Wolfpack Gold to be born

Looking to make the most of their respective low-profile gold projects in the U.S., Seabridge Gold (SEA-T) and Golden Predator (GPD-T) have teamed up to spin out the properties into Wolfpack Gold.

Wolfpack is yet to be created, but the two companies behind it have planned an $8-million, 10-million-unit initial public offering to get it started. Wolfpack will then issue 17 million shares to Golden Predator and 16 million shares to Seabridge to secure five primary properties in Nevada, plus 38 secondary U.S. properties from the two companies.

Golden Predator’s contributions include the 17.5-sq.-km Adelaide property. The Company drilled 59 holes in Adelaide over the past two years, with the best intercept hitting 7 metres averaging 21.67 grams gold per tonne. It also initiated permits for an exploration drift. Seabridge’s most advanced property is the 10-sq.-km Castle Rock property, which has an inferred resource of 14.7 million tonnes grading 0.45 gram gold per tonne.

The group of Nevada properties has varying royalty and back-in rights, to which Seabridge and Golden Predator will add a 1-2% net smelter or net profits royalty, depending on existing royalties.

The deal lets Seabridge and Golden Predator focus on their flagship properties north of the border. Seabridge is advancing the huge KSM gold-copper project in British Columbia and the Courageous Lake gold project in the Northwest Territories, while Golden Predator has its Yukon gold properties.

Seabridge has tried to shed several projects with mixed success. Cortez Gold (CUT-V) agreed to pay US$2.9 million plus roughly US$2 million in shares for a group of Nevada properties back in 2009, but failed to raise enough money. OTC-listed Constitution Mining (now GoldSands Development) then agreed to pay over US$7 million for the properties in early 2010. A few months later Constitution shifted to extracting gold from Peruvian riverbeds instead. Farther north, Bonterra Resources (BTR-V) agreed to option into Seabridge’s Red Mountain property in 2009, but that also fell through.

ICN Resources (ICN-V) has more recently agreed to acquire Seabridge’s King River project in Nevada for US$100,000, plus 250,000 shares. In 2009 ICN optioned into Seabridge’s nearby Hog Ranch property. In April Calico Resources (CKB-V) optioned Seabridge’s Grassy Mountain project for staged payment totalling 14 million shares and a $10 million payment, or 10% net profits interest royalty if a feasibility study is completed.

Golden Predator, meanwhile, went a simpler route in shedding properties by setting up Silver Predator (SPD-T) last year, and then spinning out its silver properties in Nevada and Mexico into the new entity in early 2011. Along with projects from Golden Predator, Silver Predator secured properties from Strategic Metals (SMD-V) and Rockhaven Resources (RK-V).

Seabridge’s share price was up 54¢, or 2%, to $27.10 on the day, while Golden Predator’s share price remained flat at 98¢.