Corporate Presentation January 2013


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Corporate Presentation January 2013

  1. 1. January 2013 1 1
  2. 2. 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 for the year ended December 31, 2011 and in the Company’s Annual Report Form 40-F filed with the U.S. Securities and Exchange Commission on EDGAR (available at 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. 2
  3. 3. The Case for Seabridge• Proven and probable reserves: 44.7 million ounces of gold plus 10 billion pounds of copper• Low share dilution: 45 million shares outstanding• Low valuation: $16 enterprise value per ounce of gold reserves• Low political risk: all reserves are located in Canada• Exploration upside: new discoveries could add significant higher grade reserves to improve project economics 3
  4. 4. Proven and probable reserves ranks Seabridge among world’s top ten gold companiesGold reserves (millions of ounces) 45M ozCompanies shown include North America’s largest gold companies and selected gold project development companies.Source: Company data. Data as of December 27, 2012. 4
  5. 5. Low Share Dilution - Seabridge ranks first in reserves per common share among these leading gold companiesProven and Probable gold reserves per common share 1.20 0.98 oz/share 1.00 0.80 0.60 0.40 0.20 - Yamana AuRico Buenaventura Detour Barrick Osisko Gabriel Newmont Allied Nevada Goldcorp Agnico-Eagle Newcrest Seabridge NovaGold Alamos Kinross Nevsun Anglogold New GoldCompanies shown include North America’s largest gold companies and selected gold project development companies.Source: Capital IQ, company data. Data as of December 27, 2012. 5
  6. 6. Gold reserves/resources have grown more than ten times faster than shares outstanding… 90 90 80 80 70 70 Shares Outstanding (Millions) 60 60Ounces of Gold (Millions) 50 50 40 40 30 30 20 20 10 10 - - 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Proven & Probable Gold Reserves Measured & Indicated Gold Resources Inferred Gold Resources Common Shares Outstanding Source: Company data. Data as of December 27, 2012. Note: For a breakdown of Seabridge’s mineral reserves and resources by project, tonnes and grade, please visit 6
  7. 7. With one of the largest reserve bases in the industry, Seabridge currently has one of the lowest valuationsEnterprise value/reserves (US$/oz)1$900$600$300 $16/oz - Yamana AuRico Buenaventura Detour Barrick Gabriel Osisko Newmont Allied Nevada Goldcorp Agnico-Eagle Newcrest Seabridge Alamos NovaGold Nevsun Anglogold Kinross New GoldCompanies shown include North America’s largest gold companies and selected gold project development companies.Source: Capital IQ, company data. Data as of December 27, 2012.1Enterprise value is calculated as market capitalization (basic) plus net debt and minority interests. 7
  8. 8. Low political risk … jurisdiction does matter• Peru – illegal strikes and local opposition delay approved projects (Conga, Santa Anna, Tintaya)• Argentina – open pit mining and use of cyanide banned in certain areas. 100% tax on export earnings for some resource projects (Famatina and San Jose)• Ecuador – increased taxes and royalties (Fruta del Norte)• Indonesia – creeping expropriation through imposed local and government ownership (Batu Hiju, Grassberg, Tujuh Bukit)• Chile – increased royalty structure and challenging power supply issues (all projects). Local opposition delays approved projects (El Morro)• Canada – stable regulatory and tax regime 8
  9. 9. 2012 exploration discovered higher grade copper-gold zonesat KSM and higher grade gold at Courageous Lake• $24 million in exploration planned for 2013• At KSM, exploration will focus on defining resource at Deep Kerr as well as testing for other potential “game changing” core zones• At Courageous Lake, exploration will focus on defining resource at Walsh Lake 9
  10. 10. Kerr, Sulphurets and Mitchell (“KSM”)• World’s largest undeveloped gold/copper project (by reserves). KSM reserves at 38.2 million ounces of gold and 10 billion pounds of copper• Located in “mining friendly” British Columbia near past producers• Highly favorable logistics including < 6 cents/kwh hydro power less than 30 km away, nearby highway network and year-round operating seaport facility• Estimated cash operating costs ($141 per ounce) and total costs ($598 per ounce) well below current industry averages• 55 year mine life with projected “base case” payback of 6 years = outstanding capital efficiency 10
  11. 11. KSM is a world class gold-copper projectGold & Copper Reserves Au Reserves Cu ReservesSource: Company data. 11
  12. 12. KSM – Mitchell zone 12
  13. 13. KSM – favorable logistics 13
  14. 14. KSM baseline project layout 14
  15. 15. Preliminary Feasibility Study projects large, long-life mine Life of Mine Years 1 – 7 55 Year Plan Average Grades: Gold (grams per tonne) 0.79 0.55 Copper (%) 0.23 0.21 Silver (grams per tonne) 2.39 2.74 Molybdenum (parts per million) 46.2 44.8 Average Annual Production: Gold (ounces) 851,000 508,000 Copper (pounds) 195 million 147 million Silver (ounces) 2.1 million 2.2 million Molybdenum (pounds) 1.3 million 1.1 million 15
  16. 16. KSM’s grades and per tonne values are similar to other large producing and devolpment porphyry projects Cadia El Morro Boddington Minas Conga KSM Owner Newcrest Goldcorp Newmont Newmont Seabridge New Gold Buenaventura Average Grades: Gold (gpt) 0.58 0.50 0.56 0.65 0.55 Copper (%) 0.31 0.54 0.11 0.28 0.21 Silver (gpt) 0.53 n/a n/a 2.00 2.74 Molybdenum (ppm) n/a n/a n/a n/a 44.7 In-situ spot value per tonne $52.51 $64.42 $36.69 $55.24 $47.20 Contained Metal in Reserves: Gold (million ounces) 22.2 8.3 19.5 12.6 38.2 Copper (billion pounds) 8.1 6.2 2.3 3.3 9.9 Silver (million ounces) 22 n/a n/a 38 191 Moly (million pounds) n/a n/a n/a n/a 213Source: Company data.Note: In-situ values based on $1,600/oz gold, $27/oz silver, $3.25/lb copper and $15/lb moly 16
