Seabridge Gold Applies to the BC Government for Substantially Started Status for its KSM Project

Rhea-AI Summary

Seabridge Gold's subsidiary, KSM Mining ULC, has applied for Substantially Started Status for its KSM Project, with the EAC deadline set for July 29, 2026. The company has spent over $997 million since acquiring the project in 2001, with $805 million spent after the EAC issuance in July 2014. Since 2021, $444 million has been invested in construction, focusing on infrastructure development. The project holds the third largest undeveloped copper resource and the largest gold resource globally, making it crucial for the transition to a greener future. Seabridge Chairman and CEO Rudi Fronk expressed gratitude to the BC EAO, First Nations, local workforce, contractors, and indigenous partners for their support, as well as financial backing from Sprott Resource Streaming and Royalty Corp. and Ontario Teachers' Pension Plan.

Insights

Market Research Analyst

The application by KSM Mining ULC for Substantially Started Status is a strategic move that can have significant implications for Seabridge Gold's long-term operations. The KSM Project is a major asset with the third largest undeveloped copper resource and the largest gold resource globally. Copper's designation as a critical mineral by BC and Canada underscores its importance in the transition to sustainable energy practices, potentially increasing the project's value due to rising demand for materials used in electric vehicles and renewable energy infrastructure.

From a market perspective, the substantial investment of over $997 million since 2001 and specifically the $444 million on construction since 2021, indicates a strong commitment to advancing the project. This level of investment can be seen as a positive signal to investors, reflecting the company's confidence in the project's viability. The support from Sprott Resource Streaming and Royalty Corp. and Ontario Teachers' Pension Plan, amounting to US$375 million, further validates the project's potential from a financial standpoint.

However, the reliance on the BC EAO's decision introduces an element of regulatory risk. A positive outcome would ensure the continuation of the project without the need to reapply for a new EAC, thus avoiding potential delays and additional costs. Conversely, a negative decision could impact Seabridge's stock as it may signal uncertainties regarding the project's future. Stakeholders should monitor the review process closely, as it will likely influence Seabridge's operational timeline and financial forecasting.

Environmental Policy Expert

The environmental aspect of the KSM Project is crucial, as mining activities are often subject to stringent regulatory frameworks due to their potential impact on ecosystems. The British Columbia Environment Assessment Office (BC EAO) plays a pivotal role in this context, as its assessment and the subsequent decision can either facilitate or hinder the project's progression.

Seabridge Gold's emphasis on permanent infrastructure development, such as hydroelectric power infrastructure and fish habitat compensation projects, aligns with environmental sustainability goals and could be seen as a proactive approach to meeting regulatory standards. The collaboration with local communities, indigenous partners and the acquisition of support letters from various stakeholders, including the Nisga'a Nation and municipal leaders, is indicative of the company's efforts to ensure social license to operate, which is increasingly important in resource extraction industries.

For investors, the environmental policies and practices of Seabridge Gold are significant, as they can affect the company's reputation, operational efficiency and ability to secure future permits. A successful outcome with the BC EAO would not only secure the project's status but also demonstrate Seabridge's capability to manage environmental risks, which could have positive implications for investor confidence and the company's social capital.

Financial Analyst

The financial aspects of Seabridge Gold's application for Substantially Started Status are multifaceted. The financial support from major investors such as Sprott Resource Streaming and Royalty Corp. and Ontario Teachers' Pension Plan is a strong endorsement of the KSM Project's economic prospects. This external funding reduces the financial strain on Seabridge Gold's balance sheet, allowing for a more aggressive development timeline without excessively diluting shareholder value through additional equity financing.

The $444 million spent on early construction activities since 2021 is a significant capital outlay, which needs to be carefully evaluated in terms of its impact on the company's cash flow and return on investment. Given the size of the project and the capital already invested, the potential for substantial future revenues could be a major driver for Seabridge's stock performance, contingent on the commencement of production.

Investors should consider the long-term nature of mining investments, where the time from project inception to production can span decades. The KSM Project, in particular, being a multi-generational mine, represents both an opportunity for sustained returns and exposure to long-term risks, including commodity price fluctuations and operational challenges. The financial implications of achieving Substantially Started Status are therefore significant, as it could signal a transition from development to production, marking a critical milestone in the project's life cycle and potentially affecting Seabridge's market valuation.

