Giant BC gold project receives new permits

New permits issued to Seabridge Gold's KSM project in northern British Columbia marks an important step forward as the Toront0-based company transforms the world's largest undeveloped gold project by reserves into an underground mine.

Seabridge announced on Tuesday it has received the necessary permits from the BC Government to develop an exploration adit into the large Deep Kerr Deposit at its 100%-owned project:

The proposed 2,100 meter long adit is designed to facilitate cost-effective underground exploration drilling of the Deep Kerr Deposit at depth compared to surface drilling. The adit would be collared in the Sulphurets Valley at the base of Kerr Mountain, declining at a 12 percent grade parallel to the footwall of the Kerr deposit, allowing access to mineralized zones that have only been tested to depths approximately 1,800 meters below surface. To date, all drilling at Deep Kerr has been from surface, resulting in very long holes which are slow and expensive to drill.

A new preliminary economic impact study released by Seabridge last week envisages a much larger operation than the one outlined in the preliminary feasibility study released last month and in the process improves both the environmental impact and economics of KSM.

The PEA calls for mill throughput of 170,000 tonnes per day, 40,000 tonnes more than the earlier study which Seabridge says can be done without significant redesign of facilities. Initial capital costs have been increased by just less than 10% to $5.5 billion.

In the PEA the bulk of the operations are moved underground and using the block-cave method Seabridge says it can reduce waste rock by a whopping 81% or 2.4 billion tonnes over the 51 year life of the mine.

By vastly increasing the amount of copper mined life of mine operating costs are now a negative $179 an ounce while all-in costs fall to just $358 an ounce.

Proven and probable minerals reserves at KSM are estimated at 2.2 billion tonnes grading 0.55 grams per tonne gold, 0.21% copper and 2.6 grams per tonne silver which translates into 38.8 million ounces of gold, 10.2 billion pounds of copper and 183 million ounces of silver.

During the first seven years of operation annual gold output would top 1 million ounces and life of mine annual production is estimated at 592,000 ounces of gold, 286,000 pounds of copper and 2.8 million ounces of silver.

KSM was approved at the end of 2014 after a federal and provincial environmental assessment process that took nearly seven-years. KSM was only the second metal mine in five years to receive approval.

Seabridge (TSX:SEA) (NYSE:SA) is worth just over $555 million on the New York Stock Exchange, up 26% in value year to date.