Mr. Rob Pease reports

SABINA GOLD & SILVER ANNOUNCES Q3 2014 FINANCIAL RESULTS

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

Third quarter 2014 highlights:

• The company had cash, cash equivalents and short-term investments of $38.1-million at Sept. 30, 2014.
• During the quarter, the company completed its 2014 field program, which included a total of 12,171 metres of drilling at the Goose property, comprising Echo infill and extension drilling, as well as drilling on some regional targets.
• During the quarter, the company formally launched its Back River feasibility study (FS) by engaging a team comprising JDS Energy & Mining Inc. (lead), Hatch Ltd., SRK Consulting, Knight Piesold Ltd. and AMC Consultants Pty. Ltd. All consultants have significant recent Arctic experience. The FS is expected to be completed during the first half of 2015.
• The company continued to progress the environmental assessment and permitting process on Back River, including submitting responses to information requests on the Back River draft environmental impact statement. Technical hearings on the project, including initial public hearings, are scheduled for Nov. 12 to 21, 2014, in Cambridge Bay, Nunavut.
• Subsequent to quarter-end, the company provided an update on the progress of the FS, including the potential effect of expected improved metallurgical recoveries; increased measured and indicated resources; potential improvements to underground mining costs and efficiencies; an improved tailings management strategy; and potential for mine scheduling, which could increase mill throughput by up to 20 per cent during open-pit operations. Detailed engineering on these concepts is continuing and project economics are not yet available.

"Q3 has been a productive quarter for the company," said Rob Pease, president and chief executive officer. "Our studies for the Back River FS are very much on track. While final results and economics for the FS are not expected to be completed until the first half of next year, we are very encouraged by our progress so far and believe, based on the additional information we now have, that Back River is going to be a compelling project. We are also very fortunate to have what we believe is the best Arctic team in Canada working on the project. Our consultants all have significant northern experience in design, construction, operations and permitting, which will bring relevant hands-on credibility to the FS."

Financial results

For the quarter ended Sept. 30, 2014, the company reported a net loss of $500,000, compared with a net loss of $4.1-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 the third quarter of 2014, the company recorded a deferred income tax recovery of $200,000, compared with deferred income tax expense of $4.1-million in the third quarter of 2013. This favourable variance of $3.6-million was partially offset by lower net finance income.

For the nine months ended Sept. 30, 2014, the company had a net loss of $2.9-million, compared with a net loss of $9.3-million in the same period in 2013. The difference between the periods was due to deferred income tax as noted above and lower operating expenses, primarily lower stock-based payment expenses. Partially offsetting this was a loss recorded on the disposition of the mineral properties of $900,000.

For the three- and six-month periods in 2014, operating expenses were $900,000 and $4-million, respectively (excluding the loss on disposition of mineral property), compared with $1.2-million and $6.4-million in the same periods of 2013. Lower operating expenses in 2014 relative to the comparative periods ($400,000 in the third quarter and $2.3-million for the year to date) resulted primarily from reductions in manpower, which reduced salary expenses, lower travel and professional services, and lower stock-based payments.

For the three- and six-month periods in 2014, net finance income was $200,000 and $600,000, respectively, compared with $1.3-million and $2.7-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 by $100,000 in the quarter and $600,000 for the year to date, due to reduced average cash and short-term investment balances. Amortization of flow-through share premium was nil in 2014, compared with $900,000 (quarter) and $1.5-million (year to date) in 2013. The company has not completed any flow-through share financings in 2014.

In the third quarter of 2014, total deferred exploration and evaluation expenditures were $6.9-million, compared with $25.8-million in the third quarter of 2013. For the nine-month period in 2014, total deferred exploration and evaluation expenditures were $20.9-million, compared with $66.1-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 expects to end the year with approximately $31-million in cash.

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

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