Seabridge raises US$225M to move KSM project closer to construction

Seabridge Gold (TSX: SEA) (NYSE: SA) is raising US$225 million (approximately $285 million) through a a secured note that is exchangeable at maturity for a silver royalty on its 100% owned KSM project located in northern British Columbia.

Proceeds of the financing, under which Sprott Resource Streaming and Royalty Corp. and Ontario Teachers' Pension Plan are the joint note buyers, will be used to advance the KSM project, including ongoing physical works on the property.

Seabridge has set out three main objectives for KSM that it intends to achieve with the latest funding:

• Achieve the 'substantially started' designation, which ensures the continuity of the KSM project's approved Environmental Assessment Certificate (EAC) for the life of the project;
• Complete key tasks that support construction readiness and will shorten the construction period, once a construction decision has been made;
• Enhance the KSM proposition in joint venture negotiations by securing the EAC, further de-risking the project, and accelerating the construction timetable.

Under the BC Environmental Assessment Act, a project's EAC is subject to expiry if the project has not been 'substantially started' by the deadline specified in the EAC. However, if the BC Minister of Environment and Climate Change Strategy determines that a project has been 'substantially started' before the deadline, the EAC remains in effect for the life of the project. KSM's EAC deadline is July 29, 2026.

"We are delighted to have Sprott and Ontario Teachers' as partners at KSM. Although KSM is best known for its mineral reserves and resources of gold and copper, the project also hosts a large inventory of silver. In KSM's latest technical report, silver accounts for less than 3% of projected KSM revenues, with the transaction representing a very small charge against the project's future total revenues," Rudi Fronk, Seabridge's chairman and CEO, commented.

"Furthermore, the transaction does not require share dilution which furthers our long-standing strategy of providing the industry's best leverage to gold as measured by ounces of gold per share," he added.

At maturity, the company's new project partners will use all of the principal amount repaid on maturity to purchase a 60% gross silver royalty, upon either the start of commercial production at KSM or the 10-year anniversary (or 13 years if they put the note back into the project). Prior to that, the note would bear interest at 6.5% per annum.

Seabridge has the option to buy back 50% of the silver royalty, once exchanged on or before three years after commercial production has been achieved.

KSM is one of the largest undeveloped gold projects in the world by reserves, and is currently Canada's largest gold-copper-silver development project. An updated preliminary feasibility study (PFS) estimates total proven and probable reserves of 38.8 million oz. gold, 10.2 billion lb. copper and 183 million oz. silver in 2.2 billion tonnes grading 0.55 g/t gold, 0.21% copper and 2.6 g/t silver.

Seabridge is also looking to reshape the project by integrating the Snowfield porphyry deposit that it acquired from Pretium Resources (TSX: PVG) in December 2020.

For more information, visit www.seabridgegold.net