Gold Co. Says Drill Results Show BC 'Discovery in the Making'

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Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) announced results from the first phase of its exploration drilling on its 100%-owned Iskut project in northwest British Columbia's Golden Triangle.

According to a release from the company, drilling has generated "broad widths of important gold and copper grades within a large potassic alteration system at the Snip North target."

Seabridge said the "scale and character" of the mineralization suggests a "nearby porphyry intrusive source feeding, and localized by, well mineralized tuffaceous stratigraphy several hundred meters thick."

"Last year's new gold discoveries at Snip North gave us clear direction on where to focus our efforts this year," Chairman and Chief Executive Officer Rudi Fronk said. "We're excited by the apparent size of the event we are exploring and the substantial metal content that we have found to date. Our team believes we are now in the process of unlocking the porphyry potential we had in mind when we acquired the Iskut project. We think this is a discovery in the making."

Results were released from three holes at Iskut:

• Hole 17 intersected 303 meters of 0.75 grams per tonne gold (g/t Au) and 0.10% copper (Cu)
• Hole 18 intersected 478 meters of 0.49 g/t Au and 0.13% Cu
• Hole 20 intersected 532 meters of 0.48 g/t Au and 0.10% Cu

The company focused this summer exploration-wise on drilling programs at Iskut and its 3 Aces Project in the Yukon.

Earlier this year, Seabridge announced its first mineral resource estimate (MRE) for the Bronson Slope deposit at Iskut. It found an Inferred Resource of 517.3 million tonnes (Mt) at 0.33 g/t Au for 5.4 million ounces (Moz), 0.09% Cu for 1.06 billion pounds, and 2.7 g/t silver (Ag) for 45 Moz.

Searching for a Partner

Another focus for the company has been advancing its massive 100%-owned KSM Project, also in the Golden Triangle. Its stock rose more than 11% over three weeks after July's announcement that it had received the "Substantially Started" designation from the British Columbia government for KSM, a major milestone for the company.

The company continues looking for a joint venture partner for the project, which Red Cloud Securities Analyst Taylor Combaluzier has described as "one of the largest, undeveloped gold-copper projects in the world." RBC Capital Markets is running a formal search process.

RBC Capital Markets analyst Michael Siperco wrote that "the receipt of 'substantially started' status, in our view, is a significant permitting de-risking event for KSM, and a catalyst for the stock as management continues to seek a larger partner for the development of the +$7bn gold/copper project in BC," wrote Siperco, who rated the stock Outperform, Speculative Risk with a US$30 per share target price.

"A partner with the capability and balance sheet to advance the project to feasibility and a construction decision could, in our view, validate the project, the latest updated studies, and the work done to date at the site, while providing a path for Seabridge investors to participate in future potential upside if a positive construction decision is made," the analyst wrote.

'Intensive and Extensive' Alteration Event

In Tuesday's release, Seabridge said its remaining objective at Snip North at Iskut is to "encounter intrusive rock with the veining and alteration characteristic of a porphyry Cu-Au mineral deposit, containing copper and gold of potentially mineable grades."

To date, Seabridge said it has intersected "an intensive and extensive potassium alteration event" hosted in a tuffaceous package several hundred meters thick of the Triassic Stuhini Formation containing important gold and copper concentrations. The package's known dimensions are about 1.5 kilometers by 500 meters, the company said.

"Our original interpretation of the broadly potassium-altered rocks was that we had intersected a micro-crystalline porphyritic intrusion with localized foliation and discrete intervals of thermally metamorphosed siltstone and sandstone," Seabridge said. "Aided by initial thin section petrographic analysis, we now conclude that we have encountered a series of ash tuff eruptions with locally preserved flow-top or flow-bottom breccia intervals and occasionally preserved flow banding."

The release said one key observation from the drill results implicating a potentially robust Cu-Au porphyry source was that "sizeable magmatic fluid volumes were needed to account for the scale of the potassic alteration, requiring substantial energy and suggesting a large and nearby intrusive source."

The expected role of chemically reactive tuffaceous rocks supports the likelihood that metal concentrations would not have been displaced significantly from the source intrusion, the company said.

The Catalyst: The Bulls Have Just Started Running

Gold was sluggish Wednesday after hitting its record high of US$2,685.42 in September, but most experts agree its bull market has not ended. The price was US$2,612.94 per ounce Wednesday morning.

"The gold market drifted a little bit lower in the early hours on Wednesday, but quite frankly, I think we continue to see a lot of support in the $2,600 region," wrote Christopher Lewis for FXEmpire. "And the fact that we have bounced from there, not only on Tuesday but now on Wednesday in the early hours does suggest that there are buyers out there willing to get involved."

Lewis said a market rally from here sending the price higher makes sense "central banks around the world cutting rates, which means lower interest rates, which means you don’t get paid as much to hold paper and therefore paying for storage of precious metals isn’t quite as unattractive."

Goldman Sachs has raised its forecast for gold in early 2025 to US$2,900 from the previous US$2,700, Investing.com reported.

According to Reuters, gold is on-track for its best quarter in four years. The recent rise was "fueled by the U.S. Federal Reserve's half-percentage-point cut and flare-ups in the Middle East," author Sherin Elizabeth Varghese wrote.

Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 3% of the company. According to Reuters, CEO and Chairman Rudi P. Fronk owns 1.41%.

Reuters reports that institutions own about 55% of the company. According to Reuters, Friedberg Mercantile Group Ltd. owns 13.34%, National Bank of Canada owns 5.15%, Van Eck Associates Corp. owns 4.2%, Kopernik Global Investors, L.L.C. owns 3.71%, Paulson & Co. Inc. owns 2.36%, and Sprott Asset Management L.P. owns 2.24%.

According to Reuters, there are 87.69 million shares outstanding, while the company has a market cap of CA$2.05 billion and trades in a 52-week range of CA$12.62 and CA$25.82.