In a May 19 research report from B Riley analyst Lucas N. Pipes,estimated rating was updated in light of Q1 results for the company's KSM project as well as a reported royalty agreement with Sprott.
With this, Pipes reiterated his Buy rating on the stock and US$60 target price.
KSM Royalty Agreement
The royalty agreement was made to advance the current progress of Seabridge's "substantially started" KSM project. In accordance with the royalty arrangement, Sprott will extend the payment of US$150 million to KSM. Consequently, KSM will confer upon Sprott a 1.2% net smelter royalty pertaining to its project.
This agreement is the second made between KSM and Sprott. Pipes commented that this showcases Sprott's optimism in the project and opens the door for future prospective partnerships.
Pipes noted, "We believe the progress on the ground will further de-risk the development pathway and enhance the efforts for a comprehensive partnership agreement at KSM."
Necessary Capital Provided
US$225 million had previously been raised from Sprott and Ontario Teacher's Pension Plan. This additional US$150 million gives Seabridge the necessary capital to garner "substantially started" status for KSM. This is happening a lot sooner than the June 2026 EAC deadline.
This status will give KSM "long-term validity" for its Environmental Assessment Certificate (EAC).
"We believe these efforts strengthen the attractiveness of the KSM project during joint venture discussions by securing the EAC, further minimizing project risks, and expediting the construction schedule," Pipes noted.
Quarter One Results
Pipes also noted Seabridges Q123 results.
He stated, "As a pre-production company, we would note G&A expense of CA$3.9M versus CA$4.6M YoY, capital spending of CA$42.8M versus CA$10.1M YoY, and a treasury of CA$37.6M in cash and roughly CA$1.3M in short-term deposits."
Structure and Predictions
In his report, Lucas N. Pipes reiterated his US$60 target price.
His research also shared current market data on the company.
- Price: US$13.75, with a 52-week range between US$10.03 and US$16.18
- Price Target: US$60
- Market Cap: US$1,122.6 million
Want to be the first to know about interesting Gold investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter.
- Katherine DeGilio wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Seabridge Gold Inc. Click here for important disclosures about sponsor fees.
- From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
Disclosures for B. Riley Securities, Seabridge Gold Inc., May 19, 2023
Analyst certification and important disclosures can be found on pages 4 - 7 of this report: This document represents an abbreviated discussion of the subject issuer and should not be used as the sole basis for an investment decision. Contact your B. Riley Securities representative for complete research concerning the subject issuers, including research briefs and reports.
This report has been prepared by B. Riley Securities, Inc. (“B. Riley Securities”) and may be distributed by its affiliates and subsidiaries as third-party research pursuant to FINRA Rule 2241. B. Riley Wealth Management, Inc. (“B. Riley Wealth”). is a subsidiary of B. Riley Financial, Inc., which is the parent company to B. Riley Securities and B. Riley Wealth. As such, B. Riley Wealth may distribute B. Riley Securities research pursuant to Rule 2241 and by mutual agreement. B. Riley Securities, B. Riley Wealth,is a broker-dealer registered with the SEC and are members of FINRA, SIPC, and the NASDAQ stock market. The principal business address of B. Riley Securities is 11100 Santa Monica Blvd., Suite 800, Los Angeles, CA 90025. Company-Specific Disclosures B. Riley Securities, Inc. or any of its affiliates, expects to receive or intend to seek compensation for investment banking services from Seabridge Gold Inc. in the next 3 months. B. Riley Securities, Inc. or any of its affiliates, has received compensation for investment banking services from Seabridge Gold Inc. in the past 12 months. Seabridge Gold Inc. currently is, or within the past 12 months was, a client of B. Riley Securities, Inc. The services provided were Investment Banking Services. For up-to-date B. Riley Securities, Inc. company disclosures, please click on the following link or paste the URL in a web browser: https://brileysecurities.bluematrix.com/sellside/Disclosures.action.
General Disclosures Information about the Research Analyst Responsible for this report: The primary analyst(s) covering the issuer(s), Lucas N. Pipes, CFA, certifies (certify) that the views expressed herein accurately reflect the analyst's personal views as to the subject securities and issuers and further certifies that no part of such analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the analyst in the report. The analyst(s) responsible for this research report has received and is eligible to receive compensation, including bonus compensation, based on B. Riley Securities, Inc.’s overall operating revenues, including revenues generated by its investment banking activities.
Information about B. Riley Securities, Inc.’s Conflicts Management Policy: B. Riley Securities, Inc.’s Research conflicts management policy is available at: https://brileyfin.com/conflicts-managementpolicy/. Information about investment banking: In the normal course of its business, B. Riley Securities, Inc. or any of their affiliates seek to perform investment banking and other services for various companies and to receive compensation in connection with such services. As such, investors should assume that B. Riley Securities, Inc., or any of their affiliates intend to seek investment banking or other business relationships with the companies covered in their research reports.
Information about our recommendations, holdings and investment decisions: The information and rating(s) included in this report represent the long-term view as described more fully below. The analyst may have different views regarding short-term trading strategies with respect to the stocks covered by the rating(s), options on such stocks, and/or other securities or financial instruments issued by the company, and such views may be made available to all or some of our clients from time to time. Our brokers also may make recommendations to their clients, and our affiliates may make investment decisions that are contrary to the recommendations contained in this research report.
Such recommendations or investment decisions may be based on the particular investment strategies, risk tolerances, and other investment factors of that particular client or affiliate. From time to time, B. Riley Securities, Inc., its affiliated entities, or their respective directors, officers, employees, or members of their immediate families may have a long or short position in the securities or other financial instruments mentioned in this report. We provide to certain customers on request specialized research products or services that focus on covered stocks from a particular perspective. These products or services include, but are not limited to, compilations, reviews, and analysis that may use different research methodologies or focus on the prospects for individual stocks as compared to other covered stocks or over differing time horizons or under assumed market events or conditions. Readers should be aware that we may issue investment research on the subject companies from a technical perspective and/or include in this report discussions about options on stocks covered in this report and/or other securities or financial instruments issued by the company. These analyses are different from fundamental analysis, and the conclusions reached may differ. Technical research and the discussions concerning options and other securities and financial instruments issued by the company do not represent a rating or coverage of any discussed issuer(s). The disclosures concerning distribution of ratings and price charts refer to fundamental research and do not include reference to technical recommendations or discussions concerning options and other securities and financial instruments issued by the company. Our analysts’ short-term views, recommendations by our brokers, views contained in products and services provided to customers on an individualized basis, and\or strategies, analysis, or decisions made by B. Riley Securities, Inc. or its affiliates and their respective directors, officers, employees, or members of their immediate families may be different from those published by the analyst in this report and could impact the price of the securities mentioned in this report.