Back River Gold Project

Overview

Sabina’s 100%-owned Back River Gold District is an 80km long belt, with a series of gold deposits in banded iron formation, located in southwestern Nunavut, Canada, approximately 520 km northeast of Yellowknife. The Project was purchased from Dundee Precious Metals in 2009 who remains a shareholder.

The District is advanced, large, high-grade, district scale, fully permitted with social license in hand and is in Nunavut, one of the world's best mining jurisdictions. Sabina is advancing its first mine in the District, the Goose Project. At US$1,600 gold (2021 Feasibility Study) the Project delivers an after-tax NPV5% of C$1.1 billion and an after-tax IRR of 27.7%. At 6g/t Au, these are the highest grade undeveloped open pits in the world.

Pre-development activities have begun with the Project's Port Facility and Winter Ice Road being completed as well as major earth works at the Goose Project site. The Project is currently going through detailed engineering which is expected to be completed in by the end of H1, 2021.

The Company is also currently refreshing its debt process and is waiting for an opportunistic window to project finance and make a production decision sometime in 2021.

The Company has updated its mineral resource and reserve estimates and has completed an updated feasibility study on the Project in 2021.

The 80km district hosts six properties: Goose, George, Boulder, Boot, Del and Bath, with most work being done at George and Goose. The Goose Project is where the majority of the resources are. The current global resource estimate (Goose(70%) & George(30%)) sits at:

Included in the resource are reserves of:

Click here for Summary of Mineral Reserves and Resources Estimate
The focus for initial production has been at the Goose Project which is significantly advanced.
Since the receipt of its final Project Certificate in late 2017, the Back River Project has continued to progress. From the years 2018 to 2021 there have been significant advancements in the Project.
Advancements in the past few years include:

• Completion of marine Port facility earthworks with camp, airstrip, and 10 million litre diesel tank, as well as receipt of equipment over 2 sea lift seasons.
• Winter ice road completion and delivery of materials and equipment from the marine Port facility to the Goose property.
• Extension of the existing all-weather airstrip from 3,000 to 4,500 feet to facilitate the use of large capacity cargo and transport aircraft to support underground development and future operations;
• 220 flights hauling fuel, equipment, supplies and personnel completed safely during the year;
• The procurement and transport of underground equipment required for 2021 to collar and advance the exploration decline;
• Completion of the box cut excavation for the future underground exploration ramp, in preparation for collaring of the decline in spring 2021;
• Completion of the underground equipment workshop pad and major earthworks for the underground water settling pond;
• Considerable advancement made on preparation of the permanent fuel tank pad; and
• Construction of approximately 4 km of all-weather roads connecting the exploration camp, the underground portal workshop/collar area, the underground water settling pond, the fuel tank pads and the permanent accommodation camp complex area.

Click here for Study QA/QP
The Qualified Persons as defined by NI 43-101 as pertains to the Back River Project, are James Maxwell, Director of Exploration, for the Company and Vincy Benjamin, Director of Engineering for the Company. They have approved of the written disclosure set out above.

Geology & Mineralization

The Property displays structurally controlled gold mineralization, which is largely strata bound, within broad zones of sulphidized iron formation associated with quartz veins, silicification, and shearing. The gold mineralization occurs within silicified and variably sulphidized iron formation and, to a lesser extent, meta-sedimentary units that commonly have a spatial association with narrow porphyritic felsic dykes, wherever these units are present. Gold Mineral Resources are estimated within two principal areas of the Back River Property: the Goose and George sites. This Updated Feasibility Study focuses on advancing the Goose Site only and does not incorporate the George Mineral Resources for economic analysis.

The Goose Site consists of six main deposits that contain predominantly structurally controlled gold mineralization: Goose Main, Echo, Umwelt, Llama, Llama Extension and Nuvuyak. Gold mineralization is predominantly hosted within the lower iron formation (“LIF”) and, to a much lesser extent, the underlying sediments. The Goose Main, Umwelt, Llama, Llama Extension, and Nuvuyak deposits are associated with anticlinal structures that have been structurally thickened and disrupted, and cut by axial-plane parallel felsic dykes, which apparently trace in close proximity with fluid pathways that are related to mineralization.

