(The KSM Property. Image via Seabridge Gold. Click to enlarge.)
Toronto-based
Seabridge Gold Inc. (TSX: SEA) announced on Friday it will purchase the Snowfield Property from
Pretium Resources Inc., which hosts a large gold resource immediately adjacent to Seabridge's 100%-owned KSM gold-copper project in northeast British Columbia, Canada. The $100 million (USD) acquisition enables exciting new development opportunities for KSM which could have a significant positive impact on project economics.
Located in the same valley that hosts KSM's Mitchell Deposit (pictured above), the Snowfield Property deal also hinges on a 1.5% net smelter royalty on Snowfield Property production and a future contingent payment of $20 million (USD) of which $15 million (USD) can be credited against future royalty payments.
Work is already underway to determine how to integrate Snowfield into a new KSM mine plan, according to the Company’s Chairman and CEO Rudi Fronk, who 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.”
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It has been a busy day for Seabridge Gold, having also entered into an agreement with
Cantor Fitzgerald Canada Corporation, as lead underwriter and sole book-runner on behalf of itself and a syndicate of underwriters, to purchase, on a bought deal basis, 6,100,000 common shares of the Company at the price of $17.25 (USD) per Offered Share for aggregate gross proceeds of approximately $105 million (USD).
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.