Gold Seeker Report: This Week in Mining Issue #24: Gold New ATH & Start of Earnings Season

Gold achieved an new all-time record high while silver’s surge continued early in the week, breaching $24/oz., then falling back bit, only to finish the week strong. This week, we had the first batch of earnings roll-in, most of which were much better than expected given the numerous suspended mining operations for periods of time. Financing bonanza also continued, as seen through all the announced financings and the upsized private placements (PP). Perhaps the juniors are just catching up for lost time between 2013-2018. The junior complex is raising a lot of money and it isn’t confined to just those companies that are the most prospective or those with the best-connected management teams as there are a lot of more marginal companies successfully raising money as well. The following is a list of those financings announced this week and/or upsized.

Aton Resources: Announced a PP of up to C$5m and a 10:1 reverse split. The company will issue 125m units at a price of $0.04/unit. Each unit consists of one common share of the company and one-half of one purchase warrant. Each warrant entitles the holder to acquire additional shares of the company at $0.08/share for a period of 2-years. Aton may choose to accelerate the expiry date by giving notice should it trade above $0.12/share for a period of 30 consecutive trading days.

Bunker Mining: Announced up to a C$10m PP and extension of lease for the Bunker Hill mine. Each unit will consist of one common share and one common share purchase warrant. The warrants have a 36-month maturity.

Dolly Varden: Announced a C$7.5m PP, led by Eric Sprott. It was subsequently upsized to C$10m. Each unit consists of one common share at C$0.71/unit and one-half of one warrant. The warrant holder has the option to acquire one common share at a price of C$1.10/share for a period of 24-months.

Eskay Mining: Announced a non-brokered PP, offering 3.5m flow-through units at C$0.645/FT unit for up to C$2.25m and up to 4.5m working capital units at a price of $0.45/unit for up to C$2.02m. Each FT unit comprises one flow-through common share of the company and one purchase warrant. Each warrant entitles the holder to acquire one share at a price of C$0.80 for two years from the closing of the Offering. Each WC unit comprises one common share of the company and one purchase warrant. Each WC warrant entitles the holder to acquire one common share at a price of $0.80 for up to two years from the closing.

Golden Minerals: Closed an $8.6m bought deal offering and full exercise of the option to purchase additional shares.

Great Thunder Gold: Increases its previously announced PP to C$3.1m.

Golden Tag Resources: Announced a C$5.6 financing, led by Eric Sprott. After the close, Eric Sprott will own 19.9% of the company. Each unit will consist of one common share and one-half of one purchase warrant. The financing will be done at C$0.28/unit and the warrant strike price is at $0.40, for a period of 24 months, with an acceleration clause.

HighGold Mining: Announced the closing of an upsized C$13.8m bought deal financing.

Impact Silver: Announced a C$6.0m PP financing. The company will issue units at $0.95/each. Each unit consists of one common share and on-half of one purchase warrant, with a strike price of C$1.30/share for a period of 24 months. The bookrunner will have the option to offer for sale up to an additional 2.11m units for gross proceeds of C$2m.

Kootenay Silver: Announced it has upsized the PP announced earlier in the week to C$7.0m at $0.40/unit. Each unit will be comprised of one common share and one-half of one common share purchase warrant. Each full warrant can be exercised at $0.55/share for up to 24 months after the close.  

Lion One Metals: Upsized its bought deal PP to raise C35m. This likely comes on the heels of achieving its objective at Tuvatu, identifying a feeder structure. Each unit will consist of one common share and one-half common share purchase warrant. The warrants have a 12-month maturity.

Macdonald Mines: Increased its flow-through PP to C$4.25m. Each unit will consist of one common share and one-half common share purchase warrant with a C$0.20/share strike price. Each warrant has a maturity of 24 months but if the closing price of the common stock is at a price equal to or greater than C$0.35 for a period of 10 consecutive trading days, Macdonald will have the right to accelerate the expiry date by giving notice.

Maple Gold: Increases non-brokered PP to C$4.75m through the issues of common shares at a price of C$0.17/share.

Maritime Resources: Announced $6m bought deal PP. It entered into an agreement with Sprott Capital Partners LP on its own behalf and on  behalf of a syndicate of underwriters to issue $6m of the company [approx. 26.66m] at a price of $0.15/share for gross proceeds of $4m, and $10m charity flow-through common shares at a price of $0.20/share for gross proceeds of $2m.

