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Two 100%-Owned Projects Have Analysts Talking About a Possible 'JV Partnership Offer'

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With an advanced project being looked at by potential partners and a newer project producing precious metal results, several analysts rate this precious metals explorer a "Buy."

In a Nov. 21 announcement,Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) confirmed the completion of its first exploration program on the Quartz Rise target in its 100%-owned Iskut Project in northwestern British Columbia. Seabridge Gold explained that "this year's drilling found evidence of a gold-bearing intermediate sulfidation epithermal system beneath the Quartz Rise lithocap as anticipated. Intercepts included 1.5 meters grading 8.26 g/T gold in QR-17-01 and 1.5 meters grading 74.1 g/T gold in QR-17-07. Sampling of a cliff face north of Quartz Rise returned very high grades ranging from 1.49 to 125.3 g/T gold."

Rudi Fronk, Seabridge's chairman and CEO, commented, "In our first program at Quartz Rise, our exploration team has successfully found the right environment for a high-grade epithermal gold deposit. The system at Quartz Rise has all the earmarks we were looking for and we think we have enhanced the potential for a significant discovery. . .Iskut's similarities with KSM are persuasive and this knowledge should help us zero in on the potential at Quartz Rise."

In a Nov. 21 report, Canaccord Genuity analyst Tony Lesiak stated that "while the 2017 initial 10 hole drill program on the Quartz Rise target at Iskut did not fully live up to our, perhaps, overly optimistic expectations, the results did achieve their primary goal; to provide evidence of a gold bearing epithermal system." He continued by pointing out that Canaccord "could hardly be faulted for the initial and continued enthusiasm given Iskut's proximity to KSM (+100Moz resource) and the associated high-grade (VOK at +17g/t) Brucejack deposit (~14Mozs), the location of previous high- grade gold operations at nearby Johnny Mountain and Snip and the existing 2.2Mozs Bronson Slope deposit, and the interpretation that the mineralizing system at Quartz Rise was fully intact, unlike KSM."

Lesiak noted that "the drilling, surface sampling and a subsequent IP survey have defined a potentially more favourable secondary structural orientation that may preferentially localize high grade gold; an orientation that will be followed up with the 2018 program."

Canaccord maintains a Speculative Buy rating on Seabridge with a target price of CA$29.00.

Analyst Mike Kozak with Cantor Fitzgerald also followed Seabridge Gold's announcement, highlighting both Iksut and KSM in a Nov. 21 report. Kozak stated that "while we regard the results from this initial [Iskut] program as sub-economic at present, it is important to note that this project is still very early days, and results are encouraging, suggestive of a potentially gold-rich epithermal system."

Kozak also discussed the much more advanced KSM project. "We believe a number of top-tier base metal and gold miners are lining up to offer JV terms to Seabridge on KSM. Based on management commentary, we are pushing this event to April/May next year, from our previous estimate of exit 2017," Kozak stated.

He pointed out that "Seabridge is an excellent asymmetric risk-reward trade. There are currently 10.2 MM shares short representing +20% of the market float." He highlighted that "a large-cap partner, or more likely a consortium of partners, are lining up to take a stake in KSM and provide the capital Seabridge needs to further advance the project."

Canaccord has with a Buy rating and target price of CA$24.00 on Seabridge.

Seabridge is currently trading at CA$13.08.

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1) Melissa Farley compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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