Seabridge continues shopping spree (February 18, 2002)

With the ink just drying on a deal to pick up North American Metals‘ (NAM-V) Red Mountain project in northwestern British Columbia, Seabridge Resources (SEA-V) has agreed to acquire Golden Phoenix Minerals’ (GPXM-O) Borealis project, near Hawthorne, Nev.

Seabridge will pay Golden Phoenix US$500,000 in cash, US$500,000 in two interest-free promissory notes, and issue the company 250,000 common shares. The first US$250,000 promissory note is payable one year from closing; the second, two years from closing. Seabridge has the option of paying the notes in shares valued at the 10-day average before the payment dates.

Borealis is in the prolific Walker Lane gold belt. Gold was discovered there in 1978 by Houston Oil & Minerals Co., Tenneco Resources and Echo Bay Minerals operated an open-pit, heap-leach mine and produced 635,000 oz. gold between 1981 and 1991. Reclamation activities have been completed.

Gold mineralization is characterized by large areas of silicification, hydrothermal brecciation and advanced argillic alteration in Tertiary andesite flows, breccias and tuffs. Economic deposits are structurally controlled along a series of north-to-east-striking normal faults that dip steeply to the northwest, with gold occurring as sub-micron-size particles in highly altered andesite and tuff.

The Borealis property is divided into three mineralized zones — Borealis, Polaris and Orion. Each in turn comprises three separate targets, some of which have been mined. Several other target areas have yet to be explored.

At last report, the project’s measured and indicated resources were 33.4 million tons averaging 0.044 oz. gold and 0.228 oz. silver per ton, or 1.45 million contained ounces gold and 7.6 million contained ounces silver. Seabridge plans to commission an independent review of the resource base.

Seabridge Chief Executive Officer Rudi Fronk says the Borealis project “has a significant reported resource which we will announce if it is confirmed by our due diligence.”

Says Golden Phoenix President Michael Fitzsimonds: “This sale allows Golden Phoenix to focus on bringing its Mineral Ridge mine back to gold production, which is where the near-term value of the company lies for its shareholders. Once we get the mine operational, we plan to acquire other gold properties that also have near-term production possibilities.”