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Seabridge Gold secures CA$200 million investment to advance gold mine project

It is the second investment by Sprott Resource Streaming in the KSM project
Workcamp at Seabridge Gold’s KSM project in northwest B.C. (Seabridge Gold photo)

Seabridge Gold’s KSM gold-copper mine in northwest B.C. got a big boost last week toward obtaining “substantially started” status.

The company sold a 1.2 per cent net smelter royalty to the investment company Sprott Resource Streaming for roughly CA$200 million ($150 million U.S. dollars).

Seabridge will use the investment to complete the physical works (roads, power infrastructure and camps), which the company expects will satisfy the requirements of its environmental assessment certificate (EAC) to be substantially started by the end of July 2026.

The substantially started designation ensures that the company’s EAC will remain valid throughout the life of the project.

It also has other benefits, said Seabridge CEO Rudi Fronk.

Foremost among these is making the prospect of a joint venture more palatable for a major investor.

Seabridge, a junior mining company, does not have the expertise in-house to operate a mine on the scale of the KSM project and has been looking for an operating partner for its proposed mine from the beginning.

The company got a bit of a boost recently from B. Riley Securities (a middle-market investment bank). According to analyst Lucas Pipes, the KSM project is “now ripe for third-party validation.”

B. Riley has put a buy rating of US$60 per share target price on Seabridge stock, meaning analysts expect in the short- to mid-term, dramatic increases from the current price of approximate US$15.

With the new royalty deal, Sprott would see a return of 1.2 per cent of all future net smelter returns from all metals produced at KSM.

It is not the first investment Sprott has made in KSM. Last year, along with the Ontario Teachers Pension Fund bought a 60 per cent return on silver production for US$225 million.

Seabridge used $150 million of that to advance construction last summer also with the goal of achieving substantially started status.

Michael Harrison, managing partner at Sprott, said they are pleased to expand the relationship with Seabridge and look forward to turning the KSM project into a world-class mine.

“Since our original investment last year, we continue to be impressed by the significant progress the Seabridge team is making at KSM,” he said. “The quality of the engineering and early works is excellent, and their strong relationships with the local indigenous peoples is truly best-in-class.”

READ MORE: Seabridge to spend $150 million to bring KSM project to ‘substantially started’

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Thom Barker

About the Author: Thom Barker

After graduating with a geology degree from Carleton University and taking a detour through the high tech business, Thom started his journalism career as a fact-checker for a magazine in Ottawa in 2002.
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