Metallic Minerals: Initially announced a C$6m bought deal PP and in a press release the same day, the company upsized it to C$8m. It will issue 20m units at a price of C$0.40/unit, for gross proceeds of C$8m. Each unit will consist of one common share and one-half of one purchase warrant. Each warrant will entitle the holder to acquire one common share of the company for 24 months from the close at a price C$0.60/share.

Monarca Minerals: Upsized its previously announced PP to C$3.0m. Each unit will consist of one common share of the company and one common share purchase warrant. The warrant can be exercised by or before 24 months after closing.

Nighthawk Gold: Arranged a C$10m non-brokered PP, consisting of 927k units, comprised of one non flow-through common share and one-half of one purchase warrants. It will also consist of up to 1.88m flow-through units comprised of one flow-through common share and one-half of one warrant to be issued on a non-flow through basis, and up to 2.08m flow-through common shares. Each warrant will have a C$2.0/share with a 12 months maturity. This was subsequently increased to C$12m at the end of the week.

Reyna Silver: Announced a C$4.0m brokered PP. The company will issue 6.45m units of the company at C$0.62/unit. Each unit will consist of one common share and one-half of one purchase warrant. Each warrant entitles the holder to acquire one share at a price of C$0.90 for a period of 24 months following the closing date.

Sailfish Royalties: Announced a C$18m rights offering and standby commitment. The company will issue rights to existing shareholders at the close date of August 5^th. Shareholders will receive 0.309406057 of a right for each common share of the company held. One whole right will entitle the holder to subscribe for one Share upon payment of the subscription price of C$1.00 per Share. I.e., a holder of 1,000 Shares will be entitled to subscribe for 309 Shares for an aggregate subscription price of C$309.00. 

Silver Tiger: Closed a C$11m non-brokered PP with Eric Sprott being the lead investor. Eric Sprott will invest C$4m. Each unit will be issued at C$0.30/unit. Each unit is comprised of one common share and one-half of one purchase warrant. Each warrant will have an exercise price of C$0.50/share for a 36- month period.

Spanish Mountain: Announced a $5m PP. Each unit will consist of one common share and one common share purchase warrant. Each unit will be priced at $0.42 and each warrant can be exercised at C$0.60/share for a period of two years.

Teuton Resources: Will raise C$9m via PP with Eric Sprott whereby Mr. Sprott will own 19.2% of the company following the close and 24.50% on a partially diluted basis.

In other news…

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Abitibi Royalties: Provided a company update on the company’s portfolio of NSR royalties at the world-class Canadian Malartic mine. The exploration ramp into Odyssey and East Malartic zones at the mine were approved by Agnico and Yamana. Construction of the surface infrastructure and the portal in preparation for development of the ramp to begin in August. Agnico and Yamana will begin mining more areas at Canadian Malartic upon which Abitibi’s royalties cover in the near-term. The company holds a 3% NSR on East Malartic, 3% NSR on Odyssey, 3% NSR on Sladen, 3% NSR on Sheehan, 3% NSR on Jeffrey, 2% NSR on the Gouldie zone, and a 2% NSR on the Charlie Zone.

The company also has C$63.5m in cash and is debt free. This is a solid treasury given the company has been reducing its share count, which is on-going, having les than 12.5m shares outstanding and fully diluted. The company also holds some promising exploration stage royalties. Near the start of the year, the BOD approved a 25% increase in the dividend from C$0.12/share to C$0.15/share (annualized) and is paid out on a monthly basis.  

Agnico-Eagle: Reported Q2 earnings. In Q2, despite the shutdowns of almost all of its operations at one point, the company generated net income of over $100m, and more importantly, generated $185m in operating cash flow before changes in non-cash working capital, bring 1H operating cash flow to $326m. Payable Q2 gold production was 331k oz. at cash costs and AISC of $854/oz. and $1,142/oz. Full year 2020 guidance increased while maintaining cost guidance and planned capital investment. The company expects a strong 2H 2020 on the back of higher production and gold prices. Agnico expects gold production to ramp up and average 480-500k oz. per quarter with cash costs between $690-$740/oz.

Alamos Gold: After releasing an excellent report on the Island Gold Phase III expansion last week, which has a NPV5 of $1.45B using a $1,750/oz. gold price, the company announced another high-return project. Alamos made a positive construction decision at La Yaqui in Mexico in the Mulatos district, which is nearby the existing Mulatos operation. The project highlights include:

• Average annual gold production of 123k oz.
• Mine-site AISC of just $578/oz. – which will greatly reduce the Mulatos District AISC [mid-point 2020 guidance is for AISC of $960/oz.].
• After-tax NPV5 and IRR of $260m and 58% using a $1,750/oz. gold price
• Initial mine life of five years, extending production from the Mulatos district to 2027
• Initial capital costs of $137m spent over a two-year period.

