Seabridge ups Kerr-Sulphurets-Mitchell resource

In mining — as in life — timing is everything. For proof, look no further than Seabridge Gold (SEA-V, SA-X).

The Canadian junior bought its Kerr-Sulphurets-Mitchell gold-copper project, in northwestern British Columbia, from Placer Dome for $200,000 in June 2000, at a time when gold was trading at US$260 per oz. and copper was at about US65 per lb.

Now, the spot price for gold has climbed to about US$897 per oz. — pushing well past the record high of US$858 per oz. it achieved 28 years ago and making a beeline, many analysts are convinced, for US$1,000 per oz. (Copper has also done well, surging to $3.29 per lb. since the millennium.)

“We bought the property when nobody believed in a future for gold and copper,” says Rudi Fronk, Seabridge’s president and chief executive. “We did.”

The company recently released a National Instrument (NI) 43-101 resource estimate on two of the three zones on its Kerr-Sulphurets-Mitchell project, confirming total resources of 4.5 million oz. gold and more than 3 billion lbs. copper.

The Kerr-Sulphurets project is made up of two contiguous claim blocks 65 km northwest of Stewart, in the Iskut-Stikine region.

The indicated resource clocks in at 206.3 million tonnes grading 0.25 gram gold per tonne and 0.45% copper on the Kerr zone and 74.7 million tonnes grading 0.75 gram gold and 0.24% copper on the Sulphurets zone.

There is also an inferred resource of 51.3 million tonnes grading 0.21 gram gold and 0.45% copper at the Kerr zone, and 33.6 million tonnes grading 0.62 gram gold per tonne and 0.2% copper on the Sulphurets zone.

The estimate uses a cutoff grade of 0.5 gram gold equivalent per tonne and is based on 144 drill holes and 26,410 metres of drilling on the Kerr zone and 60 drill holes and 13,030 metres of drilling on the Sulphurets zone.

But that’s not all. The Kerr-Sulphurets project includes the nearby Mitchell porphyry deposit, which was discovered in 2006, just north of the Sulphurets deposit.

In April, Seabridge filed a NI 43-101 technical report showing an inferred resource of 564 million tonnes grading 0.72 gram gold per tonne (13.1 million oz. gold) and 0.18% copper (2.23 billion lbs).

In July, Seabridge started a 15,000-metre drill program, focusing on the Mitchell zone to explore extensions of the deposit to the south, north and at depth.

All three zones are being incorporated into a preliminary assessment that will be completed before the end of the year.

“We see it as one mining operation, with one central processing plant to deal with the three zones,” Fronk explains. “Metallurgically, they are similar. So you don’t need a different processing technique for the different zones.”

A new resource estimate for the Mitchell zone is expected next month.

“Mitchell is going to get a lot bigger,” Fronk says. “We expect a meaningful increase with Mitchell well above the thirteen million ounces we have stated already and we expect a significant portion of that to go into the indicated category.”

Fronk notes that Mitchell will also have the highest gold rate of the three zones.

“It’s fair to say the Kerr-Sulphurets-Mitchell project is fast approaching to be one of the largest undeveloped gold-copper systems anywhere in the world today and only one of a handful that is one-hundred per cent owned by a junior company,” he adds. “And it’s in a jurisdiction in which the majors want to operate.”

The project is also suited to a large mining operation with year-round road access only 25 km away, connecting to the port of Stewart, which provides year-round access to the Pacific Ocean, Fronk explains.

The property is 20 km southeast of Barrick Gold’s (ABX-T, ABX-N) Eskay Creek mine.

Seabridge shares on the TSX Venture Exchange were off 25 to $27.55 apiece on the resource boost. Its shares have traded between $12.98 and $39 over the last 52 weeks.