Seabridge - Corporate Presentation August 2014
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Seabridge - Corporate Presentation August 2014

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Corporate Presentation August 2014

Corporate Presentation August 2014

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Seabridge - Corporate Presentation August 2014 Seabridge - Corporate Presentation August 2014 Presentation Transcript

  • SEABRIDGE GOLD Corporate Presentation August 2014
  • Forward Looking Statements All reserve and resource estimates reported by the Company 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. Statements relating to the estimated or expected future production and operating results and costs and financial condition of Seabridge, planned work at the Company’s projects and the expected results of such work are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by words such as the following: expects, plans, anticipates, believes, intends, estimates, projects, assumes, potential and similar expressions. Forward-looking statements also include reference to events or conditions that will, would, may, could or should occur. Information concerning exploration results and mineral reserve and resource estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed. These forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable at the time they are made, are inherently subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation: uncertainties related to raising sufficient financing to fund the planned work in a timely manner and on acceptable terms; changes in planned work resulting from logistical, technical or other factors; the possibility that results of work will not fulfill projections/expectations and realize the perceived potential of the Company’s projects; uncertainties involved in the interpretation of drilling results and other tests and the estimation of gold reserves and resources; risk of accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of environmental issues at the Company’s projects; the possibility of cost overruns or unanticipated expenses in work programs; the need to obtain permits and comply with environmental laws and regulations and other government requirements; fluctuations in the price of gold and other risks and uncertainties, including those described in the Company’s Annual Information Form filed with SEDAR in Canada (available at www.sedar.com) for the year ended December 31, 2013 and in the Company’s Annual Report Form 40-F filed with the U.S. Securities and Exchange Commission on EDGAR (available at www.sec.gov/edgar.shtml). Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management or its independent professional consultants on the date the statements are made. SEABRIDGE GOLD 2
  • The Case for Seabridge SEABRIDGE GOLD • KSM: 38.2M oz gold plus 10B lbs copper (2.2 billion tonnes at 0.55 gpT Au and 0.21% Cu) • Courageous Lake : 6.5M oz gold (91 million tonnes at 2.2 gpT Au) Proven and Probable Reserves Low Share Dilution • 48.2M shares outstanding • $9 enterprise value per ounce of gold Low Valuation reserves Low Political Risk • All reserves are located in Canada • New discoveries could add significant higher Exploration Upside grade reserves to improve project economics 3
  • 120 90 60 30 - Barrick Newmont Gold Reserves (M oz) SEABRIDGE GOLD Polyus Newcrest Anglogold Goldcorp 45M oz Seabridge Kinross Yamana Agnico-Eagle NovaGold New Gold Detour Allied Nevada Gabriel Buenaventura Polymetal AuRico Alamos Gold Reserves Reserves rank Seabridge among world’s top ten gold companies 4 Source: Company data. Data as of July 31st, 2014. Note: Companies shown include North America’s largest gold companies and selected gold project development companies.
  • 1.20 1.00 0.80 0.60 0.40 0.20 - 0.93 oz/share Seabridge Newmont Gold Reserves per Common Share SEABRIDGE GOLD Anglogold Agnico-Eagle Newcrest Allied Nevada Detour Barrick Goldcorp NovaGold Kinross New Gold Buenaventura Yamana Polyus Gabriel AuRico Polymetal Alamos Low Share Dilution 5 Seabridge ranks 1st in reserves/share among leading gold companies Source: Company data. Data as of July 31st, 2014. Note: Companies shown include North America’s largest gold companies and selected gold project development companies.
  • Low Share Dilution (cont.) Reserves and Resources continue to grow faster than shares outstanding 90 80 70 60 50 40 30 20 10 SEABRIDGE GOLD 6 Source: Company data. Data as of July 31st, 2014. Note: For a breakdown of Seabridge’s mineral reserves and resources by project, tonnes and grade, please visit http://seabridgegold.net/resources.php 90 80 70 60 50 40 30 20 10 - - 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Shares Outstanding (Millions) Ounces of Gold (Millions)
  • $600 $500 $400 $300 $200 $100 - Polymetal Goldcorp SEABRIDGE GOLD Enterprise Value per Reserve oz Attractive Valuation Buenaventura Agnico-Eagle Alamos Yamana Barrick Newmont AuRico New Gold Newcrest Anglogold Kinross Detour Polyus NovaGold Allied Nevada Gabriel Seabridge 7 Seabridge has a very low enterprise value per ounce of gold reserves Source: Company data. Data as of July 31st, 2014. (1) Enterprise Value calculated as market capitalization (basic) plus net debt and minority interest Note: Companies shown include North America’s largest gold companies and selected gold project development companies $9/oz
  • Low Political Risk SEABRIDGE GOLD • Illegal strikes and local opposition delay approved projects (Conga, Santa Peru Anna, Tintaya) • Open pit mining and use of cyanide banned in certain areas • 100% tax on export earnings for some resource projects (Famatina, San Jose) Argentina Ecuador • Increased taxes and royalties (Fruta del Norte) • Creeping expropriation through imposed local and government ownership Indonesia (Batu Hiju, Grassberg, Tujuh Bukit) • Increased royalty structure and challenging power supply issues (all projects) • Local opposition delays approved projects (El Morro, Pascua-Lama) Chile Canada • Stable regulatory and tax regime 8 Where would you rather be?