The company also reported Q2 2020 results, which was negatively impacted by both the temporary suspension at Young-Davidson [and the tie in of the lower mine expansion] and Mulatos in Mexico. The company produced 78.4k oz. Au and generated $45m in operating cash flow. Of course, AISC was elevated, largely due to higher costs at Young-Davidson during the lower mine tie-in. This will all change in 2H 2020 as company-wide costs drop significantly, production increases, and of course higher gold prices.

Alamos is well positioned with a healthy balance sheet and has one of the deepest pipelines of development projects [Phase III Island Gold, La Yaqui development, Lynn Lake, Kirazli, Agi Dagi, Camyurt]. La Yaqui will replace higher cost production at Mulatos. Other than that, Island Gold and Lynn Lake would add 240k oz. Au at 1^st quartile costs. Further, its Turkish assets, would add 375k oz. Au and each of the three are all advanced and are in the lowest decile on the industry cost curve. In other words, over the next several years, there will be downward pressure on costs as new assets come online.

Alexco: Received final water use license for Keno Hill. This is the final amended and renewed license for the district. Underground activities are currently focused on rehab services at the Bellekeno mine [which was in operation in the early 2010’s and will be the first to deliver ore to the mill in Q4]. It seems as if Alexco timed the start-up ideally as silver prices have started to break-out.

Calibre Mining: Received the environmental permit for development and operation of Pavon Norte open-pit. This is an important milestone as the company will be able to both increase production and extend the life of the Libertad mill by processing ores from various satellite deposits. Development has already commenced, Calibre is positioned to commence open-pit production from Pavon Norte in Q1 2021.  

Coeur Mining: The company was hit pretty hard from the mandated suspension of operations at its Palmarejo operations in Mexico. During the quarter [45 days + ramp up], the company generated operating cash flow of $16.4m. The low operating cash flow numbers are attributable to Silvertip, Palamarejo, and Rochester. This should improve materially as the year progresses and into 2021.

Dundee Precious Metals: Announced record results in Q2. The company’s mining operations weren’t impacted by CV19 (although throughput at its smelting operations was relative strong, and it could have been more robust if not for a reduction in throughput in April related to the management of staffing levels due to CV19). The company reported total payable output of 70.84k oz. Au, 8.54m lbs. Cu, and 45k oz. Ag (Chelopech remained steady, producing 36k oz. Au, while Ada Tepe saw its best quarterly production numbers, producing payable gold of 34k oz. Au. The company generated $75.5m in operating cash flow and over $55m in free cash flow. The company ended the quarter with $226m cash resources ($76m in cash and an undrawn $150m long-term revolving credit facility. It also has an investment portfolio, valued at $65m.

While Dundee could, and I believe should, make an acquisition (producing and/or advanced stage development asset(s)) just to diversify out of (primarily Bulgaria) and Namibia. The company has initiated a quarterly dividend earlier in 2020, and that could be increased several times unless the company uses its cash and equity portfolio to make an acquisition. It has a relatively advanced exploration asset, Timok, which will advance to the PFS level by the end of the year.

Eldorado Gold: One of a smaller group of companies which saw uninterrupted quarterly production. Production of 137.78k oz. Au is a significant increase vs. that in the comparable period in 2019 of 91.8k oz. AISC was also lower relative to Q2 2019. Full year production and cost guidance remains intact at 520-550k oz. Au with AISC of $850-$950/oz. The company generated $99m in operating cash flow vs. $38.5m in Q2 2019 and free cash of $63.4m, multiples higher vs. that in Q2 2019 of just $4.8m). The company’s cash position increased to $440m. The company also commenced construction of a 3km decline at Lamaque. The underground decline will connect the Sigma mill to the 405m level of the Triangle mine. The benefits of this include eliminating surface haulage of ore, reducing energy demands for mine ventilation and providing access to lower exploration costs. In other words, it will reduce costs and is expected to be completed in 1H 2022 for capital cost of $24m.

