimetres are not uncommon. Visible gold can often be seen to be associated with pyrrhotite and/or pyrite in the presence of
At George Lake, gold mineralization is also located within oxide iron formation near the stratigraphic base of this unit. Less significant mineralization is also hosted within silicate iron formation and surrounding sediments. Gold bearing zones are associated with sulphide concentrations in the iron formation and are commonly accompanied by increased quartz veining and attendant alteration of the surrounding rocks. Visible gold is commonly associated with elevated sulphide occurrence. Sulphides are comprised mainly of pyrrhotite, pyrite and arsenopyrite.

Exploration

Since DPM acquired the property, exploration has consisted of limited trenching, resource related drilling at both the Goose Lake and George Lake properties, exploration drilling at the George Lake, Boot and Boulder Pond claim groups, regional geochemical sampling and technical targeting studies. DPM completed approximately 62,000 meters of drilling in 135 drillholes between 2005 and 2008.

Mineral Resources

Mineral resource estimates were generated and reported for the Goose Lake and George Lake properties by Coffey Mining (formerly RSG Global Consulting Pty Ltd) in September 2007. Brett Gossage (MAuslMM) was the qualified person responsible for the estimate. Limited drilling which was completed by DPM in 2007 and 2008, after preparation of the mineral resource estimate was calculated, was reviewed by Coffey Mining and Coffey Mining determined that there was no material change to the mineral resources. A high grade low tonnage underground mining operation was targeted in the resource estimation, although preliminary investigations of a bulk mining open pit operation was reviewed with no resource reported for these studies to date.

The Back River Technical Report categorized the Back River grade estimates as a combination of indicated and inferred mineral resources in accordance with the criteria set out in National Instrument 43 101. The indicated and inferred mineral resources reported for the Goose Lake and George Lake deposits are summarised in the table below as at July 2007. All estimated blocks within the 5g/t Au grade envelopes are reported.

Recommended Exploration

The Back River Technical Report states that the gold mineralization within the Back River Project is well understood and is consistent with similar terrains worldwide. Additional mapping and drilling is required to test identified exploration targets in order to expand the resource base. According to the Back River Technical Report, it is logical that high priority be given to targets near the established larger mineral resource inventories currently identified at the Goose Lake deposit and George Lake deposits.

According to the Back River Technical Report, further scope exists to improve the current geological and resource estimation confidence in the regions currently defined as an inferred mineral resource along with extensional drilling along the general corridor of defined mineralization, although Coffey Mining recommended that the focus should be on the exploration and definition of new resources, commencing with a ground truthing of the targets defined by DPM.

Work at Back River will focus on the Goose Lake deposit which currently hosts 603,000 indicated ounces of gold at 11.9 g/t and 295,000 inferred ounces at 9.2 g/t. The current resource lies within a thick folded iron formation with a shallow plunging fold hinge. This makes Goose Lake deposit a favourable target for potential open pit development.

The Goose Lake camp was opened earlier this spring and a resupply program of fuel and drilling supplies was completed to support a two drill program this summer.

The exploration objectives for the Back River project in 2009 can be summarized as follows:

• To conduct a detailed induced polarization (IP) geophysical survey and detailed mapping to better define target locations and orientations prior to diamond drilling.
  
  
• To conduct a total of 5000 to 6000 metres of diamond drilling at the Goose Lake, focusing on priority targets outside the current deposit area.
  
  
• The 2009 budget is estimated to be $3.25 million