  • KSM Project, British Columbia, Canada SEABRIDGE GOLD 9 • KSM is the world’s largest undeveloped gold/copper project (by reserves) • Located in “mining friendly” British Columbia near past producers • Highly favorable logistics • Estimated cash costs and total costs well below current industry averages • Base Case exhibits outstanding capital efficiency • BC Environmental Assessment approved July 30, 2014. Federal approval expected October 2014 • Signed Impact Benefit Agreement with key Treaty Nation • Newly discovered Deep Kerr deposit adds significant upside potential
  • KSM is World Class! 40 30 20 10 SEABRIDGE GOLD 10 KSM is a world class gold-copper project Source: Company data. 12 10 8 6 4 2 - - KSM Donlin Pueblo Viejo Cerro Casale Boddington Caspiche Pascua-Lama Penasquito Conga Telfer El Morro Agua Rica Galore Creek Cu Reserves (B lbs) Au Reserves (M oz) Au Reserves Cu Reserves
  • KSM – Favorable Logistics SEABRIDGE GOLD 11
  • KSM – Mitchell Zone SEABRIDGE GOLD 12
  • KSM – Project Layout SEABRIDGE GOLD 13
  • KSM – Preliminary Feasibility Study SEABRIDGE GOLD 14 The PFS projects a large, long-life mine Unit Years 1-7 LOM 55-Year Plan Average Grades: Gold gpt 0.79 0.55 Copper % 0.23 0.21 Silver gpt 2.39 2.74 Molybdenum ppm 46.2 44.8 Average Annual Production: Gold oz 851,000 508,000 Copper M lbs 195 147 Silver M oz 2.1 2.2 Molybdenum M lbs 1.3 1.1
  • KSM – PFS Pre-Tax Summary SEABRIDGE GOLD 15 50+ year mine plan Note: For Operating and Total Costs, copper, silver and molybdenum revenues are taken as a by-product credits. Case Unit Base Alternate May 2012Spot Initial Capital Cost $M $5,300 $5,300 $5,300 Net Cash Flow $M $20,500 $16,800 $31,200 NPV @ 5% $M $4,500 $3,500 $7,700 Internal Rate of Return % 11.5% 10.4% 14.7% Payback Period years 6.2 6.7 5.2 Operating Costs (LOM) $/oz Au $141 $263 $60 Total Costs (includes all capital) $/oz Au $598 $720 $535 Metal Prices: Gold $/oz $1,330 $1,320 $1,650 Copper $/lb $3.45 $3.00 $3.75 Silver $/oz $25.20 $25.60 $32.00 Molybdenum $/lb $15.00 $15.00 $15.00 US$/Cdn$ Exchange Rate - 0.96x 0.96x 1.00x
  • KSM – EA Review Timeline SEABRIDGE GOLD 16
  • KSM Working Group Meetings SEABRIDGE GOLD 17 Since 2008 Seabridge has been engaged with a working group consisting of Treaty and First Nations and Canadian and U.S. Regulators
  • Earning our Social License SEABRIDGE GOLD • Seabridge has entered into a Benefits Agreement with the Nisga’a Nation including their support of the project Treaty/First Nation Support • Seabridge continues to support the training of the local labour force Employment Training • Seabridge has received the support of the Mayor and Councils of Smithers and Terrace for the development of the KSM Project Local Community Support 18
  • Support of Treaty and First Nations SEABRIDGE GOLD 19 NISGA'A NATION AND SEABRIDGE GOLD ENTER INTO KSM BENEFITS AGREEMENT June 2014 "We appreciate Seabridge's open and direct approach to working with the Nisga'a Nation. They began consulting with us very early on in the development of the KSM Project design. They listened to our concerns and took them seriously. They have been very responsive to our concerns around the environmental and social impacts of the project on Nisga'a Treaty interests. As well, Seabridge has demonstrated a real willingness to assist the Nisga'a Nation in creating genuine economic opportunities and building the capacity of Nisga'a citizens.” - Mitchell Stevens, President of the Nisga’a Nation
  • Gitxsan Summit SEABRIDGE GOLD 20 Seabridge continues to meet with and inform Treaty and First Nations on the local benefits that will be derived from the KSM Project.
