Sabina Release Feasability Study

A lot of people were waiting for this and it was, all in all, quite impressive.

I no longer hold a position in SBB, but have been in this stock a great number of times. I've held it for fundamental reasons, and I've traded its swings a while back when it was fairly predicatble around the$1 mark.

The stock was even yesterday on the news, but gained a bit today. I plan a decent entry as I was worried about cash costs in the northen environment, but I guess the high grade makes it quite economical.

Another note for those out of the loop, Rob Pease is no longer the CEO after a numer of years with the company. Stepping in is Bruce McLeod; the man who sold Mt Milligan to Thompson Creek Metals. below is a list of the basic highlights. You can read the release here.


-The Project could generate a post-tax IRR of 21.7% and net present value ("NPV") (at 5% discount rate) of $539 million

-The Project could generate Life Of Mine ("LOM") post-tax net cash flow of $914 million on gross revenues of $4.5 billion with a payback period of 2.2 years (from start of operations);

Processing rate of 6,000 tonnes per day ("tpd") could produce an average of ~346,000 oz Au per year (post commencement of commercial production)

-Average production of 413,000 oz Au in years 1 through 4;

-Majority of production from open pit;

Initial capital estimate of $695 million and sustaining capital estimate of $529 million (including closure);

-Total LOM cash cost estimate of US$535/oz Au (including third party royalties, refining and transport). LOM all-in sustaining cash cost estimates of US$671/ oz Au LOM (including sustaining capital);

-A total of 19.8 million tonnes of ore could be milled over 10 years with a LOM average grade of 5.70 grams per tonne ("g/t") Au and metallurgical recoveries of 93%;

-Base case assumptions of delivered diesel price of $0.94/L for power generation; and
Open Pit strip ratio of 7.2:1 over LOM.

Sabina down

We saw sbb break down through a good support level of $1.00 last week and through a weak support level of around 94 cents (interesting how it bounced off that level and did make it back up to the 1.00 mark on a intraday high) the other day.


I don't usually include any indicators or oscillators on my charts but I want to point out that the two which I like the most for determining overbought/oversold don't give a lot of hope for a quick swing up. I'm thinking it will drop down to low 80s/high 70s before going back up. That being said, the Bollinger bands do seem to be tightening.


Of course, another thing to consider is that this breakdown was on relatively higher volume (yes, I apologize for the ellipse used to point out the classic volume pattern, but the semi circle wasn't working well for me) and the pattern is often indicative of renewed interest. Although, I have little experience with observing this pattern on a down swing (which I guess begs the question what I even bothered to talk about it...but maybe you know). That being said, we have seen these patterns on 2 of the three break-outs, although in less idealized form.


Another thing to consider is those fuckers from Dundee, who own like 11 percent of this thing, just like to dump shares these days, doesn't matter of what.

Predictions: I predict, based on absolutely nothing, that we will see price action somewhat mirror the price action which occurred in late June, although I predict that it will be on much lower volume and the price will drift down a bit further before going back up.

And, without much further a due here is the chart

 

Sabina down through support

Bounced (roughly) off of support the other day but the upswing was short lived. As I had stated in a previous post, I was getting ready to re-enter but its descent down to the support line was with higher volume than has characterized the average volume of the last two months. For this reason, I decided to hold off as it didn't sit well with me.


The break was over the 3.5% I usually give as lee-way so it was another reason to hold off. I see some weak support at around 90 cents, but I'm not expecting alot. I've seen what happens when this stock goes below $1.00....PANIC TIME!

That being said, this stock responds to noticeable changes in the POG. A good day for gold usually means a good day for Sabina.


(Conjecture aside...what a bargain.

-Over 6 million Oz Au grading ~7g/t
-Permits in place
-positive studies, showing (iirc) roughly 540/oz all in
-In Canada
-Silver royalty worth hundreds of millions (22.5% of first 190 million Oz, 12.5% there after)
-One of the highest grading projects in the Americas not owned by a producer

All for $1.00. Purely on the specs, one of my favorite plays.



