RE:RE:RE:RE:from amk board GOOD READ.stockzorg wrote: Nice post CG. We particularly agree that NPV increases are likely in the future environment. How much can you discount reserves that will be developed several years from now if rates are negative? Not as much.
Also, I am beginning to question whether Seabridge will even need a large JV partner if they can get control of Treaty Creek. Their recent pivot to an open pit model emphasizing the gold reserves and including Snowfield's shallow gold changes the picture quite radically from my vantage point.
Let's say they take out AMK after the spinout, and make their intentions clear on purchasing all of TC assets. They would be approaching 200 million ounces of total gold reserves within a reasonable time frame. Their stock price today reflects only about $10/oz. of gold in the ground, and that's prior to the Snowfield acquisition. But the stock price today assumes a $5 Billion development effort with a tunnel required at the outset to begin operations. That's no longer the case if they own Goldstorm. So the value per ounce in the Seabridge stock price could easily go right to $20, and as they add ounces from TC areas such as PSZ, the market cap moves to $4Billion, or about $50/share.
From the standpoint of tactics, American Creek may have an interesting opportunity to get a slug of Seabridge stock while it's still below $20, knowing that it will get much higher as it becomes clear that 1) the Goldstorm open pit as KSM Phase I will not cost $5 Billion and 2) the cash flow from Goldstorm can fund the remaining open pit operations from Snowfield, Iron Cap, etc. and 3) beyond that there is lots of copper that can pay for the extraction of gold from the other deposits.
Seabridge can fund its own development by selling of some of the gold/copper streams, converting some of its higher priced stock to cash and they can borrow a reasonable amount of money to get the rest.
A JV partner in that scenario can come in with expertise, but will not need to fund the entire development, and Seabridge will keep much more than the 30% of the gold stream it has been looking for historically. With an asset that produces 1 million oz. per year of gold over the first 20 years of mine life, Seabridge is nearly a major with the massive KSM project alone, and still has the 3 Aces, Snowstorm, and Courageous Lake properties to develop even further. I no longer understand their need to bring in a JV partner to fund the entire project. I no longer understand a $5 Billion price tag up front. I no longer understand the need for a tunnel in the near term.
It will clearly be easier for Seabridge to come up with a fair offer to TUO and TUD if their stock is much higher. In the meantime, AMK holders may see a really good appreciation of their Seabridge stock as the first movers in selling out. Just a thought.
Do your own due diligence. GLTA.
Stockzorg, looking forward to your revised back of the napkin Resource calculations.
Btw, I would have to think that Tudor likely has a ROFR on any offers made on AMK & TUO.
I can't see Walter and his legalbeagles not having that structured Into a program of this magnitude.
If such IS the case and I believe that It would be, then a Seabridge acquistion of AMK Is entirely out of the question.
American Creek Is trading like they're going to roll It back......jmo on that front.
How many drills will we see smoking away up at Treaty Creek next year, 8, 10, 12?!
How much ya wanna bet their drilling away by very late April/May....I'll bet they do everything humanly possible to get underway by then.
Lets hope the labs get their chit together and are taking steps to mitigate this turnaround debalce/fiasco.
Kind Regards To All
Gill