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Form 6-K SEABRIDGE GOLD INC For: Jul 11

July 11, 2022 10:57 AM EDT

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of July 2022

 

Commission File Number 1-32135

 

SEABRIDGE GOLD INC.

(Name of Registrant)

 

106 Front Street East, Suite 400, Toronto, Ontario, Canada M5A 1E1

(Address of Principal Executive Office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☐          Form 40-F ☒

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes ☐          No ☒

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- __________

 

 

 

 

 

SEABRIDGE GOLD INC.

(the “Company”)

 

See the Exhibit Index hereto for a list of the documents filed herewith and forming a part of this Form 6-K.

 

Exhibit 99.1 is incorporated by reference (as exhibit) to the Company’s registration statements on Form S-8 (File No. 333-211331) and Form F-10 (File No. 333-251081), as may be amended and supplemented.

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  Seabridge Gold Inc.
  (Registrant)
     
  By: /s/ Chris Reynolds 
  Name:  Chris Reynolds 
  Title: VP Finance and CFO  

 

Date: July 11, 2022

 

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EXHIBIT INDEX

 

Exhibit
Number
  Document Description
99.1   Material Change Report re: Seabridge Gold Completes Updated Preliminary Feasibility Study for KSM Project.

 

 

3

 

 

Exhibit 99.1

 

FORM 51-102F3

Material Change Report

 

ITEM 1.NAME AND ADDRESS OF COMPANY

 

Seabridge Gold Inc. (“Seabridge” or the “Company”)
Suite 400 – 106 Front Street East
Toronto, ON M5A 1E1

 

ITEM 2.DATE OF MATERIAL CHANGE

 

June 28, 2022

 

ITEM 3.NEWS RELEASE

 

The news release announcing the material change referred to in this report was disseminated on June 28, 2022 through Newsfile and a copy has been filed under Seabridge’s profile on SEDAR.

 

ITEM 4.SUMMARY OF MATERIAL CHANGE

 

On June 28, 2022, the Company announced the results of an updated Preliminary Feasibility Study (the “2022 PFS”) for its 100% owned KSM project located in northern British Columbia, Canada. The 2022 PFS shows a considerably more sustainable and profitable mining operation than its 2016 predecessor, now consisting of an all open pit mine plan that includes the Mitchell, East Mitchell and Sulphurets deposits only. The primary reasons for the improvements in the plan arise from the acquisition of the East Mitchell open pit resource and an expansion to planned mill throughput. The many design improvements over the 2016 PFS include a smaller environmental footprint, reduced waste rock production, reduced green house gas emissions by electrification of the mine haul fleet, a 50% increase in mill throughput, and the elimination of capital-intensive block cave mining.

 

Notable improvements in the Base Case put forward in the 2022 PFS compared to the Base Case in the previous 2016 PFS include:

 

Proven and probable gold reserves increase 22%, from 38.8 million ounces to 47.3 million ounces, due to higher gold grades added from the East Mitchell deposit.

 

Mill throughput expands from 130,000 tonnes per day (“tpd”) to 195,000 tpd

 

Waste to ore strip ratio reduced by 23% to approximately 1:1.

 

A 90% increase in average annual gold production, 22% increase in annual copper production, 36% increase in annual silver production, and a 363% increase in annual molybdenum production.

 

Total capital of US$10.5 billion is reduced to $US9.6 billion with increases from inflation and mill expansion being wholly offset by the elimination of block cave mining from the PFS plan.

 

 

 

 

Initial capital increases from US$5.0 billion to US$6.4 billion primarily due to inflation.

 

A 20 year reduction in mine life from 53 Years to 33 years due to the increased mill throughput supplied by higher open pit production.

 

Total after tax net cash flow increases from US$10.0 billion to US$23.9 billion.

 

After tax NPV(5%) increases from US$1.5 billion to US$7.9 billion.

 

After tax IRR increases from 8.0% to 16.1%.

 

Payback period drops from 6.8 years to 3.7 years.

 

The 2022 PFS was prepared by Tetra Tech, Inc., the firm that had also authored the 2016 PFS. The 2022 PFS results released herein propose mining only 25% of the KSM resource inventory and do not include material from the copper-rich Kerr and Iron Cap deposits. An analysis of a stand-alone development of these deposits will be included as a Preliminary Economic Assessment forming a separate part of the NI 43-101 Technical Report to be filed within 45 days of the news release announcing the material change referred to in this report.

 

ITEM 5.FULL DESCRIPTION OF MATERIAL CHANGE

 

See attached news release.

