Seabridge picks up Tundra

Vancouver — 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.

Situated 150 km north of Yellowknife, the project has been worked since the 1940s. In 1990, Noranda (NRD-T) estimated the potential underground resource at 29.6 million tonnes grading 6.2 grams gold per tonne, based on a cutoff grade of 3.4 grams gold per tonne. By 1997, Placer Dome (PDG-T) entered the scene and began looking at 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 cutoff of 1.5 grams gold. 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 10 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 return royalty (NSR) on the project. The closing of the transaction is still subject to due diligence.

To fund the deal, Seabridge tabled a $5.4-million private placement of 3.2 million units priced at $1.70 each. A unit consists of one share and half a warrant. A full warrant is exercisable at $1.90 for one year.

Seabridge has been on an acquisition tear over the past 18 months.

“Our goal for 2002 is to bring our total gold resources to more than 10 million ounces,” says company president Rudi Fronk.

Earlier this year, the company acquired the Red Mountain gold project in British Columbia from North American Metals (NAM-V). Situated 19 km east of Stewart, Red Mountain hosts a measured resource of 1.3 million tonnes grading 8 grams gold per tonne and an inferred resource of 340,000 tonnes averaging 7 grams gold. 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).

“This acquisition adds a quality gold resource with low holding costs,” says Rudi Fronk.

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, which is 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 NSR agreements ranging from 2% to 6.5%.