BC Supreme Court Decides Gold Co.'s KSM 'Substantially Started' Is Reasonable

1. Seabridge Gold Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$3,000 and US$6,000.
2. As of the date of this article, officers, contractors, shareholders, and/or employees of Streetwise Reports LLC (including members of their household) own securities of Seabridge Gold Inc.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
4. This article does not constitute investment advice and is not a solicitation for any 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. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

For additional disclosures, please click here.

1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) announced that the Supreme Court of British Columbia has issued a ruling on two legal challenges concerning the BC Environmental Assessment Office's (EAO) decision that Seabridge Gold's KSM project in northwestern British Columbia was substantially started as of July 24, 2024, according to a June 8 release.

The court upheld the EAO's determination as reasonable but identified a shortfall in the consultation process with one of the petitioners, the Tsetsaut Skii km Lax Ha (TSKLH). As a result, the court has mandated a 90-day period during which TSKLH can submit their views on whether the project was substantially started. Following this period, the EAO is required to reassess its initial determination.

Additionally, the court dismissed a separate petition brought by SkeenaWild Conservation Trust that contested the Substantially Started determination. The full decision is available here for public review.

In response to the Court's decision, Seabridge Chair and CEO Rudi Fronk expressed satisfaction with the confirmation of the EAO's determination as reasonable and stated that operations at KSM would proceed during the consultation period and the subsequent EAO review. Fronk remarked,

"We are satisfied that the court has confirmed the reasonableness of the EAO determination," Seabridge Chair and Chief Executive Officer Rudi Fronk said. "We will continue to execute our work plans for KSM and look forward to meeting with the EAO to receive an update on their additional consultation activities in due course. Meanwhile, the permanent physical improvements we have made at KSM, which were considered appropriate for the determination, have been significantly enhanced. We remain appreciative of the continued support of the Nisga'a and Tahltan Nations, and the Gitxsan Hereditary Chiefs Office, for KSM."

Since applying for Substantially Started Status in January 2024, Seabridge said it has invested an additional CA$208 million in permanent works at the KSM site, bringing the total expenditures at KSM to CA$1.2 billion.

KSM Partner Still Co.'s Primary Goal

Seabridge has identified establishing a partnership for its KSM project as its primary goal for the year. In a recent update to its shareholders, Seabridge conveyed that it has made considerable strides toward this objective. The company stated, "We continue to make material progress on a partnership at KSM with our preferred partner, who is now participating with our technical team to advance the feasibility program and early works construction planning while we formalize our partnership agreement."

Additionally, the KSM Project has received notable recognition this year as it was declared a provincial priority project by the Province of British Columbia. This prestigious designation is set to streamline and accelerate the permitting process through focused provincial permitting coordination and support.

The KSM Project is globally recognized as one of the largest undeveloped copper and gold projects. It boasts substantial reserves, with estimates including 7.3 billion pounds of copper and 47.3 million ounces of gold across 2.29 billion tonnes. This vast resource base underscores the project's significant potential and the importance of the ongoing efforts to secure a strategic partnership.

The company recently published its 2025 Sustainability Report, providing a comprehensive review of its environmental, social, and governance (ESG) efforts. The KSM Project was particularly recognized, receiving the 2025 AME David Barr Award for its robust health and safety practices in a remote region of British Columbia.

On the social front, the report emphasized Seabridge's strengthened relationships with Indigenous and local communities. This includes providing CA$50,000 in bursaries to 48 students in northwest BC in collaboration with the Nisga'a Lisims Government and Tahltan Central Government and directing the majority of its procurement expenditures to local suppliers.

Analyst: Broader Support From First Nations Remains Intact

The British Columbia Supreme Court's ruling mitigates the risk of the designation being overturned based on its merits, although it introduces a potential procedural complication due to the required additional consultation, noted RBC Capital Markets Analyst Harrison Reynolds in an updated research note on June 9.

"The Court affirmed the substantive reasonableness of the determination; however, the consultation deficiency finding and ordered reconsideration represent a partial setback," Reynolds wrote. "Work at KSM continues uninterrupted during this period and since the January 2024 application, Seabridge has spent an additional ~CA$208m on permanent works (total now CA$1.2b), strengthening the factual basis for the determination should it be reconsidered."

The court's decision was specific in its findings, recognizing the reasonableness of the EAO's July 2024 determination while pointing out the need for more thorough consultation with TSKLH, the note said. The dismissal of the SkeenaWild petition underscores the court's agreement with the EAO's assessment of the merits of the project's status.

Importantly, the broader support from the Nisga'a and Tahltan Nations, along with the Gitxsan Hereditary Chiefs Office, remains intact, Reynolds noted. The consultation issue with TSKLH is specific to that group and pertains to the process rather than opposition from the wider Indigenous community.

From a project management perspective, the 2026 work program at KSM is proceeding as planned, the analyst said. This includes preparations for a feasibility study expected to be completed in the second half of 2027, ongoing road construction, and the completion of BC Hydro's Treaty Creek Terminal. The "Substantially Started" designation is crucial as it secures KSM's provincial and federal environmental assessment certificates for the life of the project, thereby removing the previous expiry deadline of July 2026. Without this designation, KSM's environmental approvals would lapse, potentially halting the project's progress.

