Mining News: Northern Neighbors: Seabridge agrees to buy SnipGold, Iskut project

Seabridge Gold Inc. April 19 reported that it has entered into a definitive agreement to acquire all of the issued and outstanding common shares of SnipGold Corp. SnipGold’s primary asset is the Iskut project, a roughly 286-square-kilometer (110 square miles) contiguous block of ground located near Seabridge’s KSM project in the in the Golden Triangle region of northwestern British Columbia. “The board of directors of Seabridge believes the proposed transaction will enhance our exploration potential in an area where our technical team has built up significant expertise,” said Seabridge Chairman and CEO Rudi Fronk. Iskut hosts Bronson Slope, a porphyry deposit with 186.9 million metric tons of measured and indicated resources averaging 0.36 grams per metric ton (2.16 million ounces) gold; 0.122 percent (502.7 million pounds) copper; and 2.19 g/t (13.17 million oz.) silver. “Our KSM project has geological similarities to SnipGold’s Iskut project, and the two properties are near enough to each other to offer synergies in terms of personnel and infrastructure,” Fronk added. Pursuant to the agreement, SnipGold shareholders will receive 1/63rd of a common share of Seabridge in exchange for each SnipGold share, representing an implied offer price of C29.1 cent per SnipGold share. This is a 115 percent premium based on the trailing 30-day volume weighted average trading price of SnipGold and Seabridge shares. SnipGold Chairman Patrick Soares said, “We are pleased by the premium that shareholders are receiving from Seabridge, which we think is in recognition of not only the exploration efforts of SnipGold management, but the underlying value of SnipGold’s property. Seabridge has the ability to fund the project going forward with minimal dilution to its shareholder base.” To be effective, the arrangement will require approval by at least 66 2/3 percent of the votes cast by SnipGold shareholders. All directors and officers of SnipGold, who hold roughly 24 percent of the SnipGold shares, have entered into voting and support agreements with Seabridge. A special meeting to vote on the arrangement is expected to take place in June.

- Shane Lasley