3-D Model Points Co. Closer to Gold at Yukon Project

Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) announced that the 2023 drill results from its wholly owned 3 Aces project in the Yukon Territory contributed to an updated three-dimensional view of the site.

Last year's 7,759 meters of core and reverse circulation drilling at the project was combined with results from historical drill programs; the model indicates the likelihood of continuous mineralization between isolate deposits and the Central Core Area (CCA) of the site, noted Red Cloud Securities analyst Taylor Combaluzier in an updated research note on Thursday.

Concentrated at the contact between sandstones and phyllites, the mineralization gets wider and higher grade where "these contacts have gone through second-generation folding."

"We believe these results help Seabridge in understanding the geological parameters controlling Au (gold)-rich mineralization, which could lead to further target delineation and eventually a maiden resource estimate at the project," wrote Combaluzier, who has rated the stock a Buy with a target price of CA$46.50 per share. "The company continues to evaluate other potential traps for gold deposition in the system and plans to follow up on these targets and expand existing gold zones."

The results "successfully confirmed the key parameters controlling gold deposition on the property and provided a clear set of directions for follow-up evaluation and resource delineation," the company said in a release.

Newsletter writer Chris Temple wrote recently that he is "table-pounding bullish" on Seabridge.

Seabridge acquired the project in 2020. Previous operators had faced "challenges" connecting and extending target zones in the Central Core Area, Chairman and Chief Executive Officer Rudi Fronk said.

"Our team's comprehensive and detailed work has recognized controls that appear to have resolved this continuity issue," Fronk said. "This year's breakthrough now gives us the tools to identify additional promising targets and expand known gold zones at 3 Aces. We now see a path for bringing the property's extensive gold mineralization into resource configurations."

The company has said the project could host higher-grade gold than its flagship project, KSM, in British Columbia's Golden Triangle. And Jim Rickards, editor of the Strategic Intelligence newsletter, has called the KSM project "one of the most attractive gold-copper acquisition targets in the world."

The Catalyst: One of the 'Richest' Deposits in the World

Three different 3 Aces target areas — Spades, Hearts, and Clubs — were drill-tested to evaluate different settings where the company's model predicted gold continuity.

Some results released from the 2023 drilling at 3 Aces by Seabridge include:

• Hole 3A23-355 intersected 1.93 grams per tonne gold (g/t Au) over 3.1 meters, including 1.7 g/t Au over 6.8 meters, 1.7 g/t Au over 12.6 meters, and 3.9 g/t over 2.7 meters.
• Hole 3A23-377 intersected 7.59 g/t Au over 7.2 meters, including 46.4 g/t Au over 1 meter.
• Hole 3A-362 intersected 2.69 g/t over 10.6 meters and 7.91 g/t Au over 3.1 meters.
• Hole 3A23-381 intersected 0.81 g/t Au over 111.2 meters.

The 35,700-hectare project consists of more than 1,700 claims in a readily accessible part of the southeastern Yukon.

The company said it believes the project could be "consistent with some of the biggest and richest gold deposits in the world."

KSM is the world's largest undeveloped gold project by reserves and resources, analyst Lucas N. Pipes of B. Riley Securities has noted. 

It's on the eastern margin of the Selwyn Basin, with sedimentary rocks extending across the Yukon and host to several base metal deposits, the company said.

Observations from the surface and the drilling results are providing better control of the stratigraphy and location of the F2 structures at 3 Aces, the company said.

"Where these fold structures encounter the significant competency differences between phyllite and sandstone, open spaces are created through dilation of the rock mass, providing a trap for the deposition of gold-bearing massive quartz veins or quartz-arsenopyrite breccia," Seabridge noted. "These fold features are also recognized outside of the preferred stratigraphic contact but generally contain narrower intervals at lower gold grades. Following these marginal grade fold features toward stratigraphic contacts is expected to lead to new discoveries."

Updated Resource Estimates at KSM

Last week, the company released updated mineral resource estimates for KSM's Kerr and Iron Cap deposits as it continues to look for a joint venture in the gold and copper project in British Columbia's Golden Triangle.

Seabridge said inferred mineral resources increased by 5.9 million ounces (Moz) Au, 3.3 billion pounds of copper (Cu), 55.4 Moz silver (Ag), and 51 million pounds of molybdenum. Indicated mineral resources increase by 300,000 ounces Au, 200 million pounds Cu, 3.5 Moz Ag, and 2 million pounds of molybdenum.

At long-term prices of US$2,000 an ounce Au and US$3.25 per pound Cu and the updates to Kerr and Iron Cap, Kozak noted consolidated Measured & Indicated and Inferred resources across the entire KSM project increased by 1% and 9%.

Newsletter writer Chris Temple wrote recently that he is "table-pounding bullish" on Seabridge.

"Even some 'experts' in the precious metals space are WAY behind in their understanding of just what kind of world-class monster Seabridge's flagship KSM Project in British Columbia's Golden Triangle has become," wrote Temple. "I believe that once [Chairman and Chief Executive Officer Rudi] Fronk & Co. have tied up their one (or more?) development partners, we'll see a major rerating of Seabridge shares."

Seabridge took an important step for KSM last month by applying for "substantially started" status for the mine. Getting the designation could help in its JV partner search.

KSM is the world's largest undeveloped gold project by reserves and resources, analyst Lucas N. Pipes of B. Riley Securities has noted. He said Seabridge has "a clear vision for a potential partnership agreement" for the project, rating the stock a Buy with a target price of US$60 per share. 

Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 3% of the company. According to Reuters, CEO and Chairman Rudi P. Fronk owns 1.45% of the company with 1.23 million shares.

Reuters reports that institutions own 54% of the company. According to Reuters, Friedberg Mercantile Group Ltd. owns 13.79%, National Bank of Canada owns 5.34%, Van Eck Associates Corp. owns 4.13%, Kopernik Global Investors, L.L.C. owns 3.22%, Paulson & Co. Inc. owns 2.44%, and Sprott Asset Management L.P. owns 2.43%.

According to Reuters, there are 84.79 million shares outstanding with 82.22 million free float traded shares, while the company has a market cap of CA$1.07 billion and trades in a 52-week range of CA$12.75 and CA$21.78.

Important Disclosures:

1. Seabridge Gold Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
3. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

For additional disclosures, please click here.