Gold Co. IDs Source of Golden Triangle Deposit

Source: Streetwise Reports   01/12/2023

Seabridge Gold Inc. says it has identified a large, mineralized breccia pipe as the source of a major deposit at one of its Golden Triangle projects.

Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) said its 2022 drilling program at its 100%-owned Iskut project in northwestern British Columbia identified a large, mineralized breccia pipe below the Bronson Slope deposit.

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 in the Golden Triangle.

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.

Analyst Mike Kozak of Cantor Fitzgerald, in an update note on the news last week, called the update a “modest positive” for the company but also reminded readers that Iskut is located near Seabridge’s flagship KSM project, also in the Golden Triangle.

“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,” Kozak wrote on Nov. 9. “We . . .  continue to view this exploration property as a highly prospective ‘free option.’ We reiterate our Buy rating and (CA$43.50) price target.”

The Catalysts: Gold Rallies, Site’s Similarities to KSM

Gold has rallied to nearly 14% higher than early November, its highest level in more than eight months. It could go higher as traders watched for the new U.S. consumer price index report on Thursday.

Seabridge drilled 10 holes for 10,162 meters at Iskut in 2022. The Bronson Slope has a measured and indicated gold-copper resource of 187 million tons at 0.36 g/t Au and 0.12% Cu, Seabridge said.

The company said it is planning a drill program this year to target an increase in that resource and find the intrusive source of the breccia pipe, noting the similarities to KSM.

“All the evidence we have gathered as well as the historical precedents tell us the source is a gold-copper porphyry intrusive similar in age to those we discovered at our nearby KSM project,” Seabridge Chairman and Chief Executive Officer Rudi Fronk said. “We have also identified other related opportunities at Iskut within a regional trend that, similar to our KSM district, could host multiple porphyry deposits. Our plan for 2023 is to prioritize locating the source of the breccia pipe and carrying what we learn across the rest of our large Iskut property.”

Geophysical surveys and surface geology work have confirmed a distinct structural feature that connects the Quartz Rise, Bronson Slope, and Snip North targets, Seabridge said.

“All the prospective gold-copper intrusions recognized on the property fall along this regional trend, and this observation has led us to envision a cluster of gold-copper deposits as at KSM,” the company stated in a news release.

Seabridge also continues to drill at KSM and its 3 Aces project in the Yukon Territory.

Company Posted Profit in 3rd Quarter

The company posted a net profit of CA$5 million or CA$0.06 per share, compared to a net loss of CA$800,000 or CA$0.01 per share in the same period in 2021, in the third quarter of 2022.

“The company continues to advance a number of activities to demonstrate a substantial start of the flagship KSM project, including infrastructure and offsetting habitat programs,” B. Riley Securities analyst Lucas N. Pipes wrote in a note on Nov. 21. “As a reminder, Seabridge published its 2022 PFS (preliminary feasibility study) for the KSM project (last summer), which highlighted several major changes to the mine plan, most notably, shifting to an entirely open pit operation.”

Analyst Mike Kozak of Cantor Fitzgerald called the update a “modest positive” for the company but also reminded readers that Iskut is located near Seabridge’s flagship KSM project, also in the Golden Triangle.

Pipes reiterated his Buy rating on the stock and upped his target price from US$57 to US$60.

“KSM is in a class of its own as the world’s only standalone development-stage mining project capable of producing +1 MMoz Au annually for decades from open-pit operations only,” Kozak wrote.

Seabridge’s PFS for an initial mine at KMS predicted a 33-year life that would also produce 178 Moz Cu and 3 Moz Ag annually. 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 of molybdenum over 39 years.

The copper-rich expansion will add “considerable value” to the company, Red Cloud Securities analyst David Talbot wrote. 

“While KSM is a world-class deposit, we believe it would likely need investment from a senior miner/strategic to help Seabridge overcome the capital spend and associated financial risk,” Talbot wrote. “Additional resources and potential production from copper-rich underground deposits help provide optionality to any potential partner.”

Seabridge is also drilling 1,500 to 1,800 meters at 3 Aces, with assays pending before the end of the year.

The company believes the project could host even higher-grade gold than KSM, which Jim Rickards, editor of the Strategic Intelligence Newsletter, called “one of the most attractive gold-copper acquisition targets in the world.”

Ownership and Share Structure

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About 36% of the company is held by institutional investors, according to Reuters, including Pan Atlantic Bank and Trust with 7.69%, FCMI Financial Corp. with 5.11%, and Van Eck Associates with 4.4%. Management, board members, and company insiders own more than 30%, the company said.

Seabridge is covered by a myriad of analysts. Click the “See More Live Data” tab in the data box at the top right for more information. 

It has a market cap of CA$1.49 billion and has about 81.3 million shares outstanding, with 67.4 million free-floating. It trades in a 52-week range of CA$28 and CA$13.83.

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Disclosures:

1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

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( Companies Mentioned: SEA:TSX; SA:NYSE.MKT,
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