In an Oct. 31, 2018 research note, ROTH Capital Partners analyst Joe Reagor reported that the first two holes of Seabridge Gold Inc.'s (SEA:TSX; SA:NYSE.MKT) resource expansion drilling at Iron Cap "showed significant intervals of mineralization at higher grades than the average of the existing resource." He added, "We view this as a significant positive development." Iron Cap is part of the company's KSM project in British Columbia, Canada.
One recent Iron Cap highlight is hole IC-18-75, which intersected 582.7 meters averaging 0.59 grams per ton gold and 0.41% copper. Also "encouraging," the intercept encompassed two areas of higher grade mineralization, too, Reagor pointed out.
The analyst discussed the possible implications of these Iron Cap results. First, the findings suggest potential for further growth of the deposit there. "We believe continued positive drill results at Iron Cap could lead to a significant increase in Seabridge's resources at KSM."
Second, the results' "potential on mine sequencing" could improve the economics of a future mining project, Reagor suggested. Specifically, because the newly found mineralization is near KSM's Mitchell-Treaty Tunnel, Iron Cap could be included in a mine model with it. Were that to happen, mining at Kerr would likely be delayed, but that deposit has demonstrated lower average grades than those shown in these recent Iron Cap assays.
Reagor concluded by saying that while ROTH finds the latest news compelling, the investment banking firm will await further Iron Cap results that also suggest potential resource expansion before updating its price target on Seabridge. Therefore, ROTH's price target on the Buy-rated company remains at CA$17 per share. This compares to Seabridge's current stock price of about CA$12.93 per share.
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Disclosures from ROTH Capital Partners, Seabridge Gold Inc., Flash Note, October 31, 2018
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
ROTH makes a market in shares of Seabridge Gold Inc. and as such, buys and sells from customers on a principal basis.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.