The Echo deposit is associated with secondary open folding of iron formation and a cross-cutting felsic dyke. Mineralization is spatially associated with the felsic dyke.

Nuvuyak, a 2018 discovery, is a continuation of the central antiform from the Goose Main deposit and continues through an area of secondary cross-folding down plunge. The gold mineralization is predominantly hosted in polyphase-folded LIF stratigraphy. The tight to isoclinal central antiform geometry is very similar to that of the Goose Main deposit.

The George Site consists of six main deposits: LCP North (“LCPn”), LCP South (“LCPs). Locale 1 (“Loc1”), Locale 2 (“Loc2”), GH, and Slave (“SL”). Gold mineralization is located within oxide iron formations near the stratigraphic base of this unit. Less significant gold mineralization is also hosted within a silicate iron formation. 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.

In addition, the Boulder and Boot prospects similarly consist of folded Beechey Lake sedimentary rocks with intercalated iron formations. The Del prospect contains the same folded sedimentary rocks as the other areas but lacks any observed iron formation horizons.

Exploration

In 2018 and 2019, exploration work at the Goose property has focused on new discovery and resource extension and optimization at the Goose Main, Umwelt, and Llama deposits, the new Nuvuyak discovery and to a lessor extent the Echo Deposit.

This work was undertaken with the objectives of further improving the economics and life span of future mine operations. Throughout this time period, exploration drilling successfully discovered mineralization extending over an additional 25% of plunging iron formation. Between the Llama Extension and Nuvuyak zones, Sabina identified an additional combined 950 m of gold mineralized iron formation along plunge from known deposits. Additional work and evaluation will be required to better understand the impact of these new potential mineral resources to the project, but it is likely that the current mine life (as outlined in the Sept 2015 43-101 feasibility report) will be significantly extended.

The 2018 exploration programs at the project consisted of two drilling programs completing approximately 22,500 m. The spring drill program, running from March to May, drilled 6,000 m, where the summer drill program completed 16,500 m from July to October. In addition, exploratory field work consisted of geological mapping and rock and till sampling on the Goose and Boulder properties during the summer field season.

The 2019 exploration programs at the project consisted of a spring drilling program and a summer trench mapping program. During the spring program, running from April to June, 6,467 m were drilled on the Goose property. The summer field program focused primarily on mapping the re-excavated and extended historic (2004-2005) trenches over the Goose Main deposit with additional small field work excursions at the Del and Goose properties.

Table 1: Exploration Spending 2018 and 2019

Figure 1: Idealized long section of the 8 km long Goose Property gold complex showing approximate strike lengths of mineral zones and possible extensions for targeted growth towards 10 million gold ounces

Key advancements in resource optimization, discovery, and geoscience include:

• The significant extension of the Llama underground gold structure. Mineralization from the bottom of the Llama open pit reserve now extends for greater than 1,200 m down plunge. Recent successes include the extension from the existing Llama underground resource (which is not in the current development plan) adding an additional plunge length of approximately 580 m, as well as the discovery of higher-grade mineralization over numerous drill holes within this plunge extension. The mineralizing structure at Llama underground remains open to depth.
• The new discovery of a significant zone of gold mineralization, the Nuvuyak Zone, located approximately 1,000 m west of the Goose Main deposit. The Nuvuyak gold zone has now been tested by 14 drill holes which confirm a strongly mineralized, folded iron formation package over a plunge extent of 370 m, open both up and down plunge. The Nuvuyak gold zone is analogous in size and mineral robustness to the other Goose deposits and is the most important discovery since the Umwelt discovery in 2010.
• The definition and expansion of a thickened, high grade corridor of mineralization within the Umwelt underground, initially at the Vault Zone and more recently in the up-plunge direction. Recent drilling and modelling show that the high-grade zone or corridor extends through Vault, up and down plunge with excellent potential for significant optimization through additional drilling. Early development of the Umwelt underground has the potential to add over 80,000 ounces a year of gold production to the Back River gold deposit.
• Key components of relevant data sets have been integrated into a 3D platform to facilitate construction of a robust geological model that has greatly enhanced the ability to interrogate, review and prioritize exploration targeting. Some of the key outcomes include: a better understanding of ore controls, a stronger and more detailed model of all important stratigraphic units, a better understanding of key structural components and the effect on iron formation and ore deposit geometry, and a better understanding of gold distribution and related mineralogy.

