SEABRIDGE GOLD INC. (OTC:SEABF,CA:SEA)
HIGH LEVERAGE PERPETUAL OPTION ON GOLD
Business Summary
Seabridge Gold is designed to provide its shareholders with maximum leverage on a rising gold price.
Over the past three years, when the gold price was low, Seabridge acquired 13.8 million ounces of gold resources, all in North America, including the 5.7 million-ounce Courageous Lake deposit.
More recently, as the gold price has risen, Seabridge has "banked" more than 25 high-grade gold exploration projects in Nevada. The aim is to continue adding gold resources through further acquisitions and exploration funded largely by partners.
"Our research shows that a dollar invested in Seabridge current shares at common prices provides ownership of more gold than a dollar invested in any other public North American gold vehicle".
Each Seabridge share represents an industry-leading 0.5 ounces of gold fully diluted.
Recent Developments:
Seabridge Restructures Option Agreement to Acquire Grassy Mountain Gold Project
Seabridge Gold has announced that it has restructured the option agreement whereby it can acquire a 100% interest in the Grassy Mountain gold property, located in eastern Oregon, from Atlas Minerals, Inc. and its wholly-owned subsidiary, Atlas Precious Metals, Inc.
Under the original acquisition terms, Seabridge would have acquired a 100% interest by paying Atlas US$1.7 million in cash, Seabridge common shares and notes. To accommodate Atlas' preference for cash, the purchase terms have been restructured. Specifically, Seabridge has delivered to Atlas a US$300,000 option payment in exchange for which Seabridge has obtained the right to acquire a 100% interest in the Grassy Mountain gold property for US$600,000 due on or before March 31, 2003. Seabridge has also agreed to provide US$500,000 in financing for an Atlas subsidiary due on or before March 31, 2003.
Seabridge President and CEO, Rudi Fronk ,said the restructuring was a benefit to both parties. "Essentially, we have obtained a US$300,000 reduction in the purchase price by significantly expediting the payments and making them in cash. Seabridge has the cash on hand to satisfy these obligations."
The Grassy Mountain Property covers approximately 6.7 square miles or 4,300 acres, and is located approximately 22 miles southwest of Vale, Oregon. Mineralization is associated with a low-grade gold-silver bearing siliceous hot springs system with enrichment along multi-stage quartz-adularia veins and favourable lithologies.
The Grassy Mountain project contains approximately 1.0 million ounces of measured and indicated gold resources which have been subject to independent studies on both open-pit and underground mining scenarios, assuming gold prices of $350 and above (see press release dated April 27, 2000).
Fundamental Considerations
The following represents the views of Seabridge Management and is not intended as investment advice.
Technical Considerations
As Seabridge represents a perpetual option on a rising gold price, an investor must actually be convinced that the gold price will be rising.
Since nobody knows the future, we have to guess where we are on the road to higher gold prices.
The chart shown below gives you an idea of what could be lying ahead.
Those who bought Seabridge back in 1998 will not complain if they still own the shares. But in those days, a gold price of $ 350 was outright fantasy for most.
Should the present gold bull market come close to what happened to the price of gold in the seventies, the rise we have seen in the share price up to now may well be only a beginning.
Our recommendation: BUY!
Peter Zihlmann
www.pzim.com
forex@pzim.com
January 22, 2003
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