Vancouver — Continuing with a corporate philosophy of acquiring advanced gold projects, Seabridge Resources (SEA-V) has inked a deal with Newmont Mining (NEM-N) and Total Resources to pick up the Tundra gold project in the Northwest Territories.
Located 150-km north of Yellowknife, the project has been worked since the 1940s. In 1990, Noranda (NRD-T) estimated the potential underground resource for the property at 29.6 million tonnes grading 6.2 grams gold per tonne, using a cut-off grade of 3.4 grams gold. By 1997, Placer Dome (PDG-T) entered the scene and began looking a t the open pit potential of the mineralization. In 1999, the major tabled an indicated and inferred resource of 69.2 million tonnes grading 2.67 grams gold, using a 1.5 gram gold cut-off. Mineralization is hosted in Archean felsic pyroclastics just below volcaniclastic sediments.
The price tag for the project is US$2.5 million. Seabridge also agreed to pay US$1.5 million should the price of gold climb above US$360 per oz for ten consecutive days, as well as an additional US$1.5 million at a production decision or if the price of gold hits US$400 per oz. Newmont and Total retain a 2% net smelter royalty in the project. The closing of the transaction is still subject to due diligence.
In order to fund the deal, Seabridge tabled a $5.44 million private placement comprising 3.2 million units priced at $1.70 each. A unit holds one share and half a warrant. A full warrant is exercisable at $1.90 for a one-year period.
“Newmont-Total stipulated that the sale of the Tundra project must be for cash plus a royalty,” says Seabridge’s President, Rudi Fronk. “For this reason, Seabridge had to arrange the financing prior to reaching agreement on the purchase terms.”
Seabridge has been on an acquisition tear over the past 18-months.
“Our stated goal for 2002 is to bring our total gold resources to more than 10 million ozs,” adds Fronk.
Earlier this year, the company grabbed the Red Mountain gold project in British Columbia from North American Metals (NAM-V).
Lying 19-km east of Stewart, Red Mountain hosts a measured resource of 1.26 million tonnes grading 8 grams gold per tonne and 340,000 tonnes averaging 7 grams gold in the inferred category. The overall resource is pegged at 12 million tonnes grading 2.54 grams gold. The estimate is based on 127,000 metres of drilling and 2,000 metres of underground workings, including a 1-km-long decline completed by now defunct Royal Oak Mines and previous operators Lac Minerals and Barrick Gold (ABX-T). The project also has on site and estimated $500,000 worth of mining equipment and a $1.5 million cash reclamation deposit lodged with the British Colombia Mines Ministry
“Consistent with our strategy, this acquisition adds a quality gold resource with low holding costs,” says Seabridge president, Rudi Fronk. “We also believe that we can realize additional value from the reclamation bond and subsequent sale of the mining equipment.”
The deposit is characterized by northwesterly plunging mineralization in three southwesterly dipping elliptical zones formed in stratified sediments and an intrusion. Northwesterly plunging folds and brittle faults cut the host rocks and mineralization.
North American Metals, 89%-owned by Wheaton River Minerals (WRM-T) acquired the property in 1999 from Royal Oak for $413,360. The price tag for Seabridge to pick up 100% of the property is 800,000 shares. The property remains subject to a series of net smelter royalty agreements ranging from 2-to-6.5%.
Be the first to comment on "Seabridge nabs Tundra"