Description of Currently Defined Goose Project Advancement Through Recent Drilling and Discussion of Resource Opportunities

Llama Underground - Llama Extension

The Llama Deposit contains an estimated 3,557,000 tonnes at 6.50 g/t Au for 743,000 ounces of gold in the Measured and Indicated categories, and an additional 295,000 tonnes at 6.77 g/t Au for 64,000 ounces of gold in the Inferred category. Of this, 1,749,000 tonnes at an average grade of 7.15 g/t Au for 402,000 ounces in the Proven and Probable categories make up the open pit Reserve. The current Feasibility Study does not contemplate an underground development at Llama. Exploration at Llama in 2017 aimed to test the down plunge continuity of the deposit, successfully returning significant high grades such as 9.48 g/t Au over 38.55 m in drill hole 17GSE516B and 15.67 g/t over 23.25 m in drill hole 18GSE530. To date 15 drill holes have extended the gold mineralization shell down plunge from the Inferred Mineral Resources (outside of the open pit shell) by approximately 580 m with grades and thicknesses greater than those intersected in the current Llama underground Resource. This drilling has extended the total “outside” of the pit gold mineralization at Llama to over 1,200 m of strike extent and it remains open to depth.

Current combined Measured, Indicated and Inferred Underground resources total 1,160,000 tonnes at 7.94 g/t Au for 295,000 ounces.

Figure 2: Llama long section showing current resource and reserves in red and the new Llama Extension mineral zone in green with recent drilling and select significant gold intercept values

Nuvuyak Discovery

The Nuvuyak Zone was discovered in 2018 with drill hole 18GSE545 that returned 11.58 g/t Au over 39.50 m. The mineral zone which is located approximately 1,000 m down plunge of the Goose Main deposit has now been drilled over 370 m of plunge length in 14 drill holes and exhibits many of the geologic and mineralogic characteristics of the existing Goose property deposits; Llama, Umwelt, and Goose Main. The deposit is open both up and down plunge, as well as in the down dip direction along the limbs of the anticlinal fold. Examples of select significant intervals from recent Nuvuyak drilling include; drill holes 18GSE559W1 which returned 12.41 g/t Au over 8.70 m, 18GSE558 which returned 16.39 g/t Au over 13.20 m, 18GSE558W2 which returned 5.81 g/t Au over 34.60 m and 19GSE566 which returned 10.04 g/t Au over 18.00 m.

Figure 3: Nuvuyak Zone discovery mineral zone with drill holes and modeled iron formation interpretation

Figure 4: Goose – Hook – Nuvuyak unfolded and idealized long section showing gold structure connection to the Goose Main deposit and high grade nature of many of the Nuvuyak discovery and follow-up drill hole values

The Nuvuyak geometry, fold amplitude, extensive strike length of the mineralized structure, considerable thickened iron formation in the hinge zone, and axial planer positioning of the felsic dyke/mineralizing structure allow for preliminary positive modelling and scoping of a large-scale mineral zone. To date current drilling at Nuvuyak shows a higher than Back River average grade of 7.86 g/t.

High Grade Corridor - Umwelt Underground

The underground portion of the Umwelt Deposit that is planned for development currently hosts an estimated 3,491,000 tonnes of 7.38 g/t for 829,000 ounces of gold in Proven and Probable Reserves. The underground mineral structure is contiguous with that of the open pit which hosts 2,668,000 tonnes of 6.49 g/t Au for 557,000 ounces of gold in Proven and Probable Reserves. Exploration at Umwelt since the Mineral Resource Estimate in October of 2014 has focused on targeting a higher grade and thickened host rock corridor demarked by a Quartz-Feldspar Porphyry (QFP) intersection with the Lower Iron Formation (LIF). The Vault Zone is situated along the QFP-LIF intersection at depth, and drilling during 2018 and 2019 illustrated that the exceptional high grade and thick intersections seen at Vault are present up-plunge from the Vault Zone; drill hole 18GSE532 returned 8.38 g/t Au over 11.45 m and drill hole 19GSE569 returned 14.97 g/t Au over 21.75 m. These recent drill intercepts suggest an opportunity to improve the current grades and thicknesses within the existing Mineral Resources at Umwelt.

