Seabridge Gold Increases Gold and Copper Resources at Iron Cap
Press Release
Toronto, Canada… Seabridge Gold Inc. announced today that an updated independent mineral resource estimate for the Iron Cap deposit has substantially increased its size while also confirming higher grade zones within the overall resource. Iron Cap is one of four large gold/copper porphyry deposits within Seabridge’s 100%-owned KSM Project located in northwestern British Columbia. The updated resource estimate, dated as of March 7, 2019, incorporates all previous drilling plus 20,341 meters of diamond core drilling completed in 18 holes during the 2018 program.
A comparison of the previous Iron Cap resource estimate and the updated one is as follows:
Seabridge Chairman and CEO Rudi Fronk noted that the new resource estimate has achieved the targeted size and grade which are likely to warrant moving the Iron Cap deposit ahead of the Kerr and Sulphurets deposits in the project’s mine plan. “Our exploration success at Iron Cap over the past two years gives us greater flexibility to optimize project economics. Iron Cap is closer to infrastructure than Kerr and Sulphurets and its development could be faster and less costly. Within the 1.9 billion tonnes of inferred resource, there exist significantly higher grade underground cave opportunities with substantial tonnage. Iron Cap clearly has the size and grade to justify early inclusion in the mining sequence. From our point of view, this is mission accomplished.”
Fronk also noted that “these resource additions once again have met our annual corporate objective of increasing gold ownership on a per share basis. We added 0.46 million ounces of indicated gold resources and 7.5 million ounces of inferred gold resources from our 2018 program. In 2018, our shares outstanding increased by approximately 3.6 million shares resulting from new financings to fund our programs plus other share issuances. Enhancing shareholder ownership of gold resources remains a governing principle for our Company and 2018 marks another successful year in achieving this self-imposed discipline.”
Gold, copper, silver and molybdenum grades in the resource were estimated by Resource Modeling Inc. (“RMI”) using ordinary kriging methods. Independently designed gold, copper, silver, and molybdenum grade envelopes along with lithologic wireframes provided the key constraints in the grade estimation plan. The grade envelopes were designed using drill hole grades and an updated structural and lithologic model that have been developed for the Iron Cap deposit. A multi-pass ordinary kriging estimation plan was developed using steeply oriented search ellipses to select eligible composites for block grade estimation based on updated variography studies.
The grade models were validated visually and by comparisons with nearest neighbor grade models. The drill hole database that was used for the estimate of the Iron Cap mineral resources consisted of data collected almost exclusively by Seabridge from 99 drill holes totaling about 67,000 meters of core drilling completed between 2005 and 2018. The entire 2018 electronic drill hole assay database was compared against certified lab assay results by RMI with no errors discovered. RMI also reviewed the quality assurance/quality control protocols and results associated with the Seabridge drilling. Based on the performance of the standard reference materials and secondary laboratory check assay results, RMI believes that the Seabridge drill samples are reproducible and suitable for estimating mineral resources.
Block net smelter return values (“NSR” values) were calculated by Moose Mountain Technical Services using metal recovery projection formulae developed by Tetra Tech from metallurgical test work. This NSR value, stated in terms of Canadian dollars, reflects metal prices, a US$/C$ currency exchange rate of 0.83, and offsite transportation, smelting, and refining charges. The metal recovery estimates were updated using previous and additional test work completed in 2018.
Iron Cap was treated as a potential block cave (bulk underground) mining target. The lateral and vertical continuity of the zone provides a geometric configuration that is likely to be amenable to this mining method. Seabridge has retained Golder Associates, a leading industry expert in underground mining, to undertake bulk underground mining studies for KSM. Golder used the block model prepared by RMI to establish three separate draw point elevations at an NSR shutoff value of C$16, and the conceptual cave footprints at these three elevations were extruded upward by 495 meters and then clipped against one another. Resources within the extruded shapes were tabulated for each of the three hypothetical draw point elevations using an NSR cut-off value of C$16, consistent with the previous updated resource estimate in our February 13, 2018 News Release. Evaluation of the economic potential of Iron Cap for the purposes of resource estimation was based on metal prices of US$3.00 per pound of copper, US$1300 per ounce of gold, US$20 per ounce of silver, US$9.70 per pound of molybdenum and a US$/C$ exchange rate of 0.83 together with estimated metal recoveries from metallurgical test work. These metal prices are generally in line with, or lower than, the metal prices used by major mining companies for their current resource disclosure for similar types of projects.
The 2018 drill program at Iron Cap confirmed that the deposit continues down dip and to the northwest. The 2018 drilling results allowed for the expansion of the mineralized system along the hangingwall of the previous interpretation. Within the conceptual cave footprints extruded up 495 meters and clipped against one another, there exist large, higher grade zones. The following table compares the undiluted tonnes and grades of the updated Iron Cap resource at higher NSR cut offs:
The rows highlighted in yellow in the table above represent the updated undiluted mineral resource tonnes, grade, and contained metal at a C$16 cut-off. The tonnes, grade, and contained metal for the other NSR cut-offs are shown to provide a relative sense of the distribution of materials within the extruded shapes. It may be possible to develop higher grade lower tonnage caves given the trends shown in the table.
Resource estimates included herein were prepared by RMI under the direction of Michael Lechner, who is independent of Seabridge and a Qualified Person as defined by National Instrument 43-101. Mr. Lechner has reviewed and approved this news release.
Exploration activities by Seabridge at the KSM Project are conducted under the supervision of William E. Threlkeld, Registered Professional Geologist, Senior Vice President of the Company and a Qualified Person as defined by National Instrument 43-101. Mr. Threlkeld has reviewed and approved this news release. An ongoing and rigorous quality control/quality assurance protocol is employed in all Seabridge drilling campaigns. This program includes blank and reference standards; in addition, all copper assays exceeding 0.25% Cu are re-analyzed using ore grade analytical techniques. Random cross-check analyses are conducted at a second external laboratory on at least 10% of the drill samples. Samples are assayed at ISO and ASTM certified laboratories in Vancouver, B.C., using fire assay atomic adsorption methods for gold and ICP methods for other elements.
Seabridge Gold holds a 100% interest in several North American gold resource projects. The Company’s
principal assets are the KSM and Iskut properties located near Stewart, British Columbia, Canada and
the Courageous Lake gold project located in Canada’s Northwest Territories. For a breakdown of Seabridge’s mineral reserves and resources by project and category please visit the Company’s website at http://www.seabridgegold.net/resources.php.
ON BEHALF OF THE BOARD
“Rudi Fronk”
Chairman and CEO
Rudi P. Fronk, Chairman and CEO
Tel: (416) 367-9292 · Fax: (416) 367-2711
Email: info@seabridgegold.net
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