'A Catalyst-Dense Phase'

Stonegate Capital Partners Analyst Dave Storms recently characterized Seabridge Gold as entering a "catalyst-dense phase," according to his latest research note dated May 27. Storms pointed out that this phase is characterized by significant progress in several key areas, including discussions on KSM partnerships, preparations for the Feasibility Study (FS), support for BC permitting, the spin-out of Valor Gold, and the initial resource estimation at Snip North. He stated, "In our view, SA is increasingly converting embedded asset value into externally validated milestones across KSM, Courageous Lake, and Bronson Corridor."

Storms identified the KSM project as the primary value driver for Seabridge Gold, highlighting its potential for a near-term re-rating. He noted that since his last report, the project's prospects have improved with the active participation of Seabridge's preferred partner in the feasibility and early works planning, as the company nears finalizing a formal agreement. The focus for 2026 includes preparing for the FS, developing green power infrastructure, building access roads, conducting environmental work, and ensuring readiness for early works, with the goal of completing the FS in the second half of 2027.

Additionally, Storms mentioned the strong shareholder support for the spin-out of Valor Gold, with Seabridge set to distribute approximately 55 million Valor shares. This strategic move is anticipated to offer a more transparent valuation reference for the 11 million ounces of Measured and Indicated (M&I) gold asset at Courageous Lake, which has previously been overshadowed by the KSM project.

In concluding his analysis, Storms provided a valuation range for Seabridge Gold. He explained, "When valuing SA, we apply an EV/NAV range of 0.8x to 0.9x, which results in a valuation of US$67.86 to US$76.85 with a midpoint of US$72.36." He added, "When using an EV/In-Situ valuation method, we apply a multiple range of 7x to 9x, which results in a valuation of US$72.41 to US$94.25 with a midpoint of US$83.33." These valuations reflect the ongoing efforts and strategic moves by Seabridge Gold as it advances through a pivotal phase of development.

The Catalyst: A Gold Rebound and a Possible Entry Opportunity?

On Thursday, gold prices experienced a rebound from a six-month low as investors began covering their short positions, according to a report by CNBC updated on June 11. This slight recovery saw spot gold increase by 0.6% to US$4,097.01 an ounce, after earlier touching its lowest level since November 21. In contrast, U.S. gold futures for August delivery saw a decrease of 0.4%, settling at US$4,118. Independent analyst Ross Norman commented on the situation, stating, "Gold is clearly significantly oversold just now, and it remains to be seen whether this is a recovery as such or simply short positions taking profit."

Geopolitical tensions also influenced the market, as the U.S. and Iran continued to exchange attacks for a second consecutive day, CNBC reported. President Donald Trump has threatened further strikes unless Tehran agrees to a peace deal promptly. Since the onset of the U.S.-Israeli conflict with Iran in late February, spot gold has declined over 22%, a drop coinciding with a surge in oil prices. The rise in crude oil prices has contributed to accelerating inflation and the prospect of prolonged higher interest rates.

While gold is traditionally seen as a hedge against inflation, the prospect of higher interest rates, which increase the opportunity cost of holding non-yielding assets like gold, tends to suppress its price. Recent data revealed that U.S. consumer inflation in May rose at its fastest pace in three years, driven by sharp increases in energy-related prices.

Looking ahead, the Federal Reserve is expected to maintain steady interest rates in the upcoming meeting chaired by Kevin Warsh, with most economists in a Reuters poll anticipating no change in rates this year. However, market traders are pricing in a 67% chance of a U.S. rate hike by December, according to the CME Group's FedWatch tool. Commerzbank analyst Carsten Fritsch noted, "The market now firmly expects the Fed to raise interest rates before the end of the year." According to the CNBC report, he added that if the upcoming Fed meeting does not indicate a likely rate increase, gold prices might begin to recover.

According to A.G. Thorson writing for FX Empire on June 8, gold had closed below its 200-day moving average and erased all of its gains for 2026. The Gold Cycle Indicator fell to 71, its lowest reading since September 2023.

"We are now at a point in the cycle where prices could drop a bit further, but that outcome is not guaranteed," Thorson wrote.

"From a longer-term perspective, I believe this move below the 200-day moving average will ultimately be viewed as an attractive entry opportunity," Thorson continued. "In 2006, gold traded below its 200-day moving average for just over a month before resuming its uptrend and rallying more than 220% over the following five years. If a similar advance were to occur from current levels, gold could approach US$14,000 by 2031."

Ownership and Share Structure¹

Management and insiders hold approximately 2% of the company, while institutions own about 63%. The remainder is held by retail investors.

Friedberg Mercantile Group Ltd. holds 15.08%, Kopernik Global Investors L.L.C. holds 10.26%, Pan Atlantic Bank and Trust holds 9.92%, and Van Eck Associates Corp. holds 6.07%.

There are around 107.62 million shares outstanding, with the company having a market cap of CA$3.76 billion and trading within a 52-week range of CA$17.90 to CA$50.77.