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Sabina Gold & Silver Corp
Symbol C : SBB
Shares Issued 226,653,652
Close 2017-12-19 C$ 2.44
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Sabina Gold to sell 24.93 million shares to Zhaojin

2017-12-19 12:45 ET - News Release

Mr. Bruce McLeod reports


Zhaojin International Mining Co. Ltd. has agreed to purchase 24.93 million common shares of Sabina Gold & Silver Corp. at a price of $2.65 per share for a total investment of approximately $66.1-million in a private placement. Upon completion of the Financing, Zhaojin International will own approximately 9.9 per cent of the company's issued and outstanding common shares on a non-diluted basis. Zhaojin International is a subsidiary of Zhaojin Mining, which is a leading Chinese gold producer and one of China's largest gold smelting companies.

"We are very excited to welcome Zhaojin, a leading Chinese gold producer, as a strategic investor. Zhaojin's investment represents a significant milestone for Sabina and is a strong endorsement of the work completed to date at our world class Back River project. This financing with Zhaojin provides Sabina with a cornerstone investor that has financial and technical resources to assist us in advancing the project to production. With this capital in hand, we are currently working on finalizing plans and budgets for 2018 which will focus on derisking the project with initial preconstruction activities as well as furthering exploration activities," said Bruce McLeod, president and chief executive officer.

In connection with the financing, Sabina and Zhaojin International have signed a shareholder agreement which includes the following provisions:

  • A standstill in effect for four years from the closing date of the financing;
  • A 12-month lock-up on share dispositions;
  • Zhaojin International will have an option to increase its shareholding to up to 19.9 per cent of the common shares of the company by a grant of participation rights in future financings (up to 33 per cent per financing), subject to certain terms and conditions, including the receipt of shareholder approval of Zhaojin, if required, and the receipt of regulatory and Sabina's board's approval;
  • Zhaojin International will have the right to nominate one director to Sabina's board at 9.9-per-cent ownership and shall have the right to appoint a second director should its equity position increase to 19.9 per cent;
  • A voting arrangement whereby Zhaojin International will exercise all of its votes associated with its common shares in support of matters proposed by Sabina's board of directors to shareholders of the company (other than certain identified matters) for four years after the closing date of the financing.

In connection with the financing, Sprott Asia acted as adviser on the transaction, BMO Capital Markets acted as financial adviser and Gowling WLG was retained as legal adviser for Sabina.

The financing is subject to regulatory and other customary approvals.

About Sabina Gold & Silver Corp.

Sabina Gold & Silver is a well-financed, emerging precious metal company with district-scale, world-class undeveloped assets in one of the world's newest, politically stable mining jurisdictions -- Nunavut, Canada.

In September, 2015, Sabina released a feasibility study on its 100-per-cent-owned Back River gold project which presents a project that has been designed on a fit-for-purpose basis, with the potential to produce approximately 200,000 ounces a year for approximately 11 years with a rapid payback of 2.9 years.

In addition to Back River, Sabina also owns a significant silver royalty on Glencore's Hackett River project; the silver royalty on Hackett River's silver production comprises 22.5 per cent of the first 190 million ounces produced and 12.5 per cent of all the silver produced thereafter.

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