Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) raised US$100 million (US$100M) through an equity financing, one-fifth of which came from an unnamed strategic investor, reported Cantor Fitzgerald Analyst Mike Kozak in a Feb. 20 research note.
"It is highly encouraging to see strategic investor interest in Seabridge and its 100%-owned massive KSM gold-copper project," Kozak wrote.
204% Potential Gain
On the news, Cantor Fitzgerald reiterated its CA$45 per share target price on the Toronto, Ontario-based company, now trading at about CA$16.83 per share, noted the analyst. Thus, the target suggests a potential return for investors of 204%.
Seabridge remains a Buy.
"We continue to believe the company will be successful in signing a joint venture agreement with a major mining company on project-accretive terms," wrote Kozak.
Application of Funds
The analyst described the financing and how Seabridge intends to use the proceeds. Of the US$100M raised, US$80M were from the sale of 8.18 million (8.18M) shares at US$12.25 apiece, and US$20M were from the sale of 1.64M shares at the same price to a strategic investor.
Seabridge will use the cash on work at its KSM project, budgeted at CA$150M this year. The majority will go to BC Hydro for completion of the switching station that is to provide KSM with low-cost, hydro-sourced electricity. Other funds will go toward a field data collection program and early engineering to support a future bankable feasibility study of KSM.
KSM Primed for Partner
Kozak highlighted that KSM is "primed for a joint venture partner" and presented some of the reasons why.
Located in northwest British Columbia, KSM is one of the largest gold-copper projects in the world, and it is permitted for construction.
KSM has had more than CA$1 billion spent on it, on exploration, development and construction work, by Seabridge since acquiring it in 2001.
KSM was awarded the substantially started designation last year, meaning its environmental assessment certificate will remain valid for the duration of the project's life.
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