Seabridge Gold Inc. June 25 said it signed a letter of intent to sell its interest in the Red Mountain gold property near Stewart, B.C. to BonTerra Resources Inc. for C$7.0 million in cash, plus a C$5.0 million convertible debenture. The transaction, which has a total value of C$12 million, is expected to close at the end of September.
Seabridge’s interest in the Red Mountain property consists of 47 claims totaling 17,125.2 hectares, or 41,272 acres. The high-grade deposit ( > 0.25 ounces per ton) has 400,000 ounces in the measured and indicated categories, plus an additional 248,000 ounces in the inferred resource category.
Seabridge’s principal assets are the KSM property also located near Stewart and the Courageous Lake gold project located in Northwest Territories.
“BonTerra is in a strong position to take our Red Mountain project forward,” said Seabridge President and CEO Rudi Fronk. “They have generated excellent exploration results on contiguous ground, which could increase the size of the high-grade Red Mountain project and enhance its economics.
“We elected to take part of the proceeds of this proposed sale in the form of a convertible debenture so that we can continue to participate in Red Mountain’s potential success. Cash proceeds from this transaction will enable Seabridge to continue advancing KSM and Courageous Lake toward feasibility without share dilution.”
BonTerra President and CEO Mitch Adam said the acquisition brings a known, high-grade deposit together with the promising high-grade exploration results the junior has obtained from its immediately adjacent Willoughby property.
“We think this combination creates the opportunity to develop a sustainable and profitable mining operation within a low-risk political jurisdiction,” Adam said.
In addition to the sale price, BonTerra also agreed to replace the C$1 million reclamation deposit, plus accrued interest, currently held in trust in favor of the BC Ministry of Mines and Energy or, subject to Seabridge’s agreement, to reimburse Seabridge for the reclamation deposit and to enter into a standard assignment and assumption agreement for the reclamation deposit.