  • Employment Training SEABRIDGE GOLD 21 Seabridge continues to support employment training within local communities for job skills that will be required at KSM
  • Terrace Open House SEABRIDGE GOLD 22 Open and continued dialogue has resulted in the endorsement of Seabridge and KSM by local communities
  • SEABRIDGE GOLD 23
  • KERR ZONE Plan View and Cross Section Index 31 Oct. 2013 Hole trace histograms: Red = Au assays Green = Cu assays SEABRIDGE GOLD Conceptual Pit Limits (Mar. 2012) 400m A K-13-34 Hole trace histograms K-13-31 K-13-24 A’ N S 24
  • SEABRIDGE GOLD 2255
  • SEABRIDGE GOLD 2266
  • SEABRIDGE GOLD 2277
  • Deep Kerr Resources (March 2014) Deep Kerr Inferred Resource Tonnes Grade Inferred Grade Inferred Grade Inferred Grade Inferred NSR Cutoff Value ($/tonne) (K) % (M lbs) g/t (K oz) g/t (K oz) ppm (K lbs) 8.0 749,928 0.42 6,917 0.30 7,325 1.7 41,349 24 40,146 12.0 675,228 0.45 6,730 0.32 6,921 1.7 37,897 26 38,175 16.0 597,280 0.49 6,472 0.34 6,515 1.8 34,644 27 35,962 20.0 514,667 0.53 6,052 0.36 5,914 1.8 30,319 28 32,087 24.0 442,221 0.58 5,640 0.39 5,485 1.9 26,670 29 28,654 28.0 376,888 0.62 5,168 0.41 4,976 2.0 23,919 30 24,849 32.0 317,108 0.67 4,700 0.44 4,477 1.9 19,570 31 21,504 36.0 272,175 0.71 4,279 0.46 4,012 1.9 16,699 31 18,621 SEABRIDGE GOLD 28 More than 2.5 times the average KSM copper grade Copper Gold Silver Moly Note: Mineral resources which are not mineral reserves do not have demonstrated economic viability. Inferred mineral resources have a high degree of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category.
  • Deep Kerr - Favorable Comparison SEABRIDGE GOLD 29 Favorable comparison to other world class gold-copper projects Source: Most recent company reserve disclosures. Grade Owner/ Tonnes Copper Gold Project Operator Location (Millions) % g/t Batu Hiju Newmont Indonesia 439 0.40 0.28 Bingham Canyon Rio Tinto United States 704 0.49 0.20 Cadia East Newcrest Australia 1600 0.29 0.49 Grasberg Freeport Indonesia 488 0.93 0.88 Oyu Tolgoi Rio Tinto Mongolia 1040 0.46 0.31
  • SEABRIDGE GOLD 30 30
  • SEABRIDGE GOLD 31 31
  • 32
  • SEABRIDGE GOLD 33
  • Courageous Lake • At 6.5M oz, (91 million tonnes at 2.2 gpT Au) Courageous Lake (“CL”) is Canada’s 2nd largest undeveloped gold reserve (KSM is 1st) • Excellent open pit grade of 2.2 gpt Au • Recently completed Preliminary Feasibility Study shows viable project with exceptional leverage to higher gold prices • Wholly owned 53 km greenstone belt provides excellent exploration potential • Located in Northwest Territories within 100 km of Diavik and Ekati, two large operating open pit diamond mines SEABRIDGE GOLD 34
  • Courageous Lake – Project Location • Project located on winter ice road, in close proximity to the Diavik and Ekati mines – Demonstrating that year round open pit bulk tonnage operations are feasible • Nearby mines provide “real-time” estimates for capital and operating costs – Additionally, with mines scheduled to close over the next several years, a local and trained workforce will be readily available SEABRIDGE GOLD 35
  • Courageous Lake – PFS Pre-Tax Summary SEABRIDGE GOLD 36 Exceptional leverage to gold price Case Unit Base Alternate Gold Price $/oz $1,384 $1,925 Initial Capital Cost $M $1,520 $1,520 Mine Life years 15.0 15.0 Average Annual Gold Production ounces 385,000 385,000 Net Cash Flow $M $1,507 $4,519 NPV @ 5% $M $303 $2,080 Internal Rate of Return % 7.3% 18.7% Payback Period years 11.2 4.0 Operating Costs (years 1-5) $/oz Au $674 $689 Operating Costs (LOM) $/oz Au $780 $796 Total Costs (includes all capital) $/oz Au $1,123 $1,141 US$/Cdn$ Exchange Rate - 0.98x 0.99x
  • CL – Value Enhancing Opportunities SEABRIDGE GOLD • Access to hydro-electric generated power • Examine year round road access opportunities Improve Capital and Operating Costs • Exploring for higher grade material that could be exploited in the early years of production • History of high grade production along belt Higher Grades • Exploring for additional bulk mineable deposits that could extend project life beyond the current 15 year estimate Additional Deposits 37
  • Courageous Lake – Exploration Potential • Existing 6.5M oz reserve (91 million tonnes at 2.2 gpT Au) covers only 2 km of an under explored greenstone belt that stretches 53 km – Owned 100% by Seabridge • Two former producing mines on belt (Salmita and Tundra) had average grades of ~1 opt Au (30 gpt) • Seabridge now exploring for additional deposits that could extend the estimated 15 year mine life – With potentially higher grades mined in early years SEABRIDGE GOLD 38
  • SEABRIDGE GOLD 3399
  • Walsh Lake Resources (March 2014) Walsh Lake Inferred Resource SEABRIDGE GOLD 40 Approximately twice the grade of Courageous Lake’s reserves Cut-Off Gold Grade Tonnes Grade Inferred (g/T) (K) g/t (K oz) 0.20 6,647 2.37 506 0.30 5,987 2.60 500 0.40 5,477 2.81 495 0.40 5,022 3.03 489 0.60 4,624 3.24 482 0.70 4,278 3.45 475 0.80 3,986 3.65 468 0.90 3,727 3.84 460 1.00 3,512 4.02 454 Note: Mineral resources which are not mineral reserves do not have demonstrated economic viability. Inferred mineral resources have a high degree of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category.
