Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) increased the consolidated mineral resource of its KSM copper-gold project in British Columbia with its updated resource estimates of the Kerr and Iron Cap deposits there, reported Cantor Fitzgerald analyst Mike Kozak in a Feb. 5 research note.
188% potential return
Following this news, Kozak noted, Cantor reiterated its CA$41 per share target price on Seabridge.
"Our target is derived via a 1x net present value discounted at 7.5% multiple on the KSM project and the assumption that Seabridge attracts a 50% joint venture partner on industry standard terms," Kozak wrote.
The mining developer, in comparison, is currently trading at about CA$14.21 per share. The implied return for investors, given the difference between the target and current prices, is significant, at 188%.
Seabridge remains a Buy.
Resulting quantities, impacts
Kozak reported that for KSM's Kerr and Iron Cap deposits, the updated resource increased the Measured & Indicated (M&I) ounces about 13% and the Inferred ounces about 9%.
The Kerr and Iron Cap resources grew the overall KSM project's M&I resource by 1%, taking it to 125,100,000 ounces (125.1 Moz) of gold equivalent (Au eq) at 0.72 grams per ton (0.72 g/t) Au eq.
Kerr and Iron Cap also expanded the overall KSM Inferred resource, by 9%, boosting it to 139 Moz Au eq at 0.65 g/t Au eq.
Maintained consistency
When calculating an updated mineral resource on Kerr and Iron Cap, explained Kozak, the Toronto, Ontario-based company used the same metals prices and foreign exchange (FX) rate it used when determining the resource estimate for the Mitchell and East Mitchell deposits in the 2022 prefeasibility study.
Specifically, Seabridge employed US$1,820 per ounce for gold and US$4.20 per pound for copper as well as an U.S. to Canadian dollars FX rate of 0.83.
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