Sabina's 100% owned Hackett River project consists of approximately 10,637 hectares and is located approximately 480 km NE of Yellowknife, and approximately 75 km from Bathurst Inlet. The project is located 23 km from the proposed all weather Bathurst Inlet port and road to Bathurst Inlet, and 105 km by road from the proposed tidewater port facility. The settlement of Bathurst Inlet, the closest community, is 100 km to the North. The Hackett River volcanic massive sulphide ("VMS") deposit currently consists of three main silver/zinc-rich zones: Main Zone, Boot and East Cleaver Lake, as well the recently discovered Jo Zone which is considered to be a satellite deposit. All the zones are located within a 2 km by 5 km window, along the contact between underlying felsic volcanics and overlying pelitic sediments.
Following Sabina's acquisition of Hackett River in 2003, most of the work completed has focused on resource delineation and engineering studies on the known deposits with a small portion of the efforts directed toward the exploration potential of the property. Exploration to-date has resulted in a significant increase in resource size and demonstrated that multiple large base metal deposits are present in a relatively small area. In September 2008, a review by an independent consulting geologist was completed on existing data and recommendations were made regarding the exploration potential of Hackett River. Based on these recommendations, the following opportunities have been identified:
- Each phase of exploration at Hackett River has resulted in the discovery of significant new or additional resources and a corresponding high rate of increase in size of the resource. This sustained rapid growth can be interpreted as reflecting a highly prolific geological setting similar to that found in world class VMS environments.
- There are a number of near surface showings and targets that represent opportunities to increase the resource base at Hackett River by looking for extensions of the existing deposits and looking for new discoveries. In order to optimize these opportunities improved geological modeling would be required.
- Previous exploration and resource drilling has encountered a number of intercepts of higher value mineralization consisting generally of copper mineralization with high grade silver and occasionally gold, that, with improved geological modeling, represents an opportunity to expand this higher value mineralization.
With this in mind, exploration has once again become a focus for the project. In 2009, the Company undertook a two phase exploration program at Hackett River. Drilling will continue to test priority exploration targets on the Hackett River claim group with emphasis on near surface targets and targets that have higher value mineralization (copper, gold and silver). Limited drilling will be completed on the Jo Zone prior to resource calculation. Testing of these targets is designed to potentially impact the ongoing project studies by defining high value near surface mineralization that could enhance the earlier years of production.
A Preliminary Economic Assessment ("PEA") was completed by Wardrop Engineering in early 2007 in accordance with NI 43-101. The PEA outlined a mining operation that could produce annually an estimated 12.4 million ounces of silver, 147,300 tonnes of zinc, 9,400 tonnes of copper, 16,800 tonnes of lead and 17,200 ounces of gold. Mine life was estimated to be 13.6 years, at a 10,000 tonne per day milling rate.
The Hackett River project development model is based on production of copper, lead and zinc concentrates with most of the silver and gold reporting to the copper concentrate. The concentrate would be trucked over an all-weather road to a port and concentrate storage facility currently proposed for construction at tidewater on Bathurst Inlet, approximately 45 km south of the community of Bathurst Inlet.
In May 2007, the Company began environmental baseline work in support of a draft environmental impact statement, which includes aquatic biology, bathymetry of water bodies, monitoring for wildlife, water chemistry, consideration of potential acid rock drainage, meteorological conditions and marine studies at the proposed port and concentrate location site on tidewater at Bathurst Inlet as well as initial public consultations with local communities. In January 2008, the Company submitted a project proposal to the Nunavut Water Board along with several applications for land use and water rights. Following these applications, a review of the project by the Nunavut Impact Review Board ("NIRB") was initiated. In September 2008, the Minister of Indian and Northern Affairs approved a Part 5 environmental assessment of the Hackett River project. In April 2009, NIRB provided the Company with the scope of the guidelines for preparation of its draft environmental impact statement.
In June 2007, Sabina engaged AMEC Americas Limited ("AMEC") to work on a prefeasibility study of the project. In 2008, AMEC focused on updating the mineable resource for the project. The Company released a summary of the updated resource calculation on March 11, 2009, which included the following highlights:
- Open pit portion of the resource increased 40% from 29.0M tonnes to 40.6M tonnes while maintaining overall resource grades.
- Indicated resource tonnes increased by 2% with grades for silver and zinc remaining in line with expectations. Overall inferred resources increased by 30% in tonnes, along with an 18% increase in zinc grade, 15% increase in copper grade and a 4% decrease in silver grade.
- All contained metals, silver, zinc, copper, lead and gold have increased, including an additional 7.1M ounces of silver, 448,000 tonnes of zinc, 57,000 tonnes of copper, 12,000 tonnes of lead and 24,000 ounces of gold.
- Detailed geological modelling has identified two mineralized zones within the Main Deposit (Main East and Main West) previously interpreted to be one zone. The Main West Zone is a high grade lens with grades significantly higher in zinc, silver and copper than the Main East Zone, and offers opportunities to recover the more economic high value mineralization at the beginning of any mining operation.
- New resource modelling has identified a significant portion of material which with closer spaced drilling could potentially be added to the resource at a future date. Also, significant high grade intercepts at the Jo deposit are not included in the current mineral resource and further drilling may bring this deposit into the overall mineral resource.