  • Catalysts for Success SEABRIDGE GOLD 41 EA/EIS Approval • BC environmental approval received July 2014 • Federal approval expected Oct 2014 Exploration Success • Pursuing exploration opportunities that will improve project economics • $16M committed for follow-up drilling at Deep Kerr and to test other potential higher grade core targets Joint Ventures • Projects being de-risked to drive joint venture terms • IBA negotiations proceeding with Treaty and First Nations • Transactions dependent on improved market conditions
  • Corporate Information SEABRIDGE GOLD • NYSE: SA • TSX: SEA • Included in GDXJ Listings • 48.2 M shares outstanding • 51.0 M fully diluted Share Structure • No debt • C$25M in working capital Balance Sheet • Interests are aligned with shareholders • Insiders own over 30% of common shares Management and Board • Own ~35% of common shares • Investors include Friedberg Mercantile, Royce, Van Eck, Weiss Financial Institutions Strategic Investors • Royal Gold (holds option to acquire NSR at KSM for $160 million in cash) 42
  • Experienced Management SEABRIDGE GOLD 43 • Over 30 years of experience in the gold business, primarily as a senior officer and director of publicly traded companies including Greenstone Resources, Columbia Resources, Behre Dolbear & Company, Riverside Associates, Phibro-Salomon, Amax, and DRX Rudi Fronk Co-Founder, Chairman & CEO • Over 30 years of experience in the mining sector and responsible for designing and managing the technical programs required to advance Seabridge's two main assets towards feasibility • Former Vice President of Solutions and Innovation for Newmont Mining Company Jay Layman Director, President & COO • Over 30 years of exploration experience and is responsible for the design and execution of Seabridge’s exploration and resource delineation programs • Previously served as Exploration Manager and Vice President with Placer Dome Bill Threlkeld Senior VP, Exploration • Over 30 years of experience in mine engineering, design, strategic analysis and start-up • Formerly a Group Executive, Mine Engineering at Newmont Mining Corporation Peter Williams Senior VP, Technical Services • Has 20 years of mining industry and public accounting experience and has been a CGA since 1994 • Currently a director of Paramount Gold and Silver Christopher Reynolds VP, CFO • Over 25 years of experience, Mr. Murphy is responsible for developing and managing Seabridge's environmental programs and community engagement strategies Brent Murphy VP, Environmental Affairs • Has practiced law in the areas of corporate finance and securities, corporate and mining since 1993 and has been counsel to Seabridge Gold since 1999 Bruce Scott VP, Corporate Affairs
  • Board of Directors • Founder and Chairman of Mintec, Inc. and one of the original developers of MineSight™, recognized as the pre-eminent reserves modeling and mine design software system with more than 300 installations worldwide Frederick Banfield • Over 45 years of mining related experience, predominately in senior technical project management and operational roles, including Newmont and Freeport Scott Barr SEABRIDGE GOLD • Over 40 years of accounting experience including senior audit partner with Deloitte Touche Thomas Dawson Chairman of Audit and Nomination Committees • Over 30 years of experience, Mr. Gonzalez-Urien is one of the most highly regarded exploration geologists in the mining industry. Ran global exploration for Placer Dome from 1989 through 2001 Eliseo Gonzalez- Urien • Currently serves as the Executive Chairman of The RMH Group, Inc. • Former CEO (and previously COO and CFO) of Echo Bay Mines Richard Kraus • Over 40 years of legal expertise in mining, securities, financing, an mergers and acquisitions • Former CEO of Anvil Mining and current director of John Sabine 44