 

ITEM 6.RELIANCE ON SUBSECTION 7.1(2) or (3) OF NATIONAL INSTRUMENT 51-102

 

This report is not being filed on a confidential basis.

 

ITEM 7.OMITTED INFORMATION

 

There are no significant facts required to be disclosed herein which have been omitted.

 

ITEM 8.EXECUTIVE OFFICER

 

For further information, please contact Rudi Fronk, Chief Executive Officer of Seabridge, at (416) 367-9292.

 

ITEM 9.DATE OF REPORT

 

July 8, 2022

 

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News Release

 

Trading Symbols: TSX: SEA For Immediate Release
                                  NYSE: SA June 28, 2022

 

Seabridge Gold Completes Updated Preliminary Feasibility Study for KSM Project

 

Estimated Annual Gold Output Rises 90% to more than 1 Million Oz for 33 years

 

After-Tax NPV(5%) soars 426% to $7.9B and Payback Period Shrinks 46% to 3.7 Years

 

Base Case Operating Costs Estimated at US$275 Per Oz of Gold Produced

after copper, silver and molybdenum credits

 

Reserves of 47.3 Million Oz Gold, 7.3 Billion Lbs Copper, 160 Million Oz Silver

and 385 Million Lbs molybdenum

 

Base Case Total Cost (Including all Capital, Reclamation and Closure Costs) Estimated at US$601 Per Oz of Gold Produced after copper, silver and molybdenum credits

 

Toronto, Canada – Seabridge Gold announced today the results of an updated Preliminary Feasibility Study (the “2022 PFS”) for its 100% owned KSM project located in northern British Columbia, Canada. The 2022 PFS shows a considerably more sustainable and profitable mining operation than its 2016 predecessor, now consisting of an all open pit mine plan that includes the Mitchell, East Mitchell and Sulphurets deposits only. The primary reasons for the improvements in the plan arise from the acquisition of the East Mitchell open pit resource and an expansion to planned mill throughput. The many design improvements over the 2016 PFS include a smaller environmental footprint, reduced waste rock production, reduced green house gas emissions by electrification of the mine haul fleet, a 50% increase in mill throughput, and the elimination of capital-intensive block cave mining.

 

The 2022 PFS was prepared by Tetra Tech, Inc. (“Tetra Tech”), the firm that had also authored the 2016 PFS. The 2022 PFS results released herein propose mining only 25% of the KSM resource inventory and do not include material from the copper-rich Kerr and Iron Cap deposits. An analysis of a stand-alone development of these deposits will be included as a Preliminary Economic Assessment (“PEA”) forming a separate part of the NI 43-101 Technical Report to be filed within the next 45 days.

 

Seabridge Gold Chairman and CEO Rudi Fronk noted: “We have redesigned KSM for an inflationary environment. The themes for this PFS are capital and energy efficiency. The mine plan is simplified to bring total capital down below 2016 estimates despite inflation by reducing sustaining capital. We have accomplished this by eliminating underground mine development which is deferred to future years. Important steps have also been taken to make the project less dependent on oil, especially diesel fuel, which is an inflationary hot spot and likely to remain so. We have done this by maximizing the use of low cost, green hydroelectric energy.”

 

Notable improvements in the Base Case 2022 PFS compared to the Base Case 2016 PFS include:

 

Proven and probable gold reserves increase 22%, from 38.8 million ounces to 47.3 million ounces, due to higher gold grades added from the East Mitchell deposit.

 

Mill throughput expands from 130,000 tonnes per day (“tpd”) to 195,000 tpd

 

Waste to ore strip ratio reduced by 23% to approximately 1:1.

 

A 90% increase in average annual gold production, 22% increase in annual copper production, 36% increase in annual silver production, and a 363% increase in annual molybdenum production.

 

Total capital of US$10.5 billion is reduced to $US9.6 billion with increases from inflation and mill expansion being wholly offset by the elimination of block cave mining from the PFS plan.

 

106 Front Street East, Suite 400, Toronto, ON M5A 1E1, Canada

Telephone: 416-367-9292 www.seabridgegold.com

 

- 3 -

 

 

Initial capital increases from US$5.0 billion to US$6.4 billion primarily due to inflation.

 

A 20 year reduction in mine life from 53 Years to 33 years due to the increased mill throughput supplied by higher open pit production.

 

Total after tax net cash flow increases from US$10.0 billion to US$23.9 billion.

 

After tax NPV(5%) increases from US$1.5 billion to US$7.9 billion.

