Seabridge rejects Indigenous opposition to KSM

Seabridge Gold (TSX: SEA, NYSE: SA) KSM is refuting criticism by the Gitxsan Huwilp and Tsetsaut Skii km Lax Ha Nation of the KSM project in British Columbia. 

The Tsetsaut “were given extensive opportunity, fully funded by Seabridge, for full consultation of the tailings management facility at a more conceptual level during the KSM project environmental assessment review process,” Seabridge said in a release on Monday.  

The issue dates to how the B.C. Environmental Assessment Office made the July 2024 decision that KSM had been “substantially started,” which prevented its environmental assessment certificate from expiring. The Tsetsaut challenged that decision in court, arguing they hadn’t been properly consulted.

The Supreme Court didn’t decide whether KSM was substantially started. Instead, it found the province had failed in its duty to consult the Tsetsaut before the environmental office made that determination. As a result, the judge quashed the office’s decision and sent it back for a new consultation and a fresh decision.

The court ordered the office to give the Tsetsaut 90 days to make written submissions, which expires Sept. 28. The Gitxsan pulled it support for the project last week to back the Tsetsaut.

Project delays

KSM, 65 km northwest of Stewart, B.C. and one of the world’s largest undeveloped gold projects, has been delayed by the First Nation legal challenge and another court dispute, with  developer Tudor Gold (TSXV: TUD).

The province has said the two companies must work out a solution over tunnels and mineral claims before it will give approvals. 

Shares in Seabridge Gold have fallen 12% over the past six months, roughly in line with the decline in the price of gold from its all-time high in February. The stock was at $44.98 on Monday afternoon, valuing the company at $4.84 billion. 

A 2022 preliminary feasibility study estimated reserves at KSM totalling 47.3 million oz. gold and 7.3 billion lb. copper, with a net present value of $5.8 billion (C$8 billion).

Land rights

Seabridge also took issue with what it called the Tsetsaut’s assertion that tailings are to be located on its exclusive territory. The company said the Tahltan and the Nisga’a nations also have treaty rights in the region. The Tsetsaut’s “insistence that the company treat them as exclusive owners of this territory has made our relationship with [them] challenging,” Seabridge said.

Ryan Beaton, a lawyer for the Tsetsaut, said Seabridge’s statement was contrary to conclusions reached by the province.

“Perhaps it is widely accepted that the Tahltan Nation claims that area, but it certainly is not widely accepted that there is any evidentiary merit to that claim,” Beaton told the Northern Miner Group.

Beaton referenced a 2021 ethnographic report on the Tsetsaut’s rights and title claims and a 2023 letter from the provincial ministry of Indigenous relations and reconciliation, agreeing with the study’s assessment.