Seabridge, Golden Predator to spin-out US properties into new company

Vancouver – Looking to make the most of their respective low-profile gold projects in the United States, 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 something in the order of 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 where it drilled 59 holes over the past two years, with the best intercept hitting 7 metres averaging 21.67 grams gold per tonne, and it initiated permitting for an exploration drift. Seabridge’s most advanced property is the 10-sq.-km Castle Rock property that has an inferred resource of 14.7 million tonnes grading 0.45 gram gold per tonne.

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

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

Seabridge has over the years 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, but that too fell through a few months later. Further north, Bonterra Resources (BTR-V) agreed to option into Seabridge’s Red Mountain property in 2009, but that also fell through.

More recently, ICN Resources (ICN-V) has agreed to acquire Seabridge’s King River project in Nevada for US$100,000 plus 250,000 shares, while in 2009 ICN optioned into Seabridge’s Hog Ranch property, also in Nevada. 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 somewhat simpler route in shedding properties by setting up Silver Predator (SPD-T) and then spinning-out of its silver properties in Nevada and Mexico into the new entity in early 2011. Along with Golden Predator, Silver Predator secured properties from Strategic Metals (SMD-V) and Rockhaven Resources (RK-V) in the process.

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