 

After tax IRR increases from 8.0% to 16.1%.

 

Payback period drops from 6.8 years to 3.7 years.

 

The 2022 PFS envisages an open pit mine operation that is scheduled to operate for 33 years. Ore delivery to the mill is increased from an initial 130,000 metric tpd to 195,000 tpd in Year 3. Over the entire 33-year mine life, ore will be fed to a flotation and gold extraction mill. The flotation plant will produce a gold/copper/silver concentrate for transport by truck to a nearby seaport at Stewart, B.C. for shipment to Pacific Rim smelters. Metallurgical projections supported by extensive metallurgical testing project a copper concentrate with an average copper grade of 24% and a high gold (64 g/t) and silver (177g/t) content, making it readily saleable. A separate molybdenum concentrate and gold-silver doré will be produced at the KSM processing facility.

 

Mineral Resources

 

The 2022 PFS uses previously disclosed resource estimates that are based on US$1,300 per ounce gold, US$3.00 per pound copper, US$20.00 per ounce silver and US$9.70 per pound molybdenum. In addition, the resources are constrained by conceptual mining shapes.

 

Measured and Indicated Mineral Resources at KSM are estimated at 5.4 billion tonnes grading 0.51 grams per tonne gold, 0.16% copper, 2.4 grams per tonne silver, and 63 ppm molybdenum (88.3 million ounces of gold, 19.4 billion pounds of copper, 414 million ounces of silver, and 742 million pounds of molybdenum). An additional 5.7 billion tonnes are estimated in the Inferred Mineral Resource category grading 0.36 grams per tonne gold, 0.28% copper, 2.2 grams per tonne silver, and 33 ppm molybdenum (65.6 million ounces of gold, 35.1 billion pounds of copper and 406 million ounces of silver, and 415 million pounds of molybdenum). A detailed table of KSM’s mineral resources can be found at the end of this news release

 

Mineral Reserves

 

Updated Mineral Reserves for the project are based on open pit mining of the Mitchell, East Mitchell and Sulphurets deposits. Waste to ore cut-offs were determined using a net smelter return (“NSR”) for each block in the model. NSR is calculated using prices and process recoveries for each metal accounting for all off-site losses, transportation, smelting and refining charges. Metal prices of US$1,300 per ounce gold, US$3.00 per pound copper, US$20 per ounce silver and US$9.70 per pound molybdenum and a foreign exchange rate of 0.79 US dollar per Canadian dollar have been used in the NSR calculations.

 

Lerchs-Grossman (“LG”) pit shell optimizations were used to define open pit mine pit limits in the 2022 PFS. Open pit designed phases use updated geotechnical design criteria based on recent site investigation programs. Mineral Reserves have been estimated using the updated pit designs. The open pit minimum NSR cut-off grade is varied between Cdn$ 11/t to Cdn$25/t and considers the estimated process operating cost of Cdn$10/t. Process operating costs include plant processing (including crushing/conveying costs where applicable), G&A, surface service, tailings, and water treatment costs. A premium cut-off grade of Cdn$25/t is used until the end of Year 5 to maximize the NPV and minimize the time to payback of initial capital.

 

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Mineral Reserves for the KSM project are stated as follows:

 

KSM Proven and Probable Mineral Reserves as of May 26, 2022

 

         Diluted Grades   Contained Metal 
      Ore
(Mt)
   Au
(g/t)
   Cu
(%)
   Ag
(g/t)
   Mo
(ppm)
   Au
(Moz)
   Cu
(Mlb)
   Ag
(Moz)
   Mo
(Mlb)
 
Proven  Mitchell   483    0.74    0.20    3.3    49    11.5    2,161    51    53 
   East Mitchell   814    0.69    0.11    1.8    91    18.1    2,043    47    163 
   Sulphurets   0    0.00    0.00    0.0    0    0.0    0    0    0 
   Total Proven   1,297    0.71    0.15    2.4    75    29.6    4,203    98    215 
Probable  Mitchell   452    0.59    0.15    2.5    74    8.6    1,458    36    74 
   East Mitchell   392    0.46    0.09    1.7    84    5.8    784    21    73 
   Sulphurets   151    0.68    0.26    1.0    70    3.3    874    5    23 
   Total Probable   995    0.55    0.14    1.9    77    17.7    3,116    62    170 
Proven + Probable  Mitchell   935    0.67    0.18    2.9    61    20.1    3,619    87    126 
  East Mitchell   1,206    0.62    0.11    1.8    89    23.9    2,826    68    236 
   Sulphurets   151    0.68    0.26    1.0    70    3.3    874    5    23 
   Total Proven + Probable   2,292    0.64    0.14    2.2    76    47.3    7,320    160    385 

 

Notes:

 

1.The Mineral Reserve estimates were reviewed by Jim Gray, P.Eng. (who is also the independent Qualified Person for these Mineral Reserve estimates), reported using the 2014 CIM Definition Standards and 2019 CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines, and have an effective date of May 26, 2022.