- Detailed modeling of all the deposits has identified metal zoning and "hot spots" that point to exploration targets that have better potential to add higher value mineralization.
Resource Estimate
The mineral resource estimate was prepared by Mr. Albert Chong, P. Geo., Senior Geologist of AMEC Americas Limited, for Sabina Silver Corp. as part of an ongoing pre-feasibility study on the Hackett River project. Based on current drill spacing the resources at Hackett have been classified as Indicated and Inferred based on CIM Definition Standards (2005). Significant additional mineralization has been identified but due to wide drill spacing the material has not been included in this mineral resource estimate. The mineral resources have been constrained in order to demonstrate reasonable prospects for economic extraction as described by National Instrument 43-101 including assumptions pertaining to mining methods, metallurgical recoveries, metal prices, mining costs and processing costs. Details are outlined in footnotes with the Mineral Resource Tables. As required by NI 43-101 regulations, the resource estimate technical report was filed on SEDAR in its entirety on April 22, 2009.
Related Documents
+ click on image to view enlarged
NOTE: The above table contains summary data, please refer to the attached Appendix1 for complete resource information
Footnotes:
This mineral resource estimate has been prepared by Mr. Albert Chong, P.Geo., Senior Geologist of AMEC Americas Limited. Mr. Chong is a qualified person as defined by National Instrument 43-101. CIM Definition Standards (2005) have been used in defining the mineral resource categories.
The mineral resources have been constrained in order to demonstrate reasonable prospects for economic extraction as described by National Instrument 43-101. The assumptions of amenability to the assumed mining methods have been provided by Ms. Margaret Podhorski-Thomas, P.Eng., Senior Engineer of AMEC Americas Limited who is a qualified person as defined by National Instrument 43-101. Assumed metallurgical recoveries for each deposit have been derived from metallurgical test work. The metallurgical test work to date is based on using a flotation process to produce saleable concentrates containing the metals in the resource estimate in varying proportions.
The effective date of the resource estimate is February 26, 2009. An NSR cut-off has been used to establish reasonable prospects for economic extraction. Mineral resources amenable to open pit mining methods have an NSR cut-off of CAD$20/tonne. Mineral resources below the conceptual open pits have an underground NSR cut-off of CAD$60/tonne.
Long-term metal price assumptions used are US$0.80/lb zinc, US$12.00/oz silver, US$1.90/lb copper, US$0.55/lb lead, US$800/oz gold, and exchange rate of $1.00 CAD = $0.85 US. Metal recoveries used to calculate NSR values are: Boot Zone- zinc- 86.1%, silver- 77.7%, copper- 73.0%, lead-76.0%, gold- 50.0%, Main Zone - zinc- 86.2%, silver- 75.2%, copper-86.0%, lead-74.0%, gold- 50.0%, East Cleaver - zinc- 86.4%, silver- 78.0%, copper-60.0%, lead-82.0%, gold- 50.0%. Metal Pay factors used for all resources are: zinc- 64%, silver- 89%, copper- 64%, lead- 55%, gold- 95%. A 2% NSR Royalty has been applied.
The contained metal figures shown are insitu. No assurance can be given that the estimated quantities will be produced. Silver grades have been reported as integers due to analytical precision. Summations within the tables may not agree due to rounding.
Metallurgical testing was also ongoing in 2008. The metallurgical test work was performed at SGS Lakefield Research Limited (SGS) and included work on mineralogy, grindability studies, and floatation process development.
Samples and tests recovered as part of the SGS studies differed from the 2007 PEA tests in that a better representative sample was used and six tests were conducted as opposed to the single test conducted in the PEA. Also the metallurgical flow sheet is slightly different between the two reports.
Overall, when compared to the Wardrop PEA, the SGS recoveries are:
- Silver higher by 7% increasing from 72% to 76.8%
- Zinc higher by 2% increasing from 89.6% to 91.7%
- Lead higher by 21% increasing from70.0% to 84.9 %
- Copper lower by 7% decreasing from 80.0% to 74.7%
- Gold higher by at least 20% from 50% to greater than 60%
Although the grades indicated for copper are lower, the concentrate grade still represents a saleable product and should not penalize production.
The PFS that commenced in 2007 has been seriously delayed, in part due to human resources constraints on the part of our consultants, but also because the technical information on the project in 2007 was inadequate to proceed to pre-feasibility.
Based on the positive results from the AMEC resource and metallurgical studies, the opportunities identified from the new AMEC generated resource model and the significant exploration potential identified at Hackett in the fall of 2008, the Company has recently decided to delay commencing the engineering work that would form part of the PFS.
Work has not stopped, however. The Company has engaged PEG Mining Consultants ("PEG") to undertake an update to the PEA to provide insight to management on how best to proceed with the PFS. This updated PEA would incorporate the new resource model and improved recoveries as well as examine increased production rates, methods of mining and infrastructure.
Upon completion of the PEG update, further PFS work will be re-assessed to determine if any changes should be made to the scope of the mine design or if further collection of technical data is required.
Exploration still remains a key mandate at Hackett River. For updated drill results, see the news release section of this website.