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JR BOI

Seabridge Gold (Sa)

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I’ve been holding a stock for a number of years called Seabridge Gold (SA).  They are a Canadian based gold exploration company whose strategy is to focus on NA deposits and grow reserves ownership on a per share basis.  They are not a producer but work to discover deposits and move them to “reserve” status with the hopes of selling their assets to a Major producer either outright or through a JV.


 

Their largest discovery to date is a property called Kerr, Sulphurets and Mitchell (“KSM”) and is located near Stewart BC.  They claim it to be the world’s largest undeveloped Gold/copper property.  They have devoted millions of dollars exploring their KSM project and now book reserves of 38.2 million ounces of gold and 10 billion pounds of copper.  They claim favorable logistics including < 6 cents/kwh hydro about 30 km away and a year round operating seaport in Stewart with a 55 year operating life.   They are well into the planning and permit process anticipating a buyout and tout a fully loaded $598/oz operating cost.


 

As I mentioned I’ve been buying into this company for the last 6 years and have watched their stock rise for $3/share all the way to $36 and back to about $11 today.  From purely an economic perspective, the numbers are compelling but they have yet to land a buyer or JV partner.  I imagine it is due in large part to the $5B estimate it will take to get the mine up and running.  Given I’m down here in Boise, I do not hear much about this operation and wondering if any of my buddies up north have any insight on Seabridge Gold, the KSM discovery, or mining activity/support in the Stewart BC area?

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Right now, raising money for mining projects is difficult. Most sources of funds are now highly risk averse - and mining is a risky business by its nature. I have long liked Seabridge, but they suffer from the same problem that all smaller non-producers do - its difficult to raise funds. I do think this will change in the future, but it is not going to happen tomorrow.

 

Someday the small mining stocks will again surge, and I am sure Seabridge will be part of this, but not in the immediate future.

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Chris, their biggest advantage they have is that their resources are in a polticially stable environment of NA.  It seems to me this would appeal to a major such as Newmont.  in fact they acquired this property from Newmont quite some time ago and as the glaciers have receeded, they have exposed some very favorable deposits.

 

JR

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I have to agree with Reno, I bought and sold SA from $12 to $30 for a couple of years. I used predefined sell marks and just bought on dips. I had dumb-luck, but became smart enough to realize that I was just gambling and sold off all my gold stocks. The ETFs really scared me as more and more claims surfaced; suggesting the shortage of physical gold to outstanding shares... When the music stops I'll weigh my gold. 

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Still riding Seabridge........I see they took an equity stake in a company called Paramount Gold (Nevada based Junior) as a means to increase the value in their Grassy Mountain project.  Anyone have any insight on Paramount or the Grassy Mountain project Seabridge is developing? 

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No special insight - its a deposit best developed by underground mining, a series of fairly flat bedded epithermal deposits laid down by hot springs. The average grade is about 5 grams of gold per ton.

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