Seabridge Gold PFS puts focus on green energy

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Seabridge Gold Inc. [SEA-TSX, SA-NYSE] has released the results of an updated preliminary feasibility (PFS) study for its 100%-owned KSM project in northern British Columbia.

Located in B.C.’s Golden Triangle region, KSM ranks as one of the world’s largest undeveloped gold projects as measured by reserves.

A key feature of the new PFS is a reduction in the total capital estimate to US$9.6 million from US$10.5 billion, with increases from inflation and mill expansion being wholly-offset by the elimination of block cave mining from the PFS mine plan, the company said.

Seabridge pegs the KSM after-tax NPV (net present value) at US$7.9 billion.

Seabridge shares tracked lower on the news, easing 1.6% or 29 cents to $17.34 in light trading. The shares currently traded in a 52-week range of $28 and $16.58.

The 2022 PFS envisages an open pit mine operation that is scheduled to operate for 33 years. Ore delivery to the mill is increased from an initial 130,000 tonnes per day to 195,000 tonnes in year three.

The flotation mill will produce a gold/copper/silver concentrate for transport by truck to a nearby seaport at Stewart, B.C., for shipment to Pacific Rim smelters.

The company said the 2022 PFS shows a considerably more sustainable and profitable mining operation than its 2016 predecessor, now consisting of an open pit mine plan that includes the Mitchell, East Mitchell and Sulphurets deposits only.

“It said the many design improvements over the 2016 PFS include a smaller environmental footprint, reduced waste rock production, reduced green house gas emissions by electrification of the mine haul fleet, a 50% interest in mill throughput, and the elimination of capital-intensive block cave mining.’’

“The mine plan is simplified to bring total capital down below 2016 estimates despite inflation by reducing sustainable capital,’’ said Seabridge Chairman and CEO Rudi Fronk. “We have accomplished this by eliminating underground mine development, which is deferred for future years,’’ he said.

“Important steps have also been taken to make the project less dependent on oil, especially diesel fuel, which, is an inflationary hot spot, and likely to remain so,’’ he said. “We have done this by maximizing use of low cost, green hydroelectric energy.

Electrification of the haul truck fleet with trolley assist reduces carbon emissions and overall mine energy costs by replacing diesel withy low cost energy from electricity.

Improvements in the latest PFS include a 22% increase in proven and probable gold reserves to 47.3 million ounces from 38.8 million. This is due to higher gold grades added from the East Mitchell deposit.

Measured and indicated resources at KSM are estimated at 5.4 billion tonnes grading 0.51 g/t gold, 0.16% copper, 2.4 g/t silver and 63 ppm molybdenum. That adds up to 88.3 million ounces of gold, 19.4 billion pounds of copper, 414 million ounces of silver and 742 million pounds of molybdenum.

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