Gold Co.'s Shareholders Approve Spin Out of Courageous Lake in Northwest Territories

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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) announced that shareholders have approved the spin out of the Courageous Lake Project in Northwest Territories as a new entity called Valor Gold Corp., according to a May 22 release.

99.76% of the shares voted at the meeting were in favor of the transaction.

Shareholders approved all proposed matters, including the special resolution for an arrangement under Section 192 of the Canada Business Corporations Act (CBCA) with Valor Gold, the release noted.

This arrangement will see Seabridge transferring its entire interest in the Courageous Lake gold project in Northwest Territories, Canada, to Valor, which is expected to become a publicly listed company on the Toronto Stock Exchange (TSX). Seabridge shareholders are set to receive 100% of Valor's common shares distributed via a plan of arrangement under the CBCA, equating to approximately one Valor share for every 1.957 Seabridge shares held.

The arrangement, detailed in Seabridge’s management information circular dated March 30, is contingent on approval from the British Columbia Supreme Court, with a hearing scheduled for May 27, the company said. If approved, the arrangement is expected to finalize on or about June 3.

Shareholders gave overwhelming approval to both resolutions put before them. The first — a special resolution approving a plan of arrangement under which Seabridge and its shareholders will exchange into shares of Valor Gold Corp. — passed with 62,677,638 votes in favor (99.76%) against just 151,730 opposed (0.24%). As a special resolution, this required a two-thirds supermajority, and the result clears that threshold by a wide margin.

The second item, an ordinary resolution approving Valor's proposed restricted share unit (RSU) and deferred share unit (DSU) plan also passed comfortably with 62,317,300 votes for (99.18%) and 512,069 against (0.82%).

What's Next

Post-arrangement, Seabridge shares will be suspended from trading on the TSX and New York Stock Exchange at the close of trading on June 4, with new shares listed the following day. Valor shares are also anticipated to begin trading on the TSX on June 5, with its listing on the OTCQB Venture Market in the U.S. to be announced separately.

For the exchange of shares, non-registered shareholders will have their shares automatically processed through CDS or DTC, while registered shareholders must actively exchange their old Seabridge shares for new ones and Valor shares using a letter of transmittal provided by Computershare Investor Services Inc., the depositary under the arrangement, the company said. This process involves submitting the old share certificates, a completed letter of transmittal, and any other required documents to receive the new shares. The arrangement details and procedures for shareholders are further outlined in the company’s management information circular and on Seabridge’s profile on SEDAR+.

Seabridge Gold has been actively pursuing its corporate goals for 2026, which include securing a partner for its expansive KSM project after updating its mineral resources, a May 13 release noted.

In its shareholder report, Seabridge highlighted ongoing progress with its preferred partner for the KSM project, stating, "We continue to make material progress on a partnership at KSM with our preferred partner who is now participating with our technical team to advance the feasibility program and early works construction planning while we formalize our partnership agreement."

A significant development for Seabridge is the designation of the KSM Project as a provincial priority project by the Province of British Columbia. This status will provide dedicated provincial permitting coordination and support, which is expected to streamline and expedite the permitting process.

The KSM Project, one of the largest undeveloped copper and gold projects globally, holds substantial reserves including 7.3 billion pounds of copper and 47.3 million ounces (Moz) of gold across 2.29 billion tonnes.

'The Long Game of Large-Scale Gold'

A Simply Wall St. piece reviewed by Sasha Jovanovic on May 7 noted that "to own Seabridge Gold, you need to believe in the long game of large-scale gold and copper discoveries eventually translating into real project development."

"The key near term catalysts have been progress at KSM and Iskut, including the new Snip North resource and metallurgical work, alongside critical permitting steps for infrastructure like the Mitchell Treaty Tunnels," the report noted. "The Courageous Lake spin out into Valor Gold fits into this story by simplifying Seabridge into a more focused portfolio while giving shareholders separate exposure to a single project. It may not change the company's most important short-term catalysts, but it could subtly shift the risk mix toward permitting, financing and execution at KSM and Iskut."

Mike Kozak from Cantor Fitzgerald reviewed Seabridge's strategic move to spin off Courageous Lake into Valor Gold on April 27.

