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%.
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.
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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- 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.
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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Disclosures for Red Cloud Securities, Seabridge Gold Inc., July 18, 2023
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