Seabridge Gold Inc. (TSX:SEA) (NYSE:SA) announced today an updated
independent mineral resource estimate for the Deep Kerr Deposit at
its 100%-owned KSM Project in northwestern British Columbia, Canada
that now contains an inferred resource of 1.01 billion tonnes
grading 0.53% copper and 0.35 g/T gold (11.3 million ounces of gold
and 11.8 billion pounds of copper), an increase of 3.2 million
ounces of gold and 2.1 billion pounds of copper over last year’s
estimate.
Seabridge Chairman and CEO Rudi Fronk noted that
“the size of Deep Kerr continues to grow with no diminishment of
grade. Furthermore, we have not yet found the limits of the immense
mineralizing system that created Deep Kerr. In the three years
since its discovery, Deep Kerr has taken its place among the
world’s largest gold-copper deposits. The shape of the deposit
continues to support cost-effective block-cave underground mining
methods and the updated resource estimate has been carefully
constrained by this mining method.”
“The 3.2 million ounce increase in gold
resources more than offsets the 1.6 million share flow-through
financing completed in April 2015 that funded a significant portion
of the 2015 drill program. Growing ounces of gold per share remains
an important component of Seabridge’s corporate strategy,” added
Mr. Fronk.
The geological model for the Kerr deposit that
encompasses Deep Kerr is a north-south trending, steep westerly
dipping, tabular intrusive complex with a horizontal extent of
2,400 meters and a vertical extent of at least 2,200 meters. The
complex includes higher grade east and west limbs that may coalesce
near surface. The west limb is up to 500 meters thick, and the east
limb up to 300 meters thick. Last year’s drilling focused on the
west limb, successfully confirming continuity of mineralization, as
predicted by modeling, and extending the west limb dip projection
over 400 meters along a strike length of almost 500 meters. These
holes established the western limits of the system as a north-south
trending normal fault that placed unaltered fine-grained
sedimentary rocks against the mineralized intrusive complex. East
of this fault, the mineral system consists of several intrusive
bodies, emplaced into an Early-Jurassic sedimentary sequence, with
all these rocks containing varying copper and gold grades that
warrant further exploration.
Gold and copper grades were estimated by
Resource Modeling Inc. (“RMI”) using inverse distance weighting
methods within geologically constrained gold and copper grade
domains constructed for the Deep Kerr zone. Trend plane search
strategies were defined for four distinct structural domains.
Copper and gold domains were similar to those used in the
end-of-year 2014 resource model that was also prepared by RMI;
confirmation drilling during the 2015 campaign corroborated the
major controls on copper and gold distribution and the
predictability of the resource model.
The grade models were validated visually and by
comparisons with nearest neighbor models. The drill hole database
that was used for the estimate of the Deep Kerr mineral resources
consisted primarily of data collected by Seabridge from 72 core
drill holes totaling more than 67,000 meters completed between 2009
and 2015. RMI reviewed the quality assurance/quality control
protocols and results associated with the Seabridge drilling and
has concluded that the number and type of gold and copper standard
reference materials (standards, blanks, and duplicates) were
reasonable. Based on the performance of those standard reference
materials, RMI believes that the Seabridge drill samples are
reproducible and suitable for estimating mineral resources.
Historical drill hole results were used in conjunction with the 72
Seabridge core holes to estimate block grades for the upper portion
of the Deep Kerr resource.
Block net smelter return values (“NSR” values)
were calculated by Moose Mountain Technical Services using metal
recovery projection formulae developed by TetraTech from
metallurgical test work. This NSR value, stated in terms of
Canadian dollars, reflects metal prices, a US/Cdn currency exchange
rate of 0.83, and offsite transportation, smelting, and refining
charges.
Deep Kerr was treated as a potential block cave
(bulk underground) mining target. The lateral and vertical
continuity of the zone provides a geometric configuration that is
likely to be amenable to these mining methods. Seabridge has
retained Golder Associates, a leading industry expert in
underground mining, to undertake bulk underground mining studies
for Deep Kerr. Golder produced several block cave optimizations on
the block model prepared by RMI to establish separate draw point
elevations at various NSR draw point shut-offs. A Cdn$24 NSR
shut-off case generated four conceptual cave footprints that were
each extruded upward approximately 500 meters. Resources were
tabulated for each of the four hypothetical draw point elevations
using various NSR cut-off grades, which is a common industry
practice for this type of a deposit. A NSR cut-off value of Cdn$24
was used to tabulate resources, consistent with prior years use of
a US$20 cut-off value and a 0.83 US/Cdn$ exchange rate. Evaluation
of the economic potential of Deep Kerr was based on metal prices of
US$3.00 per pound of copper, US$1300 per ounce of gold, US$20
per ounce of silver, US$9.70 per pound of molybdenum together with
estimated metal recoveries from metallurgical test work. These
metal prices are generally in line with, or lower than, the metal
prices used by major mining companies for their current resource
disclosure for similar types of projects.
