Two of BC’s biggest gold projects face off in court

Tudor Gold (TSXV: TUD) is taking Seabridge Gold (TSX: SEA; NYSE: SA) and British Columbia’s Chief Gold Commissioner (CGC) to court over contested tunnels at its Treaty Creek project.

The Mitchell Treaty Tunnels (MTT) are a critical part of Seabridge’s KSM project, adjacent to Treaty Creek, in northwestern B.C. KSM has a net present value (NPV) of $7.9 billion (C$10.8 billion). The MTT is to feature two parallel tunnels that pass under 17 km of terrain for the tailings management facility access road.

Tudor says the tunnels impact its exploration plans, which include recent applications for underground work in the high-grade Supercell Cell One Zone at Treaty Creek, which is still at the pre-preliminary assessment stage.

Tudor’s notice of appeal case, filed Monday with the B.C. Supreme Court, seeks to overturn the CGC’s September decision that dismissed Tudor’s application to rescind a ‘conditional mineral reserve.’ This reserve prioritizes Seabridge’s right to build, operate and maintain the MTT without interference from Tudor.

‘Competing claim’

Tudor argues that the commissioner’s Licence of Occupation for the MTT creates a competing mineral claim, threatening Tudor’s rights on the Treaty Creek property.

But Seabridge counters that, stating Monday it has no interest in the minerals beneath Tudor’s claims.

Tudor’s appeal is merely an attempt to force the CGC to reconsider jurisdiction, Seabridge CEO Rudi Fronk said in a statement, “and potentially cancel the reserve designation. We are confident that the judge will dismiss Tudor’s appeal.”

Seabridge shares slid 5¢ to $21.45 in Toronto on Monday, yet the stock has added 31% in value since January. It has a market capitalization of $2.2 billion. Tudor shares closed 2¢ lower at 52¢ apiece, with the company losing 21% in value in the year to date. It has a market cap of $136 million.

Heavyweight deposits

Seabridge’s KSM is one of the largest shovel-ready copper-gold projects in the world.

It has proven and probable reserves of 2.3 billion tonnes grading 0.64 gram gold, 0.14% copper, 2.2 grams silver and 76 parts per million molybdenum in the Mitchell, East Mitchell and Sulphurets deposits. Contained metal within the reserves comes to 47.3 million oz. gold, 7.3 billion lb. copper, 160 million oz. silver and 385 million lb. molybdenum.

Tudor’s Treaty Creek is also recognized as one of the largest undeveloped gold-copper discoveries. It has an indicated resource including both the open pit and underground deposits, of 730.2 million tonnes grading 0.92 gram gold per tonne 0.18% copper and 5.48 gram silver per tonne, or 1.19 grams gold-equivalent, for 21.7 million oz. gold, 2.9 billion lb. copper and 128.8 million oz. silver, or 27.9 million oz. gold-equivalent.