Mr. Bruce McLeod reports

SABINA GOLD & SILVER ANNOUNCES Q3 FINANCIAL RESULTS

Sabina Gold & Silver Corp. has released its financial results for the third quarter of 2015.

"The third quarter saw continued advancement of the company and the Back River project," said Bruce McLeod, president and chief executive officer. "We are very pleased with the positive reaction received from our initial project feasibility study (3KFS) announced in mid-September. We believe this is the path forward to kickstart production in the Back River district. Additionally, we added to our treasury and increased insider ownership during the quarter by completing a small flow-through financing at a premium to market at the time. The fourth quarter will focus on progressing the environmental assessment of Back River as we move towards some major permitting milestones in 2016."

Third-quarter highlights:

• The company had cash and cash equivalents, and short-term investments of $19.8-million at Sept. 30, 2015.
• In September, the company completed and announced positive results for the 3KFS. Base-case economics are in Canadian dollars, based on a gold price of $1,150 (U.S.) per ounce gold and an exchange rate of 0.80. The project's highlights include:
  • The project could generate a posttax internal rate of return of 24.2 per cent and net present value (NPV) (at 5-per-cent discount rate) of $480.3-million with a payback period of 2.9 years (from start of operations);
  • Processing rate of 3,000 tonnes per day (tpd) produces approximately 250,000 ounces Au per year in years 1 to 8 and approximately 200,000 ounces Au per year life of mine;
  • Majority of production from open-pit mining method (72 per cent LOM) with no underground production scheduled until year 3 (after payback);
  • Approximately 80 per cent of open-pit reserves in proven category;
  • Initial capital estimate of $415-million and sustaining capital estimate of $185-million;
  • Total LOM cash costs of $534 (U.S.) per ounce Au;
  • Total LOM all-in sustaining cash costs of $598 (U.S.) per ounce Au LOM;
  • 11.8-year mine life with an LOM average grade of 6.3 grams per tonne Au and metallurgical recoveries of 93 per cent.
• During the quarter, the company conducted a field exploration program focused on generating new targets at the Goose project in both the greywacke and iron formation host lithologies, which have potential for large-scale, shallow-tiered resource discoveries. The program consisted of geological mapping, prospecting, channel sampling, till sampling, core relogging and induced polarization (IP) geophysics programs. Subsequent to the quarter, on Oct. 14, 2015, the company announced results from the program, including the discovery of the Kogoyok target, a new zone of outcropping mineralization where grab samples have returned gold values including 33.86 grams per tonne, 28.10 g/t and 18.23 g/t.
• On July 14, 2015, the company completed a flow-through equity financing of 2,661,600 flow-through common shares at 50 cents per share for gross proceeds of approximately $1.3-million. The financing was non-brokered, and fully subscribed for by directors and employees of Sabina, and was completed at a 21-per-cent premium to the 20-day volume-weighted average price at the time of the announcement and resulted in a significant increase in insider ownership.
• Subsequent to the quarter on Oct. 29, 2015, the company completed and filed its National Instrument 43-101-compliant technical report on the 3KFS.

Financial results

For the quarter ended Sept. 30, 2015, the company reported a net loss of $900,000, unfavourable by $400,000 compared with the same period of 2014. The difference quarter over quarter was largely the result of impairment of investment recognized in Q3 2015 and deferred income tax expense, partially offset by lower operating expenses. The company recorded an impairment loss of $200,000 on its equity investment in Pure Gold Mining Inc. based on the closing market price at Sept. 30, 2015.

Operating expenses in Q3 2015 were lower by $100,000 than the comparable period of 2014. Interest income was lower by $100,000 due to reduced average cash balances and was largely offset by amortization of flow-through premium recognized in the period. Deferred income tax expense was unfavourable by $200,000 in Q3 2015 due to deferred income tax associated with flow-through financing completed in the quarter compared with a deferred income recovery in Q3 2014 recognized due to losses in the quarter.

For the nine months ended Sept. 30, 2015, the company reported a net loss of $4.9-million as compared with a net loss of $2.9-million for the same period in 2014. The loss in 2015 was higher by $2.0-million due to an impairment loss of $2.0-million on equity investments and a writedown of $200,000 for certain non-material mineral claims that the company elected to drop on its Wishbone property. Included in the loss in 2014 was a loss of $200,000 on disposition of its Newman Madsen property.

Excluding writedowns, operating expenses in the nine-month period of 2015 were $500,000 lower than the comparable period of 2014, due in part to a number of cost-saving measures, including staff reductions, a 50-per-cent reduction of directors' fees and a reduction of the number of board members. Offsetting were lower net finance (interest income and amortization of flow-through premium), and deferred tax expense/recovery, which were lower by $200,000 and $900,000, respectively, for the reasons noted above.

The company had cash and cash equivalents, and short-term investments of $19.8-million at Sept. 30, 2015, compared with cash and cash equivalents of $32.5-million at Dec. 31, 2014. The company forecasts the year-end cash balance at $17-million.

For the full Q3 2015 financial statements, and management's discussion and analysis, please see the company website or retrieve them from SEDAR.

Quality assurance

Angus Campbell, PGeo, vice-president, exploration, and Wes Carson, PEng, vice-president, project development, are qualified persons under the terms of National Instrument 43-101, have reviewed the technical content of this news release for the Back River project and approved its dissemination.

We seek Safe Harbor.