EMX Royalty: provided an update on its expanding portfolio of gold assets in Fennoscandia. EMX has maintained an aggressive approach to gold exploration in Sweden, Norway, and Finland, and has 17 precious metal-focused projects comprising nearly 200,000 hectares in the region. EMX prioritized gold exploration in Fennoscandia over the past several years, and helped establish a private Canadian company, Gold Line Resources, to advance its gold assets in central Sweden. Since signing the agreement with GLR, EMX has acquired several additional gold projects, many that are strategically grouped to form sub-portfolios of gold assets. EMX continues to execute its royalty generation business model in Fennoscandia, forming partnerships with other companies in exchange for royalty interests, equity stakes in partner companies, and cash payments.

Fortuna Silver: Announced the resumption of production at its Peruvian mine, Caylloma. On July 6^th, the company voluntarily suspended operations for approx. two weeks. The company sanitized and disinfected the mine site.

Golden Star Resources: The company announced the sale of the Bogoso-Prestea gold mine for total consideration of up to $95m to Future Global Resources. The purchase price will be $55m with a future contingency payment of up to $40m. This sale will bolster the company’s balance sheet so that it can focus on its primary asset, Wassa. The $55m purchase price will be paid as follows:

• $30m, which is comprised of $5m cash and the assumption of Future Global Resources of $25m of negative working capital.
• $10m of cash payable July 31^st, 2021; and
• $15m of cash payable on July 31^st, 2023
• If Future Global Resources develops the Bogoso sulfide project, the contingent payment by reference to the average gold price over the trailing 90-day period preceding the date of the positive construction decision:
  • $20m, if the average gold price is less than or equal to $1,400/oz.
  • $30m, if the average gold price is greater than $1,400/oz. but less than or equal to $1,700/oz.
  • $40m, is the average gold is greater than $1,700/oz.

Harte Gold: The company provided an operational update on its Sugar zone mine in Ontario. All mining activities have commenced at the mine. The company is ahead of schedule, supporting the planned mill restart scheduled for early August. Backfill, waste and ore development are meeting or exceeding expectations, long-hole blasting and ore haulage rates are improving, and a significant stockpile has been built up to feed the mill on restart. The company also reiterated 2020 and 2021 guidance of 20-24k oz. Au and 60-65k oz. Au. The company is evaluating an expansion of the Sugar zone mine to 1.2ktpd (vs. 800ktpd currently) and the feasibility study is expected in Q4.

K92 Mining: Announced a very robust PEA stage 3 expansion at Kora [which together with Irumafimpa, comprise the Kainantu project]. Per the PEA, the After-tax NPV5 is $1.5b using a $1,500/oz. gold price, increasing to $2b at $1,900/oz. Average annual gold equivalent production will increase 165% to 318k oz. LOM average cash costs and AISC are projected to be $353/oz. AuEq and $489/oz. AuEq. This is a very high-return project with initial expansion capital costs of $125m and life of mine sustaining capital of $341m. The phase III expansion will be funded entirely by the existing stage II cash flow. The mine life is now estimated at 12-years, with 3 of those years being at stage II production levels. This will transform the company into a true cash flow machine with production greatly increasing and costs in the bottom 10-15% on the industry cost curve.  

Kinross Gold: Given that all of Kinross’s operations are open-pit mines, many being heap leach, insulated the company to a degree against the mandated shutdowns due to CV19. Q2 production totaled 572k AuEq oz. Its three largest assets accounted for 63% of total production and were the lowest cost mines with an average cost of sales of $600 AuEq oz. Kinross generated operating cash flow of $433m, a 30% increase related to Q2 2019. Cash cost and AISC were in-line at $725/AuEq oz. and $984/AuEq oz. The company has plenty of liquidity and while it is fairly leveraged, the cash flow it will be generating for the next several years will allow it to deleverage quickly. At quarter end, its cash position was $1.53b with total liquidity of $2.3b.

There was a fair amount of positive news-flow during Q2 with Lobo-Marte PFS in Chile, which added 6.4m oz. Au to companywide reserves and increase reserve life index by 2.5-years. The company also announced an agreement in principle with the government of Mauritania, which of course means the government will be stealing more of the profits than it has been but also that the company can proceed with the phase II expansion at Tasiast. Once the 24k project is complete mid-2023, Tasiast should generate 450-500k AuEq oz. +/- for several years. Production jumped in 2019 after the Phase I expansion to 390k AuEq oz. at 18ktpd. The 24k expansion will incrementally increase throughput capacity, first to 21ktpd by year end 2021 [which should increase production upwards of 420-460k AuEq oz.] Kinross has a nice pipeline of near-term development assets, which will replace a depleted mining operation and increase annual production. These include the Tasiast 24k project, La Coipa & Lobo-Marte, and the Chulbatkan.

