Gold Co. Secures Project Financing for Massive BC Project
Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) enters into a bought-deal financing and a separate agreement with a strategic investor for a total of US$100 million as it works to push its massive flagship KSM Project in British Columbia forward. Find out which expert thinks the company is a "BIG" idea for exposure to gold and copper.
Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) announced it has entered into a bought-deal financing worth US$80 million and a separate agreement with a strategic investor for US$20 million for a total of US$100 million as work continues at its massive flagship KSM Project in British Columbia.
RBC Capital Markets and Cantor Fitzgerald Canada Corp. are the co-lead underwriters and joint book runners on behalf of a syndicate of underwriters to purchase, on a bought deal basis, 6.54 million common shares of the company at US$12.25 per share for aggregate gross proceeds of about US$80 million, the company announced in a release.
At the same time, Seabridge said it has entered into a subscription agreement with a strategic investor to purchase 1.64 million common shares "on substantially the same terms" as the bought-deal offering for an aggregate gross proceeds of about US $20 million.
"We have committed to approximately US$150 million in work at our KSM project in 2025 to continue moving it forward and to maintain our commitment to our indigenous partners and local communities," Chairman and Chief Executive Officer Rudi Fronk said. "The work includes critical path items to position KSM for a future partnership and establish the path of future work."
The underwriters of the bought-deal offering will have an option to purchase up to an additional 15% of the offered shares issued in the offering at the issue price to cover overallotments, exercisable in whole or in part, at any time until 30 days after the closing of the offering, the company noted.
The financing is expected to close on or about February 19, based on necessary approvals from the Toronto Stock Exchange and the New York Stock Exchange.
The money will go toward making the payments to B.C. Hydro for completion of the KSM switching station, preparing for a KSM bankable feasibility study and financing other costs associated with ongoing activities at the gold-copper project, and for general corporate purposes.
Newsletter author Peter Epstein reported on the company in January, writing to get "BIG" exposure to gold and copper in a safe and prolific jurisdiction, "Seabridge Gold is one of my favorite ideas."
KSM's Substantially Started Designation
Last year, the company announced two challenges in British Columbia Supreme Court seeking review of KSM's "Substantially Started" (SS) designation.
Seabridge said that in the hearing on both petitions, the petitioners have to establish that the minister's decision to grant SS status was "unreasonable, not simply incorrect," Seabridge said. "The legislation leaves the Minister with a lot of discretion in making a 'substantially started' determination, making the threshold of 'unreasonable' even harder to meet."
Newsletter author Peter Epstein reported on the company in January, writing to get "BIG" exposure to gold and copper in a safe and prolific jurisdiction, "Seabridge Gold is one of my favorite ideas."During the application process for the designation, Seabridge said it submitted letters from "representatives of the three largest indigenous peoples in the area of the KSM project, the Nisga'a Lisims government, the Tahltan central government and the Gitxsan hereditary chiefs office, as well as the village of Hazelton, the district of New Hazelton, the town of Smithers, the district of Stewart, the city of Terrace, (and) the regional district of Kitimat-Stikine, all expressing strong support for a positive SS determination for the KSM project."
"It is clear that the new petitioners do not represent the interests of northwest British Columbia or Canada," Fronk said at the time. "We are very confident there is ample evidence that the (SS) determination was reasonable and appropriate."
No Immediate Effect on Determination
Seabridge has noted that the SS designation is a major milestone for the company and KSM, which newsletter author Jay Taylor of J Taylor's Gold, Energy & Tech Stocks has called "the largest undeveloped gold and copper project in the world!"
The determination is unaffected and will remain in place if it is successfully defended, the company said.
Epstein wrote that "management, lawyers and consultants are confident the objections have little chance of meaningfully slowing" the KSM project.
Red Cloud Analyst Taylor Combaluzier, in an updated research note on December 3, 2024, wrote that his firm was "optimistic that these challenges will ultimately prove unsuccessful because the arguments by the petitioners were already considered during the SS application phase and the broad discretion the minister has in making an SS determination."
Combaluzier rated the stock a Buy with a CA$48.50 per share target price, a 146% lift from its close when he wrote.
"We note that these challenges have no immediate effect on the SS determination, and a verdict on the matter could take a year or more," he wrote.
The Catalyst: Gold Wobbles During Unprecedented Bull Market
Gold has been in an uptrend for 16 months, having rallied by 63% since October 2023, according to a Reuters report by Clyde Russell. It has accelerated since Trump was re-elected, with an increase of 16% since mid-November.
It hit a record high of US$2,942.70 on Tuesday, and experts believe it could still go higher.
However, the market did see some renewed volatility Friday as "weak consumption data highlights growing risks for the U.S. economy," reported Kitco's Neil Christensen.
Streetwise Ownership Overview*
Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT)
*Share Structureas of 2/14/2025Source: RefinitivSome experts still believe hitting the US$3,000 milestone, or higher, is possible.
According to a report by Anmol Choubey for Reuters, Phillip Streible, chief market strategist at Blue Line Futures, said gold's 45-degree rally since December might create a self-fulfilling prophecy of further price increases, potentially leading it to raise its forecast to around US$3,250 or US$3,500.
Ownership and Share Structure
Refinitiv provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 3% of the company. According to Refinitiv, CEO and Chairman Rudi P. Fronk owns 1.37%.
Refinitiv reports that institutions own about 48% of the company. According to Reuters, Friedberg Mercantile Group Ltd. owns 12.72%, National Bank of Canada owns 3.81%, Van Eck Associates Corp. owns 3.76%, Kopernik Global Investors, L.L.C. owns 3.31%, and Paulson & Co. Inc. owns 2.25%.
According to Refinitiv, there are about 91.95 million shares outstanding, while the company has a market cap of CA$1.74 billion and trades in a 52-week range of CA$12.62 and CA$28.39.
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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.As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Seabridge Gold Inc. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.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.