Seabridge Gold to raise $150m from Sprott for BC mining project

• Under the agreement, Sprott will be granted a 1.2 percent net smelter royalty on Seabridge’s Kerr-Sulphurets-Mitchell (KSM) project
• The deal’s proceeds will be used to complete the physical works at KSM
• Last year, Seabridge sold a secured note, exchangeable for a KSM royalty, to Sprott Resource Streaming and Royalty Corp and Ontario Teachers’ Pension Plan for $225 million

Seabridge Gold, Toronto-based gold exploration and mining company, has raised $150 million through a royalty agreement between its affiliate KSM Mining and Sprott Resource Streaming and Royalty Corp.

Under the agreement, Sprott will be granted a 1.2 percent net smelter royalty on Seabridge’s Kerr-Sulphurets-Mitchell (KSM) gold-silver-molybdenum-copper project located in northern British Columbia. The proceeds of the deal will be used to complete the physical works at KSM, the company said.

Seabridge will make quarterly payments of $2.4375 million (annualized, being 6.5 percent of the purchase price) from the third year. The requirement to make quarterly payments expires on the earlier of KSM achieving commercial production or March 24, 2032.

The transaction’s completion is subject to settling final documentation and obtaining all necessary third-party consents and regulatory approvals.

Last year, Seabridge sold a secured note, exchangeable for a KSM royalty, to Sprott Resource Streaming and Royalty Corp and Ontario Teachers’ Pension Plan for $225 million.

Rudi Fronk, Seabridge’s chairman and CEO, said in a statement, “This new US$150 million in financing, coupled with the US$225 million we raised from Sprott and Ontario Teachers’ Pension Plan last year, provide the capital we believe is needed to achieve substantially started status well before July 2026. It also has the added advantage of cutting time from the construction schedule once a construction decision has been made. KSM’s estimated low operating costs mean that the royalty is expected to have a minimal impact on the project’s projected financial returns. Furthermore, this funding does not require share dilution and therefore furthers our long-standing strategy of providing the industry’s best leverage to gold as measured by ounces of gold reserves and resources per share.”

Sprott Resource Streaming and Royalty Corp is an affiliate of Sprott, a Toronto-based precious metals investor.

RBC Capital Markets is acting as financial advisor and Blake, Cassels & Graydon is acting as legal counsel to Seabridge in connection with the deal. Fasken Martineau DuMoulin is acting as legal counsel to Sprott.