Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe


Seabridge Gold Ups the Ante with Nevada Acquisition Deal and Updated Resource at Deep Kerr

Share on Stocktwits


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.

Snowstorm Property, Nevada

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."

Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.

1) Tracy Salcedo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following company mentioned in this article is a billboard sponsor of Streetwise Reports: Seabridge Gold Inc. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) 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 families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview or article until after it publishes.

Want to read more about Gold investment ideas?
Get Our Streetwise Reports' Resources Report Newsletter Free and be the first to know!

A valid email address is required to subscribe