Annual Report

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# Annual Report

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# Annual Report
ANNUAL REPORT 2022
KSM Substantially Started
CORPORATE OVERVIEW
Seabridge Gold’s resource base of gold, copper and silver is one of the world’s
largest. Our principal projects are located in Canada. Our objective is to grow
resource and reserve ownership per share. Our risk-reducing strategy: acquire
North American deposits; expand them through exploration; move them to
reserves through engineering; and sell or joint venture them to established
producers for mine construction and operation.
CONTENTS
4 CEO's Report to Stakeholders
10 2022 Corporate Report Card and 2023 Objectives
18 Mineral Reserves and Resources
SUBSTANTIALLY 20 Management’s Discussion and Analysis
STARTED: 35
36
Management’s Responsibility for Financial Statements
Report of Independent Registered Public Accounting Firm
Seabridge construction crews have 39 Consolidated Statements of Financial Position
completed erection of a permanent, 40 Consolidated Statements of Operations and Comprehensive Loss
high capacity bridge over the Bell- 41 Consolidated Statements of Changes in Shareholders’ Equity
Irving River for trucking copper 42 Consolidated Statements of Cash Flows
concentrate out to Highway 37 43 Notes to the Consolidated Financial Statements
and on to the ocean-going port at 65 Corporate Information
Stewart and to bring supplies into
the project. A temporary bridge
(on the right) was constructed first Forward-Looking Statements
to enable work to proceed on the We are making statements and providing information about our expectations for the
permanent structure from both future which are considered to be forward-looking information or forwardlooking
statements under Canadian and United States securities laws. These include statements
river banks. Indigenous-owned and regarding future plans and the timing of them, including construction activities,
managed companies have been the the proposed production scenarios in respect of our principal projects, anticipated
mainstay of our substantially started exploration results at our projects and our view of the gold and copper market and
financial markets generally. The purpose of these statements is to help the reader
work programs. understand management’s current views of our future prospects and is not
intended for other purposes. This information will not necessarily be updated
unless required by securities laws. It is not investment advice. This information
is based on a number of material assumptions, and is subject to a number of
material risks, which are discussed in our annual Management's Discussion and
Analysis contained in this document under the headings “Forward-Looking
Statements” and “Risks and Uncertainties” and in the Notes to Consolidated
Financial Statements. We also refer shareholders to the more comprehensive
discussion of forward-looking information in our Annual Information Form
filed on SEDAR at www.sedar.com and our Annual Report on Form 40-F filed
on EDGAR at www.sec.gov/edgar.shtml.
ANNUAL REPORT 2022 3
CEO'S REPORT TO STAKEHOLDERS CEO'S REPORT TO STAKEHOLDERS
KSM Development History (2000 to Present)
CEO’S REPORT TO STAKEHOLDERS:
TOWARDS A SUBSTANTIALLY STARTED KSM
BC Environmental
Assessment Certificate
B.C. and Federal Environmental Deep Kerr Exploration Extended to July 2026 US$225 raised for
Assessment approvals received Adit permit and key
SS activities.
with early stage construction permit for water storage
permits facilities received
Started Early
BC Environmental Construction Works Early Works
Acquisition Discovered Deep Kerr and Assessment Certificate Acquired Building Access Roads, Camps,
of KSM Lower Iron Cap Extended to July 2024 East Mitchell Projects Team Powerline
Down plunge extension of
Iron Cap drilled
After 17 years of patient exploration, engineering and In 2021, we also decided to address a second issue which was
Substantial Start
permitting, our KSM, the world’s largest undeveloped gold- constraining our JV negotiations, namely the risk of expiry of 2001 2006 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Feasibility Study
copper project by reserves and resources, is now more our Provincial Environmental Assessment Certificate (EAC).
ready than ever for a joint venture. This has not been a To avoid expiry of the KSM EAC, it is necessary to undertake Deep Kerr drilled
linear process. Many steps were required to get to this sufficient permanent physical improvements to KSM to be First drilling
Discovered down Schedule 2 amendment
East Mitchell Data
Collection, Resource
plunge extension of for tailings management
point including two major redesigns of the mine plans and considered to have “substantially started” construction of the campaign Iron Cap facility (TMF) received
Model Update
Concept Cases to integrate
hundreds of changes, large and small, that have de-risked the KSM Project prior to July 29, 2026. Attaining “substantially East Mitchell
asset, improved its economic parameters and made it more started” from the BC government before that date results in
2012 PFS used 2016 PFS and PEA 2020 PFS and PEA 2022 PFS and PEA
attractive to potential partners. the EAC lasting for the life of the project. Potential partners for EAC Open Pit with Open Pit with All Open Pit PFS
application
did not want to undertake the expenditures required to UG at Mitchell
and Iron Cap
UG at Mitchell
and Iron Cap
with Mitchell, East
Mitchell, Sulphurets
The story of how we got here explains a lot about the mining achieve Substantially Started status before completing a PEA included UG
at Kerr
PEA included UG at
Iron Cap and Kerr
Expansion PEA
including Iron Cap
business. feasibility study and making a production decision. We and Kerr
therefore took on the work necessary to achieve the
