Canada's Seabridge Gold (TSX: SEA; NYSE: SA) is buying Pretium Resources' (NYSE: PVG) Snowfield property in northwest British Columbia for $100 million in cash, a 1.5% net smelter royalty related to all production and a $20 million future contingent payment.
The Toronto-based miner says the acquisition of Snowfield, immediately adjacent to its 100%-owned KSM gold-copper project in northeast B.C., opens up new development opportunities for its flagship asset.
Work is already underway to determine how to integrate Snowfield into a new KSM mine plan, Seabridge Gold's chairman and CEO, Rudi Fronk, said in the statement.
Fronk noted the acquisition would bring Seabridge a number of major benefits. "It adds appreciably to our ounces of gold per share, our most important measure of shareholder value, at a cost of approximately $3 per ounce," he said.
Fronk also noted that Snowfield's measured and indicated mineral resources have the potential to significantly increase KSM's proven and probable reserves.
The project's mineral resource is 25.9 million ounces of gold in the measured and indicated category and a further 9 million ounces in the inferred category as well as substantial copper resources.
"This transaction provides us the opportunity to immediately realize the value of Snowfield, an undeveloped asset that we believe is not reflected in our share price," Pretivm chief executive officer, Jacques Perron, said in a separate statement.
It has been a busy day for Seabridge Gold, having also entered into an agreement with Cantor Fitzgerald Canada Corporation, as lead underwriter and sole book-runner, to purchase 6.1 million common shares of the company at $17.25 per share. Seabridge raised a total of $105 million, which it will use to fund the acquisition of the Snowfield project.
This article first appeared in MINING.com, part of Glacier Resource Innovation Group.