BC fires slow KSM drilling, season extended

Seabridge Gold Inc. Sept. 24 reported that following delays caused by adverse weather and an unprecedented fire season in British Columbia, the company is back on track to meet its 2018 exploration goals at the KSM gold-copper project in the Golden Triangle.

"Weather conditions were far different this year than what we have experienced at KSM over the past decade, forcing us to make program adjustments on the fly. Also, the unprecedented fire activity throughout the province and in our area limited our access to some services," said Seabridge Chairman and CEO Rudi Fronk.

The company said both labor and equipment were in short supply as these resources were dedicated to firefighting efforts.

"We are now on top of these issues and we expect to complete our planned program by extending our field season by several weeks," Fronk added.

The 2018 program includes confirmation work in the established reserve areas to ensure that the world-class KSM project is ready for final feasibility when a partner is secured; and exploration drilling to further define the higher grade core of the Iron Cap deposit.

The four deposits that make up the KSM project – Kerr, Sulphurets, Mitchell and Iron Cap – encompass 2.2 billion metric tons of proven and probable reserves averaging 0.55 grams per metric ton (38.8 million ounces) gold, 0.21 percent (10.2 billion pounds) copper, 2.6 g/t (183 million oz) silver, and 42.6 parts per million (207 million lb) molybdenum.

These reserves support a 53-year mine that would average 540,000 oz gold, 156 million lb copper, 2.2 million oz silver, and 1.2 million lb molybdenum per year, according to a 2016 prefeasibility study.

Confirming the reserves

This year the company completed 1,746 meters of drilling to confirm the mineral reserves in those areas where production would likely begin.

Three of the holes were drilled in the Mitchell deposit. Highlights from this drilling include 374.1 meters of 0.84 g/t gold, 0.2 percent copper and 3.36 g/t silver in hole M-18-132; and 376.5 meters of 0.79 g/t gold, 0.27 percent copper and 5.49 g/t silver in M-18-134.

One hole drilled into Kerr, K-18-53, cut two zones of mineralization – 134.3 meters of 0.26 g/t gold, 0.41 percent copper and 1.78 g/t silver; and 222.9 meters of 0.28 g/t gold, 0.51 percent copper and 1.94 g/t silver.

Hole S-18-80 cut five narrower zones of mineralization from 106.7 meters to 430 meters at Sulphurets – 57.3 meters of 0.41 g/t gold, 0.21 percent copper and 0.45 g/t silver; 78.7 meters of 0.78 g/t gold, 0.36 percent copper and 0.74 g/t silver; 26.2 meters of 0.8 g/t gold, 0.07 percent copper and 0.46 g/t silver; 23.5 meters of 0.93 g/t gold, 0.04 percent copper and 1.39 g/t silver; and 63 meters of 0.57 g/t gold, 0.05 percent copper and 0.70 g/t silver.

Seabridge said these results confirm block grades comparable to model predictions.

In addition to reserve confirmation, the company is completing 12 waste characterization holes along the margins of the Mitchell and Sulphurets deposits.

So far, eight of these holes have been completed. Early results indicate an updated block model of waste types along the margins of these deposits is performing well. The updated block model, however, did not capture several narrow un-mineralized intrusions encountered in this drilling. These occurrences will be included when the model is modified and are expected to reduce the volume of potentially acid-generating waste rock.

Another nine holes to collect geotechnical data were completed this year to evaluate the material properties of fractures and faults on the planned pit walls at Mitchell and Sulphurets.

Planned hydrogeological pump tests were abandoned for this season, in part due to the exceptionally dry weather.

Expanding Iron Cap

The biggest portion of this year's roughly 27,000-meter drill program at KSM is to extend Iron Cap, a large gold- and copper-rich deposit that is gaining a prominent role in the proposed mine-plan at KSM.

A resource calculated for Iron Cap early this year outlines 370 million metric tons of indicated resource averaging 0.43 grams per metric ton (5.1 million oz) gold; 0.23 percent (1.9 billion lb) copper; 4.2 g/t (49.9 million oz) silver; and 48 parts per million (39 million lb) molybdenum. Plus, 1.3 billion tons of inferred resource averaging 0.48 g/t (20 million oz) gold; 0.3 percent (8.6 billion lb) copper; 2.9 g/t (121 million oz) silver; and 34 ppm (34 million lb) molybdenum.

In a prefeasibility study completed in 2016 Iron Cap was not slated to be mined until about 32 years into the life of a proposed operation for KSM.

At that time, however, this deposit had 224 million metric tons of probable reserves averaging 0.49 g/t gold, 0.2 percent copper and 3.6 g/t silver.

The substantially larger gold-copper resource outlined at Iron Cap since the study has prompted Seabridge to investigate the viability of mining Iron Cap much earlier in the life of a future mine at KSM. And, the company believes there is the potential to grow this resource.

Seabridge said results from the 2017 drill program confirm that the grade at Iron Cap increases as the deposit plunges to the west. This high-grade core zone is the target of roughly 16,700 meters of drilling this year.

So far, eight exploration holes have been completed at Iron Cap and the last five targeting the deeper and potentially higher grade expansion of this deposit are in progress.

While assays are still pending from the Iron Cap drilling, Seabridge said initial indications are that the deposit approaches near vertical continuity to a depth of at least 1,800 meters.

"Results thus far indicate that all of our confirmation work is consistent with our development model and the inferred resource at Iron Cap will grow substantially," said Fronk.

–SHANE LASLEY