Figure 5: Umwelt Underground and Vault zone drilling with highlighted high grade intercepts

Additional down plunge opportunity is significant and untested by drilling where the Umwelt structure remains open. There is a strong opportunity to increase the high grade mineralization within the existing resource along the QFP/LIF intersection up-plunge from Vault and along the upward plunge of the intersection towards the open pit. The more recent drilling has given confidence to the concept that the iron formation and mineralization is thicker and higher grade near this central QFP/LIF intersection which provides significant opportunity to impact the resource.

To properly scope the higher grade and thicker mineralized intersections within an approximate 100 m wide corridor in the prospective area would require approximately 6,500 m of additional drilling. The proposed optimization drilling (yellow stars) is indicated in Figure 6 below.

Figure 6: Umwelt Long Section Showing High Grade Corridor and Planned Drilling

Geology and Exploration Targeting Advances

Several field programs and geoscience initiatives were undertaken at Back River between 2018 and early 2020 to complement the drilling programs and further advance new target generation, target testing, and mineral system/ore deposit understanding. The geoscience initiatives were detailed studies contributing to a broad mission of establishing the structural evolution and the paragenesis of gold mineralization with a primary goal of improving regional exploration criteria. Initiatives included: reconnaissance drilling, focused oriented core audits and structural data review, geological mapping and rock sampling, trenching and detailed structural mapping, targeted structural studies, quaternary mapping and till sampling, and age dating studies of key host rocks and prominent sulphide minerals.

The strong focus on geoscience and detailed observation resulted in several products and recommendations that have improved and aided in the updating of the Goose property stratigraphy and structural model. All data sets have been integrated to some degree into a 3D platform to facilitate construction of a robust geological model that has greatly enhanced the ability to interrogate, review and prioritize exploration targeting. Some of the key outcomes include; a better understanding of ore controls, a stronger and more detailed model of all important stratigraphic units, a better understanding of key structural components and the effect on iron formation and ore deposit geometry, and a better understanding of gold distribution and related mineralogy.

Figure 7: Goose property iron formation modelling, deposit mineralization and select targeting locations

The development of this multi-focus approach and integrated 3D exploration model along with a comprehensive target-log book and re-defined exploration tool box has allowed the exploration team to advance a number of priority targets including opportunities; outside the conventional iron formation host rock, targets extensional to defined ore bodies, and higher grade resource optimization targets within ore bodies at the Goose property.

Evidence of the success of this approach is highlighted by the discovery of Nuvuyak a mineral zone fast approaching 1,000,000 oz in scope, the identification and expansion of a high grade corridor within the Umwelt underground and the large drilling step-outs that resulted in the significant extension of the Llama underground deposit.

The increased understanding of gold mineralization controls at the Goose property and the geological evolution of the Back River basin continues to be evolved. With better understanding and incorporation of these new understandings and continued refined exploration methods Sabina has increased potential for success in future exploration through the Back River gold complex.

2020 Plans

A planned 8,500 meter drill program will target additional high grade potential at Umwelt, infill and plunge extension at Llama and other new high potential exploration targets within the 8km Goose Property gold complex. An initial focus will be at Umwelt to test the high-grade underground corridor continuity up plunge from Vault towards the bottom of the planned open pit. Exploration will also commence infill drilling at Llama with the objective of extending resources from the bottom of the current Llama underground resource model, further down plunge and potentially beyond the limits of recently established mineralization intercepts.

An additional focus of drilling will be the testing of a select number of new exploration targets. These targets have been identified through an intensive re-evaluation of the exploration model leading to a target ranking exercise based on potential impact and prospective geological characteristics. The exploration team continues to strongly review and improve its understanding of the gold mineralization system to strengthen the ability to find new gold zones but also to help define and trace high grade structures within known deposits. Exploration targeting will be supported and advanced by a field program that includes an airborne geophysics survey, trenching , rock sampling and mapping.

On February 24, 2021, the Company completed and announced the results of its UFS on its Back River Project. Base case economics in Canadian dollars were based on a gold price of US$1,600/oz and an exchange rate of 1.31 ($C:$US).

