Analysts from Cantor Fitzgerald and Paradigm Capital were part of a site visit earlier this summer to Seabridge Gold Inc.'s (SEA:TSX; SA:NYSE.MKT) KSM copper-gold and Iskut gold projects.
Don MacLean, senior analyst with Paradigm Capital wrote, "We believe Seabridge provides investors with ownership in one of the most strategically compelling and prolific copper‐gold projects in the world, the KSM project in B.C. Seabridge offers investors one of the lowest market caps per ounce, as well as exploration sizzle with the Iskut gold project, acquired in June 2016."
MacLean noted that "following last year's impressive drill results at KSM's Iron Cap deposit, Seabridge is back with two drills currently in operation. This year's campaign will further test the down-plunge extension of the resource shell, stepping out further to the north, as well as the high-grade potential in the footwall of the Sulphurets Thrust Fault. . .growth at Iron Cap could be transformational for KSM's gold production profile."
Referring to the Iskut gold project, MacLean commented that "although the historic data quality on the Iskut property is relatively poor, we are impressed with the boots-on-ground, new-thinking approach and quality target generation that the exploration team has put together at Iskut."
Paradigm Capital has a 12-month target of CA$20 on Seabridge; the shares are currently trading at around $14.45.
Mike Kozak of Cantor Fitzgerald wrote that "at the newly acquired Iskut property, Seabridge has initiated its maiden drill program (3,500-10,000m) also budgeted at C$5.0 MM. The Company is well capitalized with C$35 MM in cash (no debt). Initial assay results from the 2017 exploration program at both projects will be released in batches, likely beginning in the next 4-6 weeks due to assay lab backlog."
Discussing the scale of the KSM project, Kozak commented, "At 5.9 BBt grading 0.44g/T Au and 0.26% Cu (P&P+M&I+Inf.) Seabridge's 100%-owned KSM project is already the world's largest undeveloped mining project globally in terms of Reserves, and the second largest in terms of total Resources. That said, there is still room for the project to grow materially in size, and more importantly, improve in grade."
The single most important event for Seabridge over the coming months, Kozak stated, "will be to partner-up with a large-tier, or consortium of large-tier miners and/or off-takers. Based on our discussions with Seabridge management over the last several months, and its technical team on site earlier this week, we believe there is a strong likelihood of a partnering event by the end of this year, which is the internal goal."
"While the CAPEX requirement at KSM is substantial to say the least (~$5.5 BB), the sheer size/scale of KSM (+1.2 MMoz AuEq/yr over a mine-life of +50 years) makes it a truly unique, sought-after asset, and one that is highly likely to attract a number of potential top-tier JV partners," the Cantor Fitzgerald analyst stated.
Cantor Fitzgerald has a one-year target price of CA$20 for Seabridge.
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