The Deep Kerr undiluted inferred mineral
resource at various NSR cutoff values are tabulated below:
Deep Kerr Undiluted Inferred Mineral
Resources |
|
|
|
|
|
|
|
|
|
|
NSR Cutoff(C$/tonne) |
Tonnes (000) |
CopperGrade (%) |
Copper(millions of bs) |
GoldGrade(g/t) |
Gold (000of ounces) |
SilverGrade(g/t) |
Silver (000of ounces) |
MolyGrade(ppm) |
Moly (000of lbs) |
8 |
1,570,700 |
0.41 |
14,193 |
0.29 |
14,645 |
1.8 |
90,898 |
24 |
83,048 |
12 |
1,455,200 |
0.43 |
13,791 |
0.31 |
14,504 |
1.8 |
84,214 |
25 |
80,182 |
16 |
1,309,200 |
0.46 |
13,273 |
0.32 |
13,469 |
1.8 |
75,765 |
26 |
75,022 |
20 |
1,168,000 |
0.50 |
12,871 |
0.34 |
12,768 |
1.9 |
71,349 |
27 |
69,505 |
24 |
1,008,200 |
0.53 |
11,777 |
0.35 |
11,345 |
2.0 |
64,829 |
27 |
59,996 |
28 |
831,600 |
0.58 |
10,631 |
0.38 |
10,160 |
2.1 |
56,147 |
28 |
51,320 |
32 |
692,300 |
0.63 |
9,613 |
0.40 |
8,903 |
2.1 |
46,742 |
28 |
42,723 |
The line with bolded values in the table
above represents the updated undiluted inferred mineral resource
tonnes, grade, and contained metal at Cdn$24 cut-off within four
footprints that were extruded approximately 500 meters vertically,
(similar to the procedure used in 2015, see link to Mar 23, 2015
NR). The tonnes, grade, and contained metal for the other NSR
cut-offs are shown to provide a relative sense of the distribution
of materials within the conceptual block cave shapes. Mineral
resources which are not mineral reserves do not have demonstrated
economic viability. Inferred mineral resources have a high degree
of uncertainty as to their existence, and their economic
feasibility. It cannot be assumed that all or any part of an
inferred resource will ever be upgraded to a higher category.
Resource estimates included herein were prepared
by RMI under the direction of Michael Lechner, who is independent
of Seabridge and a Qualified Person as defined by National
Instrument 43-101. Mr. Lechner is a highly-regarded expert in his
field and frequently undertakes independent resource estimates for
major mining companies. Mr. Lechner has reviewed and approved this
news release.
Seabridge is undertaking an update of the 2012
KSM Preliminary Feasibility Study (“PFS”), which is expected to be
completed later this year. In this update, Seabridge will restate
mineral resources for all of the zones at KSM using both open pit
and block-cave mining methods to constrain the resources. The
updated PFS will also include changes to key input parameters since
2012 including metal prices, currency exchange rates, labor rates
and energy costs as well as incorporate technology improvements and
engineering studies realised since 2012. In addition, the updated
PFS will incorporate a preliminary economic assessment of the
potential economic improvements resulting from the inclusion of the
Deep Kerr and Lower Iron Cap zones into KSM mine sequencing. It is
anticipated that the updated PFS will provide ongoing direction to
exploration and delineation drilling, engineering and optimization
studies and identify areas where continuing research could create
new value for the project.
Exploration activities by Seabridge at the KSM
Project have been conducted under the supervision of William E.
Threlkeld, Registered Professional Geologist, Senior Vice President
of the Company and a Qualified Person as defined by National
Instrument 43-101. An ongoing and rigorous quality control/quality
assurance protocol was employed during the 2015 program including
the submission of blanks and certified reference standards, in
addition all copper assays that exceeded 0.25% Cu were re-analyzed
using ore grade analytical techniques. Cross-check analyses are
conducted at a second external laboratory on at least 10% of the
samples. Samples were assayed at ALS Chemex Laboratory, Vancouver,
B.C., using fire assay atomic adsorption methods for gold and total
digestion ICP methods for other elements.
Seabridge holds a 100% interest in several North
American gold projects. The Company’s principal assets are the KSM
Project located near Stewart, British Columbia, Canada and the
Courageous Lake gold project located in Canada’s Northwest
Territories. For a full breakdown of Seabridge’s mineral reserves
and mineral resources by category please visit the Company’s
website at http://www.seabridgegold.net/resources.php.
All reserve and resource estimates
reported by the Corporation were calculated in accordance with the
Canadian National Instrument 43-101 and the Canadian Institute of
Mining and Metallurgy Classification system. These standards differ
significantly from the requirements of the U.S. Securities and
Exchange Commission. Mineral resources which are not mineral
reserves do not have demonstrated economic viability.
