The Conversation (0)
Seabridge Gold got an early Christmas present last Friday when its British Columbia-based KSM project got the go-ahead from Canada’s federal government. According to Chairman and CEO Rudi Fronk, the next step for the company will be to find a partner.
Seabridge Gold (TSX:SEA,NYSE:SA) got an early Christmas present last Friday when its British Columbia-based KSM project got the go-ahead from Canada’s federal government.
Leona Aglukkaq, minister of the environment, the Canadian Northern Economic Development Agency and the Arctic Council, said in a statement that the project “is not likely to cause significant adverse environmental effects when the mitigation measures described in the Comprehensive Study Report are taken into account.”
The company has been moving towards this point since 2009, and this past summer took a big step forward when it received an Environmental Assessment Certificate from the BC government. However, it hit a bit of bump following the tailings pond breach at Imperial Metals’ (TSX:III) copper-gold Mount Polley mine.
“Definitely Mount Polley slowed down the federal approval,” said Rudi Fronk, chairman and CEO of Seabridge. “Originally we were expecting to have it sometime in October. However, with the Mount Polley situation, the government decided to extend the public review period.”
That said, he’s not too bothered by the delay. “One of the good things about Mount Polley [is that] it really did give us a chance to get out in front of people and explain our tailings management design. It gave us a chance to actually show how robust our design is,” he noted.
In terms of what’s next for Seabridge, Fronk said that while the company already has early stage construction permits from the BC government, construction is not its first priority. “Our next big step will be to find a partner that’s going to build this project with us. This is a project that is of such a scale that there are very few companies in the world that have the financial and the technical resources to build a mine this size, and we’re definitely not one of them, as we’ve said all along,” he explained.
Indeed, KSM’s proven and probable reserves sit at 38.2 million ounces of gold, 9.9 billion pounds of copper, 191 million ounces of silver and 213 million pounds of molybdenum, making it the largest undeveloped gold-copper mine in the world. Over a 52-year mine life, it is expected to put out 130,000 tonnes per day of ore.
Fronk didn’t give a timeline for finding the partner that will help take the project to that point, but he did say Seabridge has been speaking with potential allies since 2008, and is confident that with federal government approval in hand, talks will become easier. “It’s a big de-risking [that] big companies pay attention to,” he said, adding that it will also likely help Seabridge get a good deal for shareholders.
All in all, said Fronk, “it was a nice Christmas present for our team. The amount of work that had to be done to get through the process is just amazing.”
At close of day Monday, shares of Seabridge were sitting at $8.10 on the TSX and $6.97 on the NYSE. They peaked earlier in the day at $9 and $7.71, respectively.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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