Seabridge has committed to financially supporting Valor Gold by investing CA$10 million. This investment includes purchasing 0.7 million shares of Valor at CA$7.29 each for CA$5.1 million and acquiring a 10% gold stream at a fixed price of US$4,000 per ounce for an additional CA$4.9 million. Kozak views this spinout positively for Seabridge, estimating Valor Gold's market capitalization at about CA$400 million based on the indicative financing price of CA$7.29 per share. He believes this strategy will "likely deliver immediate value to Seabridge shareholders," estimating a contribution of about CA$2.75 per Seabridge share from the Courageous Lake project, which had been overshadowed by Seabridge’s larger KSM project in British Columbia.

Kozak continues to recommend buying Seabridge stock with a target price of CA$66 per share, suggesting a potential 119% return.

He commended the strategic decision to spin out the Courageous Lake project, highlighting its expected positive impact on shareholder value.

According to the updated 2024 Pre-Feasibility Study (PFS), the project is now envisioned as a smaller, less capital-intensive operation with an annual gold output of 201,000 ounces and an All-In Sustaining Cost (AISC) of US$999 per ounce over a 13-year lifespan. The revised plan includes a 7,500 tons per day processing plant with an initial capital cost of US$747 million. The project's economics forecast a post-tax Net Present Value (NPV) at a 5% discount rate of US$523 million and an Internal Rate of Return (IRR) of 21% at a gold price of US$1,850 per ounce.

Furthermore, RBC Capital Markets, through Analyst Josh Wolfson, has rated the stock as Outperform with a price target of US$71 per share, and B. Riley Securities Analyst Nick Giles has given Seabridge a Buy rating with a target of CA$65, forecasting a 44% return at the time of his analysis.

The Catalyst: Gold Dip Could Be Big Opportunity

In early U.S. trading on Wednesday, spot gold and silver prices experienced significant declines, influenced by a combination of lower oil prices, stronger global equities, and diminished demand for safe-haven assets, despite some support from decreased Treasury yields, according to according to a report by Kitco NewsWire on May 27.

At the time of reporting, spot gold had fallen by 1.35% to approximately US$4,446.70 an ounce, and spot silver had dropped 3.16% to around US$74.545.

Thursday is expected to feature key economic data releases including April's personal income and spending, durable goods orders, the second estimate of first-quarter GDP, and new home sales data.

Geopolitically, the Strait of Hormuz continues to play a critical role in influencing energy prices, inflation expectations, and the precious metals market, Kitco said. Despite recent military tensions, including U.S. strikes on Iranian boats and Iran's retaliatory actions against U.S. aircraft, the markets are currently more responsive to the optimism surrounding ongoing U.S.-Iran negotiations.

These talks are anticipated to potentially lead to a peace agreement and the reopening of the strait, the article noted. This has contributed to a decrease in oil prices, with Brent crude trading near US$95 and WTI close to US$92, significantly below the highs of last week. This reduction in oil prices has eased inflation concerns and contributed to lower yield pressures.

For gold, the prospect of a peaceful resolution and the reopening of the Strait of Hormuz are exerting a dual influence. While the reduced need for safe-haven assets negatively impacts gold prices, the lower oil prices and reduced rate pressures provide some support, Kitco said.

Gold prices have been on a consistent upward trajectory for so long that even seasoned investors might have overlooked a significant recent drop, wrote Matt Richardson for CBS News MoneyWatch on May 26.

The price per ounce has fallen nearly 20% from its January high, a decrease of about US$1,000 from earlier in 2026, the article said. Several factors have contributed to this decline, presenting a potentially fleeting opportunity for investors to purchase gold at a more accessible price point. It's crucial for both new investors and those looking to increase their holdings to seize this opportunity while it lasts, he said.

"While multiple factors have contributed to that decline, the reality is that this opportunity to get invested at a more affordable price may not last very long," Richardson said. "So, it's important that investors who have yet to get started with the metal, as well as those who want to boost their holdings, take advantage while they still can."

Ownership and Share Structure¹

Management and insiders hold approximately 2% of the company, while institutions own about 60%. The remainder is held by retail investors.

Friedberg Mercantile Group Ltd. holds 15.08%, Pan Atlantic Bank and Trust holds 9.92%, Kopernik Global Investors L.L.C. holds 6.81%. and Van Eck Associates Corp. holds 6.07%.

There are around 107.62 million shares outstanding, with the company having a market cap of CA$4.68 billion and trading within a 52-week range of CA$16.50 to CA$54.29.