The UFS highlights include:

• An after-tax internal rate of return of 27.7%;
• An NPV5% of $1.1 billion based on a 5% discount rate;
• Life-of-mine (“LOM”) after-tax net cash flow of $2.0 billion on gross revenues of $7.0 billion;
• Payback period of 2.3 years (from start of operations);
• A total of 18.7 million tonnes of ore to be milled over 15 years
• Total gold production of 3.35M oz over life-of-mine (“LOM”)
• LOM average grade of 6.0 g/t gold and average metallurgical recoveries of 93.4%;
• Annual LOM gold production of 223 koz, including 287 koz per year in the first 5 years;
• Approximately half of mine production to come from open pits;
• Initial capital estimate of $610 million and LOM sustaining capital and closure costs of $419 million;
• Total LOM cash costs of US$679/oz of payable gold (including third party royalties, refining and transport);
• LOM all-in sustaining cash costs of US$775/oz (including sustaining capital and closure costs);
• Base case assumptions of delivered diesel price of $0.91 per litre for power generation and $0.95/L for mobile
• and stationary equipment; and
• LOM open pit strip ratio of 10.1:1.

On March 4, 2021, the Company completed and filed its NI 43-101 compliant technical report on the Back River Project entitled “Technical Report for the Initial Project Feasibility Study on the Back River Gold Property, Nunavut, Canada” dated March 3, 2021 on www.sedar.com or on this website at https://www.sabinagoldsilver.com/assets/docs/NI-43-101-Technical-Report-Updated-Feasibility-Study-FINAL.pdf.

Project development work at Goose in 2021 will focus on advancement of detailed engineering, procurement, completion of select earthworks at the Port Facility and Goose site and commencing the development of the underground ramp for exploration of the Umwelt deposit.

Detail engineering will advance on the crushing and screening plant, process plant, power-house, truck shop and the Goose site fuel farm design. Detailed engineering is targeted to be largely competed in Q3 2021.

Additionally, Sabina is working to complete detailed design for the plant site pond; rough grade for the process plant; fuel farm pad; water management structures; and accommodation complex design. As part of this work, the Company is also evaluating optimization opportunities on the sequencing of underground and open pit mining.

The exploration ramp will involve establishing the on-surface support facilities, collaring the 5m x 5m portal and driving toward the Umwelt underground to facilitate continued exploration at depth.

Procurement items include phase one of the accommodation complex (estimated to be 278 rooms); steel and cladding for the process mill building and truck shop; multiplate steel tunnels for crushed ore reclaim; construction equipment required for foundation installation and building erection; secondary cone crusher, crusher screen and grizzly feeder; and phase

one of the open pit mining fleet. These items will enable Sabina to be well prepared to begin pre-stripping of the Echo open pit once funding is obtained and a production decision is made.

Sabina is also working with a logistics specialist (air and sealift) to finalize the execution strategy for mobilizing goods and equipment to site.

Construction activities are expected to continue with civil works, including:

• construction of bulk fuel storage tank and containment at the Goose Site;
• completion of the fuel containment berm at the Port;
• advancement of the underground exploration ramp development at Umwelt;
• completion of infrastructure to support ramp activities, including a surface workshop for equipment
• maintenance; and
• water storage settling pond, with the current field season including a geotechnical drilling program to provide additional information for water management structures.

Project Development and Activities

During 2018 and 2019, activities were focused on high value initiatives that continued to both advance and de-risk the project in critical areas with the purpose of maintaining flexibility around timing of a full construction decision.

During 2018, significant advancements were completed in engineering design work, priority purchases, logistics planning, and physical works that included the completion of the Port facility at Bathurst Inlet, receipt of equipment and material at the Port through a summer sealift and construction and operation of the of the winter ice road route.

During Q1 2020, negotiation of the EPC contract was well advanced. The preliminary EPC contract price had been estimated to be $196.1 million which compares to an EPCM estimate of $125.1 million in the 2015 FS. The increase of $71.0 million (or 57%) resulted from: (a) change of execution strategy (to EPC from EPCM); (b) inflation and escalation costs since 2015 (approximately 12%); and (c) various changes to scope ($36.8 million). Changes to scope includes facilities and equipment which would provide for lower risk and increased equipment reliability and/or lower operating costs, such as purchase of an oxygen plant rather than a third-party contract service. It also includes the estimated cost of logistics for all process plant materials and equipment which is a transfer of scope to the EPC contractor from owner managed execution.

