The Streetwise Live! Broadcast on June 4, 2021, focused on Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) and its large copper resources—in addition to its gold. Precious metals expert Matt Badiali and Seabridge CEO and Chairman Rudi Fronk fielded questions about the magnitude of the metals resources at Seabridge's KSM project, the economic benefits of the copper there, the world's copper supply relative to new green initiatives and the company's strategy regarding project-related environmental and social issues.
Host Cyndi Edwards introduced Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) as a company that is well known for gold but also has opportunities for green energy, given the significant amount of copper it has amassed at its flagship KSM project. Edwards noted that copper has numerous applications in solar, hydro, thermal and wind renewable energy and in electric vehicles.
During the broadcast, Edwards shared a picture of the Mitchell deposit at Seabridge's KSM, which Rudi Fronk described. The visible green color actually is copper, oxidizing naturally, he said. He pointed out that the helicopter to the left of the copper shows the ample scale of the metal present.
"It's hard to comprehend how big KSM is," Fronk said. "In terms of total economic resources, we now have 9.8 billion tons, which contain 142 million ounces (142 Moz) of gold and 50 billion pounds (50 Blb) of copper."
Fronk explained that finding copper was a surprise. When the company was formed in 1999, the management team was focused solely on gold and growing gold ounces faster than shares outstanding, he said. However, while exploring for the precious metal, the company also found copper, so much of it that now, in terms of pounds of copper per share, it provides more copper ownership per share than most copper companies.
At KSM, "we knew we were in a gold rich porphyry environment," Fronk said. "Grades of copper continued to get better, particularly at Deep Kerr and Lower Iron Cap."
Edwards asked Matt Badiali, a precious metals expert following Seabridge, why the Canadian company is well positioned to capitalize on its copper reserves.
"You have to understand how massive these copper reserves are," he said. "They're so big that mining them and selling them will pay for all of the mining costs, and you get all of the gold that they're going to produce for free." Fronk confirmed that is the case.
The CEO added that copper is in short supply today; it is in deficit in the market. That deficit is expected to grow to 30 million metric tons by 2030 even taking into account new mines and mine expansions planned to be built during the interim, he said. In 2030 alone, the deficit will amount to 6 million metric tons.
"New [copper] mines aren't being built fast enough to meet the new green energy initiatives," he added. "Our industry needs to produce more [copper]."
Badiali talked about how Seabridge is navigating KSM-related environmental and social concerns, issues that tend to derail projects. He said that the company began addressing both early on, the preferable strategy. From the start it began engaging with the First Nations in the region and started environmental groundwork. Also, Seabridge is using renewable energy in the form of hydroelectric power at the project instead of diesel generators.
Finally, Edwards indicated that Seabridge shares were currently trading around $19.50–19.60. Numerous Wall Street analysts rate the company a Buy and have price targets on it that range from $23.98 to $105, with $46.60 being the median. She asked Badiali what he thinks about the analysts' stance.
"KSM is in the Top 10 of gold reserves globally," he said. "This is a giant, giant project. Between KSM and Courageous Lake, the two big projects that Seabridge holds, they have 45 Moz of gold and 17.6 Blb of copper. They know it's there. It's all in reserve.
"You have gold in a bull market, and you have copper in a major bull market, so that you have tailwinds on your investment, and you have a lot of metal in the ground that we know is there," Badiali continued. "So I put a lot of faith in what these analysts have done. I think they're probably right on."
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1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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- Rudi Fronk - CEO/Chairman owns securities of the company.
- Disclosures for: Matt Badiali - Precious Metals Expert. I, or members of my immediate household or family, own securities of the following companies discussed in the broadcast: None. I personally am, or members of my immediate household or family are, paid by the following companies discussed in the broadcast: None. My company has a financial relationship with the following companies discussed in the broadcast: None.
- Disclosures for: Cyndi Edwards, Host. I, or members of my immediate household or family, own securities of the following companies discussed in the broadcast: None. I personally am, or members of my immediate household or family are, paid by the following companies discussed in the broadcast: None. My company has a financial relationship with the following companies discussed in the broadcast: None.