La Coipa is restarting in Chile and the Phase 7 deposit will be mined from 2022-2024 [potentially longer if it can increase reserves] or average production of approx. 225k AuEq oz. Once La Coipa is depleted, the company will replace that production [expected in 2027] via development of Lobo-Marte. La Coipa has reserves and resources of 768k oz. Au + 37m oz. Ag and 955k oz. Au + 27m oz. Ag. Lobo-Marte has reserves of 6.4m oz. In other words, La Coipa and Lobo-Marte present a smart strategic boost to production with a long initial mine life. The Chulbatkan deposit is similar to its other high margin Russian operations. The company completed the acquisition in January 2020 and is a large, near-surface resource and will likely support a low-cost, low-strip, high-grade, open-pit heap leach. The mineralization at the deposit is continuous and open along strike and at depth with the potential for additional high-grade structures within the resource.

There could be significant upside on this 120 sqkm with multiple, untested and under-explored promising targets. The company views this project as being about 5-years away from first production. Kinross will drill out and advance technical studies at Chulbatkan over the next 3-years, followed by a 2-year construction period. Currently, the resource estimate is 3.9m oz., but this is likely to increase, perhaps significantly.  

Kirkland Lake Gold: Reported a strong Q2 despite mandated shutdown of operations and inability to achieve full production rates for a period of time (Detour and Macassa). The company produced 329.7k oz. Au during the quarter, a 54% increase relative to the comparable period in 2019. AISC remained low at $751/oz. [$526/oz. excluding Detour Lake] vs. $658/oz. in Q2 2019. The company reported robust operating cash flow of $222m and free cash flow of $94m. If you remove the $132.6m tax payment [final tax instalment for the 2019 tax year] made in Australia, operating cash flow was $355m with free cash flow of $226m. The company’s cash position remains strong with $537m and no debt. The company can increase its cash position quickly, especially at current metal prices but the company also repurchased $50m of common stock during the quarter. Kirkland also announced a new high-grade intersection at Fosterville Swan zone as well as the expansion of Robin’s Hill, Cygnet and Harrier targets.

Key Intercepts from the Swan zone:

• 7m @ 976 g/t Au
• 5.8m @ 933 g/t Au
• 5.6m @ 416 g/t Au
• 7.3m @ 222 g/t Au

The drill results from Robin’s Hill confirm substantial scale of mineralized system and new intercepts identify potential resource extensions and new mineralization surrounding the Currie Fault. Key intercepts include:

• 2.9m @ 30.8 g/t Au (Currie Fault)
• 1.6m @ 10.60 g/t Au (Currie Fault)
• 3.7m @ 9.6 g/t Au (Currie Fault)
• 2.8m @ 7.7 g/t Au (Currie Fault)
• 11.7m @ 5 g/t Au (Currie Fault)
• 3.2m @ 68.1 g/t Au (Herschel Fault)

Drilling of the Cygnet and Harriet targets illustrate growth potential outside existing mineral resources. Key intercepts include:

• 5.9m @ 13.6 g/t Au (Cygnet)
• 2.1m @ 12.7 g/t Au (Cygnet)
• 8m @ 5.4 g/t Au (Cygnet)
• 3.8m @ 24.5 g/t Au (Harriet)
• 3.7m @ 22.8 g/t Au (Harriet)
• 5.5m @ 20.90 g/t Au (Harriet)

Liberty Gold: Expands the new high-grade oxide gold D-3 zone at Black Pine. D-3 and D-1 extension discoveries have returned high-grade results. These include: 96m @ 1.44 g/t Au, 19.8m @ 3.04 g/t Au [including 4.6m @ 8.54 g/t], and 22.9m @ 2.21 g/t Au in the F zone.

Oceana Gold: The company produced 58.68k oz. Au in Q2 2020 at AISC of $1,265/oz. on sales of 62k oz. Au. The company has some nice growth projects with the Martha underground and the high-return Waihi district PEA, which will generate a NPV5 of $665m with a 51% IRR. The company generated $16.7m in operating cash flow.

Mako Mining: Continued to intersect high-grade mineralization as production nears. The objective of the definition drilling at San Albino were to delineate the geometry of the mineral resources amenable to open-pit mining and provide sufficient information for a new resource estimate which is still expected in Q3. The two holes in this press release include 2.1m @ 20.04 g/t Au and 0.80m @ 31.70 g/t Au.   

