June 30, 2023
Seabridge Gold Inc. (TSX:SEA, BUY, C$45.25 target, Taylor Combaluzier and David A. Talbot) has closed its previously announced US$150M Sprott Streaming agreement as per which Sprott was granted a 1.2% NSR on its KSM Au-Cu project in BC (read note). The transaction has been restructured as a sale of a secured note to Sprott, designed to be repaid at maturity by NSR. The note bears a 6.5% annual interest to be paid quarterly prior to the maturity date, which is defined as earlier of either commercial production being achieved, or March 24, 2032. The proceeds from this transaction along with the US$225M raised from Sprott and Ontario Teacher’s Pension Plan in 2022 (read more), are expected to help Seabridge in: 1) achieving the ‘substantially started’ designation for the KSM project, ensuring the continuity of its approved Environmental Assessment Certificate (EAC), 2) complete tasks required for construction readiness, and 3) enhance the KSM proposition in its ongoing JV discussions. We view this royalty agreement positively as it avoids shareholder dilution in the near term and should allow the company to reach the substantially started designation ahead of the 2026 deadline for the current EAC. Read more
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Seabridge Gold Inc. – TSX:SEA – 1,2
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