Seabridge Gold Inc.'s (SEA:TSX; SA:NYSE.MKT) Courageous Lake project has robust economics, significant resources and reserves, and lots of exploration upside, noted a Red Cloud Securities report. Learn why the mining investment bank considers the spinout a positive move.
Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) plans to spin out its 100%-owned Courageous Lake gold project located in Canada's Northwest Territories into a company named Valor Gold, reported Taylor Combaluzier, vice president and mining analyst at Red Cloud Securities, in a Dec. 17 research note.
"In the current gold price environment, we believe this potential spinout could likely help unlock more value for Seabridge shareholders," Combaluzier wrote.
Red Cloud maintained its CA$74.50 per share (CA$74.50/share) target price on the Canadian development-stage mining company, trading at about CA$40.17/share at the time of Combaluzier's report, the analyst noted.
The differences between these prices suggest a potential return for investors of 85%.
Seabridge remains a Buy.
Red Cloud views the Courageous Lake spinout as positive because it believes that the market is undervaluing the project within Seabridge and that the company's current share price mostly reflects its flagship KSM project in British Columbia, Combaluzier wrote. In Red Cloud's post-financing net asset value per share discounted at 5% (NAVPS5%) for Seabridge of CA$111.80, Courageous Lake comprises about 13%, or CA$14.75/share.
The Spinco Gold Valor will have a dedicated management team and board, which is now being formed, reported the analyst. Potentially, Valor Gold shares will be distributed to Seabridge shareholders, and the spinco will be listed on a major exchange. Also, Valor Gold may complete a private financing to raise capital for 2026-2027.
Combaluzier highlighted Courageous Lake's robust economics in the 2024 prefeasibility study. The calculated after-tax NPV5% is US$523 million (US$523M), and the internal rate of return (IRR) is 20.6%, using a gold price of US$1,850 per ounce (US$1,850/oz). At a higher gold price of US$2,500/oz, the after-tax NPV5% and IRR increase to US$1.1 billion (US$1.1B) and 38.2%, respectively.
As for the Courageous Lake operation, the PFS outlined it producing an average of 201,000 ounces (201 Koz) of gold per year over a 12.6-year life of mine, at a cash cost of US$863/oz and at an all-in sustaining cost of US$999/oz. Initial capex is US$747M.
"Notably, the 2024 preliminary economic assessment demonstrated the potential to extend mine life for another 15.9 years at 205 Koz of gold per year," wrote the analyst
The project also has significant resources and reserves, Combaluzier noted. The resource includes 11,000,000 ounces (11 Moz) of gold in the Measured and Indicated category and 3.3 Moz of gold in the Inferred category. Proven and Probable reserves are 2.8 Moz of 2.6 grams per ton gold, "which would make it one of the highest-grade, open-pit gold projects in Canada," according to the analyst.
Courageous Lake offers exploration upside, too, Combaluzier wrote. To date, less than 15% of the nearby satellite pits and 500-square-kilometer property have been explored. The spinco, Valor Gold, intends to further explore for satellite deposits via targeted drilling.
Meanwhile, the analyst reported, Seabridge's primary focus is advancing KSM. Near-term work there includes completing the power switching station and finalizing a feasibility study, for which the company has the funding, given its CA$100M financing earlier in 2025. Also, regarding KSM, Seabridge is continuing its talks with prospective joint venture partners.
Upcoming potential catalysts for Seabridge include KSM development updates, expected on an ongoing basis; announcement of a KSM joint venture with a major partner, likely to happen in 2026; a mineral resource estimate for the Snip North deposit at the Iskut project in Q1/26; and the Courageous Lake spinout.
According to Combaluzier's report, Seabridge management owns 2.32% of the company. Major shareholders are Pan Atlantic Bank and Trust with 16.66%, Van Eck Associates Corp. with 7.84%, Kopernik Global Investors with 6.66%, FCMI Parent Co. with 4.77%, Tidal Investments LLC with 2.94% and the Canadian Imperial Bank with 2.04%.
Seabridge has 104.3 million basic shares outstanding. Its market cap is CA$4.2B. Its 52-week range is CA$13.44-43.50/share.
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SeaBridge Gold is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$3,000 and US$6,000.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, December 17, 2025
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