(PS: in their corporate presentations, they often provide a chart comparing other high grade project with 5+ million oz in the Americas and they don't use the Roman V when writing the name Pretium...yea, I'd feel stupid doing that as well.) )

Further Discourse on the Trading of SBB

I'm getting ready to re-enter SBB. Problems I'm seeing now though is that the price action may be changing. Instead of tracing back down to the support line at around $1 it may follow the trend line which starts at the low of $0.81. As well, the price has closed right at the 50DMA. Monday will be interesting to see if it goes back above the 50DMA, which I will take as confirmation of a change in price action and a change to the trend line.

Sabina Trading

Like I've said over a million times, favorite stock to trade.


I have been doing some minor trading, buying at $1 and selling at around $1.40. This worked well the first two times as the chart seemed pretty simple to read. Generally I'll trade that if a stock breaks a R level on its 3rd attack by more than 3.5% I'll go in long. Volume is hard to judge...sometimes I feel that its the only thing that means anything and other times I feel that it means nothing.


That being said, at $1.42 it bounced back below the $1.40 line. Yesterday, it fell a good 15%....but then again so did almost ever gold/mining stock worth owning even with gold up around $20 to break the $1400 mark.


So, here we are today, up 4.6 percent so far. I'll be watching to see how this behaves closely.


UPDATE: Closed down, like a good deal of the gold stocks, at $1.26 today. As an aside....always nice to watch the senseless dumping that goes on near the end of the day with the GDXJ. I really would have thought that with gold breaking strongly through the $1400 mark we would have seen a big lift in the juniors. That being said, the majors usually turn before the juniors.

Sabina confirms grade and thickness

A nice release from Sabina. Its always nice, as a shareholder, to see one of your investments continually put out strong results. This is a great way to end the season and I have much excitement for the March drill season. That being said, the press release notes that drill results will continue to be released through out the fall.

Its nice to see some more results from the Umwelt deposit which, along with their Llama deposit, are the big two at the Back River Project.

NEWS RELEASES		<< previous | next >>

SABINA REPORTS DRILLING CONFIRMS THICKNESS AND GRADE AT BACK RIVER PROJECT, NUNAVUT

Sabina Reports Drilling Confirms Thickness and Grade at Back River Project, Nunavut

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 2, 2012) - Sabina Gold & Silver Corp. (TSX:SBB) -

Hole 12GSE234 returns 10.31 g/t Au over 39.85m in G2 Zone
Hole 12GSE238 returns 18.18 g/t Au over 25.7 m below proposed Umwelt Open pit
Hole 12GRL076 at Locale 2 at George returns 12.84g/t over 23.00m

Sabina Gold & Silver Corp. is pleased to announce more assay results from holes drilled at its Goose and George properties as part of the 2012 exploration program at its 100% owned Back River Gold Project in Nunavut, Canada.

Work at Back River in 2012 is heavily focussed on infill, geotechnical and extension drilling at the existing deposits in support of the upcoming Back River Pre-Feasibility Study.

In particular, work has focussed on the extension of the Umwelt deposit at depth. Planned conversion holes both in the G2 Zone and approximately 200 metres below the proposed Umwelt pit continue to demonstrate the continuity of the deposit.

12GSE238, a planned resource conversion drillhole on section 4000U returned 18.18 g/t Au over 25.7 m (including 1.85m @ 140.82g/t Au). It intersects the upper G2 Zone between a wide low-grade intersection 60m up-dip (11GSE049: 18m @ 2.04g/t), and a wide high-grade zone 110m down-dip (12GSE217, released in August 2012: 16.1m @ 51.93g/t).

Hole 12GSE234 was also a planned resource conversion hole, on section 4250U, returning 10.31 g/t Au over 39.85 m (including 0.95m @ 72.46g/t Au). The hole intersected the G2 zone approximately 37m up-dip from 11GSE123 which had comparable grade/width (32.95m @ 6.85g/t).

