Gains Reported For KSM Project

TORONTO - Seabridge Gold Inc. reported results of a Preliminary Economic Assessment (PEA) for its 100%-owned KSM project located in northern British Columbia, Canada. Unlike the updated Preliminary Feasibility Study (the 2016 PFS) announced on September 19, 2016, the PEA takes a different approach to developing the KSM Project by incorporating the Deep Kerr Zone and the Iron Cap Lower Zone into a conceptual project design. 

The PEA was prepared by Amec Foster Wheeler.  The 2016 PFS incorporated KSM's Measured and Indicated Mineral Resources into mine plans generating Proven and Probable Mineral Reserves of 2.2 billion tonnes grading 0.55 grams per tonne gold, 0.21% copper and 2.6 grams per tonne silver (38.8 million ounces of gold, 10.2 billion pounds of copper and 183 million ounces of silver). The 2016 PFS could not include the higher grade resources delineated at Deep Kerr and the Iron Cap Lower Zone as they are in the Inferred Mineral Resources category which cannot be considered as Mineral Reserves required for inclusion in a PFS. The PEA was undertaken to evaluate a different approach to developing the KSM Project by emphasizing low cost block cave mining and reducing the number and size of the open pits, which significantly reduces the surface disturbances in the re-designed project.  The PEA assesses the potential impacts of incorporating these inferred resources into project design, capital and operating cost estimates and projected economics. The results of the 2016 PFS remain valid and represent a viable option for developing the KSM project, with the PEA assessing an alternative development option at a conceptual level. The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the results of the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.  Seabridge Gold Chairman and CEO Rudi Fronk noted that the PEA demonstrates the potential for significant project improvements over the 2016 PFS. It is important to acknowledge that the PEA includes Inferred Mineral Resources and is more conceptual, not having the same amount of engineering work involved in a PFS. The results are therefore not directly comparable. However, the PEA should help our shareholders understand the potential value of the exploration discoveries we have made at Deep Kerr and Lower Iron Cap these past three years at considerable expense. I would also note that we have had great success at KSM upgrading inferred resources to higher categories and we therefore believe that the improvements suggested by the PEA could be realized. The mine production plan starts in lower-cost open pit areas using conventional large scale equipment before transitioning into block cave underground bulk mining later in the mine life. Starter pits have been selected in higher grade areas and cutoff grade strategy optimizes revenues to minimize the payback duration.