Each one in plain English, with the numbers worked through for a shareholder.
2 Apr 2024resource reserve update● NeutralMajor
A new Courageous Lake study cut the project to something buildable: 33.9 million tonnes of proven and probable reserves at 2.6 g/t for 2.8 million ounces, US$747 million of initial capital, after-tax value of US$523 million at a 5% discount, 20.6% return and a 2.8-year payback, with all-in sustaining costs of US$999 an ounce. The 2012 study had reported a 6.5 million ounce reserve at the same deposit, so the ounces in the mine plan have fallen by more than half even as the economics improved.
The 2022 prefeasibility study reshaped KSM into an all open-pit mine of Mitchell, East Mitchell and Sulphurets at 195,000 tonnes a day: proven and probable gold reserves up 22% to 47.3 million ounces, after-tax value at 5% up from US$1.5 billion to US$7.9 billion, return from 8.0% to 16.1%, payback down to 3.7 years, mine life cut from 53 to 33 years, and initial capital up from US$5.0 billion to US$6.4 billion. It mines about a quarter of the resource inventory and leaves out the copper-rich Kerr and Iron Cap deposits entirely.
Refiled the KSM technical report with the 2020 economic assessment stripped out. Ontario Securities Commission staff accepted each study on its own but objected to publishing two mutually exclusive mine plans that use the same rock, and made Seabridge pick one; it kept the 2016 prefeasibility study because that is what the federal and provincial environmental approvals rest on. The headline 80% value uplift announced in April is no longer part of the filed record.
Filed the technical report backing the April announcement, carrying both the 2016 prefeasibility study and the 2020 preliminary economic assessment, within the 45 days the company had promised.
A new preliminary economic assessment for KSM built around a much larger Iron Cap block cave lifted the after-tax value at a 5% discount rate from US$3.4 billion to US$6.0 billion, the return from 10% to 14%, and cut payback from 6.4 to 4.0 years. KSM's resources by then stood at 50.4 million ounces of gold measured and indicated plus 56.9 million inferred, with 14.2 and 32.1 billion pounds of copper; the study leans on inferred material, and the 2016 prefeasibility study remained the governing plan.
Filed the 2016 KSM prefeasibility update, which keeps a 53-year mine at 130,000 tonnes a day, puts total cost at US$673 an ounce of gold with a 6.8-year after-tax payback, and reports capital costs down and gold and copper reserves slightly up despite weaker metal prices. Filed alongside it is a separate preliminary economic assessment - a lower-confidence study - testing a smaller-pit, block-cave-led alternative.
The last two Deep Kerr holes of 2015 infilled around the year's step-outs and, with all five holes drilled there returning good gold and copper widths, Seabridge expects the resource to grow again.
Two more step-out holes down-dip of Deep Kerr returned 340 metres at 0.53 g/t gold and 0.60% copper, again inside the area being evaluated for underground mining.
Hole K-15-49 cut 483 metres at 0.43 g/t gold and 0.56% copper some 400 metres below the known limit of Deep Kerr, inside the shape Seabridge is evaluating for block-cave underground mining.
First 2015 holes extended Mitchell 350 metres below the current reserve limit, cutting 174 metres at 0.55 g/t gold with 0.28% copper and 167 metres at 0.81 g/t gold with 0.25% copper, which Seabridge said supports extending the planned block cave downwards.
Drilling began on the 2015 program, whose main test is whether a high-grade core sits beneath the Mitchell deposit as it did beneath Kerr and Iron Cap.
Set the 2015 program to hunt a third core zone, this time beneath Mitchell, KSM's largest deposit, while more drilling at Deep Kerr and the Iron Cap Lower Zone would refine the block-cave shapes for underground mining.
First resource for the Iron Cap Lower Zone, KSM's second core zone: 164 million tonnes inferred at 0.59 g/t gold and 0.27% copper. Between it and the Deep Kerr expansion, one year's drilling added 5.4 million inferred ounces of gold and 4.2 billion pounds of copper.
