Instead of opening in 2021, Sabina Gold and SilverSA国际影视传媒檚 gold mine will now start operations in late 2022, at the earliest.
ThatSA国际影视传媒檚 a decision the company made in February when it couldnSA国际影视传媒檛 find a taker to buy equity on terms Sabina deemed satisfactory. ItSA国际影视传媒檚 an industry-wide dilemma, according to Bruce McLeod, SabinaSA国际影视传媒檚 president and CEO.
The choice was welcomed by some of SabinaSA国际影视传媒檚 existing shareholders, McLeod said, because the resulting dilution would have lowered the value of their holdings in the company more than they would have liked.
SA国际影视传媒淵ou really have to wait until those markets are willing to finance good assets,SA国际影视传媒� said McLeod.
Sabina, in need of $540 million to build the mine, has expressed confidence in its ability to negotiate a debt package. However, the company wanted debt to account for no more than 60 per cent of the funds, with equity accounting for the remainder.
Due to the financing setback, Sabina will spend the next year aiming to eliminate risks, McLeod said. One item working in the explorerSA国际影视传媒檚 favour is the availability of a fixed-price approach to build a process plant instead of only a cost-plus contract, which would reimburse the contractor for labour and materials, plus pay a profit.
SA国际影视传媒淭hat will certainly provide far more cost certainty and less risk to, at least, the physical plant,SA国际影视传媒� McLeod said of the fixed-contract option, adding that a bid is expected to be delivered within the next month.
The location of the burgeoning mine, 400 km southwest of Cambridge Bay SA国际影视传媒� SA国际影视传媒渢o most people in the middle of nowhere,SA国际影视传媒� he said SA国际影视传媒� is also perceived as a risk. That hasnSA国际影视传媒檛 stopped Agnico Eagle, McLeod noted.
Sabina, which has $41 million budgetted for 2019 activities, established its port facility at Bathurst Inlet in 2018 and was working on its winter road in February and March. Although 70-90 truckloads are planned this year, upwards of 600 truckloads per season will move from the port to the Goose site during the mineSA国际影视传媒檚 construction phase. McLeod compared building an ice road to assembling IKEA furniture, saying it will get easier and more efficient as itSA国际影视传媒檚 done year after year. Asked about the possibility of an all-season road in the future, he replied that the winter road is sufficient for SabinaSA国际影视传媒檚 needs. In addition, all-season roads generally cost $1 million per kilometre, meaning a $160 million expenditure for Sabina versus less than $10 million annually to construct the winter road.
SA国际影视传媒淭he payback just isnSA国际影视传媒檛 there,SA国际影视传媒� McLeod said of an all-season road, adding that the company will be flying its gold bars out.
One other thing Sabina is determined to do is SA国际影视传媒渃ontinuing to add ounces and show that this is truly is a multi-generational long-life asset,SA国际影视传媒� he said.
Sabina received its type A water licence from the Nunavut Water Board in November and is in possession of a project certificate for the Goose property mine.
