Co. Submits Important Application for Massive BC Gold Project

Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) has started off the new year by looking to lock down the future of its massive flagship KSM project in British Columbia's Golden Triangle.

The company has applied for "substantially started" status for the mine. Getting the designation could help in its search for a joint-venture partner for the project, which one analyst has noted would be a "top-five annual gold producer."

"Seabridge has invested ~(CA)$450M since 2021 to complete work on power, roads, fish habitat, bridges, and a camp" at KSM, wrote Red Cloud analyst Taylor Combaluzier in a January 18 updated research note.

"We believe this is a key milestone for the company and that the status would help de-risk the project and thereby support Seabridge’s efforts to attract a potential JV partner," wrote Red Cloud analyst Taylor Combaluzier.

"We believe this is a key milestone for the company and that the status would help de-risk the project and thereby support Seabridge’s efforts to attract a potential JV partner."

The company has said that since 2001, it has spent more than CA$997 million on the project, which is in one of the world's best mining jurisdictions with good government infrastructure and green hydroelectric power.

Combaluzier rated the stock a Buy with a CA$46.50 per share target price, a nearly 235% increase over its price of CA$13.89 late Tuesday morning.

The Catalyst: Label Important to Help Attract JV Partner

British Columbia requires sufficient on-site improvements to attain the "substantially started" label. KSM's deadline for receiving the certificate is July 29, 2026.

Analyst Michael Siperco of RBC Capital Markets has noted that KSM would be a "top-five annual gold producer" at full production. Siperco gave the stock an Outperform, Speculative Risk rating with a CA$25 per share target price.

Analyst Michael Siperco of RBC Capital Markets has noted that KSM would be a "top-five annual gold producer" at full production. Siperco gave the stock an Outperform, Speculative Risk rating with a CA$25 per share target price.

In an updated note on Jan. 17, he wrote that the application will "likely succeed, given general support from affected indigenous communities (including two benefit agreements in place), the +$800 (million) spent at site since the EAC was issued in 2014, the +$400 (million) spent on KSM early project construction since 2021, and the investment in access road construction, a permanent camp, and early environmental work."

"The application for 'substantially started' status, and in our view, the likely approval of this submission could be a significant permitting de-risking event for KSM, and a catalyst for the stock as management continues to seek a larger partner for development of the +$7 (billion) gold/copper project," the analyst wrote.

Company Has a 'Clear Vision,' Analyst Says

The massive 41,000-hectare project is the world's largest undeveloped gold project by reserves and resources, analyst Lucas N. Pipes of B. Riley Securities has noted.

The company has "a clear vision for a potential partnership agreement," he wrote, rating the stock a Buy with a target price of US$60 per share. 

"The market is currently short on development projects, and market interest/M&A is heating up," Pipes wrote.

In its third-quarter report to shareholders last year, Seabridge noted it was making progress in the partner search, with several companies visiting the project as part of their due diligence.

"Dialogue is now continuing with a number of these companies," the company noted in the report.

Potential partners would include "senior gold, copper, or diversified miners with experience building large-scale open pit (or potentially block cave) operations," Siperco wrote.

Seabridge recently closed on the sale of a US$150 million secured note to Sprott Resource Streaming and Royalty Corp. to complete the "substantially started" work at the project.

When the note matures, Sprott Streaming will use the principal amount repaid to purchase a 1% net smelter royalty (NSR) on all metals produced at the project, the company said.

Siperco said the company is looking for a "senior producer that could provide funding through feasibility and a construction decision, with an option to acquire control."

"A partner with the capability and balance sheet to advance the project to feasibility and a construction decision could, in our view, validate the project, the latest updated studies, and the work done to date at site, while providing a path for Seabridge investors to participate in future potential upside if a positive construction decision is made," the analyst wrote.

Proven and probable reserves at KSM's initial mine total 47.3 million ounces gold (Moz Au), 7.3 billion pounds copper (Cu), 160 Moz silver (Ag), and 385 million pounds of molybdenum (Mo), with average production over a 33-year mine life of 1.03 Moz Au, 178 million pounds Cu, 3 Moz Ag, and 4.2 million pounds Mo, a preliminary feasibility study (PFS) has found.

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 4z% 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 82.22 million free float traded shares, while the company has a market cap of CA$1.17 billion 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. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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