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Gold Co.'s Claims About License Lack Merit
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Two firms are at odds over permissions allowing one of them to build tunnels in an area where the other one owns mining claims, noted a Red Cloud Securities report.

Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) likely will not have its license of occupation and permit relative to its KSM project revoked, as requested by Tudor Gold, purported Red Cloud Securities analyst David Talbot in a July 18 research note.

"We believe this is an opportunistic move by Tudor," Talbot wrote.

Notable Gain for Investors

As such, Red Cloud maintained its Buy rating and CA$45.25 per share target price on the gold explorer, now trading at about CA$17.48 per share, noted Talbot.

The gap between the current share and target prices implies a significant return for investors of 159%.

Approvals Explained

In September 2014, Seabridge was granted the license and permit that are in dispute, following the completion of a thorough regulatory process.

The license allows Seabridge to occupy the area in which it plans to build the Mitchell Treaty Tunnels (MTT) in order to construct them. The purpose of the tunnels is to connect the mine and the mill at its KSM project in northwest British Columbia. Once the tunnels are built, the license will convert to a statutory right of way applicable to the length of the MTT that, in part, will traverse through the Treaty Creek property in which Tudor owns an interest.

The permit, a Mines Act M-245, allows for various activities to be carried out along the tunnel's route.

Opposing Views

Tudor claims that by law, the government lacked the authority to issue such a license and permit, and these permissions it granted destroy the value of Tudor's mineral rights, Talbot relayed.

Seabridge, on the other hand, asserts that when Tudor acquired said rights in June 2016, Seabridge already had the license and permit, and that was public knowledge. Thus, Tudor's arguments are meritless and trivial, according to Seabridge's management.

Red Cloud agrees with Seabridge.

"Due diligence would have shown that this license and permit were in effect well before Tudor became the owner of the mining claim through which Seabridge has the right to construct the MTT," Talbot wrote.

Work at KSM Continues

Tudor's claims and efforts will not stop Seabridge's plans for or progress at KSM, Talbot reported management as saying.

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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. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  3. 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., July 18, 2023

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.

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