Seabridge Gold Inc.'s (SEA:TSX; SA:NYSE.MKT) recent drilling in the Bronson Slope target at its Iskut project in British Columbia's Golden Triangle expanded the existing copper-gold deposit and showed a large alteration system is present, reported Red Cloud Securities analyst Taylor Combaluzier in a Dec. 21 research note.
"We view these initial results from Bronson Slope positively given the strong indications of a deeper, porphyry source to the breccia and intermediate sulfidation mineralization," Combaluzier wrote. "Coupled with the results at Snip North, we believe that Iskut may be underlain by a large porphyry system." Snip North is another of Seabridge's targets at Iskut, near Bronson Slope.
173% gain possible
Given this news, Red Cloud reiterated its CA$45.25 per share target price on the Canadian mining developer, currently trading at about CA$16.38 per share, the analyst noted.
The difference between these prices implies a significant potential return, of 176%.
Seabridge remains a Buy.
Signs of deeper porphyry system
The newly released drill results are from 16 diamond holes placed in the Bronson Slope, reported Combaluzier. The objectives of drilling were to expand the resource there and test for the source of mineralization at depth.
The results highlighted a large alteration system, and this comes from a deeper porphyry mineralized system, highlighted Combaluzier. The latter is also the source of the "large, explosive breccia pipe" discovered in 2022 and an intermediate epithermal occurrence, the analyst wrote.
Combaluzier provided some of the standout intercepts of this batch of results.
Hole SBS-23-19 returned 0.87 grams per ton (0.87 g/t) gold, 0.02% copper and 29.2 g/t silver over 252 meters (252m). Hole SBS-23-18 showed 0.36 g/t gold, 0.02% copper and 2.6 g/t silver over 551.8m.
What to watch for
At the Bronson Slope target, Seabridge plans follow-up drilling in 2024, seeking to identify the location of the porphyry, Combaluzier noted.
As for its flagship KSM asset, 19 miles east of Iskut, the company likely will apply in January 2024 for it to be granted the substantially started designation. This status would make the project's permits valid throughout KSM's life. Since 2021, Seabridge has spent CA$450 million on advancing KSM, before the July 2026 application deadline, so it would meet the requirements.
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