However, as a result of factors impacting the business model of the service provider, a modified EPC structure was proposed, the details of which are being negotiated. Due to ongoing market volatility, supply chain disruptions and fluctuation of foreign currency exchange rates, largely driven by global impacts of the evolving COVID-19 pandemic, the Company made the decision to put efforts on advancing the EPC contract on hold. Given the increased uncertainty of impact on financial markets, management considers it prudent to delay the negotiation process for a fixed price contract. In the interim, the Company plans to complete detailed engineering on the project which will enable a lump sum bid on the construction components of the Project. This is anticipated to be completed in the first half of 2021.

Site works included construction of a fuel storage facility at the marine Port, summer sealift, receipt of equipment and materials, and the completion of the inaugural winter ice road and transport of equipment and materials to Goose site.

2018 Key Activities and Summarized Costs

Recruitment and organization of an Owner’s team to manage oversight of all work programs including logistics, site supervision, construction management, engineering management, cost control, contract management, purchasing and camp operations. Additionally, the Owners team provided internal engineering support for all project aspects.

Construction of the marine Port Facility located at Bathurst Inlet to initiate receipt of equipment and materials for the annual summer sealift required during construction and operations. Sabina purchased all construction equipment and infrastructure (i.e., bulldozers, haul trucks, drilling and blasting equipment, fuel storage, camp facilities and infrastructure), and fully managed the construction, completed over a three-month period. The marine Port facility included construction of a fully winterized 40 person camp, fuel storage facility, lay down areas, a 900 metre (m) air strip, equipment maintenance and material storage structures, and barge receiving jetties.

Receipt of two summer sealift shipments from the east and west sea access routes, which enabled verification of routes and advancement of logistical planning detail. The sealift program received one sailing from the east using a large shipping vessel with lightering barges and one sailing from the west using ocean barges which can offload directly onto shore (3 in tow) with an ocean tugboat. Equipment and materials shipped are included in Table 9.

Figure 1: Sabina’s marine Port facility as the first sealift arrives (September 2018)

Figure 2: Off-loading of sealift materials at the Port facility (August 2018)

• Advancement of engineering and procurement activities were undertaken throughout the year including joint development of an EPC contract model with partners SCGT (Sedgmen Engineering and Clark, Gisborne, Tarpon (CGT Industrial)). The engineering review process resulted in the identification of strategic purchases required to fulfill planned schedule and engineering, most notably; processing equipment vendor data for engineering, building shell engineering data, overhead crane purchases, bulk rebar, bulk explosives, and immediate need and long lead construction equipment. The strategic purchases are categorized within as construction equipment, infrastructure, and process plant.
• Select test work programs were executed during the year to support the ongoing basic engineering efforts and confirm processing decisions. Whole ore leach was selected over flotation, FLSmidth regrind mills were definitively selected over others in the same market space, and an additional gravity concentrator was added to ensure no free gold was lost to tailings. Test work was also conducted on a natural esker source found on the Goose property which concluded that the material could be used for concrete design instead of the previous assumption that concrete aggregate would require crushed and screened material at a significantly higher cost.
• Basic engineering efforts during the year enabled Sabina to finalize the process plant and truck shop layouts, plant site location, process plant orientation on the plant site, fuel farm location, site wide road network, water management features and tailings storage facility design.
• Completed site works at Goose included construction of a road network, laydown pads, and stream crossings. The work at the Goose property lasted 3 months and during that time Sabina completed a permanent road from the airstrip quarry to the exploration camp, installed two bridges across Gander Creek, and a pioneer road with length approximately halfway to the finalized plant site.
• During the last quarter of 2018, Sabina initiated work on establishing the Winter Ice Road for transportation of the sealift materials received in August, to the Goose camp and plant site. Preparation for the winter ice road, which would see completion in 2019 included the hiring of a contractor workforce, preparing the marine Port Facility, and making select purchases.

