Mining Company Closes on Financings Totaling US$100M

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Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) has successfully closed on its bought deal offering and a separate agreement with a strategic investor for a total of US$100 in financing as it continues to work at its massive KSM Project in British Columbia.

RBC Capital Markets and Cantor Fitzgerald Canada Corp. led the bought deal offering of 6.54 million common shares of the company at US$12.25 per share for aggregate gross proceeds of about US$80 million, the company announced in a release.

The company said it also successfully closed its previously announced private placement with a strategic investor for 1.64 million common shares on substantially the same terms as the bought deal offering for aggregate gross proceeds of approximately US$20 million.

The common shares issued under the private placement are subject to a statutory four-month hold period under applicable securities laws.

"The financing ensures continued forward momentum at KSM while we engage with our short list of prospective joint venture partners, Chairman and Chief Executive Officer Rudi Fronk said. "This year's program will provide the remaining field data that we anticipate will be required for the bankable feasibility study, which we expect to undertake with our joint venture partner."

The money will go toward making the payments to B.C. Hydro for completion of the KSM switching station, preparing for a KSM bankable feasibility study and financing other costs associated with ongoing activities at the gold-copper project, and for general corporate purposes.

While the financing will let Seabridge hold its priority status with B.C. Hydro, the company will also evaluate some other "engineering alternatives our prospective joint venture partners have proposed for advancing KSM," Fronk said.

Major Milestone Hit for Flagship Asset

Seabridge holds a 100% interest in several North American gold projects. Its principal asset, KSM, and its Iskut project, are located in northwest British Columbia's Golden Triangle. Its Courageous Lake project is located in Canada's Northwest Territories, the Snowstorm project in the Getchell gold belt of Northern Nevada, and the 3 Aces project is set in Yukon.

There were two challenges announced last year in British Columbia court seeking review of KSM's "Substantially Started" (SS) designation, which Seabridge has noted is a major milestone for the company and KSM, which newsletter author Jay Taylor of J Taylor's Gold, Energy & Tech Stocks has called "the largest undeveloped gold and copper project in the world!"

During the application process for the designation, Seabridge said it submitted letters from "representatives of the three largest indigenous peoples in the area of the KSM project, the Nisga'a Lisims government, the Tahltan central government and the Gitxsan hereditary chiefs office, as well as the village of Hazelton, the district of New Hazelton, the town of Smithers, the district of Stewart, the city of Terrace, (and) the regional district of Kitimat-Stikine, all expressing strong support for a positive SS determination for the KSM project."

"It is clear that the new petitioners do not represent the interests of northwest British Columbia or Canada," Fronk said at the time. "We are very confident there is ample evidence that the (SS) determination was reasonable and appropriate."

Analyst Optimistic Challenges Won't Find Success

The determination is unaffected and will remain in place if it is successfully defended, the company said.

Newsletter author Peter Epstein wrote that "management, lawyers and consultants are confident the objections have little chance of meaningfully slowing" the KSM project.

Red Cloud Analyst Taylor Combaluzier, in an updated research note on December 3, 2024, wrote that his firm was "optimistic that these challenges will ultimately prove unsuccessful because the arguments by the petitioners were already considered during the SS application phase and the broad discretion the minister has in making an SS determination."

Combaluzier rated the stock a Buy with a CA$48.50 per share target price, a 146% lift from its close when he wrote.

"We note that these challenges have no immediate effect on the SS determination, and a verdict on the matter could take a year or more," he wrote.

The Catalyst: Higher and Higher

Gold hit another all-time high Thursday, surging to at least $2,954.95 per ounce. The yellow metal has repeatedly hit new highs in recent weeks, rising about 13% on the year so far, Lyle Niedens reported for Investopedia.

Niedens wrote that the threshold of US$3,000 appears in reach, as gold is considered a safe-haven asset for investors during times of uncertainty.

"Several Wall Street firms have raised their gold price forecasts to US$3,000 or higher," Niedens wrote. "Goldman Sachs, for instance, cited 'structurally higher central bank demand' for gold in addition to investors' appetite for parking assets in safe havens when it early this week raised its gold-price forecast to US$3,100 by the end of 2025, up from US$2,890 previously."

The writer cautions that some firms aren't as optimistic. Morgan Stanley sees gold slipping by the fourth quarter, he wrote, because "a potential Russia-Ukraine peace deal could damp the central bank demand that helped drive gold higher."

Others are still set that gold will hit the US$3,000 milestone, or higher. According to a report by Anmol Choubey for Reuters, Phillip Streible, chief market strategist at Blue Line Futures, said gold's 45-degree rally since December might create a self-fulfilling prophecy of further price increases, potentially leading it to raise its forecast to around US$3,250 or US$3,500.

Ownership and Share Structure

Refinitiv provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 3% of the company. According to Refinitiv, CEO and Chairman Rudi P. Fronk owns 1.37%.

Refinitiv reports that institutions own about 48% of the company. According to Reuters, Friedberg Mercantile Group Ltd. owns 12.72%, National Bank of Canada owns 3.81%, Van Eck Associates Corp. owns 3.76%, Kopernik Global Investors, L.L.C. owns 3.31%, and Paulson & Co. Inc. owns 2.25%.

According to Refinitiv, there are about 91.95 million shares outstanding, while the company has a market cap of CA$1.55 billion and trades in a 52-week range of CA$15.09 and CA$28.39.