 

2.Mineral Reserves are based on the 2022 PFS all open pit Life of Mine plan.

 

3.Mineral Reserves are mined tonnes and grade, the reference point is the mill feed at the primary crusher and includes consideration for operational modifying factors.

 

4.Mineral Reserves are reported at NSR cut-off grades that vary between of $11/t and $25/t using the following assumptions: metal prices of US$1300/oz Au, US$3.00/lb Cu, US$20/oz Ag, and US$ 9.70/lb Mo at a currency exchange rate of 0.79 US$ per CAD$; Copper concentrate terms are 96% payable Cu; 97.8% payable Au; 90% payable Ag, molybdenum concentrate terms are 99% payable. Offsite costs (smelting, refining, transport, and insurance) are C$281 per tonne of copper concentrate and C$5527 per tonne of molybdenum concentrate; doré terms are $2/oz offsite costs (refining, transport and insurance), 99.8% Au payable, and 90% Ag payable; metallurgical recovery projections vary depending on metallurgical domain and metal grades and are based on metallurgical test work.

 

5.The NSR cut-off grade is varied from Cdn11/t to Cdn25/t and covers the estimated process operating cost of $10/t for ore processing, G&A, surface service, tailings , and water treatment costs.

 

6.Mineral Reserves account for mining loss and dilution.

 

7.Mineral Reserves are a subset of the mineral resource.

 

8.Numbers have been rounded as required by reporting guidelines.

 

Production

 

The open pit only mine production plan using ultra class mining starts in the higher grade Mitchell pit. Production from the high grade upper East Mitchell zone is introduced in Year 3. Waste mined from the Sulphurets, East Mitchell and Mitchell pit is placed in the Mitchell rock storage facility (RSF) until Mitchell pit is mined out by Year 25. Final waste from East Mitchell is backfilled into the mined out Mitchell pit from Year 25 onward along with some waste rehandled from the Mitchell RSF.

 

The updated mine plan reduces overall footprint by not using the McTagg RSF as required in the 2016 PFS and by utilizing mined out pits for backfilling waste rock.

 

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Autonomous mine operations where applicable and an integrated remote operations centre reduce on-site personnel.

 

Electrification of the haul truck fleet with trolley assist reduces carbon emissions and overall mine energy costs by replacing diesel with low cost energy from electricity.

 

Mill feed ramps up to 130,000 tonnes per day by Year 2 followed by a 50% increase to 195,000 tonnes per day from Year 3 onwards. Average annual mill feed throughput for the 33 years of mine life is estimated at 69.5 million tonnes.

 

At Mitchell, a near-surface higher grade gold zone crops out allowing for gold production in the first seven years that is substantially above the mine life average. The mine plan is specifically designed for mining highest gold grade first to facilitate a quick capital investment payback. The project’s post-tax payback period is approximately 3.7 years for the Base Case or 11% of mine life. Metal production for the first seven years, compared to life of mine average production, is estimated as follows:

 

Average Annual Metal Production

 

   Years 1-7
Average
   Life of Mine Average 
Average Grades:        
Gold (grams per tonne)   0.89    0.64 
Copper (%)   0.21    0.14 
Silver (grams per tonne)   3.0    2.2 
Molybdenum (parts per million)   52    76 
Annual Production:          
Gold (ounces)   1,413,000    1,027,000 
Copper (pounds)   251 million    178 million 
Silver (ounces)   3.8 million    3.0 million 
Molybdenum (pounds)   2.1 million    4.2 million 

 

Note: Annual production shows total metal contained in copper concentrate, doré, and molybdenum concentrate.

 

Capital Costs

 

Initial capital cost (including contingency of US$ 949 million) is estimated at US$6.4 billion, approximately 28% higher than the initial capital estimate in the 2016 PFS primarily due to inflation experienced over the past two years. Initial capital assumes certain early works (e.g. roads and power infrastructure) are being completed ahead of a major project construction decision as a part of the ongoing KSM substantial start activities.