Figure 3: First of two Gander Stream bridge crossings at the Goose Site (August 2018)

Figure 4: Sabina’s marine Port facility with laydown area, camp, fuel tank farm, and airstrip (September 2018)

2019 Key Activities and Summarized Costs

• Completion of upgrades to key infrastructure at the marine Port Facility including warehousing, laydowns, fuel storage, and fresh water supply were undertaken throughout the year when camps were open. Additionally, during the summer a 10 million litre diesel storage tank and a 500 thousand litre diesel storage tank were erected in a dedicated containment area at the marine Port facility. The tanks are part of a larger tank farm requirement for operations of 40 million litres. While the marine Port facility was open, the remainder of construction equipment purchased in 2018 and the 2019 purchases were sealifted to the marine Port facility. The sealift consisted of a single sailing from the west and all materials were successfully offloaded and stored at the marine Port facility in early September.

Figure 5: 10 million litre fuel tank under construction at the marine Port facility (August 2019)

Figure 6: Line up of purchased equipment awaiting transport to the Goose Site at the marine Port facility (September 2019)

• Engineering and procurement activities were ongoing through the year along with progression of the EPC execution contract model, as well as continued basic engineering and project optimization work.
• Engineering for the balance of the project was focused on all aspects at the basic engineering level. With project optimization completed, design criteria/layout effectively frozen, and basic engineering substantially completed, Sabina was able to perform an internal CAPEX update using first principles.
• Evaluation during the EPC process highlighted additional strategic work and purchases in the categories of construction equipment, infrastructure, and the process plant. Works and equipment included processing equipment vendor data for engineering, additional construction equipment, and diesel fuel tank materials.
• During the first half of 2019, Sabina completed the construction of the 172 kilometre (km) winter ice road from the marine Port facility at Bathurst Inlet to the Goose site. The inaugural construction was initially pushed from a single base at the marine Port facility and later advanced with additional use of a mobile mid-point camp. Construction of the full 172 km winter ice road and haulage of approximately 70 loads of construction equipment and materials from the marine Port Facility to Goose site was completed in April.
• While the Goose property was open during operation of the winter ice road the decision was made to stockpile fuel at the site in preparation for a potential limited earthworks program. To this end, 400,000 litres of diesel was stockpiled at the Goose diesel tank storage facility.

The Owner’s team covered all oversight aspects of the work programs: logistics, site supervision, construction management, engineering management, cost control, contract management, purchasing and camp operations.

Figure 7: Materials being loaded for transport down the winter ice road at the marine Port facility (May 2019)

Figure 8: Transportation of material and equipment along the winter ice road (May 2019)

Figure 9: Line up of purchased equipment delivered to Goose following winter ice road construction (May 2019)

Figure 10: Receiving fuel delivery at the marine Port facility (April 2019)

See here for QA/QP

The Qualified Person as defined by NI 43-101 as pertains to the Back River Project, is Vincy Benjamin, Director of Engineering for the Company who has approved this disclosure.

Permitting

Sabina has received all authorizations for construction and commencement of operations at the Goose Property as planned for in the UFS.All mining areas included within the UFS (Llama, Umwelt, Echo and Goose Main) are permitted within Sabina’s existing Goose authorizations and the UFS approach to waste and water management remains in line with the current authorizations.Sabina anticipates some regulatory engagement to ensure management plans and associated requirements align with changed activities planned within the UFS.

In December, 2017, Sabina completed the environmental assessment process which enabled construction and operations at Goose.Early in 2018 Sabina received the Type B water license, allowing it to proceed with pre-development activities, including infrastructure works at the Port as well as earthworks to establish all weather roads between the deposits, camp sites and the mill site.This was followed by receipt of the Type A water license in November 2018, which enables all activities at site including mine construction and operations.In June 2020 Sabina received approval to use the Initial Tailings Storage Facility location with the receipt of a Schedule 2 permit under the Metal and Diamond Mines Effluent Regulation to operate the initial TSF. Although operational improvements have resulted in this 1.7km long TSF not being required during the contemplated UFS mine life, its permitted use does allow Sabina flexibility including additional tailing, waste rock and water capacity for potential future growth. In addition to these key authorizations Sabina holds numerous other renewable approvals from the federal government including Crown Indigenous Relations and Northern Affairs Canada land leases (expiry date of 2048), fisheries authorizations from the Department of Fisheries and Oceans Canada (expiry date of 2031), and navigable waters authorizations from Transport Canada (no expiry date).Sabina currently has agreement on the closure security costs of the currently permitted Project (~$43 m).Sabina will complete progressive reclamation throughout operations and anticipates that the closure security costs for the UFS will not exceed the already agreed upon amount although the timing of payments is expected to change.

