This should further derisk the asset and support the company's efforts to attract a potential joint venture partner to advance it, noted a Red Cloud Securities report.
Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) received the substantially started status for its KSM copper-gold project from the British Columbia (B.C.) government, reported Red Cloud Securities Vice President and Mining Analyst Taylor Combaluzier in a July 29 research note.
"We view this news very positively and believe the substantially started designation is a significant milestone for the company," Combaluzier wrote.
On this news, Red Cloud reiterated its CA$46.50 per share target price on the Canadian explorer, trading at the time of the report at about CA$22.43 per share, noted the analyst.
The difference between these two prices implies a 107% upside for investors.
Seabridge remains a Buy.
Combaluzier explained that now, due to the substantially started status, the environmental assessment certificate (EAC) on KSM will remain valid throughout the life of the project. KSM, in B.C.'s Golden Triangle, is one of the world's largest undeveloped copper-gold projects.
Seabridge completed the necessary requirements for the designation well before the deadline of July 2026. Doing so eliminated the risk of the US$225 million ($225M) secured note from Sprott and the Ontario Teachers' Pension Plan being "put back to KSMCo at the initial investment plus a premium," the analyst pointed out.
Also, receipt of the substantially started status, highlighted the analyst, removed the regulatory overhang on Seabridge and KSM. This should make the project more attractive to prospective joint venture partners and, therefore, increase Seabridge's chances of securing a partner.
Since acquiring KSM in 2001, Seabridge spent about CA$1 billion on it, including work on power, roads, bridges, a camp, and a fish habitat.
The company invested CA$800M of the total after receiving the EAC in 2014.
The mining company has two major catalysts ahead, noted Combaluzier.
One is signing an agreement with a joint venture partner to advance KSM. The second is securing funding, about CA$50M, to cover the costs of construction at the project.
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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. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. 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.
Disclosures for Red Cloud Securities, Seabridge Gold Inc., July 29, 2024
Disclosure Requirement Red Cloud Securities Inc. is registered as an Investment Dealer and is a member of the Canadian Investment Regulatory Organization (CIRO). Red Cloud Securities registration as an Investment Dealer is specific to the provinces of Alberta, British Columbia, Manitoba, Ontario, Quebec, and Saskatchewan. We are registered and authorized to conduct business solely within these jurisdictions. We do not operate in or hold registration in any other regions, territories, or countries outside of these provinces. Red Cloud Securities bears no liability for any consequences arising from the use or misuse of our services, products, or information outside the registered jurisdictions. Part of Red Cloud Securities Inc.'s business is to connect mining companies with suitable investors. Red Cloud Securities Inc., its affiliates and their respective officers, directors, representatives, researchers and members of their families may hold positions in the companies mentioned in this document and may buy and/or sell their securities. Additionally, Red Cloud Securities Inc. may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services. Red Cloud Securities Inc. has prepared this document for general information purposes only. This document should not be considered a solicitation to purchase or sell securities or a recommendation to buy or sell securities. The information provided has been derived from sources believed to be accurate but cannot be guaranteed. This document does not take into account the particular investment objectives, financial situations, or needs of individual recipients and other issues (e.g. prohibitions to investments due to law, jurisdiction issues, etc.) which may exist for certain persons. Recipients should rely on their own investigations and take their own professional advice before investment. Red Cloud Securities Inc. will not treat recipients of this document as clients by virtue of having viewed this document.
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Company Specific Disclosure Details
The analyst has visited the head/principal office of the issuer or has viewed its material operations.The issuer paid for or reimbursed the analyst for a portion, or all of the travel expense associated with a visitAnalysts are compensated through a combined base salary and bonus payout system. The bonus payout is determined by revenues generated from various departments including Investment Banking, based on a system that includes the following criteria: reports generated, timeliness, performance of recommendations, knowledge of industry, quality of research and client feedback. Analysts are not directly compensated for specific Investment Banking transactions.
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