 

Sustaining capital over the 33 year mine life is estimated at US$3.2 billion, a reduction of US$2.3 billion from the 2016 PFS, and is dominated by mill throughput expansion and mine fleet ramp up in Year 1 and 2, and tailings sustaining capital mid way through the mine life.

 

In addition to sustaining capital, a further US$1,273million has been charged against the project including US$653 million set aside in a sinking fund during the production period to pay for estimated water treatment obligations which continue after closure and US$620 million for physical reclamation and post closure maintenance after mining operations have ceased. 

 

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Initial capital and sustaining capital estimates are summarized as follows:

 

Capital Costs (US$ million)

 

   Initial   Sustaining   Total 
   US$ M   US$ M   US$ M 
Direct Costs            
Mine   1,420    1,766    3,187 
Process   2,003    309    2,312 
Tailings Management Facility   513    630    1,143 
Environmental   15    8    23 
On-site Infrastructure   39    -    39 
Off-site Infrastructure   76    11    87 
Power Supply/Energy Recovery   121    46    167 
Total Direct Capital   4,188    2,770    6,958 
Indirect cost   1,090    97    1,188 
Owner’s cost   204    -    204 
Contingency   949    343    1,293 
Total Capital   6,432    3,210    9,642 

 

Operating Costs

 

Average mine, process and G&A operating costs over the project’s life (including waste mining and on-site power credits, excluding off-site shipping and smelting costs) are estimated at US$11.36 per tonne milled (before base metal credits). Estimated unit operating costs decreased 8% from the 2016 PFS primarily due to the change from combined open pit and block cave mining to open pit only mining, a 50% increase in mill throughput capacity, and technology improvements including automation and electrification of the mine fleet. A breakdown of estimated unit operating costs is as follows:

 

LOM Average Unit Operating Costs (US$ Per Tonne Milled)

 

Mining   3.31 
Process   6.31 
G&A + Site Services   1.06 
Tailings Storage/Handling   0.11 
Water Management/Treatment   0.50 
Energy Recovery   -0.07 
Provincial Sales Tax   0.13 
Total Operating Costs   11.36 

 

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Economic Analysis

 

A Base Case economic evaluation was undertaken incorporating historical three-year trailing averages for metal prices as of June 20, 2022. This approach is consistent with the 2016 PFS Base Case. Two alternate cases are also presented: (i) an Alternate Case that incorporates lower metal prices than used in the Base Case to demonstrate the project’s sensitivity to lower prices; and (ii) a Recent Spot Case incorporating recent spot prices for gold, copper, silver and the US$/Cdn$ exchange rate. The pre-tax and post-tax estimated economic results in U.S. dollars for all three cases as well as the 2016 PFS Base Case are as follows:

 

Projected Economic Results (US$)

 

   2016 PFS
Base Case
   2022 PFS
Base Case
   2022 PFS
Recent
Spot
Case
   2022 PFS
Alternate
Case
 
Metal Prices:                
Gold ($/ounce)   1,230    1,742    1,850    1,500 
Copper ($/pound)   2.75    3.53    4.25    3.00 
Silver ($/ounce)   17.75    21.90    22.00    20.00 
Molybdenum ($/lb)   8.49    18.00    18.00    18.00 
US$/Cdn$ Exchange Rate:   0.80    0.77    0.77    0.77 
Cost Summary:                    
Operating Costs Per Ounce of Gold Produced (years 1 to 7)  $119   $35   $-83  $118 
Operating Costs Per Ounce of Gold Produced (life of mine)  $277   $275   $164   $351 
Total Cost Per Ounce of Gold Produced (inclusive of all capital and closure)  $673   $601   $490   $677 
Initial Capital (billions)  $5.0    $6.4   $6.4   $6.4 
Sustaining Capital (billions)  $5.5   $3.2   $3.2   $3.2 
Unit Operating Cost (US$/tonne)  $12.36   $11.36   $11.36   $11.36 
Pre-Tax Results:                    
Net Cash Flow (billions)  $15.9   $38.6   $46.1   $27.9 
NPV @ 5% Discount Rate (billions)  $3.3   $13.5   $16.4   $9.2 
Internal Rate of Return   10.4%   20.1%   22.4%   16.5%
Payback Period (years)   6.0    3.4    3.1    4.1 
Post-Tax Results:                    
Net Cash Flow (billions)  $10.0   $23.9   $28.6   $17.1 
NPV @ 5% Discount Rate (billions)  $1.5   $7.9   $9.8   $5.2 
Internal Rate of Return   8.0%   16.1%   18.0%   13.1%
Payback Period (years)   6.8    3.7    3.4    4.3 

 

Note:

 

1.Operating and total cost per ounce of gold are after copper, silver and molybdenum credits.
  
