New gold-copper zone could change KSM plan

Seabridge Gold Inc. Sep. 6 said results from the first five holes drilled this year into the Iron Cap deposit at its KSM copper-gold project in northwestern British Columbia indicate that significant changes to the project's mine plan could be warranted.

Four of the holes have long intercepts with gold grades above one gram per metric ton.

"We see the potential to make another substantial improvement to KSM's projected economics if we can grow the gold-rich Iron Cap deposit. The first five holes drilled this year are confirming this potential. The widths of mineralization are excellent and the gold grades are much higher than expected," said Seabridge Chairman and CEO Rudi Fronk.

This year's 10,000-meter-plus drill program is testing zones tapped in IC-16-62, a hole drilled at the end of the 2016 program that cut 555 meters averaging 0.83 grams per metric ton gold and 0.24 percent copper, and 61 meters of 1.2 g/t gold and 0.95 percent copper.

Highlights from the first five follow-up holes include: 594.8 meters of 0.52 g/t gold and 0.38 percent copper in IC-17-63; 422.5 meters of 1.04 g/t gold and 0.32 percent copper in IC-17-65; 137.7 meters of 1.56 g/t gold and 0.29 percent copper, 63.6 meter of 4.77 g/t gold and 0.01 percent copper and 876.9 meter of 0.32 g/t gold and 0.37 percent copper in IC-17-66; and 417.1 meters of 1.02 g/t gold and 0.33 percent copper in IC-17-67.

Seabridge hopes the 10 to 12 holes drilled in this mineralized area this year will add several hundred million tons of inferred resources at Iron Cap.

"As the geology of the Iron Cap deposit becomes clearer to us, we are increasingly confident that it will rival the plus billion tonne Kerr and Mitchell deposits in size," said Fronk.

The original target concept for this area contemplated pursuing a lower zone representing the down plunge continuity of the existing Iron Cap resource, and the new blind discovery found in the upper 200 meters of hole 62.

This two target zones model was based on what appeared to be an intrusive unit not previously recognized at Iron Cap juxtaposed along a fault to the main Iron Cap deposit.

This year's drilling, however, indicate the upper blind discovery is a previously unrecognized mineralized intrusion potentially expanding the size of the Iron Cap deposit significantly.

The potential size and grade of Iron Cap, coupled with the deposit's location, has Seabridge considering changes to the KSM mine plan.

"Iron Cap is the closest deposit to project infrastructure and is permitted as a cost-efficient block cave operation but the current plan has it being mined after the Kerr deposit. Iron Cap could be developed years earlier than the Kerr deposit at a much lower cost. Also, Iron Cap has historically reported higher gold grades than the Kerr deposit," said Fronk.

-SHANE LASLEY