Seabridge Gold (SEA.TO, NYSE:SA) has announced an updated resource estimate on the KSM project in British Columbia, Canada. The Deep Kerr zone of the project now contains 9.3 billion pounds of copper and 8.2 million ounces of gold, based on a total tonnage of 782 million tonnes at an average grade of 0.54% copper and 0.33 g/t gold using a cut-off value of $20/t.
Even if you’d increase the cut-off value to $32/t, the resource estimate would still contain a very respectable 6.7 billion pounds of copper, 5.4 million ounces of gold and in excess of 26 million pounds of molybdenum. The grade might seem low for an underground deposit, but the Deep Kerr zone will very likely be mined through block cave mining. Additionally, looking at the topography of the KSM project, it’s not unlikely the Deep Kerr zone could be reached by simply constructing a ramp from the valley into the mountain.
Seabridge Gold has signed 10 confidentiality agreements with senior copper and gold producers but we can imagine most of them will be trigger-shy as this still is a project requiring several billions of dollars to be constructed.
Disclosure: The author holds no position in Seabridge Gold. Please see our disclaimer for current positions.