2.Total cost per ounce includes all start-up capital, sustaining capital and reclamation/closure costs.
  
3.Results include consideration of Royalties and Impact Benefit Agreements
  
4.The post-tax results include the B.C. Mineral Tax and provincial and federal corporate taxes.

 

The NI 43-101 Technical Report will include sensitivity analyses illustrating the impact on project economics from positive and negative changes to metal prices, capital costs and operating costs.

 

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National Instrument 43-101 Disclosure The updated KSM PFS was prepared by Tetra Tech, and incorporates the work of a number of industry-leading consulting firms. These firms and their Qualified Persons (as defined under National Instrument 43-101) are independent of Seabridge and have reviewed and approved this news release. The principal consultants who contributed to the 2022 PFS, and their Qualified Persons are listed below along with their areas of responsibility:

 

Tetra Tech, under the direction of Hassan Ghaffari P.Eng (surface infrastructure, capital estimate and financial analysis), John Huang P.Eng. (metallurgical testing review, permanent water treatment, mineral process design and operating cost estimation for process, G&A and site services, and overall report preparation)
   
Wood Plc. Under the direction of Henry Kim P.Geo. (Mineral Resources)
   
Moose Mountain Technical Services under the direction of Jim Gray P.Eng. (open pit Mineral Reserves, open pit mining operations, mine capital and mine operating costs, MTT and rail ore conveyance design, tunnel capital costs)
   
W.N. Brazier Associates Inc. under the direction of W.N. Brazier P.Eng. (Electrical power supply, energy recovery plants)

 

ERM (Environmental Resources Management) under the direction of Rolf Schmitt P.Geo. (environment and permitting)
   
Klohn Crippen Berger Ltd. Under the direction of David Willms P.Eng (design of surface water diversions, diversion tunnels, tailing management facility, water treatment dam and RSF and tunnel geotechnical)
   
BGC Engineering Inc. under the direction of Derek Kinakin P.Geo., P.L.Eng. (rock mechanics, geohazards and mining pit slopes)

 

Seabridge holds a 100% interest in several North American gold projects. Seabridge’s assets include the KSM and Iskut projects located near Stewart, British Columbia, Canada, the Courageous Lake project located in Canada’s Northwest Territories, the Snowstorm project in the Getchell Gold Belt of Northern Nevada and the 3 Aces project set in the Yukon Territory. For a full breakdown of Seabridge’s Mineral Reserves and Mineral Resources by category please visit the Company’s website at http://www.seabridgegold.com.

 

Neither the Toronto Stock Exchange, New York Stock Exchange, nor their Regulation Services Providers accepts responsibility for the adequacy or accuracy of this release.

 

All reserve and resource estimates reported by the Corporation were estimated in accordance with the Canadian National Instrument 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards. The U.S. Securities and Exchange Commission (“SEC”) now recognizes estimates of “measured mineral resources,” “indicated mineral resources” and “inferred mineral resources” and uses new definitions of “proven mineral reserves” and “probable mineral reserves” that are substantially similar to the corresponding CIM Definition Standards. However, the CIM Definition Standards differ from the requirements applicable to US domestic issuers. US investors are cautioned not to assume that any “measured mineral resources,” “indicated mineral resources,” or “inferred mineral resources” that the Issuer reports are or will be economically or legally mineable. Further, “inferred mineral resources” are that part of a mineral resource for which quantity and grade are estimated on the basis of limited geologic evidence and sampling. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

 

This document contains “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as “forward-looking statements” are made as of the date of this document. Forward-looking statements relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the estimated amount and grade of mineral reserves and mineral resources; (ii) estimates of the capital costs of constructing mine facilities and bringing a mine into production, of operating the mine, of sustaining capital and the duration of financing payback periods; (iii) the estimated amount of future production, both ore processed and metal recovered; (iv) estimates of operating costs, life of mine costs, net cash flow, net present value (NPV) and economic returns from an operating mine; and (v) the completion of a Preliminary Economic Assessment and its timing. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “envisages”, “assumes”, “intends”, “strategy”, “goals”, “objectives” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

 

- 9 -

 

 