"We continue to be excited about the potential of the Umwelt deposit to depth. Results from the G2 Zone in particular continue to be very encouraging and we look forward evaluating our 2012 work to identify the potential impacts it will have on the upcoming pre-feasibility study," said Rob Pease, President & CEO. "While we continue to drill at Back River, work is winding down for the season and we expect to close our camps in early October. Drilling results will continue to be reported through the fall."

Umwelt Drilling Highlights

Hole Id	From (m)	To (m)	Length (m)	Au (g/t)	Zone Name
12GSE234	529.60	530.25	0.65	1.30	Main East
	533.85	535.00	1.15	1.13	Main East
	540.30	580.15	39.85	10.31	Main East
Including	541.80	542.95	1.15	32.17	Main East
Including	577.05	578.00	0.95	72.46	Main East
12GSE238	654.60	656.60	2.00	8.19	Main East
	686.50	687.35	0.85	47.77	Main East
	695.25	720.95	25.70	18.18	Main East
Including	701.10	702.20	1.10	42.51	Main East
Including	715.50	717.35	1.85	140.82	Main East

True widths have not yet been determined.

George Conversion Drilling

Conversion drilling at the George property continues to yield significant gold grades and widths from the Locale deposits where two diamond drill rigs are currently active. Initial assays continue to demonstrate resource confidence, while indicating a high potential for resource expansion at depth, along strike, and within parallel zones. Encouraging results from recent drilling intercepts at the Locale 2 deposit highlighting these opportunities include holes 12GRL062 (4.11g/t over 22.00m), 12GRL065 (4.18g/t over 7.40m), 12GRL070 (4.76g/t over 11.65m and 1.82g/t over 42.20m) and 12GRL076 (12.84g/t over 23.00m). Drilling at the George property is envisioned to complete during the first week of October.

Locale 2 drilling Highlights

Hole Id	From (m)	To (m)	Length (m)	Au (g/t)	Zone Name
12GRL062	139.00	140.00	1.00	1.22	Locale 2
	171.00	173.00	2.00	1.61	Locale 2
	183.00	184.00	1.00	2.54	Locale 2
	238.60	240.00	1.40	2.50	Locale 2
	297.00	319.00	22.00	4.11	Locale 2
Including	309.30	310.40	1.10	39.54	Locale 2
12GRL065	166.00	167.00	1.00	1.34	Locale 2
	275.00	276.00	1.00	1.11	Locale 2
	314.00	315.00	1.00	1.77	Locale 2
	318.00	319.00	1.00	1.10	Locale 2
	323.00	325.70	2.70	2.45	Locale 2
	392.00	393.00	1.00	3.26	Locale 2
	395.00	396.50	1.50	2.64	Locale 2
	398.00	399.00	1.00	3.29	Locale 2
	406.00	407.00	1.00	1.65	Locale 2
	412.00	419.40	7.40	4.18	Locale 2
12GRL070	165.00	166.00	1.00	1.17	Locale 2
	170.00	171.00	1.00	3.79	Locale 2
	187.00	189.00	2.00	1.50	Locale 2
	322.00	323.00	1.00	1.22	Locale 2
	336.30	341.00	4.70	1.66	Locale 2
	343.00

As a side note, I was browsing through blog and articles when I saw that M Giordanos mentioned Sabina is one of his top picks write ups. He says....

"On the mining side, he said Sabina Gold & Silver Corp. (TSX: T.SBB, Stock Forum) is one to watch. “They are in the Nunavut area with the Black River Gold Project that they are “advancing nicely.” They also have a silver royalty from the Hackett River silver-zinc mine which is being developed by Xstrata Zinc Canada. In Giordano’s opinion, Sabina benefits from strong management, excellent assets, and a strong balance sheet, with about $140 million in cash.
Read more at http://www.stockhouse.com/natural-resources-news/2012/aug/2/stockhouse-movers---shakers--giordano-reveals-his-.aspx#TuMpF9ort62FOmrW.99 "