A ROTH Capital Partners report discussed the new
drill results.
In an Oct. 31, 2018 research note, ROTH Capital Partners analyst Joe
Reagor reported that the first two holes of Seabridge Gold
Inc.'s (SEA:TSX; SA:NYSE.MKT) resource expansion drilling at Iron Cap
"showed significant intervals of mineralization at higher grades than
the average of the existing resource." He added, "We view this as a
significant positive development." Iron Cap is part of the company's KSM
project in British Columbia, Canada.
One recent Iron Cap highlight is hole IC-18-75, which intersected 582.7
meters averaging 0.59 grams per ton gold and 0.41% copper. Also
"encouraging," the intercept encompassed two areas of higher grade
mineralization, too, Reagor pointed out.
The analyst discussed the possible implications of these Iron Cap results.
First, the findings suggest potential for further growth of the deposit
there. "We believe continued positive drill results at Iron Cap could
lead to a significant increase in Seabridge's resources at KSM."
Second, the results' "potential on mine sequencing" could
improve the economics of a future mining project, Reagor suggested.
Specifically, because the newly found mineralization is near KSM's
Mitchell-Treaty Tunnel, Iron Cap could be included in a mine model with it.
Were that to happen, mining at Kerr would likely be delayed, but that deposit
has demonstrated lower average grades than those shown in these recent Iron
Cap assays.
Reagor concluded by saying that while ROTH finds the latest news
compelling, the investment banking firm will await further Iron Cap results
that also suggest potential resource expansion before updating its price
target on Seabridge. Therefore, ROTH's price target on the Buy-rated company
remains at CA$17 per share. This compares to Seabridge's current stock price of
about CA$12.93 per share.
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