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TICKERS: SEA; SA

Gold Co.'s Focus Remains on Finding a Partner, Analyst Says
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Cantor Fitzgerald hosts Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) for a one-day institutional marketing non-deal roadshow in New York. The company says its focus remains on finding a JV partner for its massive KSM project in British Columbia.

Cantor Fitzgerald last week hosted Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) for a one-day institutional marketing non-deal roadshow in New York, the firm said in a November 21 updated research note.

Analyst Mike Kozak, who reiterated his Buy rating on the stock with a CA$45 per share price target, said the schedule was made up of investors of all AUM sizes and strategies and included a blend of existing shareholders and asset managers who were being introduced to Seabridge for the first time.

According to Kozak, one of the main takeaways from the even was that Seabridge's "primary focus remains on securing a joint-venture (JV) partnership on the KSM project with a large-cap gold or copper miner which management expects to complete in the near-term."

Ideal JV Structure

Seabridge said the ideal JV structure would be a two-phased approach, with a Phase I partner earn-in (less than 10% of the project) funding a Bankable Feasibility Study (BFS) at a cost of about CA$150 million over two years. The Phase II earn-in (total 51-65% of the project) would be comprised of the partner making a construction go-ahead decision, securing more than 50% of the KSM project's initial CAPEX requirement within the JV in a non-recourse way net to Seabridge (offtake, project debt, etc.), and the partner sole-funding the front-end of the majority of the remaining initial CAPEX requirement.

"Seabridge’s primary focus remains on securing a joint-venture partnership with a large-cap gold or copper miner, which management expects to complete in the near-term," Kozak wrote. "Seabridge noted that receiving its 'substantially started' designation from the British Columbia provincial government, that affirms its Environmental Assessment Certificate (EAC) over the life of the KSM project, was a major de-risking event from the perspective of the company's potential large-cap joint-venture partners."

Discussions Continue

Kozak noted the company is in JV partnership discussions with both large-cap gold and large-cap copper miners, with the potential copper JV-partners considering future production expansion scenarios at KSM from the 195 kilotons per day (ktpd) outlined in the 2022 Pre-Feasibility Study (PFS) to up to 400 ktpd.

"Over its +20-year history, approximately CA$1 (billion) has been spent at the KSM project (exploration, permitting, economic studies, early-stage construction, etc.)," Kozak wrote. "At present, BC Hydro is constructing the switching station at Treaty Creek that will eventually connect the KSM project site to province’s existing low-cost hydro-sourced Northwest Transmission Line (NTL)."

Kozak said his reiterated price target of US$36/CA$45 "has a bias to the upside."

"Our target is derived via a 1.0x NPV7.5% multiple on the KSM project and the assumption that Seabridge attracts a 50% JV-partner on industry standard terms," he wrote.


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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. As of the date of this article, officers 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. 

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Disclosures for Cantor Fitzgerald, Seabridge Gold Inc., November 21, 2024

The opinions, estimates and projections contained in this report are those of Cantor Fitzgerald Canada Corporation. (“CFCC”) as of the date hereof and are subject to change without notice. Cantor makes every effort to ensure that the contents have been compiled or derived from sources believed to be reliable and that contain information and opinions that are accurate and complete; however, Cantor makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions which may be contained herein and accepts no liability whatsoever for any loss arising from any use of or reliance on this report or its contents. Information may be available to Cantor that is not herein. This report is provided, for informational purposes only, to institutional investor clients of CFCC, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited. This report is issued and approved for distribution in Canada, Cantor Fitzgerald Inc., a member of the Investment Industry Regulatory Organization of Canada ("IIROC"), the Toronto Stock Exchange, the TSX Venture Exchange and the CIPF. This report is has not been reviewed or approved by Cantor Fitzgerald & Co., a member of FINRA. This report is intended for distribution in the United States only to Major Institutional Investors (as such term is defined in SEC 15a-6 and Section 15 of the Securities Exchange Act of 1934, as amended) and is not intended for the use of any person or entity that is not a major institutional investor. Major Institutional Investors receiving this report should effect transactions in securities discussed in the report through Cantor Fitzgerald & Co.

Non US Broker Dealer 15a-6 disclosure: This report is being distributed by (CF Canada/CF Europe/CF Hong Kong) in the United States and is intended for distribution in the United States solely to “major U.S. institutional investors” (as such term is defined in Rule15a-6 of the U.S. Securities Exchange Act of 1934 and applicable interpretations relating thereto) and is not intended for the use of any person or entity that is not a major institutional investor. This material is intended solely for institutional investors and investors who Cantor reasonably believes are institutional investors. It is prohibited for distribution to non-institutional clients including retail clients, private clients and individual investors. Major Institutional Investors receiving this report should effect transactions in securities discussed in this report through Cantor Fitzgerald & Co. This report has been prepared in whole or in part by research analysts employed by non-US affiliates of Cantor Fitzgerald & Co that are not registered as broker-dealers in the United States. These non-US research analysts are not registered as associated persons of Cantor Fitzgerald & Co. and are not licensed or qualified as research analysts with FINRA or any other US regulatory authority and, accordingly, may not be subject (among other things) to FINRA’s restrictions regarding communications by a research analyst with a subject company, public appearances by research analysts, and trading securities held by a research analyst account.

Potential conflicts of interest The author of this report is compensated based in part on the overall revenues of Cantor, a portion of which are generated by investment banking activities. Cantor may have had, or seek to have, an investment banking relationship with companies mentioned in this report. Cantor and/or its officers, directors and employees may from time to time acquire, hold or sell securities mentioned herein as principal or agent. Although Cantor makes every effort possible to avoid conflicts of interest, readers should assume that a conflict might exist, and therefore not rely solely on this report when evaluating whether or not to buy or sell the securities of subject companies. Disclosures as of November 21, 2024 Cantor has provided investment banking services or received investment banking related compensation from Seabridge Gold Inc. within the past 12 months. The analysts responsible for this research report do not have, either directly or indirectly, a long or short position in the shares or options of Seabridge Gold Inc. The analyst responsible for this report has visited the material operations of Seabridge Gold Inc. (KSM and Iskut). No payment or reimbursement was received for the related travel costs.

Analyst certification The research analyst whose name appears on this report hereby certifies that the opinions and recommendations expressed herein accurately reflect his personal views about the securities, issuers or industries discussed herein. Definitions of recommendations BUY: The stock is attractively priced relative to the company’s fundamentals and we expect it to appreciate significantly from the current price over the next 6 to 12 months. BUY (Speculative): The stock is attractively priced relative to the company’s fundamentals, however investment in the security carries a higher degree of risk. HOLD: The stock is fairly valued, lacks a near term catalyst, or its execution risk is such that we expect it to trade within a narrow range of the current price in the next 6 to 12 months. The longer term fundamental value of the company may be materially higher, but certain milestones/catalysts have yet to be fully realized. SELL: The stock is overpriced relative to the company’s fundamentals, and we expect it to decline from the current price over the next 6 to 12 months. TENDER: We believe the offer price by the acquirer is fair and thus recommend investors tender their shares to the offer. UNDER REVIEW: We are temporarily placing our recommendation under review until further information is disclosed. Member-Canadian Investor Protection Fund. Customers' accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request.





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