Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) has begun its 2023 drilling campaign at its 100%-owned Iskut project in British Columbia's Golden Triangle.
The first of three helicopter-portable core drills have been taken to the site and two others are due to arrive in the coming weeks.
The company said it plans 12 to 15 holes, removing more than 12,000 meters of core beginning at the Snip North target and then expanding to the Bronson Slope target.
"At Snip North, we have extensive evidence of copper-gold mineralization in historical drilling and deep penetrating geophysical surveys," Seabridge Chairman and Chief Executive Officer Rudi Fronk said. "As the season matures and snow melts, we'll move upslope, following a pronounced regional structural tend, to continue work below the Bronson Slope target. Our team is enthusiastic that both these targets are new copper-gold-rich porphyry systems. In addition, we think there is significant potential to expand the existing Bronson Slope mineral resource."
Geophysical surveys and surface geology confirm a district-scale structural feature that connects the Quartz Rise, Bronson Slope, and Snip North targets. Results from drilling last year identified copper and gold grades outside of the 187 million tonnes (Mt) Bronson Slope resource, the company said.
"We . . . continue to view this exploration property as a highly prospective 'free option,'" wrote Mike Kozak of Cantor Fitzgerald, who has rated the stock a Buy.
Resource expansion potential may extend as far as 1.2 kilometers southeast along strike, connecting to historical drilling that encountered numerous high-grade intersections, the company has said.
In an updated research note after Iskut's 2022 results were released, analyst Mike Kozak of Cantor Fitzgerald noted that Iskut is located near Seabridge's flagship KSM project, which is also in the Golden Triangle.
"We . . . continue to view this exploration property as a highly prospective 'free option,'" wrote Kozak, who has rated the stock a Buy with a CA$42 per share price target.
"The 2022 field season at Iskut included 10,162 (meters) of drilling within ten holes," Kozak wrote. "The newly discovered breccia pipe below the Bronson Slope skarn deposit will help Seabridge target the source of mineralization at the project, thought to be a large Au-Cu porphyry system at depth."
The quartz-magnetite pipe, which holds gold and copper mineralization from multiple hydrothermal eruptive events, has been identified as the source of the Bronson deposit.
One hole, SBS-22-05, returned 289 meters of 0.70 grams per tonne gold (g/t Au) and 0.28% copper (Cu). SBS-22-01 returned 446 meters of 0.28 g/t Au and 0.14 Cu.
The Catalyst: Similarity to KSM
The regional structural trend that hosts the mineral occurrences at Iskut has similar characteristics to the one that hosts a cluster of porphyry systems at KSM, which Jim Rickards, editor of the Strategic Intelligence Newsletter, has called "one of the most attractive gold-copper acquisition targets in the world."
Iskut covers 22,238 hectares including 13 crown land grants, 20 British Columbia legacy mineral claims, and 53 British Columbia mineral cell claims. It straddles the Iskut River in the Pacific Coast Range of northwestern British Columbia.
Seabridge said a magnetotelluric survey that began there last year is being expanded at Snip North. It will be investigating sericite-pyrite alteration and Cu-Au geochemical anomalies in sedimentary rocks found by 32 shallow diamond core holes drilled by previous operators.
Lucas Pipes of B Riley Securities, Joe Reagor of Roth Capital Partners, and Mike Kozak of Cantor Fitzgerald also rate Seabridge a Buy.
Deeper drilling is planned there, including three to four holes totaling 3,500 meters.
The main part of the of the program will focus on drilling below the Bronson Slope resource. A large, steeply plunging quartz-magnetite breccia pipe was discovered last year. Copper and gold concentrations within and on the margins of the breccia pipe are evidence the source intrusion could host a significant mineral system, the company said.
"Resource expansion potential will be evaluated from results in the shallow parts of holes targeting the deeper breccia pipe and its intrusive source," the company said in a release.
Company Raises Money To Complete Work at Flagship
The company has five core projects, including KSM and Iskut. It recently raised US$150 million by granting Sprott Resource Streaming and Royalty Corp. a 1.2% net smelter return (NSR) royalty on KSM.
The money will be used to complete work at the KSM site to meet the criteria for "substantially started" status to get its environmental assessment certificate (EAC) extended indefinitely. It also will enable the company to complete a switching station and work needed to connect to BC Hydro's electricity lines for the construction and operation of the mine.
"We view this royalty agreement positively as it avoids shareholder dilution in the near term and, along with the US$225M (Seabridge) secured from Sprott and Ontario Teacher’s Pension Plan in 2022, should allow the company to reach the substantially started designation ahead of 2026 deadline for the current EAC," wrote analysts David Talbot and Taylor Combaluzier of Red Cloud Securities in a May 12 research note.
They rated the stock a Buy with a CA$45.25 per share price target.
Lucas Pipes of B Riley Securities, Joe Reagor of Roth Capital Partners, and Mike Kozak of Cantor Fitzgerald also rate Seabridge a Buy.
Proven and probable reserves at KSM's initial mine total 47.3 million ounces (Moz) Au, 7.3 billion pounds copper (Cu), 160 Moz silver (Ag), and 385 million pounds of molybdenum (Mo), with average production over a 33-year mine life of 1.03 Moz Au, 178 million pounds Cu, 3 Moz Ag, and 4.2 million pounds Mo, a preliminary feasibility study (PFS) found.
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Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT)
The company also released a preliminary economic assessment (PEA) for a separate, underground block cave mine with a small open pit. That mine is expected to produce 14.3 billion pounds Cu, 14.3 Moz Au, 68.2 Moz silver, and 13.8 million pounds Mo over 39 years.
Ownership and Share Structure
About 36% of the company is held by institutional investors, according to Reuters, including Pan Atlantic Bank and Trust with 7.69% or 6.25 million shares, National Bank of Canada with 5.68% or 4.62 million shares, and FCMI Financial Corp. with 5.11% or 4.16 million shares.
Management, board members, and company insiders own more than 30%, the company said. Fronk owns 1.49% or 1.21 million shares, according to Reuters. The rest is retail.
It has a market cap of CA$1.5 billion and has about 82.4 million shares outstanding, with 79.96 million free-floating. It trades in a 52-week range of CA$21.78 and CA$13.83.
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