Seabridge locks in $115.7 million for Snowfield buy

Snowfield is located in the same valley that hosts Seabridge subsidiary KSM Mining’s Mitchell deposit. (Image courtesy of Pretivm Resources.)

Canada’s Seabridge Gold (TSX: SEA) (NYSE: SA) announced it has successfully raised $115.7 million, more than enough to fund the acquisition of Pretivm Resources’ (NYSE: PVG) Snowfield property in northwest British Columbia.

“Proceeds from the financing will pay the entire $100 million upfront cash payment payable in respect of the acquisition of the Snowfield property, the expenses related to the acquisition, with the remainder used for general working capital,” the Toronto-based miner said.

Seabridge said Snowfield, immediately adjacent to its 100%-owned KSM gold-copper project, will open up new development opportunities for its flagship asset.

The deal, announced last week, will also give Pretivm a 1.5% net smelter royalty related to all production from the Snowfield project and a future $20 million contingent payment.

Boost to KSM

Snowfield’s mineral resource is 25.9 million ounces of gold in the measured and indicated category and a further 9 million ounces in the inferred category, in addition to substantial copper resources.

“Work is already underway to determine how to integrate Snowfield into a new KSM mine plan,” Seabridge chairman and CEO Rudi Fronk said last week.

An updated preliminary economic assessment (PEA) for KSM released in April had outlined a 44-year mine life and indicated a four-year payback on the $5.2 billion initial capex.

The transaction is expected to close by December 16.

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