  17. 17. Preliminary Feasibility Study pre-tax summary55 year mine plan PFS PFS Alternate Recent Spot Base Case Case PricesInitial Capital Cost $5.3 billion $5.3 billion $5.3 billionNet Cash Flow $20.5 billion $16.8 billion $31.2 billionNPV @ 5% $4.5 billion $3.5 billion $7.7 billionIRR (%) 11.5 10.4 14.7Payback Period (years) 6.2 6.7 5.2Operating Costs Per Ounce of AssociatedGold (life of mine) 141 263 60 copper, silver andTotal Costs Per Ounce of Gold molybdenumProduced (includes all capital) 598 720 535 significantly enhances cash and total costsMetal Prices: Gold ($/ounce) 1,330 1,320 1,650 Copper ($/pound) 3.45 3.00 3.75 Silver ($/ounce) 25.20 25.60 32.00 Molybdenum ($/pound) 15.00 15.00 15.00US$/Cdn$ Exchange Rate 0.96 0.96 1.00 17
  18. 18. Low cost vs. gold industry In the 2012 PFS, average estimated cash cost at KSM is $141/oz for the base case and $60/oz at recent spot prices Cash cost ($/oz) 1,500 1,000 500 KSMBase Case: $141/oz - 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percentile (%) Source: World Gold Analyst. Actual cash costs for world’s 14 largest gold producers as at March 2012. Only gold majors logos shown. Base case assumes gold at $1,330/oz, copper at $3.45/lb, silver at $25/oz and moly at $15/lb. Spot price assumes gold at $1650/oz, copper at $3.75/lb, silver at $32/oz and moly at $15/lb. 18
  19. 19. KSM Permit application to be filed in early 2013• Three iterations of the KSM Preliminary Feasibility Study have resulted in design changes based on feedback from Treaty, First Nations and the public• Confident that our permit application scheduled for the end of January will be approved based on its technical merits.• Project approval from federal and provincial regulators is expected within 15 months of application submittal. 19
  20. 20. 20
  21. 21. 21
  22. 22. 22
  23. 23. Courageous Lake• At 6.5 million ounces Courageous Lake is Canada’s 2nd largest undeveloped gold reserve (KSM is 1st)• Located in Northwest Territories within 100 kilometers of Diavik and Ekati (2 large operating open pit diamond mines)• Excellent open pit grade of 2.2 grams of gold per tonne … more than twice the grade of Osisko and Detour Gold development projects• Wholly owned 53 kilometer greenstone belt provides excellent exploration potential• Recently completed Preliminary Feasibility Study shows viable project at current gold prices with exceptional leverage to higher gold prices 23
  24. 24. Courageous Lake• Project located on winter ice road, in close proximity to 2 operating large scale open pit diamond mines• Diavik and Ekati demonstrate that year round open-pit mine is feasible• Nearby mines provide “real-time” estimates for capital and operating costs for bulk tonnage operation• With nearby mines scheduled to close within next several years, a local and trained workforce will be readily available 24
  25. 25. Courageous Lake• Existing 6.5 million ounce reserve covers only 2 kilometers of under explored 53 kilometer greenstone belt owned 100% by Seabridge• Two former producing mines on belt (Salmita and Tundra) had average grades of approximately 1 ounce of gold per tonne (30 gpt)• Seabridge now exploring for additional deposits that could extend estimated 15 year mine life with potentially higher grades mined in early years 25
  26. 26. Courageous Lake Preliminary Feasibility StudyJuly 2012 (US$) Recent Alternate Base Case Spot Case Case Gold Price $1384 $1618 $1925 Initial Capital Cost $1,520 million $1,520 million $1,520 million Mine Life 15 years 15 years 15 years Average Annual Gold Production 385,000 ozs 385,000 ozs 385,000 ozs Net Cash Flow $1,507 million $2,785 million $4,519 million NPV @ 5% $303 million $1,054 million $2,080 million Internal Rate of Return 7.3% 12.5% 18.7% Payback Period 11.2 years 7.4 years 4.0 years Operating Costs (years 1 to 5) $674 $683 $689 Operating Costs (life of mine) $780 $789 $796 Total Costs (includes all capital) $1123 $1134 $1141 US$/Cdn$ Exchange Rate 0.98 0.99 0.99 26
  27. 27. Pursuing value enhancing opportunities at Courageous Lake • Examining options to improve capital and operating costs – Access to hydro-electric generated power – Examine year round road access opportunities • Exploring for higher grade material that could be exploited in the early years of production – History of high grade production along belt • Exploring for additional bulk mineable deposits that could extend project life beyond the current 15 year estimate 27
  28. 28. 28
  29. 29. Driving value through joint ventures• Projects being de-risked to drive joint venture terms – Increasing reserves and resources – Open dialogue with Treaty and First Nations on project design and layout – Advancing through environmental approval and permitting process – Pursuing exploration opportunities that will make a difference in overall project economics and potential joint venture partners• Transactions dependent on improved market conditions 29
  30. 30. Corporate information• Listed on the NYSE and TSX Major Shareholders• 45.6 million shares outstanding; Friedberg Mercantile Group 48.0 million fully diluted Royce & Associates Officers, Directors and Employees• Management and Board aligned Van Eck Associates with shareholders Bristol Investment Partners• Insiders own approximately 30% of Royal Gold, Inc. common shares• Institutions own approximately 40% of common shares• Strong balance sheet – No debt – >C$45 million in cash 30