Metalla: Announced the acquisition of what could be a highly accretive royalty on Kirkland Lake’s Fosterville mine.  It entered into a purchase and sale agreement with NuEnergy Gas Limited to acquire its 2.5% NSR royalty on the northern and southern portions of Kirkland Lake Gold’s Fosterville mine for A$6 million (A$4 million in common shares of $MTA and A$2 million in cash).

We shouldn’t expect this to begin throwing off cash in the near-term, but over the medium and especially longer-term, this royalty provides excellent optionality. Robin’s Hill, is set to become a second mining front at Fosterville, likely in 2022 +/-. Currently the royalty covers no portion of the property where mineralization has been identified but given the exploration upside, this could change quickly.

New Gold: Q2 AuEq production totaled 98k oz. with AISC of $1,283/oz. during the quarter, an improvement over Q1 of this year. Higher gold prices allowed the company to generated $53m in operating cash flow. The company did some financial restructuring during the quarter as it entered into a definitive agreement with Artemis Gold to divest its Blackwater Project for C$190m in cash, an 8% gold stream, and a C$20m equity stake in the company. During the quarter, the company also completed a $400m senior notes offering yielding 7.50% due 2027, that was used, along with cash on hand, to fund the full redemption of its outstanding 6.25% senior notes due 2022. Things should improve operationally for the company in the 2H 2020.

Nomad Royalty: Entered into an agreement to acquire an existing NSR royalty on the Troilus gold project in Quebec. In exchange for $7.5m, Nomad will obtain a 1% NSR on all metals produced from 81 mineral claims and on surveyed mining lease comprising the property. Troilus is an early stage royalty as opposed to Nomad’s current portfolio which primarily consists of producing royalty and streams and those in advanced development. The last resource estimate as of end 2019 includes 4.71m oz. (Indicated) AuEq with several new targets identified. The mine was previously in operation up until 2010. The purchase prices will be paid via $1.9m in cash and the issuance of 5.77m units to the vendor. Each unit will consist of one-half of one common share purchase warrant for a 24-month period following close.  

Roxgold: Released new exploration drilling results from the company’s Boussoura project in Burkina Faso. Highlights include:

• 61m @ 2.5 g/t Au
• 18m @ 2.4 g/t Au
• 20m @ 4.4 g/t Au
• 6m @ 2.2 g/t Au
• 2m @ 5.6 g/t Au

The company has robust production growth, although that won’t begin until 2023 barring any M&A activity.

Sandstorm Gold Royalties: Announced Q2 results. Given its largest operations were impacted by mandated shut-downs, the company still managed attributable production of 10.92k AuEq oz., generating operating cash flow of $13.4m (vs. Q2 2019 of $14.5m). The company’s balance sheet is robust with over $40m in cash, $70m in equity and debt securities, strong and increasing cash flow, and up to a $225m revolving credit facility ($300m w/accordion), or $410m in available liquidity to complete new deals. The company has some near-term growth via fixed stream deliveries from Relief Canyon, the ramp-up of Fruta Del Norte, and a possible increase in the Aurizona NSR to 5% (which is triggered when gold is above $2k/oz. Next quarter should show a big jump in cash flows given its operations will be back on-line, presumably for a full quarter, near-term growth, and a gold price, which will be, on average, considerably higher. As Hot Maden comes closer to reaching production, it should get fully valued over the next two or so years.

Teranga Gold: Announced robust pre-feasibility study results for its flagship project, Sabodala-Massawa. Highlights include:

• First five-year average annual production of 384k oz. with AISC of $671/oz.
• Average net cash flow of $215m annually @ 1,600/oz. Au over the first 5-years.
• Reserves increases 120% to 4.8m oz. Au at $1,250/oz. Au.
• Companywide annual gold production expected to increase 40% to approx. 500k oz.

Acquiring Massawa from Barrick has proven very smart as this will propel the company into the ranks of a mid-tier producer with low AISC over the next 16-years of $749/oz.

Tudor Gold: Drilled near-surface intercepts at Treaty Creek averaging 2.12 g/t Au over 348m within 930m @ 1.16 g/t Au. Drilling extends the Goldstorm system by another 150m to the Northeast with a hole than intercepted 550m @ 0.982 g/t Au. These type of drill holes should continue as its on trend with Seabridge’s KSM project located 5km southwest of Goldstorm.