SEABRIDGE GOLD INC Annual Report - How They Did This Year

Think of Seabridge Gold not as a typical gold miner, but as a "gold prospector and developer." They don't dig up and sell gold. Instead, they find massive deposits, prove they are worth mining, and prepare them for future construction. They hold one of the world’s largest portfolios of undeveloped gold, totaling about 43 million ounces of proven and probable reserves.

1. What does this company do?

Seabridge’s goal is simple: maximize the amount of gold owned per share. They find properties, expand the known resources through drilling, and look to partner with or sell these projects to larger companies. They avoid the "mine building" phase because it is expensive. Building a mine can cost $5 billion to $10 billion. Avoiding this keeps them from taking on massive debt or issuing so many new shares that your ownership percentage shrinks.

2. Financial performance & Strategy

Because they aren't selling gold yet, they don't have a profit. They operate at a loss while paying to develop their sites. Their success is measured by the growth of their "gold-per-share" metric.

• Strategic Funding: To avoid debt, Seabridge sells shares on the stock exchange when they need cash. In early 2025, they raised $100 million by selling shares directly to the market and another $100 million through a "bought deal" at about $14.50 per share. This gives them cash without the heavy interest costs of bank loans.

3. Major wins and strategic shifts

• The KSM Project: This is their "crown jewel" in British Columbia. It is one of the world’s largest undeveloped gold-copper projects. They recently secured a 20-year renewal for their tunnel project land rights. In July 2024, the BC government declared the project "substantially started." This means their environmental permits no longer expire, making the project much safer and more attractive for future partners.
• Indigenous Partnerships: Seabridge has built strong ties with local Nations. They have formal profit-sharing agreements with the Nisga’a and Tahltan Nations. Between 2021 and 2025, they spent $576.9 million on early construction. Notably, 63% of that money went to Indigenous-owned businesses. These agreements are legally binding for any future partners.
• Courageous Lake Spin-out: They are moving the "Courageous Lake" project into a new, independent company called "Valor Gold." This lets Seabridge focus entirely on KSM and Iskut while giving shareholders a stake in a new, specialized exploration company.

4. Sustainability and Governance

Seabridge ties executive pay to environmental and social goals. In 2025, 15% of officer bonuses depended on meeting targets like zero injuries, high water quality, and strong community relations.

5. Key risks for investors

• Legal & Political Challenges: Laws are changing, and Indigenous groups now have more influence over land use. While Seabridge works hard to maintain relationships, they face challenges with some groups. Government intervention could delay projects or increase costs.
• The "Developer" Trap: They rely on finding a partner. If they can't land a deal, they must keep spending $50 million to $100 million annually to maintain their properties. Without a partner, they may have to keep issuing more shares, which reduces your ownership percentage.
• Royalty Obligations: They have sold "royalties"—a slice of future production—to raise cash. They granted a 2% royalty on KSM to Sprott Resource Streaming and Royalty Corp. This means a portion of future revenue is already spoken for, which could make the project slightly less attractive to major mining partners.

Investor Takeaway: Seabridge is a high-stakes play on the value of their land assets. If you are considering an investment, ask yourself if you believe the KSM project is attractive enough to lure a major mining partner. Your success depends on their ability to prove the project's value and secure that partnership before they run out of cash or dilute your shares further.