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Toronto, Ontario–(Newsfile Corp. – December 4, 2020) – Seabridge Gold Inc. (TSX: SEA) (NYSE: SA) (“Seabridge” or the “Company”) announced today it has agreed to purchase from Pretium Resources Inc. (“Pretivm”) the Snowfield Property which hosts a large gold resource immediately adjacent to Seabridge’s 100%-owned KSM gold-copper project in northeast British Columbia, Canada. The acquisition enables exciting new development opportunities for KSM which could have a significant positive impact on project economics.
The Snowfield Property, located in the same valley that hosts KSM’s Mitchell Deposit (see attached map), is being purchased from Pretivm for US$100 million (the “Cash Payment”), a 1.5% net smelter royalty (NSR) on Snowfield Property production and a future contingent payment of US$20 million of which US$15 million can be credited against future royalty payments. Seabridge plans to obtain financing for the Cash Payment, and the acquisition is contingent on Seabridge obtaining that financing.
Seabridge Chairman and CEO Rudi Fronk said: “This acquisition brings Seabridge a number of major benefits. First, it adds appreciably to our ounces of gold per share, our most important measure of shareholder value, at a cost of approximately US$3 per oz. Second, Snowfield’s measured and indicated mineral resources have the potential to significantly increase KSM’s proven and probable reserves. Snowfield’s mineral resource is 25.9 million ounces of gold in the measured and indicated category and a further 9.0 million ounces in the inferred category as well as substantial copper resources (see table below). The estimated strip ratio for Snowfield deposit is less than one-to-one and previous studies indicate its resources can be successfully blended with Mitchell ore.”
“Work is already underway to determine how to integrate Snowfield into a new KSM mine plan. We expect a large portion of the Snowfield mineral resource could be exploited in a combined operation, which could potentially improve KSM’s IRR and NPV projections as well as shortening the payback period of initial capital. Our current environmental approvals include haul roads through the Snowfield Property which may allow us to expedite its development and access some of its best grade material early in the mining process. The next step is to generate additional data that is necessary to complete a new Preliminary Feasibility Study (“PFS”) for the KSM Project which includes the Snowfield Property. We believe this new PFS will increase project reserves and improve capital efficiency by extending the life of open pit mining, thereby allowing us to delay the capital-intensive development of underground mining later in the project life.”
A definitive agreement has been signed between Seabridge and Pretivm which contemplates a closing before year end. In addition to the Cash Payment, consideration includes a 1.5% NSR on Snowfield Property production and a further conditional payment of US$20 million payable to Pretivm within 6 months following the earlier of (i) commencement of commercial production from Snowfield Property or any part thereof; and (ii) announcement by Seabridge of a bankable feasibility study which includes production of reserves from the Snowfield Property. US$15 million of the conditional payment will be offset against amounts payable pursuant to the 1.5% NSR. Seabridge will retain a right-of-first-refusal to purchase the 1.5% NSR should Pretivm decide to sell it.
|SNOWFIELD ESTIMATED MINERAL RESOURCES BASED ON A GOLD EQUIVALENT
CUT-OFF GRADE OF 0.30 G/T (1)(2)(3)(4)
|Category||Tonnes (millions)||Gold (g/t)||Silver (g/t)||Copper (%)||Moly (ppm)||Rhen (ppm)||Contained(3)|
|Copper (billion lbs)||Moly(3) (million lbs)||Rhen(3) (million oz)|
Seabridge has completed its own work to verify the Snowfield mineral resource estimate and has concluded that the resource estimate reported above is relevant and reliable. No material work has been completed on the Snowfield Property since the February 2011 mineral resource estimate and Seabridge considers it a current estimate. William E. Threlkeld, Senior Vice President, Exploration of Seabridge prepared or supervised the verification work performed by Seabridge on the 2011 resource estimate. Mr. Threlkeld is a qualified person for the purposes of NI 43-101.
About Seabridge Gold Inc.
Seabridge holds a 100% interest in several North American gold projects. The Company’s principal assets are the KSM and Iskut Projects located near Stewart, British Columbia, Canada and the Courageous Lake gold project located in Canada’s Northwest Territories. For a full breakdown of Seabridge’s mineral reserves and mineral resources by category please visit the Company’s website at http://www.seabridgegold.com/resources.php.
For further information please contact:
Rudi P. Fronk, Chairman and C.E.O.
Tel: (416) 367-9292 • Fax: (416) 367-2711
Email: [email protected]
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