Calling the new preliminary economic assessment for Seabridge Gold Inc.’s (SEA:TSX; SA:NYSE.MKT) KSM “a big improvement for a unique massive Au-Cu project,” Paradigm Capital believes the company will continue to build value for investors.
“We believe Seabridge provides investors with ownership in one of the most strategically compelling and prolific copper‐gold projects in the world, the KSM project in BC, at one of the lowest market caps per ounce to the investor,” analyst Don MacLean wrote in an Oct. 26 research report.
Seabridge announced the new PEA for KSM in an Oct. 6 press release. The company also announced discovery of “a previously unknown deposit with initial gold and copper grades among the best found to date on the KSM Project” in an Oct. 18 press release, and on Oct. 26 announced it has identified “a prospective new porphyry copper-gold system with a potentially intact epithermal precious metals zone at its top” at its wholly owned Iskut project, also in British Columbia.
Following release of the new PEA on KSM, Paradigm did a “full model rebuild” of its investment thesis for Seabridge, according to MacLean, noting, “Over the past 3 years, Seabridge has continuously improved its massive KSM project in Northwestern B.C., finding deeper and higher-grade mineralization, derisking it with permitting and operational redesign.”
The new PEA, MacLean wrote, “outlines further game-changing improvements.”
Among improvements in the economics of the KSM project, as outlined in the Paradigm report, is a boost in the “after-tax IRR from 8.0% to 10.0%. . .a substantial uplift for a mega project.” MacLean also noted that KSM’s “life-of-mine total cash costs dropped sharply to $179/oz from $277/oz, mostly because Deep Kerr’s higher proportion of copper boosts project copper credits to $1,328/oz from $795/oz.”
In addition, MacLean wrote that, “the shift from 70% open-pit mining (tonnes) to 78% underground block caving [is] transformational.”
Arguing that investors should consider owning Seabridge “sooner rather than later,” the Paradigm analyst cited the “current gold price setback” as a “buying opportunity,” a shortage of “large new undeveloped gold and copper project in safe jurisdictions with attractive economics,” and an expectation that 2017 will “offer potentially exciting exploration into a new higher-grade target at KSM.”
MacLean also commented on developments at Iskut, stating, “We like the exploration thesis underlying the investment.”
Read what other experts are saying about:
Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.
1) Tracy Salcedo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Seabridge Gold Inc. The companies mentioned in this article were not involved in any aspect of the article preparation. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview or article until after it publishes.
( Companies Mentioned: SEA:TSX; SA:NYSE.MKT,
from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/pub/na/17156