Seabridge lures Noranda to BC

Vancouver — Junior Seabridge Gold (SEA-V) has signed a deal enabling Noranda (NRD-T) to earn a majority stake in the Kerr-Sulphside gold-copper project in northern British Columbia.

Under the agreement, the major can earn a half-interest by spending $6 million over six years. Noranda can then pick up another 15% by funding a feasibility study on the project. If, after earning its initial half-stake, Noranda elects not to proceed with a feasibility study, Seabridge can reaquire all of the project by paying $3 million.

“We believe the Kerr-Sulphside project has the potential to become a world-class deposit,” says Seabridge President Rudi Fronk, “but it needs the technical and financial resources of a major company like Noranda to determine its value and move it forward.”

Situated 20 km southeast of Barrick Gold’s Eskay Creek mine, the Kerr-Sulphside project hosts two deposits which occupy two properties in the Iskut-Stikine region. The project is underlain by Upper Triassic to Middle Jurassic Hazelton Group volcanic, volcaniclastic and sedimentary rocks at the western edge of the Bowser Basin. Mineralization is associated with felsic to intermediate plugs, small stocks, and dykes.

The Sulphurets deposit contains a total measured, indicated and inferred resource of 54.8 million tonnes grading 1.02 grams gold per tonne, using a cutoff of 0.5 gram gold per tonne. Disseminated copper-gold mineralization is centred around a hydrothermal breccia and dyke complex believed to mark the higher levels of a monzonite-related copper-gold porphyry system.

The Sulphurets gold zone is defined by a 2.5-by-1-km geochemical anomaly grading greater than 340 parts per billion gold and more than 0.1% copper. The zone contains two distinct styles of mineralization, which are associated with a complex series of overlapping hydrothermal alteration zones.

The Breccia gold zone, which contains 2-4 grams gold with minor copper, has been overprinted by later silicification.

The Raewyn copper-gold zone, which carries 0.3-0.8% copper and 0.4 gram gold, contains strong biotite, silica and local chlorite-albite alteration.

Both zones are enveloped by a broad halo of phyllic quartz-sericite-pyrite alteration. Also, they both trend northeasterly within strongly altered and fractured volcanic and immature sedimentary rocks of the Hazelton Group below the Sulphurets thrust fault.

The Sulphurets property comprises 158 claim units carrying annual assessment requirements of $33,000. Three of the claims are subject to a 1% net smelter return royalty capped at US$635,000. Annual advanced royalty payments of $5,000 have been made since 1991.

The Kerr deposit hosts a measured, indicated and inferred resource of 140.8 million tonnes grading 0.75% copper and 0.36 gram gold, based on a 0.4% copper cutoff.

Mineralization extends for 3 km from the crest of a ridge above the southwestern branch of the Sulphurets glacier down to the lower slopes of a cirque-like basin just above Sulphurets Lake.

The deposit is described as a pyrite-rich copper-gold system hosted in strongly altered and deformed monzonitic intrusions in Stuhini Group sedimentary and volcaniclastic rocks. Alteration consists of variable amounts of sericite, chlorite, quartz and anhydrite. The mineralization occurs in a quartz stockwork with associated pyrite, chalcopyrite, bornite, tetrahedrite and rare enargite. The highest-grade values are found within a core of chlorite-bearing alteration and quartz stockwork. Strong phyllic alteration with quartz and disseminated pyrite flanks the core zone.

From 1985 to 1992, 144 diamond drill holes defined a mineralized zone measuring 1.9 km long by 100-150 metres wide to vertical depths of 350 metres.

The Kerr property consists of 190 claim units and 10 placer claims carrying annual assessment requirements or cash-in-lieu payments of $40,000.

Seabridge picked up the project in June 2001 from Placer Dome (PDG-T) in return for 500,000 shares and 500,000 warrants exercisable at $2 per share for two years. Placer also retained a 1% net smelter return royalty (NSR), which is capped at $4.5 million. The junior is required to purchase the NSR for $4.5 million should a feasibility study demonstrate a 10% internal rate of return.