Deep Kerr's inferred resource grew 52% in a year to 782 million tonnes at 0.54% copper and 0.33 g/t gold - 8.2 million ounces of gold and 9.3 billion pounds of copper - up from 515 million tonnes and 5.9 million ounces in the maiden estimate of April 2014. All of it still inferred.
The 2014 Deep Kerr campaign - 12,900 metres in 13 holes - added about 400 metres of strike and 300 metres of depth and confirmed the geological model built after the 2013 discovery, with a substantially larger resource expected.
Eight further holes at the Iron Cap Lower Zone, added to seven reported in September, were expected to support a first resource estimate for the new zone in the first quarter of 2015.
Confirmed a second major gold-copper discovery at KSM, the Iron Cap Lower Zone, with intercepts including 514 metres at 0.68 g/t gold and 0.30% copper; an extra rig was moved in to push it towards a resource estimate. The zone first appeared in the 2013 drilling that also found Deep Kerr.
Drilling restarted at KSM aimed at growing the 515 million tonne Deep Kerr inferred resource and lifting its grade, plus testing more core-zone targets including Iron Cap at depth.
Filed the technical report putting a first number on Deep Kerr: 515 million tonnes of inferred resource at 0.53% copper and 0.36 g/t gold, or 5.9 million ounces of gold and 6.1 billion pounds of copper, from one season's drilling. It is an inferred-category resource, the lowest confidence category, and sits below the existing KSM pits.
First resource for the Walsh Lake discovery of September 2012: 4.62 million tonnes of inferred material at 3.24 g/t for 482,000 ounces of gold. Small beside the 6.5 million ounce FAT reserve next door, but higher grade, and Seabridge frames it as potential early-years feed for a Courageous Lake mine.
The last three 2013 holes at Iron Cap, the fourth KSM porphyry, cut 253 metres at 0.90 g/t gold and 0.37% copper below the existing resource and extended the deposit to the northwest and at depth - the same core-zone hunt that found Deep Kerr, now pointed at a second target.
Closed out the Deep Kerr season: 23,802 metres drilled between June and October, with 23 of 25 completed holes cutting substantial widths of at least 0.5% copper, and a maiden resource estimate promised for January 2014. Seabridge said the discovery dramatically changes KSM's economic profile.
Five more Deep Kerr holes, and previously unreported high-grade veins up to 76 metres wide outside the main zone; of 26 holes that hit the zone, all 20 assayed carried wide intervals at or above 0.5% copper and 17 averaged above 0.6%.
More Deep Kerr results, including 315 metres at 0.65% copper and 0.45 g/t gold; 26 of 29 holes drilled that summer hit the high-grade zone and all 15 assayed so far carried wide intervals at or above 0.5% copper.
Deep Kerr kept getting better: 228 metres at 0.72% copper and 0.96 g/t gold, and a second bornite-zone hit of 66 metres at 1.19% copper and 0.80 g/t gold. The zone measures at least 1,600 metres along strike and is open to the north and at depth, with five rigs drilling 1,000 metres of it for a first resource estimate.
Started the 2013 KSM exploration season on four targets, three of them core-zone concepts, looking for grades at multiples of the project's reported reserves - the same search that turned up Deep Kerr and the Camp Zone in 2012.
Began a $3.1 million, 16-hole winter program to define a first resource at the Walsh Lake discovery; the 2012 summer campaign there drilled 23 holes for 10,211 metres, with 22 of 23 hitting significant gold and 26 intercepts above 15 g/t, over an 850-metre strike still open.
Ten final holes on the Camp Zone, discovered at KSM the previous summer, returned ten intercepts above 10 g/t gold; the zone sits at low altitude near planned infrastructure.
Final 2012 results confirmed Deep Kerr as a genuine discovery, with the last hole returning long copper runs including 22 metres at 0.98% copper, and three further core-zone targets identified. Seabridge planned a $15 million 2013 campaign from June aimed at a first Deep Kerr resource estimate.