We bought KSM in 2001 when copper was US$0.60 a pound Substantially Started designation. BC Hydro's power will transfer to Seabridge at this switching station
and gold was under US$300 per ounce. Although it already
had a substantial gold and copper resource, the project In February 2022, we secured US$225 million in funding from 2022 Substantially Started
was uneconomic at those metal prices but we made the Sprott Resource Streaming and Royalty Corp. and Ontario Activities
calculation that time and markets would change that. When Teachers’ Pension Plan to fund Substantially Started activities.
We immediately started an aggressive program to construct 2022 Substantially Started activities at
they did, by 2006, we started to spend money exploring KSM.
permanent infrastructure at KSM to mitigate the EAC expiry KSM focused on power, camps, roads,
The results exceeded all our expectations.
risk, allowing a now expanding field of prospective partners to bridges and fish habitat areas.
KSM's 2012 Preliminary Feasibility Study (PFS) formed the concentrate on the project opportunity. This work, described
basis for our successful application for an Environmental in detail below, accelerates the time frame to production, Power
Assessment Certificate and more in-depth engagement with facilitates the work of completing a FS in a timely manner and In February 2022 Seabridge signed an $84
our local Indigenous groups and regulators. Subsequent greatly strengthens our hand in the negotiations to come. million Facilities Agreement with British
major improvements were made in response to the feedback We have also provided considerable work for the Tahltan Columbia Hydro and Power Authority
we received. A further PFS was completed in 2016 and Nation and the Nisga’a Nation, further cementing the strong (BC Hydro) covering the design and
the current one mid-2022. Each reflected more of what relationship we have formed with them over the years. construction of facilities by BC Hydro to
prospective partners said they wanted and more of what supply construction phase hydro-sourced
we thought would improve the value of the project, its With the elimination of these two issues, we are pleased electricity to the KSM project.
attractiveness to prospective partners and the joint venture to report that our JV discussions have taken on a new life,
terms we could therefore expect for our shareholders. with more companies engaged than ever before. Recent KSM will connect to BC Hydro’s existing
improvements in metal prices (see our Gold Market update Northwest Transmission Line (NTL) at BC
The 2022 PFS resolved an important issue that has opened the below), coupled with a much more vibrant M&A environment Hydro’s Treaty Creek Switching Station
joint venture (JV) process to a much wider set of prospects for gold and copper projects, have further enhanced our (TCT). This TCT, located where KSM’s
than the 2016 iteration. The issue was underground mining. position in JV discussions. Let’s also not forget that the Treaty Creek access road meets Highway
The 2016 PFS proposed a combination of open pit and block gold industry is running short on reserves while the copper 37, is scheduled to be completed before
cave operations which provided optimum access to the four industry will require new projects to meet the growing the end of 2025. Our KSM project team
KSM deposits. However, only two suitable JV candidates have copper demand emanating from green energy initiatives. In has completed its design for a 30 km long
had success at block caving (a serious limitation) and capital recognition of these facts, we have engaged a leading mining 287 KV transmission line to interconnect
requirements in the early years to develop the underground industry bank to assist with advancing JV negotiations. the TCT and the KSM plant site.
workings added capital expenditures.
Could we have done a joint venture deal along the way? We Previous studies at KSM originally
In 2020, we addressed this issue when we acquired the received proposals but they would have meant leaving far too incorporated diesel power for
Snowfield deposit (now named East Mitchell) right next door, much value on the table. Projects like KSM are very rare. We construction activities, with hydro
which we incorporated into the 2022 PFS for a new, open-pit- think the final terms of a JV will be well worth the wait. power, for operations, to be supplied
only, mine plan. This step has potentially opened up a much later from BC Hydro’s NTL. Connecting
larger universe of possible bidders while also reducing life of to BC Hydro’s NTL earlier than previously KSM Mitchell Deposit
mine capital expenditures, despite inflationary pressures.
ANNUAL REPORT 2022 4 ANNUAL REPORT 2022 5
CEO'S REPORT TO STAKEHOLDERS
planned provides a number of significant ESG and economic facility area of the project. The other two permanent camps
advantages including: will be on the mine side of the project. Camp site locations
have been chosen and designed to ensure minimal land
(i) Green hydro power will replace significant diesel power requirements, avoid geohazards, and reduce potential for
generation over the multi-year construction phase, with a adverse environmental effects.
corresponding large reduction in greenhouse gas emissions;
During 2022, permanent accommodations at Camp 11 were
(ii) Hydro power is less than 25 percent of the cost of diesel- commissioned, providing 120 beds to support construction
generated power with consequent capital and operating cost and eventual operations on the Treaty Creek side of the
savings; and property, just off Highway 37. Earthworks for the Camp
11 area were accelerated to help de-risk construction and
(iii) The TCT and transmission line will eventually be required operations activities which include support facilities, laydown
for operations and moving this infrastructure forward in the areas and centralized infrastructure. In 2023, Camp 11 will be
pr

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