Business
Seabridge Gold to Raise US$150 Million under KSM Net Smelter Royalty Agreement with Sprott Funds to be Used Towards Achieving 'Substantially Started' Status
Toronto, Ontario--(Newsfile Corp. - May 11, 2023) - Seabridge Gold (TSX: SEA) (NYSE: SA) announced today that its wholly-owned subsidiary, KSM Mining ULC ("KSMC
About this update from Seabridge Gold Inc
[{"type":"text","content":" Toronto, Ontario--(Newsfile Corp. - May 11, 2023) - Seabridge Gold (TSX: SEA) (NYSE: SA) announced today that its wholly-owned subsidiary, KSM Mining ULC (\"KSMCo\"), has agreed to the principal terms of a royalty agreement under which Sprott Resource Streaming and Royalty Corp. (\"Sprott\") pays KSMCo US$150 million (approximately C$200 million at the current exchange rate) and KSMCo grants Sprott a 1.2% net smelter royalty (\"NSR\") on its 100% owned KSM project located in northern British Columbia, Canada. The proceeds will be used to complete the physical works at KSM for which Seabridge expects to achieve a designation of 'substantially started' from the B.C. government. Seabridge Chairman and CEO Rudi Fronk explained: \"This fund-raising is intended to move KSM towards accomplishing three main objectives without the requirement for shareholder dilution: Achieve the 'substantially started' designation which ensures the continuity of the KSM project's approved Environmental Assessment Certificate (\"EAC\") for the life of the project; Complete key tasks which support construction readiness and shorten the construction period once a construction decision has been made; and Enhance the KSM proposition in our ongoing joint venture discussions by securing the EAC, further de-risking the project, and accelerating the construction timetable.\" Mr. Fronk noted that the new funding \"will enable us to complete the switching station and related work required for connecting KSM to BC Hydro's Northern Transmission Line for construction and operation of the mine. Access to this green energy will substantially enhance KSM's sustainability and carbon profile. Proceeds from the royalty agreement will also allow us to continue providing significant work for companies owned and managed by our Indigenous partners in the KSM project, an important ESG objective.\" Key terms of the Royalty Agreement include: A royalty rate of 1.2% of future net smelter returns from all metals produced at KSM. KSMCo has the option of buying back 0.2% of the 1.2% NSR (reduce it to 1.0%) any time within the first 30 months of Closing this transaction for a payment of US$21.5 million (the \"Initial Buydown Right\") which can be satisfied in cash or by delivering Seabridge common shares. Commencing in year 3, Seabridge will make quarterly payments of US$2.4375 milli...