Seabridge Reports 38% More Gold than Previous Estimates at Courageous Lake

Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) announced in a press release on January 16, 2024, that it had released results from an updated PFS for its Courageous Lake project. According to the company, this study is more efficient, with lower costs, environmental impact, strip ratio, and higher mineral grades than the 2012 feasibility study. 

The updated PFS revealed that the mine could produce 2.5 million ounces of gold over a 12.6 year mine life. The Company also reported the results of a new Preliminary Economic Assessment which could add an additional 15.9 years of mine life to the project. The company now reports 11.0 million ounces of measured and indicated ounces of gold, which is a 38% increase over previous estimates. The combined 28.5 years of mine life would average approximately 202,000 ounces of gold production per year. Other highlights of the updated PFS include a 19% increase in the project's average gold reserve grade and a reduction of 39% in the mine's strip ratio.

The company reports that the updated PFS estimates an after-tax NPV5 of US$523 million, a 73% increase from the PFS completed in 2012, and that initial capital fell to US$747 million, a 50% drop and that the company increased its after-tax IRR from 7.3% to 20.6%.

CEO and Chairman Rudi Fronk commented, "We now have a second valuable 10 million-plus ounce gold resource project in a safe jurisdiction. The project consists of an entire greenstone belt, which has prospective shallow drill results and gold showings along its 54 km length. As we move towards a joint venture on our KSM project, we will be shifting our attention to Courageous Lake's potential to generate considerable additional shareholder value."

Analyst Taylor Combaluzier with Red Cloud Securities reviewed the company on December 27, 2023, and rated Seabridge as a "Buy," with a target share price of CA$45.25 and a potential return on investment of 176%. 

Seabridge announced in a separate press release that its subsidiary, K.S.M. Mining U.L.C., has put in an application for its flagship KSM project to be designated "substantially started."

British Columbia requires sufficient on-site improvements to get the label. If approved, the project's environmental assessment certificate will remain valid for the life of the project. The company said it has spent more than CA$997 million on the project since 2001.

Chairman and CEO Rudi Fronk stated, "We look forward to working with the B.C. E.A.O. and First Nations are on the review of our application. The permanent physical improvements we have made to the K.S.M. site are truly impressive. Since launching our early construction program three years ago, a proposed mine development that only existed on paper is now taking physical shape on the ground with roads and bridges, permanent living facilities for our personnel, hydroelectric power infrastructure, and new fish habitat compensation projects." Fronk continued, "This rapid transformation could not have been accomplished without our local workforce, contractors, and indigenous partners, which has met and exceeded our expectations."

Weakening Dollar Primes Gold for Rise

On January 14, 2024, Egon von Greyerz with Gold Switzerland predicted that a weakening American dollar in 2024 would push the value of gold up again. Investors often turn to gold when faith in the value of currency is low, which seems to be the position taken by von Greverz. He commented, "Now is really the time to become a real gold bug."

On December 28, 2023, Alasdair Macleod also reported that gold in 2024 would break out again on account of a weak dollar. Macleod stated, "To support this thesis, the relative price volatility for commodities and energy in dollars and gold are compared. Gold wins hands down as the objective value in commodity transactions."

177% Return

Analyst Taylor Combaluzier with Red Cloud Securities reviewed the company on December 27, 2023, and rated Seabridge as a "Buy," with a target share price of CA$45.25 and a potential return on investment of 176%. Taylor cited the company's recent results from the Snip North drill target on the Iskut project and the company's future drill plans on the Bronson Slope target.

Mike Kozak with Cantor Fitzgerald rated the company on December 15, 2023, as a "Buy" for potential investors, with a target share price of US$32.75, representing an estimated return on investment of 177%. This report also cited the company's drill results from the Iskut project.

Analyst Michael Siperco with R.B.C. Capital Markets gave the company a positive rating on January 16, 2024, labeling its stock as "Outperform" and "Speculative Risk." He named a target price of CA$25.00 and cited the company’s updated PFS for Courageous Lake as the reason behind his assessment of the company.

According to the company's investor presentation, it has a number of catalysts to report, including pending assays from the 3 Aces Project.

Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 1.43% of the company. According to Reuters, CEO and Chairman Rudi P. Fronk owns 1.43% of the company with 1.21 million shares.

Reuters reports that institutions own 34.76% of the company. According to Reuters, Friedberg Mercantile Group Ltd. owns 13.79% of the company with 11.70 million shares, National Bank of Canada owns 5.34% of the company with 4.52 million shares, Van Eck Associates Corporation owns 4.00% of the company with 3.39 million shares, Kopernik Global Investors, L.L.C. owns 3.22% of the company with 2.73 million shares, Paulson & Co. Inc. owns 2.44% of the company with 2.07 million shares, Sprott Asset Management L.P. owns 2.43% with 2.06 million shares, T.D. Securities, Inc., owns 1.18% of the company with 1.00 million shares, Sprott Asset Management U.S.A. Inc. owns 1.18% of the company with 1.00 million shares, and Fidelity Management & Research Company L.L.C. owns 1.18% of the company with 1.00 million shares.

According to Reuters, there are 84.79 million shares outstanding with 82.27 million free float traded shares, while the company has a market cap of CA$919.67 million and trades in the 52-week period between CA$13.34 and CA$21.78.

Important Disclosures:

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. Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
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