TheNewswire – February 15, 2022 – Global Stocks News – Sabre Gold Mines (TSX:SGLD) (OTCQB:SGLDF) just published positive drill assays from its 100%-owned Copperstone gold project located in Arizona, USA.
Sabre Gold holds 100% interest in two near-term North American gold producers: the fully permitted Copperstone gold mine located in Arizona, USA, and the Brewery Creek gold mine located in Yukon, Canada, both of which are former producers.
Management intends to restart production at Copperstone followed by Brewery Creek in the near term.
In the last month, the price of gold has increased $70/ounce from $1,780 to $1,850/ounce.
“The Reserve Bank of India (RBI) has been on a global gold buying spree,” reports Kitco News, “The RBI bought up 77.5 metric tonnes of gold in 2021.”
Copperstone Drill Highlights:
RC P2C33 6.0 meters at 13.4 g/t including 3.0 m at 21.6 g/t
RC P2C38 4.5 meters at 14.5 g/t including 3.0 m at 20.7 g/t
Core P2C04C 8.1 meters at 8.5 g/t including 0.7 m at 48.8 g/t
Core P2C03C 4.6 meters at 10.3 g/t including 0.8 m at 39.5 g/t
RC P2D84 12.2 meters at 8.0 g/t
RC P2B17 1.5 meters at 16.5 g/t
Four years ago, Copperstone was described as a “near-term gold producer.” Global Stocks News asked the current CEO why it is necessary to conduct more drilling before going into production.
“When I stepped in, in the middle part of 2019,” stated SGLD CEO Giulio Bonifacio, “It was apparent to me that we needed to get a deeper understanding of the actual costs of building a mine.”
“How do we ensure a level of success, while reducing the possibility of unpleasant surprises?” asked Bonifacio rhetorically, “My geological team believes the predecessor company prematurely pushed Copperstone towards production.”
“They didn’t do the required delineation drilling, therefore they didn’t understand the deposit as well as they should, which lead to dilution and marginal returns, ultimately creating a situation where the asset had to be put up for sale,” added Bonifacio, “We intend to avoid these pitfalls by advancing all our detailed engineering efforts, inclusive of mine development and processing over the past 18 months.”
“The initial assay results from our in-fill drill program, designed to provide detailed geologic information for final stope planning and design have been received,” stated Mike Maslowski, Sabre Gold V.P of Technical Services & Exploration. “Drill results are showing very good continuity of the mineralized shear zone and gold grades while adding further confidence to our resource model and detailed mine plan.”
The RC program consisted of 85 holes for a total of 3,004 meters.
The core and RC drilling targeted both the C and D Zones where the initial mining at Copperstone is scheduled to begin.
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Drill holes were designed to drill sections of the planned mining areas at close spacings of approximately 6.5 meters along strike and dip to provide detailed data on grade and thickness distributions.
The results show the drill holes are intercepting the projected shear zones near the modeled locations and are showing good structural continuity along the dip and extending the zone down dip.
“Overall drill results from this latest round of RC drilling are correlating with the previous core drilling assays which will help confirm ore delineation and ore control methodology,” stated SGLD.
One of the advantages of adding ounces to a former underground producer is the ability to use a mine shaft as a drilling platform, providing optimal location and depth.
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Concurrently with the Copperstone Mine Plan Development, Sabre Gold has also been advancing its Yukon property.
On January 18, 2022 Sabre Gold published a Preliminary Economic Assessment (PEA) for the former Yukon gold mine Brewery Creek, targeted for a near-term re-start.
“The PEA and initial results confirm our plans to move to resumption of production at Brewery Creek with what will be low re-start capital with attractive economics which we believe will be further enhanced in 2022,” stated Bonifacio.
Brewery Creek PEA Highlights:
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After-tax NPV at 5% of $112 million at an Internal Rate of Return (IRR) of 27.6% at $1,700 per ounce gold increasing to $157 million at an IRR of 35.7% at $1,900 per ounce gold
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After-tax average annual cash flow of $36 million at $1,700 per ounce gold increasing to $44 million at $1,900 per ounce gold
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Average Annual Production of 60,000 ounces per year for a total 473,000 ounces gold over an initial 8-year mine life;
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Total cash cost of $850 per ounce and all-in sustaining cost (AISC) US$966 per ounce gold
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Pre-production capital costs of $105 million with life of mine sustaining costs of $18 million
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Payback period of 2.6 years at $1,700 per ounce gold
Excellent expansion potential to extend mine life and annual production with three open prospective resource areas and several targets within a 182 square kilometers project boundary.
Lower technical and execution risk as a past brownfields producer with existing infrastructure and road access from previous mining operation.
Sabre Gold has approximately 1.5 million ounces gold in the Measured and Indicated categories, and approximately 1.2 million ounces gold in the Inferred category.
Based on February 15, 2022 market cap of CND $37 million, the SGLD gold-in-the-ground (Measured/Indicated/Inferred) is valued at less than USD$12/ounce on two brownfield former producing gold mines.
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“Looking at some of the other central banks, Hungary bought 63 tonnes over the year, tripling its gold reserves, Brazil bought 62 tonnes, while Uzbekistan and Kazakhstan added 30 tonnes and 15 tonnes, respectively,” reported Kitco News
One tonne of gold is currently worth USD $59 million.
According to filings on Canadian Insider, between November 21, 2021 and December 7, 2021 Bonifacio purchased 539,000 SGLD shares on the open market.
The assay results published on February 15, 2022 confirm model gold grades and are defining grade distributions to provide details for detailed stope design and mine-planning
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