"The biggest challenge in developing KSM is its immense scale. With over 11 billion t of economic mineral resources, coupled with a projected construction cost of US$6.4 billion, there are few potential partners capable of building and operating the mine."

Rudi Fronk


November 22, 2023

Can you please introduce Seabridge Gold and provide a rundown of the highlights of 2023?

Recognizing that an ounce of gold is worth more in your pocket than in the ground, we are now advancing to the second phase of our strategy by looking to partner our giant KSM project with a major mining company that possesses the technical, financial and social skills to build and operate KSM. To this end, in 2023 we initiated a formal KSM joint venture process to secure a partner, while at the same time continuing early site construction to ensure our permits remain valid for the life of the project.

In addition to its size, capital efficiency and location, what sets KSM apart from other large undeveloped gold/copper projects is its environmental approvals and construction permits in hand. However, to ensure that the approvals remain in place for the life of the project, KSM needs to be “Substantially Started” by July 2026.

In 2021 we decided to start early-site construction activities to ensure that we achieve a Substantially Started designation. We have now raised US$375 million in two secured note transactions from Sprott Royalties without share dilution. Both of the notes issued to Sprott and their partners will convert into royalties at commercial production. By the end of this year, we will have spent in excess of C$400 million on the construction of roads and bridges, camps, power and fish habitats. We are planning to file our Substantially Started application with the B.C. government in January 2024.

What are the biggest challenges you have faced in developing the KSM project?

The biggest challenge in developing KSM is its immense scale. With over 11 billion t of economic mineral resources, coupled with a projected construction cost of US$6.4 billion, there is a limited number of potential partners capable of building and operating the mine. Thus, we need the right JV partner.

Another challenge is the regulatory process. We commenced the environmental assessment (EA) process in early 2008 but did not achieve final approvals until late 2014. The EA process is time-consuming and expensive. We proactively engaged with five Indigenous groups in the region. These entities are now seeing the benefits of the project with over C$250 million of our early-site construction activities being awarded to Indigenous-related companies.

How do you assess the supply and demand fundamentals for gold?

In our view, annual supply and demand fundamentals have very little impact on the gold price. This is because, unlike traditional commodities like oil and copper, every ounce of gold mined throughout history is essentially available as above-ground supply. What determines the gold price is its relative value to financial assets like stocks, bonds and fiat currencies. We believe the price of gold is poised to go significantly higher over the next several years due to an upcoming global sovereign debt crisis. Governments around the world continue to run large fiscal deficits that require funding. In our view, funding these deficits will require excessive money printing which will result in much higher gold prices.

What are Seabridge’s priorities for 2024?

Firstly, we are focused on securing the Substantially Started designation for KSM.

Secondly, our goal is to secure a JV partner for KSM. Our objective in a JV is to maintain a meaningful interest in the project while minimizing our capital exposure. In Q3 2023 we had five large mining companies visit KSM and discussions are advancing with several of these companies.

Finally, our commitment to exploration remains steadfast. We have three promising early-stage projects in our portfolio: Iskut in British Columbia, 3 Aces in the Yukon, and Snowstorm in Nevada. Each of these projects has the potential to be a game-changer for our company.

In conclusion, if you believe the price of gold is set to go higher, or you are just looking for portfolio insurance, Seabridge common shares have a 24-year track record of outperforming the gold price and other gold equities when the price of gold is rising. I personally have over 90% of my net worth invested in Seabridge common shares, underscoring my confidence in the company's future and the value we intend to deliver to our shareholders.


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