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Gold Co. Updates PFS and Growth Plans
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Seabridge Gold Inc. recently released an updated PFS, according to a Red Cloud Securities report.

Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) released an updated preliminary feasibility study (PFS) for its 100%-owned Courageous Lake gold project in the Northwest Territories, reported Red Cloud analysts Taylor Combaluzier and David Talbot in a January 17 research note.

The study outlines improved economics on a smaller but higher-grade initial mine plan with a 12.6-year run at 200,000 ounces per year average gold production.

A separate preliminary economic assessment (PEA) details an envisioned 15.9-year underground expansion phase below the PFS open pit. Analyst Taylor Combaluzier still sees considerable upside for the full-scale project.

Updated Prefeasibility Results

The new PFS incorporates larger gold reserves and resources compared to 2012, now sitting at 2.8 million ounces proven and probable and 11 million ounces measured and indicated, respectively.

By applying a lower 7.6:1 strip ratio and a reduced US$747 million capital program, Courageous Lake's after-tax net present value (NPV5%) rises 73% to US$523 million with 20.6% IRR at US$1,850 per ounce gold.

Average all-in-sustaining costs are forecast at US$999 per ounce of gold, with payback in under three years from initial production expected for 2030. This optimized starter plan utilizes just 30% of defined resources, retaining major expansion potential.

Growth Potential Below Mine Plan

An additional PEA considers a conceptual underground expansion post the open pit phase, leveraging inferred resources not in the base case. Combaluzier sees this potentially tacking on 16 years of operations at a similar production rate.

The incremental project nets a discounted value of US$104 million with minimal added upfront development cost.

Valuation Lifted on Execution

Red Cloud lifts its target price to C$46.50 as updated studies have increased visibility into building Courageous Lake. The firm also cites progress derisking Seabridge's flagship KSM project in updated valuation metrics.

Combaluzier maintains a Buy rating, now applying a 0.75x multiple to his CA$62 net asset value per share estimate given enhanced confidence in the path forward for Seabridge's assets.

Upcoming drilling, engineering, and environmental programs should continue to unlock fundamental value not yet reflected in shares, in the analyst's view. Ongoing efforts to secure a joint venture partner may provide additional upside catalysts.

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Important Disclosures:

  1. [Seabridge Gold Inc.] is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
  2. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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Disclosures for Red Cloud Securities, Seabridge Gold Inc., January 17, 2024

Red Cloud Securities Inc. is registered as an Investment Dealer and is a member of the Investment Industry Organization of Canada (IIROC). Part of Red Cloud Securities Inc.'s business is to connect mining companies with suitable investors. Red Cloud Securities Inc., its affiliates and their respective officers, directors, representatives, researchers and members of their families may hold positions in the companies mentioned in this document and may buy and/or sell their securities. Additionally, Red Cloud Securities Inc. may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services. Red Cloud Securities Inc. has prepared this document for general information purposes only. This document should not be considered a solicitation to purchase or sell securities or a recommendation to buy or sell securities. The information provided has been derived from sources believed to be accurate but cannot be guaranteed. This document does not take into account the particular investment objectives, financial situations, or needs of individual recipients and other issues (e.g. prohibitions to investments due to law, jurisdiction issues, etc.) which may exist for certain persons. Recipients should rely on their own investigations and take their own professional advice before investment. Red Cloud Securities Inc. will not treat recipients of this document as clients by virtue of having viewed this document. Red Cloud Securities Inc. takes no responsibility for any errors or omissions contained herein, and accepts no legal responsibility for any errors or omissions contained herein, and accepts no legal responsibility from any losses resulting from investment decisions based on the content of this report. 

Company Specific Disclosures

  1. The analyst has visited the head/principal office of the issuer or has viewed its material operations.
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Analyst Certification The Red Cloud Securities Inc. Analyst named on the report hereby certifies that the recommendations and/or opinions expressed herein accurately reflect such research analyst’s personal views about the company and securities that are the subject of this report; or any companies mentioned in the report that are also covered by the named analyst. In addition, no part of the research analyst’s compensation is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

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