Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
In July 2023, Seabridge Gold (TSX:SEA; NYSE:SA) reported to shareholders that Tudor Gold (TSXV:TUD) had applied to the BC government to rescind a portion of Seabridge’s licence of occupation for the KSM copper-gold project. The area of dispute covers what would be the right-of-way for planned to connect the mine site with the mill 23 km away.
On Nov. 20, the BC Ministry of Energy, Mines and Low Carbon Innovation responded to Seabridge with confirmation that the government’s authority to issue licences and permits within an area where mineral title is held by a third party.
The BC Ministry of Water, Land and Resource Stewardship confirmed there is no basis to cancel the licence under the provisions of the relevant legislation or the terms of the licence.
In its earlier news release, Seabridge said the rights conveyed by the licence and the relevant activities authorized by the permit were initially conveyed to it in September 2014. Tudor claimed in its filing that the government had no authority to issue the permit because it had acquired the mineral rights in 2016.
The area in question covers the land between the mine site and the processing plant/tailings facility. A pair of tunnels (Mitchell Treaty Tunnels or MTT) will be driven through the area to transport ore, deliver fuel, and accommodate the hydro power lines.
Seabridge says its licence allows its subsidiary KSM Mining the right to occupy the area during construction. Once construction is complete, the licence will be converted into a statutory right of way, including where the tunnels pass through mineral claims owned by Tudor.
“We are pleased that the BC government is taking no action on Tudor’s request,” said Seabridge CEO Rudi Fronk. “We understand that in granting authorizations such as the licence and the permit the BC government will consider the impacts on third parties such as Tudor and protect the rights of third parties, which it has done, but in confirming our licence and the permit we believe it is acting in accordance with the best interests of the people of BC.”
Tudor was quick to issue its own news release asserting that the permit does not cover the route of the MTT. It cites recent correspondence in October and November this year from the Ministry of Energy. Tudor has promised to oppose any application by Seabridge to build the MTT.
Seabridge holds a 100% interest in several North American gold projects. Seabridge’s flagship asset is the KSM copper-gold project 70 km north of Stewart, BC. The company’s Iskut gold project is also located in the province’s Golden Triangle.
The Courageous Lake project (NWT), the 3 Aces project (Yukon) and the Snowstorm project (Nevada) round out its gold portfolio.
