Drill Results Confirm Promising Targets in Golden Triangle

Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) has announced results from drilling and survey work on its 100%-owned Iskut property in northwest British Columbia's Golden Triangle.

The company announced results expanding the known Bronson Slope copper-gold deposit, confirming "an extensive area of magmatic-hydrothermal alteration" and the "intermediate epithermal occurrence that expands the known Bronson Slope copper-gold deposit."

"One of the concepts that led us to acquire the Iskut Project was the expectation that a larger epithermal mineral deposit could potentially be preserved at Bronson Slope," Fronk said. "This expectation has been confirmed, but as we have learned more about this occurrence, we have become more convinced and excited about the potential to find its source porphyry. Next year's program will aim to integrate the upside at Bronson Slope with our hypothesis of a regional structurally controlled porphyry district encompassing the entire Iskut project."

At the Snip North target, the company said it found a porphyry mineral system, which was the aim of the 2023 exploration program.

"We view these initial results from Snip North positively given the strong indications of a likely deeper, higher-grade porphyry source to the intermediate sulfidation mineralization intersected in this drilling," wrote  Red Cloud analysts Taylor Combaluzier and David Talbot.

"The discovery consists of the intact, well-preserved upper parts of a copper-gold porphyry, which identifies as an intermediate sulfidation epithermal occurrence," the company said in a release. "Work continues, using the drill hole data to vector toward the large intrusive source for the pervasive mineralization found to date."

Red Cloud analysts Taylor Combaluzier and David Talbot wrote in an updated research note on December 15 noted that the exploration work was to follow up on shallow historical drill holes at the project.

"We view these initial results from Snip North positively given the strong indications of a likely deeper, higher-grade porphyry source to the intermediate sulfidation mineralization intersected in this drilling," wrote the analysts, who rated the stock a Buy with a CA$45.25 per share target price.

Analyst Mike Kozak of Cantor Fitzgerald called the results "encouraging." He gave the stock a Buy rating with a one-year target price of CA$41 per share.

However, analysts from both companies pointed out that Seabridge's flagship KSM project, also in the Golden Triangle, holds much of the company's current value.

A major goal of the company is to secure a joint-venture (JV) project for KSM, which is in one of the world's best mining jurisdictions, with good government infrastructure and green hydroelectric power.

Seabridge said it is planning to submit its application early next year for the "substantially started" designation for KSM, which one analyst has noted would be a "top-five annual gold producer."

British Columbia requires sufficient on-site improvements to attain the "substantially started" label.

"Seabridge has invested (about CA)$450M since 2021 to complete work on power, roads, fish habitat, bridges, and a camp," Combaluzier and Talbot wrote for Red Cloud. "The substantially started designation would make KSM's permits valid for the life of the project, which should help de-risk it and thereby support Seabridge's efforts to attract a potential JV partner."

The Catalyst: A 'District-Scale' Structural Feature

The company's exploration program for 2023 included an airborne magnetic survey, a magnetotelluric survey (MT), and six diamond drill holes totaling nearly 6,000 meters.

Seabridge said the geophysical surveys showed a strong positive magnetic anomaly surrounded by a low-resistivity response co-incident with historical gold-copper assays. A roughly north-south fence of holes was drilled across the northeast-striking structural trend to evaluate its mineral occurrences and associated host rocks.

Analyst Mike Kozak of Cantor Fitzgerald called the results "encouraging." He gave the stock a Buy rating with a one-year target price of CA$41 per share.

"We are clearly at the top of the system with the intrusive target below us," Seabridge Chairman and Chief Executive Officer Rudi Fronk said. "Our drill results should enable us to vector towards improving mineralization, including what we expect will be higher copper grades. We believe we are on the track of a sizeable porphyry mineral system with ore-grade potential, which we will pursue aggressively in next year's drilling."

Highlights from the Skip North drilling included 0.80 grams per tonne gold (g/t Au), 0.07% copper (Cu), and 1.19 g/t silver (Ag) over 277 meters; 0.61 g/t Au, 0.07% Cu, and 1.36 g/t Ag over 252 meters; and 0.30 g/t Au, 0.09% Cu, 0.59, and g/t Ag over 421.5 meters.

Seabridge said the surveys and surface geology confirmed a "district-scale northeast-trending structural feature" on a trend that has similar characteristics to those hosting porphyry systems at KSM.

Finding a Senior Partner

KSM "would be a top-five annual gold producer" at full production "with resources that could support a mine life of +100 years," analyst Michael Siperco wrote for RBC Capital Markets, giving the stock an Outperform — Speculative Risk rating with a per-share target price of US$25. 

"The key catalyst for the stock is finding a senior partner to bring KSM to a construction decision, with a process underway," the analyst wrote. "We think generational gold/copper assets in good mining jurisdictions are hard to find and harder to advance, making KSM a potentially attractive option for producers looking for long-term, consistent production potential."

Seabridge also has drilled at its 3 Aces project in the Yukon Territory and its Snowstorm project in Nevada. Assays are pending.

Ownership and Share Structure

About 36% of the company is held by institutional investors. Management, board members, and company insiders own approximately 25%, the company said. Fronk owns 1.49% or 1.21 million shares, according to Reuters. The rest is retail.

It has a market cap of CA$1.39 billion and has about 84.23 million shares outstanding, with 81.72 million free-floating. It trades in a 52-week range of CA$21.78 and CA$13.34.

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1. Seabridge Gold Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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