The amount will be raised through the sale of a secured note to Sprott and Ontario Teachers', which is to be exchanged at maturity for a silver royalty on the gold-copper-silver project in northern British Columbia
Seabridge Gold has announced that it is raising $225m from Sprott Resource Streaming and Royalty and Ontario Teachers’ Pension Plan to advance its 100% KSM project in Canada towards construction.
The amount will be raised by selling a secured note which is to be exchanged at maturity for a silver royalty on the gold-copper-silver project in northern British Columbia.
Seabridge Gold will use the proceeds to continue ongoing physical works at the project and move it towards the ‘substantially started’ status.
By achieving the ‘substantially started’ designation, Seabridge Gold will be able to ensure the continuity of the project’s approved environmental assessment certificate (EAC) for the life of the mine.
Last November, the company secured a two-year extension to the EAC from the British Columbia government due to Covid-19 related impacts.
The Canadian company said that the proceeds from the note sale will help to finish key tasks which underpin construction readiness and will reduce the construction period, once a construction decision has been taken.
Seabridge Gold said that the fund-raising will also boost the KSM proposal in its joint venture negotiations by securing the EAC, which will de-risk the project further, and speed up the construction timetable.
Sprott Resource Streaming managing partner Michael Harrison said: “KSM is Canada’s largest gold-copper-silver development project and an outstanding economic opportunity that we confidently expect to become one of our longest-life silver royalties.
“Seabridge has done an excellent job exploring, engineering and de-risking KSM, including securing an approved Environmental Assessment and building strong relationships with its local indigenous peoples.”
After the note matures, the investors will utilise all of the principal amount repaid on maturity to buy a 60% silver royalty.
Seabridge Gold chairman and CEO Rudi Fronk said: “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.
“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.”
The transaction is expected to be closed later this month.