All forward-looking statements are based on Seabridge’s or its consultants’ current beliefs as well as various assumptions made by them and information currently available to them. The most significant assumptions are set forth above, but other these assumptions include: (i) the presence of and continuity of metals at the Project at estimated grades; (ii) the geotechnical and metallurgical characteristics of rock conforming to sampled results; (iii) the quantities of water and the quality of the water that must be diverted or treated during mining operations; (iv) the capacities and durability of various machinery and equipment; (v) the availability of personnel, machinery, equipment and hydro-electric power at estimated prices and within the estimated delivery times; (v) currency exchange rates; (vi) metals sales prices; (vii) appropriate discount rates applied to the cash flows in the economic analysis; (viii) tax rates and royalty rates applicable to the proposed mining operation; (ix) the availability of acceptable financing under assumed structure and costs; (ix) anticipated mining losses and dilution; (x) metallurgical performance; (xi) reasonable contingency requirements; (xii) success in realizing proposed operations; (xiii) receipt of permits and other regulatory approvals on acceptable terms; and (xiv) the successful conclusion of consultation with impacted indigenous groups. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Many forward-looking statements are made assuming the correctness of other forward-looking statements, such as statements of net present value and internal rates of return, which are based on most of the other forward-looking statements and assumptions herein. The cost information is also prepared using current values, but the time for incurring the costs will be in the future and it is assumed costs (and metals prices) will remain stable over the relevant period.

 

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements as a number of important factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur as forecast, but specifically include, without limitation: risks relating to variations in the mineral content within the material identified as mineral reserves or mineral resources from that predicted; variations in rates of recovery and extraction; the geotechnical characteristics of the rock mined or through which infrastructure is built differing from that predicted, the quantity of water that will need to be diverted or treated during mining operations being different from what is expected to be encountered during mining operations or post closure, or the rate of flow of the water being different; developments in world metals markets; risks relating to fluctuations in the Canadian dollar relative to the US dollar; increases in the estimated capital and operating costs or unanticipated costs; difficulties attracting the necessary work force; unavailability of hydro-electric power and risks relating to the costs of other energy sources; increases in financing costs or adverse changes to the terms of available financing, if any; tax rates or royalties being greater than assumed; changes in development or mining plans due to changes in logistical, technical or other factors; changes in project parameters as plans continue to be refined; risks relating to receipt of regulatory approvals or the conclusion of successful consultation with impacted indigenous groups; changes in regulations applying to the development, operation, and closure of mining operations from what currently exists; the effects of competition in the markets in which Seabridge operates; operational and infrastructure risks and the additional risks described in Seabridge’s Annual Information Form filed with SEDAR in Canada (available at www.sedar.com ) for the year ended December 31, 2021 and in the Corporation’s Annual Report Form 40-F filed with the U.S. Securities and Exchange Commission on EDGAR (available at www.sec.gov/edgar.shtml). Seabridge cautions that the foregoing list of factors that may affect future results is not exhaustive.

 

When relying on our forward-looking statements to make decisions with respect to Seabridge, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Seabridge does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by Seabridge or on our behalf, except as required by law.

 

ON BEHALF OF THE BOARD
“Rudi Fronk”
Chairman and C.E.O.

For further information please contact:
Rudi P. Fronk, Chairman and C.E.O.
Tel: (416) 367-9292 • Fax: (416) 367-2711
Email: [email protected]

 

- 10 -

 

 

KSM Project Mineral Resources (Inclusive of Mineral Reserves as stated above)

 

Measured Resources

 

  Cut Off      Gold   Copper   Silver   Molybdenum 
Project  Grade (g/t)   Tonnes
(000)
   Grade (g/t)   Ounces (000)   Grade (%)   Pounds (millions)   Grade (g/t)   Ounces (000)   Grade (ppm)   Pounds (millions) 
KSM:  NSR:                                     
Mitchell  $10.75    691,700    0.68    15,124    0.19    2,876    3.3    72,831    52    79 
East Mitchell  $11.25    1,012,800    0.65    21,098    0.11    2,514    1.8    59,233    89    198 
KSM Total        1,704,500    0.66    36,222    0.14    5,390    2.4    132,064    74    277 

 

Indicated Resources

 

