Mining Company Meets Strategic Gold Project Milestones

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Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) issued its annual corporate Report Card this week based on 15 goals in 2024, meeting all of them except for one — finding a joint venture (JV) partner for its massive KSM project in British Columbia.

Calling it the company's "most important objective," Seabridge said "significant progress has been made" on the goal, which was weight 20.5% in the grading in the Report Card, which the company has been issuing for more than 20 years.

During 2024, "extensive effort" was used answering "hundreds of due diligence queries" and conducting dozens of seminars on the project.

"During the year, our bankers and our team also conducted detailed assessments of several potential JV partners to determine their financial, technical, and social skills to build and operate KSM," the company said in the report card. "After receiving KSM’s Substantially Started (SS) designation in July 2024, we are now advancing discussions with three potential partners."

Out of the other 14 goals, the only one the company did not meet 100% was completing a drill program of at least 8,000 meters at its 3 Aces project in Yukon, leaving its overall score at nearly 80%.

"The objective was largely accomplished with our Board awarding 94.25% of the 5.5% objective weighting due to only 7,620 of the planned 8,000 meters of drilling being completed," the Report Card noted.

Seabridge said a follow-up drilling program for 3 Aces is planned for 2025.

'The Most Important Catalyst'

Find a JV partner for KSM remains "the most important catalyst for the stock," noted B. Riley Securities Analyst Nick Giles in an updated research note on February 27 as he rated the stock a Buy with a CA$50 per share price target.

"The KSM project in British Columbia stands as the world's largest undeveloped gold project in terms of resources," wrote Giles. "It boasts proven and probable reserves of 47.3 (million ounces) Moz gold, 160 Moz silver, and 7.3 billion pounds of copper. We believe there are very few comparable developments today, especially with all three metals combined in one location."

Giles continued, "We believe the economies of scale and tier 1 jurisdiction make for very attractive net economics and should ultimately translate to a JV partner."

Another Major Goal Met: Substantially Started for KSM

Another highly weighted objective was receiving the SS designation for KSM, a major milestone it achieved in July. That was 13% of the overall score.

There were two challenges announced last year in British Columbia court seeking review of KSM's SS designation, however 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" and 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.

Remaining Objectives

The company said CA$75.9 million was raised from its At-The-Market (ATM) financing facility in 2024, enabling it to complete its planned 2024 programs and make payments to advance construction activities at the BC Hydro switching station that will provide power for the project, which was Objective 2 on the Report Card and weighted 12%.

Find a JV partner for KSM remains "the most important catalyst for the stock," noted B. Riley Securities Analyst Nick Giles in an updated research note on February 27 as he rated the stock a Buy with a CA$50 per share price target.

The third objective, weighted 6%, which the company also met, was to end 2024 with more gold resources per share than reported at the end of 2023. At the end of 2023, each one of the company's shares was backed by 1.98 ounces of gold, Seabridge noted.

"At December 31, 2024, each one of our shares was backed by 1.99 ounces per share, a small but positive increase over the previous year," Seabridge noted.

Other objectives met by the company in 2024 include improving cyber and data security systems (3%), preparing KSM for a JV transition (4%), initiating and advancing a sale or joint venture process for its Courage Lake project (4.5%), remaining in compliance with permits and regulations for its projects (4.5%), strengthening its social license with Treaty and First Nations communities (5.5%), continuing to mature its risk management programs (3.5%), continuing to develop the company's sustainability strategy (4.5%), promoting a positive culture of health and safety (4%), preparing a new technical report for its Bronson Slope project and completing drilling at its Iskut project (6.5%), and continuing to evaluate the potential for a Getchell-style discovery at its Snowstorm project (3%).

The Catalyst: Rally Not Over Yet

Gold has repeatedly hit new highs in recent weeks, rising at least 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."

However, Angela Brown of CBS News MoneyWatch reported, the price of gold is not immune to volatility, especially in the short term. Will gold prices continue to rise? 

"We don't think that the rally is over yet," Lina Thomas, a commodities strategist at Goldman Sachs Research, noted during a recent discussion regarding gold prices, Brown reported. "We have a target of US$3,500 by the end of 2025. The reason for that is twofold: One, structurally higher central bank demands, and two, some boost to ETF flows because the Fed is expected to cut twice this year. That being said, if safe-haven demand remains high or picks up again … we can easily go to US$3,300 by the end of 2025."

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$1.47 billion and trades in a 52-week range of CA$15.09 and CA$28.39.