Seabridge raising US$105 million to fund Pretium deal

Seabridge Gold Inc. [SEA-TSX; SA-NYSE] said Friday December 4 that it is raising US$105 million from the bought deal sale of 6.1 million common shares priced at US$17.25 each to an underwriting syndicate led by Cantor Fitzgerald Canada.

Proceeds from the share sale will be used to finance the purchase of the Snowfield property in northwestern British Columbia from Pretium Resources Inc. [PVG-TSX]. The deal was announced in a separate press release on Friday.

Seabridge shares eased 8.3% or $2.08 to $22.89 on volume of 141,384. The shares are trading in a 52-week range of $28.48 and $7.37.

Pretium shares fell 0.82% or 12 cents to $14.48 on volume of 393,623. The shares trade in a 52-week range of $19.13 and $6.25.

Seabridge Gold holds a 100% interest in several North American gold resource projects. The company’s principal assets are the KSM and Iskut properties near Stewart, B.C., and the Courageous Lake gold project in the Northwest Territories. KSM is one of the world’s largest undeveloped gold projects as measured by reserves. It is estimated to contain 38.8 million ounces of gold and 10.2 billion pounds of copper in proven and probable reserves.

Snowfield is located about 65 km north of Stewart  and 21 km south of the former Eskay Creek gold mine. The project shares a common boundary with Seabridge’s KSM Project and hosts a near-surface, low-grade, bulk tonnage porphyry-style gold deposit with gold-copper, molybdenum and rhenium mineralization.

According to a February, 2011 estimate, Snowfield hosts a measured and indicated resource of 25.9 million oz gold, 75.8 million oz silver, 2.98 billion lbs copper and 1.1 billionlbs molybdenum, and 258.3 million lbs rhenium.

Under the agreement with Seabridge, Pretium will receive US$100 million in cash, payable on closing and a 1.5% net smelter royalty on all production from Snowfield. Pretium will also receive a US$20 million contingent cash payment, payable within six months of the earlier of KSM Mining (or a parent company) completing a bankable feasibility study, which includes reserves from Snowfield, or the start of production from any part of Snowfield.

Pretium said US$15 million of the deferred US$20 million payment represents an advance NSR royalty payment and shall offset amounts payable under the NSR royalty.