Sabina, KIA complete financial agreements for Nunavut gold project
Sabina working to move Back River gold project into production by 2017
Sabina Gold and Silver Corp. and the Kitikmeot Inuit Association say they have finalized two agreements that will deliver benefits to Nunavummiut in that region.
Sabina owns and operates the Back River project, located about 160 kilometres southeast of Bathurst Inlet, which is in the advanced stages of gold exploration.
Earlier this year, the two groups signed off on agreements for a development trust and capacity funding — two funds that Sabina will contribute to on behalf of the KIA.
First announced in 2011, Sabina will launch the trust fund by paying about $1.4 million to an existing KIA fund that supports development and community initiatives in the Kitikmeot.
The trust will receive three per cent of Sabina’s net proceeds from silver royalties retained by Sabina on the Hackett River and Wishbone properties, which it sold to Glencore Canada in 2011.
A portion of the trust funds will also be held for allocation after the mine or project’s closure.
“The KIA is committed to principles of economic sustainability and environmental stewardship in respect of Back River,” said KIA president Charlie Evalik, in an April 29 release. “We view these agreements as important steps to establishing a cooperative long term relationship which is aligned with these principles.”
Sabina’s chief executive officer and president Rob Pease said the company is proud to be among the first in Nunavut to create such a trust.
“The development of the trust is indicative of our investment in the economic stability and environmental stewardship of the Kitikmeot,” Pease said in the same release.
Environmental assessment and permitting processes for Back River are underway, with the project’s draft environmental impact statement now in the hands of the Nunavut Impact Review Board.
Under the terms of its capacity agreement, Sabina will provide funding to the KIA to employ staff, technical specialists and other administrative support necessary through the environmental and permitting process.
Sabina did not indicate what that funding is worth, only that will be paid out over the next three years.
The Back River proposal includes six open-pit mining areas within the Goose and George properties with one underground mine at Goose.
All the ore would be processed at the Goose property where gold bars would be poured and then flown out by air.
When operational, the Kitikmeot mine is expected to process 5,000 tonnes of material per day and produce about 300,000 ounces of gold per year for up to 10 years.
Sabina hopes to move Back River into production by 2017.