Mining News: Seabridge raises $22M to explore KSM, Iskut

Seabridge Gold Inc. April 28 announced the closing of a C$22 million flow-through financing. As a result, Seabridge issued 1.1 million flow-through shares at C$20 each, which is a 27.7 percent premium to the closing price on the day the offering was announced. Under Canada’s Income Tax Act, a flow-through financing allows mineral exploration companies to transfer their exploration expenses to individual investors that purchase the shares. Most exploration companies do not generate revenues, so they do not need the tax write off, however, the flow-through investor can apply his portion of the exploration expense to reduce or eliminate his tax liability. The exploration company must spend the flow-through dollars raised on a qualifying mineral project in Canada within two years of closing the financing. Seabridge is using the money raised with this financing to fund the 2017 exploration program at its KSM and Iskut projects in northwestern British Columbia. Seabridge Chairman and CEO Rudi Fronk noted that “This year’s exploration program includes drilling some of the most exciting targets in our history. We also aim to continue to improve the prospective economics of our KSM project.” Four of the zones at the KSM project – Kerr, Sulphurets, Mitchell and Iron Cap – contain 2.2 billion metric tons of proven and probable reserves averaging 0.55 grams per metric ton (38.8 million oz.) gold, 0.21 percent (10.2 billion pounds) copper, 2.6 g/t (183 million oz.) silver, and 42.6 parts per million (207 million lbs.) molybdenum. These reserves support a 53-year mine that would average 540,000 oz. of gold, 156 million lbs. of copper, 2.2 million oz. of silver, and 1.2 million lbs. of molybdenum annually, according to a prefeasibility study published in September. Iskut, about 30 kilometers (19 miles) northwest of KSM, is an earlier staged gold-silver project acquired by Seabridge in 2016. Seabridge closed a separate C$15.7 million financing in mid-April.

–SHANE LASLEY