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Seabridge Gold to spend $150 million to bring northwest B.C. gold mine project to “substantially started”

Spending made possible by investment by Sprott and Ontario Teachers’ Pension Fund
Workcamp at Seabridge Gold’s KSM project in northwest B.C. (Seabridge Gold photo)

Seabridge Gold is planning to spend $150 million this year to bring its KSM gold-copper mine project up to “substantially started” status.

By doing so, the company, which has offices in Smithers, hopes secure its environmental certificate, further de-risk the project and attract the partner it has been seeking since the beginning.

“Ultimately, that is our objective, is to joint venture,” said Brent Murphy, Seabridge vice-president of environmental affairs. “Seabridge does not have the financial or the technical wherewithal to take [the project] all the way through to construction and operations.”

The fieldwork required to advance the project is being made possible by an investment by Sprott Resource Streaming and Royalty Corp. and the Ontario Teachers’ Pension Plan.

Last week, the company announced it had sold a $225,000 “secured note” to Sprott and the Ontario Teachers that will give the investors a 60 per cent return on silver revenue from the mine. Seabridge currently estimates silver will account for three per cent of the mine’s total revenue.

According to Murphy, the investment will allow the company to put the infrastructure in place that will allow them to update their preliminary feasibility study (PFS).

This includes road construction and a deal with BC Hydro to connect the proposed mine site to the utility’s Northwest Transmission Line.

“That means KSM will be powered by green energy, hydropower, which is fantastic,” Murphy said. “So, we don’t have to rely on generators going forward. It’ll help minimize our carbon footprint.”

Work is already underway he said.

“We’re working very closely with BC Hydro now. They’re actually out in the field now starting to work on they’re declaring work on this switching station site.

The updated PFS will add the Snowfield Deposit (a.k.a. the East Mitchell Deposit) Seabridge just purchased from Petivm at the end of 2020 to the project.

“It’s our belief that by bringing that deposit into the mine plan, we’ll have a significant improvement on the project financing, or on the project finances and rate of return and we think that’ll generate a lot of interest,” he said.

READ MORE: Seabridge buys Snowfield gold deposit from Pretivm

The project, touted as “world’s largest undeveloped gold project by resources,” originally received its Environmental Assessment Certificate in 2014. The certificate has been extended twice since then and the project must be substantially started in order to ensure the continuity of the certificate throughout the life of the project.

The company currently estimates a lifespan of 52 years once the mine is in production.

Murphy is confident all of these factors will enhance the company’s position in joint venture negotiations.

He said the company is currently engaged in discussions with a number of potential senior partners who could see the project through to construction and operations.

He did not say whether one of those potential partners is Australian gold mining giant Newcrest, which has in the past three years acquired two major mining operations in northwest B.C., the Red Chris mine in 2019, and most recently, just a couple of weeks ago, Brucejack Mine.

Murphy added Seabridge intends to match the $150 million 2022 expenditure in 2023 as well, noting that 75 to 85 per cent of that money will go to local and Indigenous contractors.

“By the end of 2023, we will have invested $800 million into the project, which is obviously a substantial amount of money,” he said. “And we are working closely with our Indigenous partners, specifically the Nisga’a and Tahltan, as well as our other indigenous groups, the Gitanyow, Gitxsan and Tsetsaut Skii km Lax Ha.”

MORE MINING NEWS: Newcrest completes acquisition of Pretivm Resources

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Pardon me, are you still trying to sell that mine? Or? Yes, ultimately, that is our objective is to joint venture. So yeah, cool. theeword does not have financial or the technical wherewithal to take it all the way through to construction and operations.

Thom Barker

About the Author: Thom Barker

After graduating with a geology degree from Carleton University and taking a detour through the high tech business, Thom started his journalism career as a fact-checker for a magazine in Ottawa in 2002.
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