Drilling Expands Mineralization, IDs New Gold Targets at Yukon Project

Source: Streetwise Reports 08/08/2024

Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) says its core drilling program at its 3 Aces project in the Yukon is expanding known mineralized zones in the Central Core Area (CCA) and identifying new targets.

Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) announced that its core drilling program at its 3 Aces project in Canada’s Yukon Territory is expanding known mineralized zones in the Central Core Area (CCA) and identifying new targets.

The company said a second helicopter-portable reverse circulation drill has begun evaluating historical prospects on the property outside the CCA that show similar characteristics.

“Our team is recognizing the favorable characteristic details of gold-bearing zones conforming to our new geological model across the 3 Aces Project,” Chairman and Chief Executive Officer Rudi Fronk said in a release. “The principal patterns that localize gold in the Central Core Area are being recognized broadly across the property. We remain confident that this year’s work will move the project towards resource delineation while also increasing the prospective size of the 3 Aces opportunity.”

Fieldwork at 3 Aces this year includes drilling, geophysical surveys, surface mapping, and reclamation efforts.

The 35,700-hectare 3 Aces property features orogenic zones of gold, some boasting grades exceeding 5 grams per tonne (g/t), and Seabridge’s opportunity there, management said, is “to find a large surface deposit of unusually attractive grade in a receptive, secure jurisdiction.”

The ‘New 3 Aces Exploration Model’

The “new 3 Aces exploration model” predicts continuity of mineralization, including high-grade gold, localized along the limbs of second-order folds, the company said.

Mineralized zones are best expressed on these fold limbs at the contacts between phyllite units and coarse interbedded sandstone and conglomerate. Brittle fracturing and arsenopyrite-bearing quartz veins and breccias at these contacts are the preferred host to gold on the zones that crop out in the CCA, Seabridge noted.

The exploration model predicts continuity of these gold traps under cover in the CCA. Extensions of several F2 folds in the CCA are being investigated with early drilling and Seabridge said it has encountered several zones of favorable arsenopyrite-bearing veins and breccias on these projected fold limbs as expected in the model.

Analysts at the Cantor Fitzgerald “firmly believe that achieving the ‘substantially started’ designation status is the final de-risking event needed for KSM to secure a large-cap joint-venture partner on attractive terms,” wrote Kozak, who reiterated his Buy rating for the stock and a target of CA$45 per share.

“These zones are likely to expand the size of previously recognized gold-bearing zones in the CCA,” the company said.

Drilling continues at 3 Aces and at Seabridge’s Iskut project in the Golden Triangle, and assay results are expected to be available shortly, Seabridge said.

“Regionally, surface mapping and sampling are finding evidence of F2 folds in unexplored areas of the property,” the company said in Wednesday’s release. “Initial work on several regional targets has pinpointed arsenopyrite-bearing quartz veins and breccias along fold limbs that mimic the gold zones in the CCA.”

Exploration continues at these targets, and drilling is now underway. Several new targets are also being developed that may better explain some large gold-in-soil anomalies and other historical exploration results.

“This ongoing regional work is providing Seabridge with strong evidence of a potential district-scale opportunity at 3 Aces,” the company said.

Seabridge said it believes the characteristics of the project are “indicative of an orogenic gold project consistent in formation with other orogenic gold deposits in the vicinity and around the world.”

Milestone Reached for KSM Flagship

Last month, the company announced it had received its “substantially started” designation from the British Columbia government for its 100%-owned flagship KSM project in British Columbia’s Golden Triangle.

Seabridge has worked toward fulfilling the requirements needed to earn the designation since acquiring the project in 2001, and the company’s stock went up on the news.

“This is a significant regulatory milestone for the KSM Project, positioning it to become a multigenerational economic anchor for northwestern B.C.,” said Fronk. “This decision provides the regulatory assurance we have needed to move forward with joint venture discussions for the KSM Project.”

Finding a joint venture partner for KSM tops the company’s list of goals for the year.

In an updated research note, Cantor Fitzgerald analyst Mike Kozak noted that the substantially started decision de-risks KSM for any such possible partnerships.

Analysts at the firm “firmly believe that achieving the ‘substantially started’ designation status is the final de-risking event needed for KSM to secure a large-cap joint-venture partner on attractive terms,” wrote Kozak, who reiterated his Buy rating for the stock and a target of CA$45 per share.

Seabridge also recently announced its first mineral resource estimate (MRE) for the Bronson Slope deposit at its 100%-owned Iskut project 30 kilometers by air from KSM in the Golden Triangle.

It found an Inferred Resource of 517.3 million tonnes (Mt) at 0.33 g/t gold (Au) for 5.4 million ounces (Moz), 0.09% copper (Cu) for 1.06 billion pounds, and 2.7 g/t silver (Ag) for 45 Moz.

‘Bull Case for Gold Remains Intact’

Gold hit its highest price ever of US$2,483.35 last month, and some believe it is already in a bull market. After a recent upleg, it has cooled and was US$2,384.05 on Wednesday.

Bloomberg Senior Commodity Strategist Mike McGlone has predicted that it will only be “a matter of time” before gold hits US$3,000.

According to analysts at J.P. Morgan, the “bull case for gold remains intact.”

“Gold’s resurgence has come earlier than expected, as it further decouples from real yields,” said Gregory Shearer, head of base and precious metals strategy at J.P. Morgan. [OWNERSHIP_CHART-700]

“We have been structurally bullish (on) gold since the fourth quarter of 2022, and with gold prices surging past US$2,400 in April, the rally has come earlier and has been much sharper than expected. It has been especially surprising given that it has coincided with Fed rate cuts being priced out and U.S. real yields moving higher due to stronger labor and inflation data in the U.S.,” Shearer said.

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 1.41%.

Reuters reports that institutions own about 52% of the company. According to Reuters, Friedberg Mercantile Group Ltd. owns 13.18%, National Bank of Canada owns 5.09%, Van Eck Associates Corp. owns 4.19%, Kopernik Global Investors, L.L.C. owns 3.67%, Paulson & Co. Inc. owns 2.33%, and Sprott Asset Management LP owns 2.21%.

According to Reuters, there are 88.75 million shares outstanding, while the company has a market cap of CA$1.81 billion and trades in a 52-week range of CA$12.62 and CA$23.48.

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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.
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( Companies Mentioned: SEA:TSX; SA:NYSE.MKT, )