In mid-2020 various project enhancements were submitted for consideration by interested parties including the Nunavut Planning Commission, Nunavut Impact Review Board, Nunavut Water Board, Kitikmeot Inuit Association, federal and territorial governments.These enhancements included the extension of airstrips, use of additional fresh water, land-based work on the winter ice road, and deeper mining at the Umwelt deposit to access the Vault zone.Sabina has received approval from both Nunavut Planning Commission and Nunavut Impact Review Board and is currently moving through the water license amendment process.

Social License

In April 2018, the Company and the Kitikmeot Inuit Association entered into renewable 20 year benefit and land tenure agreements under a Framework Agreement (“FA”) setting out rights and obligations with respect to surface land access on Inuit owned land on the Goose Project.The FA provides the commercial leases authorizing mine development and operations and includes an Inuit Impact and Benefits Agreement, grants the KIA a 1% net smelter royalty on future production from the proposed mine on the Goose Property along with other obligations required by the Nunavut Land Claims Agreement.

The FA provides the long-term certainty of land tenure required to de-risk, finance, develop and ultimately mine at Back River.This agreement enhances KIA’s and Sabina’s existing relationship of mutual respect, demonstrates that Nunavut is a pro-responsible development/mining region and underscores its “open for business” strategy.

Mineral Resource Estimates, December 31, 2020

Source: AMC, 2020.
Notes: CIM Definition Standards (2014) were used for reporting the Mineral Resources.
The Qualified Person is Dinara Nussipakynova, P.Geo. of AMC Mining Consultants (Canada) Ltd.
Measured and Indicated Mineral Resources are inclusive of Mineral Reserves.
Metal price: US$1,550 /troy oz for gold
Exchange rate: 1.00 US$:1.31 C$.
Process Recovery: Goose deposits is 93% and for George deposits is 95%.
Cut-off grade: for Goose and George deposits, open pit is 1.4 g/t Au. Goose deposits underground is 3.0 g/t Au. George deposits underground is 3.5 g/t Au.
Goose Mineral Resources deposits are Goose Main, Umwelt, Echo, Llama, Llama Extension and Nuvuyak.
George Mineral Resources deposits are LCP North, LCP South, Locale 1, Locale 2, GH, and Slave.
Open pit Mineral Resources are constrained by an optimized pit shell using gold price and exchange stated above.
The George underground Mineral Resources were estimated within mineral domains expanded to a minimum horizontal width of 2 m.
Drilling results for Goose Main, Echo, Llama Extension and Nuvuyak are up to November 15, 2020.
Drilling results for Umwelt are up to October 16, 2020.
Drilling results for Llama and all George deposits are up to December 31, 2013.
The numbers may not add due to rounding.

Mineral Reserve Estimates January 15, 2021

1. A gold price of US$1500/oz is assumed.
2. An exchange rate of CDN$1.31 to US$1.00 is assumed.
3. The numbers might not add due to rounding.
4. Diluted Au grades are shown/listed for both COG and Mineral Reserves.
5. Notes for open pit:Dilution and recovery factors are applied as per open pit mining method.
   A COG of 1.72 g/t was used on undiluted grade for the Umwelt Open Pit Mineral Reserve Estimate.
   A COG of 1.74 g/t was used on undiluted grade for the Llama Open Pit Mineral Reserve Estimate.
   A COG of 1.70 g/t was used on undiluted grade for the Goose Main Open Pit Mineral Reserve Estimate.
   A COG of 1.60 g/t was used on undiluted grade for the Echo Open Pit Mineral Reserve Estimate

6. Notes for underground:Dilution and recovery factors are applied as per underground mining method.
   A COG of 3.9 g/t was used for the Umwelt underground Mineral Reserve Estimate.
   A COG of 4.1 g/t was used for the Llama underground Mineral Reserve Estimate
   A COG of 4.1 g/t was used for the Goose Main underground Mineral Reserve Estimate
   A COG of 3.5 g/t was used for the Echo underground Mineral Reserve Estimate

Back River Gold Project NI 43-101 Technical Report for Goose Project at Back River Gold District March 2021