A blow has been dealt to Nunavut gold developer Sabina Gold and Silver (SBB.TO).
The Nunavut Impact Review Board (“NIRB”) has recommended Sabina’s Back River gold project not move forward to the licensing and permitting phase until more information is provided, particularly with respect to caribou and climate change.
The shock sent Sabina's shares down over 30% at the open on Thursday.
In a conference call Thursday morning to discuss the decision, CEO Bruce McLeod said he was "very surprised and disappointed" with the result. Sabina is currently reviewing the NIRB's report but McLeod remains confident the concerns can be addressed through further consultation and collaboration with stakeholders.
The climate change concerns centered around mine closure, Sabina VP Wes Carson said on the call, noting that Sabina plans to use the same permafrost encapsulation method of storing waste employed by other northern mines, including Agnico Eagle's Meadowbank and the diamond operations.
Carson said NIRB wants to see more monitoring and mitigation plans for the Bathurst caribou herd, which is declining in numbers. The herd has not utilized Sabina's project area for over 20 years, according to Carson.
CEO Bruce McLeod doesn't think Sabina will have to change the scope of the Back River project, but noted the delays are magnified by seasonal access. "Any kind of delay today, whether it be 2 months or 6 months, will likely result in a 12-month delay to the project because of the seasonality."
That delay will undoubtedly weigh on Sabina's share price.
"We fully appreciate the central importance of caribou in the North," said McLeod. "Obviously, climate change is a matter that impacts everyone - and Northern Canada is more heavily impacted than other places. These are values and concerns we share. Sabina will be considering these issues carefully as it continues its review of the NIRB report."
There is widespread local support for Back River including from the Kitikmeot Inuit Association, which urged approval of the gold project during recent public hearings, McLeod noted.
Here's a link to today's news release: Sabina Gold & Silver Statement on the Nunavut Impact Review Board's Report Regarding the Back River Gold Project, Nunavut, Canada