Sabre Gold Mines Corp. (TSX: SGLD, OTCQB: SGLDF)
|Terms||Gold Stream of 9.9% of gold produced until a cumulative 21,000 ounces are delivered, then 3.3% of gold produced until a cumulative 27,200 ounces are delivered, then 1.2% of gold produced thereafter, all at a cash payment per ounce of gold delivered equal to 25% of the average LBMA gold spot price.|
|Purchase Price||US$18 million in three US$6 million tranches. Tranches 1 and 2 have been paid in full. Payment of Tranche 3 remains subject to certain closing conditions.|
COPPERSTONE GOLD PROPERTY LOCATION
- Near-term production: Copperstone is expected to achieve commercial production in H1 2023.
- Tier 1 jurisdiction in Arizona, USA: The mine restart plan envisions an approximately 550 tonne-per-day underground operation and whole ore leach process to produce gold doré on site.
- Low capital intensity restart: Fully permitted with significant (+US$100 million) infrastructure in place.
- Historical producer: Copperstone historically produced over 500 koz from 1987 to 1993 through open-pit mining, and was acquired by Sabre Gold in 2014.
- Expansion potential: The September 2021 mineral resource update contains 306 koz in Measured and Indicated Resources and 212 koz in Inferred Resources, highlighting good potential for an eventual increase in mineral reserves and mine life extension.
- Significant exploration upside: Sabre Gold has identified multiple high-priority drill targets and highlights over 1 Moz of near-mine resource potential at Copperstone.
Copperstone is a past-producing gold mine located in western Arizona, USA, approximately 230 km west of Phoenix and has year-round access. The project sits within the Walker Lane gold trend, a mineral belt hosting a total known gold endowment of over 40 Moz.
The Copperstone Project is presently under construction and re-development as an underground operation. Over 500 koz were produced from 1987 to 1993 by Cyprus Minerals via open pit methods and a further 17 koz were produced from 2012 to 2013 by American Bonanza via shallow underground declines. Sabre Gold estimates that over US$100 million in mining and processing infrastructure remain in place at Copperstone allowing for relatively modest restart capital costs (US$22.7 million according to the May 2018 PFS).
Sabre Gold recently announced an updated mineral resource at Copperstone. Measured Resources at Copperstone increased by 53% to 196 koz (806 kt at 7.6 g/t), and Inferred Resources increased by 45% to 212 koz (1,124 kt at 5.9 g/t), for a total 23% increase in gold ounces across all mineral resource categories. The updated mineral resource statement supports Star Royalties’ investment case, and given the significant increase in Measured Resources, shows good potential for an eventual increase in mineral reserves and mine life extension. Sabre Gold highlights over 1 Moz of near-mine resource potential at Copperstone.
The mine and process plant are forecast to run at a constant rate of 550 tpd, with all mineralized material being crushed, milled and processed by whole ore leach (direct cyanidation of Copperstone’s entire ore feed and production to doré). Gold recoveries are expected to average 95%. The mining method is expected to be predominantly mechanized cut-and-fill using rock fill and cemented rock fill with an average dilution assumption of 25.3%. Annual gold production is expected to be approximately 40 koz. According to Sabre Gold, average all-in sustaining costs are projected to be ~US$1,100/oz.
SABRE GOLD: COPPERSTONE RESOURCE ESTIMATE
Source: Sabre Gold disclosures.
- The effective date of the mineral resource estimate is June 16, 2021. The QP for the estimate is Mr. Richard A. Schwering, P.G., SME-RM, of Hard Rock Consulting, LLC. and is independent of Sabre Gold Mines Corp.
- Mineral resources are not mineral reserves and do not have demonstrated economic viability such as diluting materials and allowances for losses that may occur when material is mined or extracted; or modifying factors including but not restricted to mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors. Inferred mineral resources may not be converted to mineral reserves. Inferred mineral resources are that part of a mineral resource for which the grade or quality are estimated on the basis of limited geological evidence and sampling. Inferred mineral resources do not have demonstrated economic viability and may not be converted to a mineral reserve. It is reasonably expected, though not guaranteed, that the majority of Inferred mineral resources could be upgraded to Indicated mineral resources with continued exploration.
- The mineral resource is reported at an underground mining cut-off of 2.74 grams/tonne (0.080 oz/ton). The cut-off is based on the following assumptions: a gold price of $1,700 oz/ton, a mining cost of $68.04/tonne ($75.00/ton), a processing cost of $32.66/tonne ($36.00/ton), a G&A cost of $12.70/tonne ($14.00/ton), a 95.0% gold recovery, 3.0% gross royalties, and a refining and smelting cost of $10.00 oz/ton.
- Rounding may result in apparent differences when summing tonnes, grade and contained metal content. Tonnage and grade measurements are in metric units unless otherwise stated. Prices are stated in US currency.
- The number of modelled domains increased to 48 from 42.
SABRE GOLD: COPPERSTONE LONG SECTION
Source: Sabre Gold disclosures.