Seabridge Gold's recent announcement of an increased resource estimate at
its KSM project caught the attention of one analyst, and follows another
announcement that the company intends to purchase a project that potentially
intersects three of Nevada's well-known gold trends.
In a Feb. 16 announcement, Seabridge Gold
Inc. (SEA:TSX; SA:NYSE.MKT) reported "an updated independent mineral
resource estimate for the Deep Kerr Deposit at its 100%-owned KSM Project in
northwestern British Columbia, Canada. The new inferred resource now totals
1.92 billion tonnes grading 0.41% copper and 0.31 g/T gold (containing 19.0 million
ounces of gold and 17.3 billion pounds of copper) constrained by conceptual
block cave shapes."
Seabridge noted that the "updated resource estimate represents an
increase of 3.0 million ounces of gold and 2.1 billion pounds of copper over
last year's inferred resource estimate."
In a Feb. 16 research report, National Bank Financial Analyst Raj Ray
wrote: "The resource additions announced today fall within the
conceptual mine plan outlined in the 2016 PEA that envisages a combination of
underground (~78%) and open-pit (~22%) mining with three underground block
caves�Kerr, Mitchell Underground and Iron Cap, and two open-pits�Mitchell and
Sulphurets. The growth of the inferred resource at Deep Kerr bodes well for
future mine plan optimization including increased production rates and
potentially higher cut-off grades."
In addition, Ray noted that Seabridge's "KSM project provides
attractive optionality and is one of the few fully permitted large-scale
projects in a stable jurisdiction."
On Feb. 14, Seabridge announced it had entered into a letter of intent to
acquire the Snowstorm Project in Nevada from a private company, Paulson Gold
Holdings LP.
"The Snowstorm Project consists of 31 square miles of land holdings
strategically located at the projected intersection of three of the most
important gold trends in Northern Nevada: the Carlin Trend, the Getchell
Trend and the Northern Nevada Rift Zone," the company stated.
Seabridge intends to acquire 100% of the project, which "consists of
700 mining claims and 5,800 acres of fee lands carefully assembled in a
private company over a 15 year period and explored over the past 10 years.
The Snowstorm acquisition also includes an extensive package of data
generated by previous operators," according to the company.
Seabridge plans to acquire the project for "(i) 700,000 Seabridge
common shares; (ii) 500,000 common share purchase warrants exercisable for
four years at $15.65 per share; (iii) a conditional cash payment of US$2.5
million if exploration activities at Snowstorm result in defining a minimum
of five million ounces of gold resources compliant with National Instrument
43-101; and (iv) a further cash payment of US$5.0 million on the delineation
of an additional five million ounces of gold resources," according to
the company.
With regard to the Snowstorm project, Seabridge Chairman and CEO Rudi
Fronk stated, "The Snowstorm Project has all the earmarks of an
outstanding exploration play in one of the world's best environments for
finding large gold deposits. We appreciate the opportunity to capitalize on
its outstanding potential."
Commenting on the Deep Kerr news on Feb. 16, Fronk noted, "The
resource additions at Deep Kerr fall within a conceptual mine plan that
supports cost-effective block-cave underground mining method . . . This
year's resource additions likely mean further enhancements to the project's
economics."
Additionally, Seabridge, on Feb. 22, confirmed the close of the sale of its leasehold interest in the
Castle-Blackrock claim block in Nevada to Columbus Gold Corp. According to
Fronk, "the sale is part of a continuing program of divesting non-core
assets in order to focus resources on core holdings, including its KSM and
Iskut projects and the Snowstorm project."
In Cantor Fitzgerald's Jan. 23 Precious Metals & Mining Macro Industry
Report, Seabridge is listed as one of the firm's five Preferred Gold and
Silver Names. According to the report, these companies are "high-quality
geopolitically stable gold/silver developers and smaller tier operators capable
of demonstrating output growth in the 'sweet spot' of the production
curve."
