23 April 2018
Sabina Gold & Silver Corp.and the Kitikmeot Inuit Association announced a 20 year benefit and land tenure agreements under a framework agreement setting out rights and obligations with respect to surface land access on Inuit owned land on the Back River Project. Additionally, these agreements provide Inuit of the Kitikmeot Region with financial and socio-economic benefits including, training, jobs, initiatives to create additional opportunities outside of the mining industry, share ownership in Sabina and a 1% net smelter royalty on future production from the proposed mine on the Goose property.
These are comprehensive milestone agreements that provide the long-term certainty of tenure required to de-risk, finance, develop and ultimately mine at Back River. These agreements enhance KIA and Sabina’s existing relationship of mutual respect and demonstrate that Nunavut is a pro-responsible development/mining region and underscore its “open for business” strategy.
“We are very pleased to have completed these agreements and to welcome the KIA as Sabina shareholders,” said Bruce McLeod, President & CEO “These agreements have been negotiated in good faith with a result that benefits both Sabina shareholders and our Nunavut stakeholders. For our shareholders we have created more value in the Company by securing tenure and further de-risking the project. Inuit of the Kitikmeot Region have the opportunity to benefit from gold production on their lands both financially and through initiatives to create long term economic sustainability in jobs and training in and outside of the mining industry.We appreciate the significant efforts of the KIA as we worked to finalize these agreements and look forward to working with them to implement the various initiatives contemplated under these agreements.We are pleased to be working in one of the world’s safest mining jurisdictions.”
“On behalf of the KIA Board, I would like to congratulate Sabina on the completion of these Agreements for the Back River Project,” said Stanley Anablak, President of the Kitikmeot Inuit Association. “These Agreements allow a mine to be built and operated on Inuit Owned Land and will provide significant social and economic opportunities and benefits to Inuit of the Kitikmeot Region. Sabina has been very professional in these negotiations. We wish them success in their development plans for the mutual benefit of Sabina Shareholders and Kitikmeot Inuit.”
The FA has a maximum term of 20 years and includes, among others, the following key provisions and agreements:
•KIA consent to operations and confirmation that KIA has been adequately consulted about Back River;
•Land use licenses which permit Sabina to conduct exploration work at Back River;
•Advanced exploration leases permitting various advanced exploration and pre-production activities at Back River;
•Commercial leases authorizing the development of mines and related operations and closure activities at the Goose Property;
•A 1% net smelter return royalty paid to the KIA on production at Back River on the properties that are subject to a commercial lease;
•A grant of 6.7 million Sabina shares to the KIA expected on or about May 20, 2018 subject to regulatory approval.
•An IIBA setting out commitments associated with Inuit employment, training and education, Kitikmeot business opportunities, formation of an Inuit Environmental Advisory Committee and investments in community infrastructure projects with the objective of supporting regional wealth creation initiatives within Kitikmeot communities;
•An initial investment of $4 million in regional wealth creation initiatives in the Kitikmeot, $2 million of which will be paid forthwith and the remainder no later than upon a production decision, with additional payments commencing the third year following commercial production if Sabina-related employment targets are not achieved.The purpose of the regional wealth creation initiative is to create new long term operating jobs outside of the mine to expand and diversify the Kitikmeot economy;
•An annual payment to the KIA of up to $1 million to cover KIAs cost of implementing the FA; and
•Water and wildlife compensation agreements including additional payments if Sabina fails to implement caribou mitigation commitments regarding calving and post-calving periods made to the Nunavut Impact Review Board.