Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) released an "improved and upgraded resource" estimate for its KSM project that reflects a "sizable" increase" from 2020, reported Cantor Fitzgerald analyst Mike Kozak in an April 14 research note.
At the consolidated KSM project (including East Mitchell, formerly Snowfield), the total resource in all categories reflects 8.4% more contained gold, silver, copper and molybdenum, calculated as gold equivalent, and a 3.4% lower average grade, than the resource estimate prepared two years ago, Kozak pointed out.
The analyst presented the new resource figures. Measured & Indicated (M&I) resources are now 5,400,000,000 tons (5.4 Bt) at 0.73 grams per ton gold equivalent (0.73 g/t Au eq), or 126,000,000 (126 Moz) Au eq. This compares to the previous 2020 M&I resource of 4.4 Bt at 0.77 g/t Au eq, or 109 Moz Au eq.
Updated Inferred resources are 5.7 Bt at 0.71 g/t Au eq, or 129 Moz Au eq, versus 5.4 Bt at 0.72 g/t Au eq, or 126 Moz Au eq, previously.
The updated M&I resource for all five deposits at KSM — Mitchell, East Mitchell, Kerr, Sulphurets and Iron Cap — is 11 Bt at 0.72 g/t Au eq, or 255 Moz Au eq.
The new resource update incorporated results from last year's drill program along with an increased net smelter return cutoff of CA$10.75 per ton, up from CA$9, at Mitchell and CA$11.20 per ton at East Mitchell. Cutoffs were based on US$1,300 per ounce gold and US$3 per pound copper, higher prices than those used in the 2020 resource estimate.
The next step for Seabridge, Kozak noted, is completing the integrated mine plan that is now in progress.
This plan "will likely result in the lower-risk, at-surface East Mitchell deposit displacing the underground KSM block cave component to later in the mining sequence for the consolidated project," he wrote. The outlined mining project will likely produce, from open pit operations only, 1 Moz Au per year over a 35-year mine life, Cantor Fitzgerald estimates.
Seabridge will follow up the mine plan with a prefeasibility study of it, completion of which is expected this June.
Cantor Fitzgerald has a Buy rating and a CA$43.50 per share price target on Seabridge. The stock is currently trading at around CA$25.32 per share.
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Disclosures for Cantor Fitzgerald, Seabridge Gold, April 14, 2022
The author of this report is compensated based in part on the overall revenues of Cantor, a portion of which are generated by investment banking activities.
Cantor may have had, or seek to have, an investment banking relationship with companies mentioned in this report. Cantor and/or its officers, directors and employees may from time to time acquire, hold or sell securities mentioned herein as principal or agent. Although Cantor makes every effort possible to avoid conflicts of interest, readers should assume that a conflict might exist, and therefore not rely solely on this report when evaluating whether or not to buy or sell the securities of subject companies.
Cantor has provided investment banking services or received investment banking related compensation from Seabridge Gold Inc. within the past 12 months.
The analysts responsible for this research report do not have, either directly or indirectly, a long or short position in the shares or options of Seabridge Gold Inc.
The analyst responsible for this report has visited the material operations of Seabridge Gold Inc. (KSM and Iskut). No payment or reimbursement was received for the related travel costs.
Analyst certification: The research analyst whose name appears on this report hereby certifies that the opinions and recommendations expressed herein accurately reflect his personal views about the securities, issuers or industries discussed herein.