Toronto, Ontario--(Newsfile Corp. - January 17, 2024) - Seabridge Gold (TSX: SEA) (NYSE: SA)announced today that its wholly owned subsidiary, KSM Mining ULC ("KSM Co"), has applied to the British Columbia Environment Assessment Office ("BC EAO") for Substantially Started Status for its 100% owned KSM Project.

Under the B.C. Environmental Assessment Act, a project's environmental assessment certificate ("EAC") expires if the project has not been substantially started by the deadline specified in its EAC. However, the B.C. Minister of Environment and Climate Change Strategy or Associate Deputy Minster (the "Minister") may determine that a project has been 'substantially started' before the deadline, in which case the EAC remains in effect for the life of the project. KSM's current EAC deadline is July 29, 2026. In determining whether a project has been substantially started, the Minister assesses on a project-specific basis whether sufficient permanent on-site physical improvements have been completed to warrant the designation. Examples of B.C. mining projects designated as 'substantially started' include Galore Creek, Kemess and Kitsault.

KSM Co. has spent over $997 million since acquiring the KSM Project in 2001, of which $805 Million has been spent after the issuance of the EAC in July 2014. Since 2021, when Seabridge made the decision to commence early construction activities, $444 Million has been spent on KSM Project construction, focusing on the development of permanent infrastructure on site which will be required to operate the multi-generational mine. The KSM Project has the third largest undeveloped copper resource in the world as well as the largest gold resource. Copper has been designated as a critical mineral required by BC and Canada to assist in the transition to a greener future and KSM is poised to make a significant contribution to this need.

Seabridge Chairman and CEO Rudi Fronk stated: "We look forward to working with the BC EAO and First Nations on the review of our application. The permanent physical improvements we have made to the KSM site are truly impressive. Since launching our Early construction program three years ago, a proposed mine development that only existed on paper is now taking physical shape on the ground with roads and bridges, permanent living facilities for our personnel, hydroelectric power infrastructure and new fish habitat compensation projects. This rapid transformation could not have been accomplished without our local work force, contractors and indigenous partners which has met and exceeded our expectations. Additionally, this work would not have been possible without the financial support of Sprott Resource Streaming and Royalty Corp. and Ontario Teachers' Pension Plan who collectively provided US$375 million in funding for these activities."

Mr. Fronk added: "Finally, I want to personally thank the Nisga'a Nation, the Gitxsan Hereditary Chiefs office, BC Hydro and the municipal leaders of Terrace, Smithers, Stewart, Hazelton, and the Regional District of Kitimat Stikine for their letters of support that have been filed with our application."

About Seabridge Gold

Seabridge holds a 100% interest in several North American gold projects. Seabridge's principal asset, the KSM project, and its Iskut projects are located in Northwest British Columbia, Canada's "Golden Triangle", the Courageous Lake project is in Canada's Northwest Territories, the Snowstorm project in the Getchell Gold Belt of Northern Nevada and the 3 Aces project is in the Yukon Territory. For a full breakdown of Seabridge's Mineral Reserves and Mineral Resources by category please visit the Seabridge's website at http://www.seabridgegold.com.

Neither the Toronto Stock Exchange, New York Stock Exchange, nor their Regulation Services Providers accepts responsibility for the adequacy or accuracy of this release.

ON BEHALF OF THE BOARD
"Rudi Fronk"
Chairman & C.E.O.

For further information please contact:
Rudi P. Fronk, Chairman and C.E.O.
Tel: (416) 367-9292 • Fax: (416) 367-2711
Email: info@seabridgegold.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/194505

FAQ

What is the EAC deadline for KSM Project?

The EAC deadline for KSM Project is July 29, 2026.

How much has Seabridge Gold spent on the KSM Project since acquiring it in 2001?

Seabridge Gold has spent over $997 million on the KSM Project since acquiring it in 2001, with $805 million spent after the EAC issuance in July 2014.

What is the significance of the KSM Project in terms of resources?

The KSM Project holds the third largest undeveloped copper resource and the largest gold resource globally.

Who provided financial support for the KSM Project activities?

Sprott Resource Streaming and Royalty Corp. and Ontario Teachers' Pension Plan collectively provided US$375 million in funding for the KSM Project activities.