Bill Cara

Cara Community GSM 50: Seabridge Gold

Seabridge Gold (TSX: SEA) (NYSE: SA) reviewed 2020-09-30

Market Cap:       $1.25B

Share Price:        $18.89

Shares outstanding: 66 million

Cash on hand: $40 M

Credit facility: $37.1 M (Q2 20)

Long-term Debt: None

Current operations: No

Administrative  Expenses: $10 M per year fixed cost

Insider holdings: stated at 40% by CEO and Chairman Mr Rudi Fronk

Website: seabridgegold.net

Investor Presentation: https://seabridgegold.net/corppres.php

Location: principal mine (KSM) located in British Columbia, Canada; nearest town: Stewart. KSM is located near to Pretium Resources’ operational Brucejack mine.

Fully permitted: Yes.

Type: Open-pit and blockade; Gold-copper porphyry.

Other assets: Courageous Lake (NW Territories); Iskut (BC), Snowstorm (Nevada, US).

Infrastructure: well-developed, near to Highway 37; Canadian and BC governments invested some $700 million to develop highway, power grid and two ports; hydro-electric power.

Company seeks a JV partner to build the KSM mine at estimated $6 Billion cost; expected payback is four years; mine life estimated 40+ years; potential world-class Tier 1 mine; 38 M oz. gold proven and probable reserves, with 10 Billion pounds copper.

Geo-physical technical work continues.

Investor sentiment: Seabridge literally sits on a gold mine but needs a major (on the order of a Freeport Mac, Barrick, or Newmont) to build and operate the mine. In our view, if a major is announced with a commensurate commitment to build, stock would likely pop into 20s or 30s.

Bottom line:

  • Rudi Fronc is a very good promoter who has stuck with this company for years
  • A good play in a rising gold price environment; likely a lower-weight addition to a diversified portfolio; deserves consideration as such
  • I have never held a position, but considering it