In a Nov. 21 announcement,Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) confirmed the completion of its first exploration program on the Quartz Rise target in its 100%-owned Iskut Project in northwestern British Columbia. Seabridge Gold explained that "this year's drilling found evidence of a gold-bearing intermediate sulfidation epithermal system beneath the Quartz Rise lithocap as anticipated. Intercepts included 1.5 meters grading 8.26 g/T gold in QR-17-01 and 1.5 meters grading 74.1 g/T gold in QR-17-07. Sampling of a cliff face north of Quartz Rise returned very high grades ranging from 1.49 to 125.3 g/T gold."
Rudi Fronk, Seabridge's chairman and CEO, commented, "In our first program at Quartz Rise, our exploration team has successfully found the right environment for a high-grade epithermal gold deposit. The system at Quartz Rise has all the earmarks we were looking for and we think we have enhanced the potential for a significant discovery. . .Iskut's similarities with KSM are persuasive and this knowledge should help us zero in on the potential at Quartz Rise."
In a Nov. 21 report, Canaccord Genuity analyst Tony Lesiak stated that "while the 2017 initial 10 hole drill program on the Quartz Rise target at Iskut did not fully live up to our, perhaps, overly optimistic expectations, the results did achieve their primary goal; to provide evidence of a gold bearing epithermal system." He continued by pointing out that Canaccord "could hardly be faulted for the initial and continued enthusiasm given Iskut's proximity to KSM (+100Moz resource) and the associated high-grade (VOK at +17g/t) Brucejack deposit (~14Mozs), the location of previous high- grade gold operations at nearby Johnny Mountain and Snip and the existing 2.2Mozs Bronson Slope deposit, and the interpretation that the mineralizing system at Quartz Rise was fully intact, unlike KSM."
Lesiak noted that "the drilling, surface sampling and a subsequent IP survey have defined a potentially more favourable secondary structural orientation that may preferentially localize high grade gold; an orientation that will be followed up with the 2018 program."
Canaccord maintains a Speculative Buy rating on Seabridge with a target price of CA$29.00.
Analyst Mike Kozak with Cantor Fitzgerald also followed Seabridge Gold's announcement, highlighting both Iksut and KSM in a Nov. 21 report. Kozak stated that "while we regard the results from this initial [Iskut] program as sub-economic at present, it is important to note that this project is still very early days, and results are encouraging, suggestive of a potentially gold-rich epithermal system."
Kozak also discussed the much more advanced KSM project. "We believe a number of top-tier base metal and gold miners are lining up to offer JV terms to Seabridge on KSM. Based on management commentary, we are pushing this event to April/May next year, from our previous estimate of exit 2017," Kozak stated.
He pointed out that "Seabridge is an excellent asymmetric risk-reward trade. There are currently 10.2 MM shares short representing +20% of the market float." He highlighted that "a large-cap partner, or more likely a consortium of partners, are lining up to take a stake in KSM and provide the capital Seabridge needs to further advance the project."
Canaccord has with a Buy rating and target price of CA$24.00 on Seabridge.
Seabridge is currently trading at CA$13.08.
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Disclosures from Canaccord Genuity, Seabridge Gold Inc., Flash Update, Nov. 21, 2017
Analyst Certification: Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research.
Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity Inc. and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Required Company-Specific Disclosures (as of date of this publication):
Seabridge Gold currently is, or in the past 12 months was, a client of Canaccord Genuity or its affiliated companies. During this period, Canaccord Genuity or its affiliated companies provided investment banking services to Seabridge Gold.
In the past 12 months, Canaccord Genuity or its affiliated companies have received compensation for Investment Banking services from Seabridge Gold .
Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from Seabridge Gold in the next three months.
Up-to-date disclosures may be obtained here.
Disclosures from Cantor Fitzgerald, Seabridge Gold Inc., Nov. 21, 2017
Disclaimers: The opinions, estimates and projections contained in this report are those of Cantor Fitzgerald Canada Corporation (“CFCC”) as of the date hereof and are subject to change without notice. Cantor makes every effort to ensure that the contents have been compiled or derived from sources believed to be reliable and that contain information and opinions that are accurate and complete; however, CFCC makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions which may be contained herein and accepts no liability whatsoever for any loss arising from any use of or reliance on this report or its contents. Information may be available to Cantor that is not herein.
Potential conflicts of interest: The author of this report is compensated based in part on the overall revenues of CFCC, a portion of which are generated by investment banking activities. CFCC may have had, or seek to have, an investment banking relationship with companies mentioned in this report. CFCC and/or its officers, directors and employees may from time to time acquire, hold or sell securities mentioned herein as principal or agent. Although CFCC makes every effort possible to avoid conflicts of interest, readers should assume that a conflict might exist, and therefore not rely solely on this report when evaluating whether or not to buy or sell the securities of subject companies.
Disclosures as of November 21, 2017
CFCC has provided investment banking services or received investment banking related compensation from Seabridge Gold within the past 12 months.
The analysts responsible for this research report do not have, either directly or indirectly, a long or short position in the shares or options of Seabridge Gold.
The analyst responsible for this report has visited the material operations of Seabridge Gold (KSM and Iskut). No payment or reimbursement was received for the related travel costs.
Analyst certification: The research analyst whose name appears on this report hereby certifies that the opinions and recommendations expressed herein accurately reflect his personal views about the securities, issuers or industries discussed herein.