Mr. Rob Pease reports

SABINA GOLD & SILVER ANNOUNCES Q2 2014 FINANCIAL RESULTS

Sabina Gold & Silver Corp. has released its financial results for the quarter ended June 30, 2014.

Second quarter 2014 highlights:

• The company had cash and short-term investments of $45.6-million at June 30, 2014.
• On April 22, 2014, the company reported the results of continuing metallurgical testing at Back River. The improved recoveries (88 per cent in the prefeasibility study to an indicated 94 per cent) in combination with the increased mineral resource estimate announced earlier this year will be incorporated into the feasibility study.
• On April 28, 2014, the company and the Kitikmeot Inuit Association jointly announced that they have finalized the agreements for the development trust and capacity financing. These two important agreements will continue to foster and build a relationship of co-operation between the two organizations as they work together toward the responsible development of the Back River gold project.
• On June 12, 2014, the company held its annual general meeting of shareholders; all nominated directors to the board were re-elected.
• During the quarter, the company completed 11,392 metres of drilling, including 7,523 m of exploration drilling focused on near deposit and extension to existing resources and 3,869 m of geo-mechanical drilling targeting additional data for the feasibility study.
• On June 25, 2014, the company completed the sale of the company's 100-per-cent-owned Newman-Madsen property to Pure Gold Mining Inc. (formerly Laurentian Goldfields Ltd.). As consideration, Sabina received 6.5 million shares of Pure Gold; the shares received had a fair value of 42 cents per share or $2.73-million on the closing date.
• Subsequent to the quarter-end, the company formally launched its FS by engaging a team comprising JDS Energy & Mining Inc. (lead), Hatch Ltd., SRK Consulting, Knight Piesold Ltd. and AMC Consultants Pty. Ltd. The FS is anticipated to be completed during the first half of 2015.

"Q2 has been a productive quarter for the company," said Rob Pease, president and chief executive officer. "We were successful on a number of fronts, demonstrating the continuity and expansion potential at Echo, finalizing some very important agreements with the KIA and completing metallurgical testing that has the opportunity to enhance project economics. We look forward to a busy third quarter as we launch into our FS. We are very pleased with our team of consultants, all of which have substantial Arctic experience. Work completed to date continues to demonstrate the potential for Back River to become a meaningful gold producer."

Financial results

For the quarter ended June 30, 2014, the company reported a net loss of $800,000 compared with a net loss of $1.6-million in the same period in 2013. The difference between the periods was mainly the result of a favourable variance on deferred income tax; in first quarter 2014, the company recorded a deferred income tax recovery of $900,000 compared with deferred income tax expense of $1.0-million in Q2 2013. This favourable variance of $1.9-million was partially offset by a loss of $800,000 on the disposition of its Newman-Madsen mineral property and lower net finance income.

For the six months ended June 30, 2014, the company had a net loss of $2.4-million compared with a net loss of $5.3-million in the same period in 2013. The difference between the periods was as noted above and due to lower stock-based payments in 2014.

For the three- and six-month periods in 2014, operating expenses were $1.1-million and $3.2-million, respectively (excluding the loss on disposition of mineral property), compared with $1.3-million and $5.1-million in the same periods of 2013. Lower operating expenses in 2014 relative to the comparative periods ($200,000 in Q2 and $1.9-million for the year to date) resulted primarily from reductions in manpower which reduced salary expenses and lower stock-based payments.

For the three- and six-month periods in 2014, net finance income was $200,000 and $400,000, respectively, compared with $700,000 and $1.5-million in the same periods in 2013. The decrease was the result of lower interest income and amortization of flow-through premium. Interest income was lower due to the reduced average cash and short-term investment balances. Amortization of flow-through share premium was nil in 2014 compared with $600,000 in 2013. The company has not completed any flow-through share financings in 2014.

In Q2 2014, total deferred exploration and evaluation expenditures were $10.0-million compared with $26.1-million in Q2 2013. For the six-month period in 2014, total deferred exploration and evaluation expenditures were $13.7-million compared with $40.2-million in in the same period of 2013. The decrease in 2014 was primarily the result of significantly reduced drilling activity at Back River, and decreased environmental and economic assessment expenditures compared with 2013.

The company has reforecast its budget for 2014 and now expects to end the year with approximately $30-million in cash. This is lower than previously forecast, however is primarily a timing difference related to FS and environmental assessment efforts in 2015. The company's guidance for cash at the end of 2015 is approximately $23-million, including costs to complete the FS and the environmental review process, excluding any additional exploration activities that may be planned for 2015.

For the full June 30, 2014, interim financial statements and management's discussion and analysis, please see the company website.

Annual general meeting of shareholders

On June 12, 2014, the company held its annual general meeting of the shareholders.

The results voting results have been included in the table and include overwhelming positive votes for the re-election of all nominated directors.

                                                                           %
                                                        Against/    against/
Motion/nomination                    For       % for    withheld    withheld

Number of directors          109,129,805      85.87%  17,955,335      14.13%
Terrence E. Eyton            115,033,532      99.72%     318,900       0.28%
David A. Fennell             101,246,871      87.77%  14,105,561      12.23%
Jonathan Goodman             110,751,665      96.01%   4,600,767       3.99%
Scott B. Hean                115,277,717      99.89%     124,715       0.11%
James N. Morton              115,147,632      99.82%     204,800       0.18%
Robert Pease                 115,266,017      99.93%      86,415       0.07%
John Wakeford                114,003,042      98.83%   1,349,390       1.17%
Anthony P. Walsh             112,544,887      97.57%   2,807,545       2.43%
John F. Whitton              102,324,946      88.71%  13,027,486      11.29%
LeRoy E. Wilkes              102,344,731      88.72%  13,007,701      11.28%
Appointment of auditor       126,545,727      99.57%     541,513       0.43%

We seek Safe Harbor.