Update gives Seabridge’s KSM project another 5.9M inferred oz gold

A resource update for Seabridge Gold‘s (TSX: SEA; NYSE: SA) Kerr and Iron Cap deposits at its KSM gold-copper project in northwestern British Columbia has added significant amounts to its indicated and inferred categories. 

The update gives an extra 5.9 inferred million oz. of gold, 3.3 billion lb. of copper, 55.4 million oz. of silver, and 51 million lb. of molybdenum. Indicated resources increased by 300,000 oz. of gold, 200 million lb. of copper, 3.5 million silver, and 2 million lb. of molybdenum.

Seabridge chair and CEO Rudi Fronk said the resource updates reflect gains from a consistent application of metal price parameters. 

“As we move towards a joint venture on KSM, it makes sense to normalize our resource estimates across all of KSM’s deposits,” he said. 

The update comes just over half a year after Seabridge secured US$150 million in funding in a deal with Sprott Resource Streaming and Royalty. Seabridge subsidiary KSM Mining will also give up a 1.2% net smelter return (NSR) royalty from the project located near Stewart, B.C. 

Seabridge will use the proceeds to complete the physical works at KSM that will allow the provincial government to give it a designation of “substantially started.”

The resource update used the same metals prices as the 2022 Mitchell and East Mitchell open pit estimates (US$1,820 per oz. gold, US$4.20 per lb. copper, US$28 per oz. silver, and US$13.5 per lb. molybdenum at an exchange rate of US83¢: C$1.00.)

The Kerr and Iron Cap deposits are intended to eventually become underground mines with block caving, although there is a portion of the Kerr deposit that can be mined by open pit methods.

Kerr now hosts is 384.2 million indicated tonnes grading 0.22 gram gold per tonne, 0.41% copper, 1.2 grams silver, and 5 parts per million (ppm) molybdenum;  2.6 billion inferred tonnes at 0.27 gram gold, 0.35% copper, 1.7 grams silver, and 21 ppm molybdenum.

Iron Cap contains 471 million indicated tonnes at 0.38 gram gold, 0.21% copper, 4.3 grams silver, and 39 ppm molybdenum. The inferred portion is 2.3 billion tonnes at 0.41 gram gold, 0.27% copper, 2.5 grams silver, and 31 ppm molybdenum.

The company further noted that the increased mineral resources compared to the previous estimate would only be mined after the 33 years of mine life based on the open pit reserves. Any future cash flows resulting from these additional mineral resources is not considered material.

A preliminary economic assessment from 2022 outlines an operation that will need a preproduction investment of US$1.5 billion followed by sustaining costs of US$12.8 million. That will support a 170,000-tonne-per-day mining rate and average annual output of 368,000 oz. of gold, 366 million lb. of copper, and 1.8 million oz. of silver. 

In the Mitchell, East Mitchell and Sulphurets deposits, the proven and probable reserves are 2.3 billion tonnes grading 0.64 gram gold, 0.14% copper, 2.2 grams silver, and 76 ppm molybdenum. Contained metal within the reserves comes to 47.3 million oz. of gold, 7.3 billion lb. of copper, 160 million oz. of silver, and 385 million lb. of molybdenum.