Sabina halts Back River until market stabilises

• Sabina Gold & Silver is decelerating its development of the Goose site at the Back River Gold Project in Nunavut
• The company will not negotiate contracts or plan project operations until a more stable market emerges after the COVID-19 pandemic
• Consequently, the planned spring drill program at Goose will be deferred, with hopes of restarting later this year
• The company reported a net loss of C$8.1 million in 2019, $4 million of which was due to devaluations on the company’s inactive property claims
• Sabina Gold & Silver (SBB) is up 3.04 per cent, with shares trading for C$1.18 and a $351.52 million market cap

Sabina Gold & Silver (TSX:SBB) is slowing its 2020 planned developments, and reported a net loss in its 2019 financial report.

Specifically, Sabina is decelerating its development of the Goose site at the Back River Gold Project in Nunavut.

The company claims that the ongoing COVID-19 pandemic is causing an unprecedented level of instability in the market. 

Consequently, Sabina will not negotiate any further contracts or plan any project operations, until a more predictable market emerges.

Specifically, the company will hold off finalising an engineering, proposal and construction program, for a planned processing plant at Back River.

These programs depend heavily on reliable global supply chains and steady resource prices, which are uncertain in the current economy.

Furthermore, Sabina will defer the planned spring drill program at Goose. As a result, all staff at the camp have returned to their home communities.

The company hopes to reinitiate the drill program later this year.

Alongside this news, Sabina has released its full-year financial results. The company recorded a net loss of C$8.1 million in 2019. 

This is not unusual for mining exploration companies, which often run at a loss for multiple years while developing sites.

However, these losses have been compounded by non-cash costs associated with the company’s Red Lake properties. Sabina owns a number of claims across the Red Lake region that have cumulatively cost $4.2 million in write-downs.

While the specifics of the write-downs remain unclear, they usually refer to asset devaluation that doesn’t affect the company’s cash-holdings.

Excluding these devaluations, Sabina reported a net loss of $3.9 million from expenses and operations.

Sabina Gold & Silver (SBB) is up 3.04 per cent, with shares trading for C$1.18 at 1:00pm EST.