In KSM and Courageous Lake, Seabridge Gold Inc. (TO:SEA) has explored and developed two world-class assets with a combined resource of 90.3Moz, of which 63.1% is in the measured and indicated categories. Both are in North America, both have the potential to form the basis of large, long-life, low-cost mines and both have been the subject of pre-feasibility studies conducted in 2012. KSM will be the subject of an updated PFS, which is scheduled for imminent release. In the meantime, investors can buy shares in SEA at a resource multiple (market cap/total attributable resource) of c US$7/oz, which is less than the global average cost of discovery of such a resource.
Kerr-Sulphurets-Mitchell (KSM)
Comprising 64.0Moz in total (of which 76.6% is in the measured and indicated categories), KSM is the largest undeveloped gold deposit in North America and among the top 10 in the world, on a par with Pascua-Lama, Donlin, Pueblo Viejo, Boddington and Penasquito. A pre-feasibility study (PFS) conducted in 2012 demonstrated the potential for a 508koz per year open pit mine (851koz in the first seven years) subsequently configured for block caving over c 50 years for an initial capital cost of US$5.3bn and ongoing operating costs of US$141/oz net of by-products. According to the PFS, the post-tax NPV of the project is US$2.5bn (at US$1,330/oz Au, US$3.45/lb Cu and US$25.20/oz Ag and a 5% discount rate) and the IRR 11.5% (before tax). KSM received its state Environmental Assessment Certificate in July 2014 and final federal approval in December 2014. Since then, Seabridge has been granted permits for the first 2.5 years of construction and is working on the balance. An update to the PFS is expected imminently, while subsequent drilling has been successful in identifying high-grade zones beneath the surface porphyry deposits (Deep Kerr and the Iron Cap Lower zone deposit).
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