This document contains "forward-looking
information" within the meaning of Canadian securities legislation
and "forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995. This
information and these statements, referred to herein as
"forward-looking statements" are made as of the date of this
document. Forward-looking statements relate to future events or
future performance and reflect current estimates, predictions,
expectations or beliefs regarding future events and include, but
are not limited to, statements with respect to: (i) the estimated
amount and grade of mineral resources; (ii) the east and west limbs
of the Deep Kerr deposit coalescing near surface; (iii) exploration
being warranted in the east area of Deep Kerr; (iv) the shape of
the Deep Kerr deposit supporting block cave mining;
(v) the number and type of gold and copper
standard reference materials being reasonable and the Seabridge
drill samples being reproducible and suitable for estimating
mineral resources; (vi) the updated PFS being completed this year;
and (vii) the updated PFS providing ongoing direction to
exploration and delineation drilling, engineering and optimization
studies and identifying areas where continuing research could
create new value for the project. Any statements that express or
involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives or future events or
performance (often, but not always, using words or phrases such as
"expects", "anticipates", "plans", "projects", "estimates",
"envisages", "assumes", "intends", "strategy", "goals",
"objectives" or variations thereof or stating that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved, or the negative of any of these terms
and similar expressions) are not statements of historical fact and
may be forward-looking statements.
All forward-looking statements are based
on Seabridge's or its consultants' current beliefs as well as
various assumptions made by them and information currently
available to them. The principle assumptions are listed above, but
others include: (i) the presence of and continuity of metals at the
Project at modeled grades; (ii) the capacities of various machinery
and equipment; (iii) the availability of personnel, machinery and
equipment at estimated prices; (iv) exchange rates; (v) metals
sales prices; (vi) block net smelter return values; (vii)
conceptual cave footprints, draw points and heights; (viii)
appropriate discount rates; (ix) tax rates and royalty rates
applicable to the proposed mining operation; (x) financing
structure and costs; (xi) anticipated mining losses and dilution;
(xii) metallurgical performance; (xiii) reasonable contingency
requirements; (xiv) success in realizing proposed operations; (xv)
receipt of regulatory approvals on acceptable terms; and (xvi) the
negotiation of satisfactory terms with impacted Treaty and First
Nations groups. Although management considers these assumptions to
be reasonable based on information currently available to it, they
may prove to be incorrect. Many forward-looking statements are made
assuming the correctness of other forward looking statements, such
as statements of net present value and internal rates of return,
which are based on most of the other forward-looking statements and
assumptions herein. The cost information is also prepared using
current values, but the time for incurring the costs will be in the
future and it is assumed costs will remain stable over the relevant
period.
By their very nature, forward-looking
statements involve inherent risks and uncertainties, both general
and specific, and risks exist that estimates, forecasts,
projections and other forward-looking statements will not be
achieved or that assumptions do not reflect future experience. We
caution readers not to place undue reliance on these
forward-looking statements as a number of important factors could
cause the actual outcomes to differ materially from the beliefs,
plans, objectives, expectations, anticipations, estimates
assumptions and intentions expressed in such forward-looking
statements. These risk factors may be generally stated as the risk
that the assumptions and estimates expressed above do not occur,
but specifically include, without limitation: risks relating to
variations in the mineral content within the material identified as
mineral reserves or mineral resources from that predicted;
variations in rates of recovery and extraction; developments in
world metals markets; risks relating to fluctuations in the
Canadian dollar relative to the US dollar; increases in the
estimated capital and operating costs or unanticipated costs;
difficulties attracting the necessary work force; increases in
financing costs or adverse changes to the terms of available
financing, if any; tax rates or royalties being greater than
assumed; changes in development or mining plans due to changes in
logistical, technical or other factors; changes in project
parameters as plans continue to be refined; risks relating to
receipt of regulatory approvals or settlement of an agreement with
impacted First Nations groups; the effects of competition in the
markets in which Seabridge operates; operational and infrastructure
risks and the additional risks described in Seabridge's Annual
Information Form filed with SEDAR in Canada (available at
www.sedar.com) for the year ended December 31, 2014 and in the
Corporation's Annual Report Form 40-F filed with the U.S.
Securities and Exchange Commission on EDGAR (available at
www.sec.gov/edgar.shtml). Seabridge cautions that the foregoing
list of factors that may affect future results is not
exhaustive.
When relying on our forward-looking
statements to make decisions with respect to Seabridge, investors
and others should carefully consider the foregoing factors and
other uncertainties and potential events. Seabridge does not
undertake to update any forward-looking statement, whether written
or oral, that may be made from time to time by Seabridge or on our
behalf, except as required by law.
ON BEHALF OF THE BOARD
"Rudi Fronk" Chairman & C.E.O.
For further information please contact:
Rudi P. Fronk, Chairman and C.E.O.
Tel: (416) 367-9292 · Fax: (416) 367-2711
Email: info@seabridgegold.net
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