    Cut Off         Gold     Copper     Silver     Molybdenum  
Project   Grade (g/t)     Tonnes
(000)
    Grade (g/t)     Ounces (000)     Grade (%)     Pounds (millions)     Grade (g/t)     Ounces (000)     Grade (ppm)     Pounds (millions)  
KSM:                                                            
Mitchell   $ 10.75-       1,667,000       0.48       25,935       0.14       5,120       2.8       149,160       66       241  
East Mitchell   $ 11.25       746,200       0.42       10,080       0.08       1,390       1.7       41,814       79       130  
Sulphurets     NSR       446,000       0.55       7,887       0.21       2,064       1.0       14,339       53       52  
Kerr     Pits       374,000       0.22       2,660       0.41       3,405       1.1       13,744       5       4  
Iron Cap   $ 16       423,000       0.41       5,576       0.22       2,051       4.6       62,559       41       38  
KSM Total     NSR
UG
      3,656,200       0.44       52,138       0.17       14,030       2.4       281,616       58       465  

 

Measured plus Indicated Resources

 

  Cut Off    Gold  Copper  Silver  Molybdenum
Project  Grade
(g/t)
 

Tonnes
(000)

  Grade
(g/t)
  Ounces
(000)
  Grade
(%)
  Pounds
(millions)
  Grade
(g/t)
  Ounces
(000)
  Grade
(ppm)
  Pounds
(millions)
KSM:                             
Mitchell  $10.75-    2,358,700    0.54    41,059    0.15    7,996    2.9    221,991    62    320 
East Mitchell  $11.25    1,759,000    0.55    31,178    0.10    3,904    1.8    101,047    85    328 
Sulphurets   NSR    446,000    0.55    7,887    0.21    2,064    1.0    14,339    53    52 
Kerr  Pits    370,000    0.22    2,660    0.41    3,405    1.1    13,744    5    4 
Iron Cap  $16    423,000    0.41    5,576    0.22    2,051    4.6    62,559    41    38 
KSM Total   NSR UG    5,356,700    0.51    88,360    0.16    19,420    2.4    413,680    63    742 

 

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Inferred Resources

 

  Cut Off      Gold   Copper   Silver   Molybdenum 
Project  Grade
(g/t)
   Tonnes
(000)
   Grade (g/t)   Ounces (000)   Grade (%)   Pounds (millions)   Grade (g/t)   Ounces (000)   Grade (ppm)   Pounds (millions) 
KSM:                                        
Mitchell  $10.75    1,282,600    0.29    11,819    0.14    3,832    2.5    102,228    47    133 
East Mitchell   NSR    281,100    0.37    3,372    0.07    403    2.3    21,112    61    38 
Sulphurets   Pits    223,000    0.44    3,155    0.13    639    1.3    9,320    30    15 
Kerr  16     1,999,000    0.31    19,823    0.40    17,720    1.8    114,431    23    103 
Iron Cap   NSR    1,899,000    0.45    27,474    0.30    12,556    2.6    158,741    30    126 
KSM Total   UG    5,684,700    0.36    65,643    0.28    35,150    2.2    405,832    33    415 

 

Note:

 

1.The effective date for the Mineral Resource Estimate for Mitchell and East Mitchell is March 31, 2022, and for Kerr, Sulphurets and Iron Cap is December 31, 2019.

 

2.The Mineral Resource estimates have been reviewed and approved by Henry Kim P.Geo., an independent Qualified Person. Mr. Kim verified the databases supporting the mineral resource estimates and conducted a personal inspection of the property and reviewed drill core from a range of representative drill holes at site and at the core storage facilities in Stewart, B.C. with Seabridge geology staff.

 

3.Mineral Resources were prepared in accordance with CIM Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014) and CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines (Nov 29, 2019).

 

4.Mineral Resources were constrained within minable shapes depending on their mining methods.

 

5.Mineral Resources are reported inclusive of those Mineral Resources that were converted to Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

 

6.Following metal prices were used to determine Mineral Resources: US$1300/oz Au, US$3/lb Cu, US$20/oz Ag, and US$ 9.7/lb Mo.

 

7.For other key assumption parameters, methods used for: Mitchell and East Mitchell, see news release “Seabridge Gold Reports Updated Mineral Resource Estimates for Mitchell and East Mitchell Deposits” dated April 14, 2022; Kerr, Sulphuret, and Iron Cap, see “KSM (KERR-SULPHURETS-MITCHELL) PREFEASIBILITY STUDY UPDATE, NI 43-101 TECHNICAL REPORT” dated April 30, 2020.
  
8.Numbers may not add due to rounding.
  

Note: United States investors are cautioned that the requirements and terminology of NI 43-101 may differ from the requirements of the SEC, including Regulation SK-1300. Accordingly, the Issuer’s disclosures regarding mineralization may not be comparable to similar information disclosed by companies subject to the SEC’s mining disclosure standards. Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

 

 

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