Seabridge Gold to Sell Residual Noche Buena Project Interest for US$10.12 Million
TORONTO, CANADA -- (Marketwire) -- 10/28/10 -- Seabridge Gold (TSX: SEA)(NYSE Amex: SA) announced today that it has agreed to sell its remaining interest in the Noche Buena project to Minera Penmont, S. de R.L. de C.V. ('Penmont') for US$10.12 million in cash. Closing is expected within the next 30 days. Penmont is a joint venture between Fresnillo plc. and Newmont USA Limited, a wholly owned subsidiary of Newmont Mining Corporation.
As background, in late 2008 Seabridge sold its 100% working interest in the Noche Buena project to Penmont for US$25 million in cash and a commitment by Penmont to pay Seabridge a further US$5 million upon commencement of commercial production from Noche Buena and a 1.5% net smelter royalty payable on all production from Noche Buena sold for US$800 per ounce of gold or greater. On closing of this transaction, Seabridge will no longer have any interests in the Noche Buena project.
Seabridge President and CEO Rudi Fronk said: 'The cash proceeds will be used to continue advancing our core projects, KSM and Courageous Lake, towards feasibility. One of the elements of our strategy is to fund our core projects through the sale of non-core assets such as Noche Buena in order to minimize common share dilution. We hope to make further asset sales over the next several months. Our aim is to increase our proven and probable gold reserves, which now stand at 30.2 million ounces, while maintaining a low number of outstanding shares, which now totals 42.3 million fully-diluted,' he said.
Seabridge holds a 100% interest in several North American gold projects. The Company's principal assets are the KSM property located near Stewart, British Columbia, Canada and the Courageous Lake gold project located in Canada's Northwest Territories. KSM is one of the world's largest undeveloped gold/copper projects. Proven and probable reserves for the KSM project (see news release dated March 31, 2010 for details) using a gold price of US$850 per ounce, a copper price of US$2.25 per pound are as follows:
KSM Proven and Probable Reserves
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Average Grades
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Reserve Tonnes Gold Copper Silver Molybdenum
Zone Category (millions) (gpt) (%) (gpt) (ppm)
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Mitchell Proven 570.6 0.64 0.17 2.95 58.0
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Probable 764.8 0.59 0.16 2.93 62.3
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Total 1,335.4 0.61 0.16 2.93 60.4
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Sulphurets Probable 142.2 0.61 0.28 0.44 101.8
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Kerr Probable 125.1 0.28 0.48 1.26 Nil
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Totals Proven 570.6 0.64 0.17 2.95 58.0
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Probable 1,032.1 0.56 0.22 2.38 60.2
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Total 1,602.7 0.59 0.20 2.58 59.4
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Contained Metal
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Gold Copper Silver Moly
Reserve Tonnes (million (million (million (million
Zone Category (millions) ounces) pounds) ounces) pounds)
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Mitchell Proven 570.6 11.7 2,101 54.1 73.0
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Probable 764.8 14.5 2,722 72.0 105.0
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Total 1,335.4 26.3 4,823 126.1 178.0
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Sulphurets Probable 142.2 2.8 883 2.0 31.9
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Kerr Probable 125.1 1.1 1,319 5.1 Nil
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Totals Proven 570.6 11.7 2,101 54.1 73.0
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Probable 1,032.1 18.4 4,924 79.1 137.0
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Total 1,602.7 30.2 7,024 133.1 209.9
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Exploration activities at KSM are being conducted by Seabridge personnel under the supervision of William E. Threlkeld, Senior Vice President of Seabridge and a Qualified Person as defined by National Instrument 43-101.
All reserve and resource estimates reported by the Corporation were calculated in accordance with the Canadian National Instrument 43-101 and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
This document contains 'forward-looking information' within the meaning of Canadian securities legislation and 'forward-looking statements' within the meaning of the United States Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as 'forward-looking statements' are made as of the date of this document. Forward-looking statements relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the amount of mineral reserves and mineral resources; (ii) any potential for the increase of mineral reserves and mineral resources, whether in existing zones or new zones; and (iii) further sales of assets. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as 'expects', 'anticipates', 'plans', 'projects', 'estimates', 'envisages', 'assumes', 'intends', 'strategy', 'goals', 'objectives' or variations thereof or stating that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.
All forward-looking statements are based on Seabridge's or its consultants' current beliefs as well as various assumptions made by them and information currently available to them. These assumptions include: (i) the presence of and continuity of metals at the Project at modeled grades; (ii) the capacities of various machinery and equipment; (iii) the availability of personnel, machinery and equipment at estimated prices; (iv) exchange rates; (v) metals sales prices; (vi) appropriate discount rates; (vii) tax rates and royalty rates applicable to the proposed mining operation; (viii) financing structure and costs; (ix) anticipated mining losses and dilution; (x) metallurgical performance; (xi) reasonable contingency requirements; (xii) success in realizing further optimizations and potential in exploration programs and proposed operations; (xiii) receipt of regulatory approvals on acceptable terms, including the necessary right of way for the proposed tunnels; and (xiv) the negotiation of satisfactory terms with impacted First Nations groups. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Many forward-looking statements are made assuming the correctness of other forward looking statements, such as statements of net present value and internal rates of return, which are based on most of the other forward-looking statements and assumptions herein. The cost information is also prepared using current values, but the time for incurring the costs will be in the future and it is assumed costs will remain stable over the relevant period.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements as a number of important factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur, but specifically include, without limitation: risks relating to variations in the mineral content within the material identified as mineral reserves or mineral resources from that predicted; variations in rates of recovery and extraction; developments in world metals markets; risks relating to fluctuations in the Canadian dollar relative to the US dollar; increases in the estimated capital and operating costs or unanticipated costs; difficulties attracting the necessary work force; increases in financing costs or adverse changes to the terms of available financing, if any; tax rates or royalties being greater than assumed; changes in development or mining plans due to changes in logistical, technical or other factors; changes in project parameters as plans continue to be refined; risks relating to receipt of regulatory approvals or settlement of an agreement with impacted First Nations groups; the effects of competition in the markets in which Seabridge operates; operational and infrastructure risks and the additional risks described in Seabridge's Annual Information Form filed with SEDAR in Canada (available at www.sedar.com) for the year ended December 31, 2009 and in the Corporation's Annual Report Form 40-F filed with the U.S. Securities and Exchange Commission on EDGAR (available at www.sec.gov/edgar.shtml). Seabridge cautions that the foregoing list of factors that may affect future results is not exhaustive.
When relying on our forward-looking statements to make decisions with respect to Seabridge, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Seabridge does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by Seabridge or on our behalf, except as required by law.
ON BEHALF OF THE BOARD
'Rudi Fronk'
President & C.E.O.
Contacts:
Seabridge Gold Inc.
Rudi P. Fronk
President and C.E.O.
(416) 367-9292
(416) 367-2711 (FAX)
info@seabridgegold.net
www.seabridgegold.net