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January 30, 2002
Seabridge Closes Acquisition of Quartz Mountain Gold Project
Toronto (Canada) — Seabridge Resources
announced today that it has completed its acquisition of a 100% interest
in the Quartz Mountain Gold Project located in Lake County, Oregon.
Independent resource models constructed for this project in the 1980s
estimated total gold resources from 1.75 million ounces to 2.54 million
ounces. These historical estimates do not conform with the new National
Instrument Policy 43-101. Seabridge has therefore commissioned an
independent review of these models to generate a classified resource
which conforms with this policy.
During 1987 and 1988 at least six independent resource models
were constructed for Quartz Mountain which do not conform with
National Instrument 43-101. Using a polygonal method, Wright
Engineers Limited of Canada estimated a total unclassified resource
at 67.25 million tons grading 0.026 ounces of gold per ton, or total
contained ounces of 1.75 million. Using an inverse-distance block
model method, Wright Engineers estimated the total unclassified gold
resource at 128.6 million tons at a grade of 0.020 ounces per ton, or
total contained ounces of 2.54 million. In a third model, Minproc,
using a cross-sectional polygonal methodology, estimated proven
resources of 67.54 million tons grading 0.026 ounces per ton (1,739,000
contained ounces), probable resources of 3.39 million tons grading 0.021
ounces per ton (72,000 contained ounces) and possible resources of 0.72
million tons grading 0.024 ounces per ton (17,000 contained ounces). The
three remaining unclassified resource models fell within the ranges of the
Wright Engineers' estimates. All six of the historic resource models
incorporated a cut-off grade of 0.01 ounces of gold per ton. Seabridge
has commissioned a resource estimation review of the Quartz Mountain project
by an independent third-party which will review all historical resource
estimates in terms of methodology and assumptions and restate the resources at
Quartz Mountain to comply with National Instrument 43-101 requirements.
Seabridge CEO Rudi Fronk noted that the Quartz Mountain acquisition
could increase the Company's total gold resources by as much as 52%.
"Our corporate strategy is to provide our shareholders with the highest
possible gold ownership per common share. This acquisition makes a
strong contribution to our strategy." (see Corporate Strategy)
The Quartz Mountain property is located in the Fremont National Forest
of south-central Oregon, 30 miles west of the town of Lakeview via State
Highway #140. The property currently consists of 67 unpatented mining
claims which host two separate deposits, Quartz Butte and Crone Hill.
Gold was first discovered at Quartz Mountain in the 1890s. Very
little work was performed on the project until the 1980s. From 1985
to 1996 Quartz Mountain Resources joint ventured, or optioned, the
project to several partners including Galactic Resources Corporation,
Pegasus Gold Corp. and Newmont Exploration Ltd. During this period
significant work was undertaken, including 715 drill holes totaling
256,000 feet (235,000 feet of reverse circulation and 21,000 feet of
diamond core drilling). Additionally, independent feasibility studies
were prepared by Minproc (USA) Inc. in 1988 and Davy McKee Engineers
and Constructors in 1989 for a large open pit mining operation
incorporating both heap leach and conventional milling technology.
The existing gold resources at Quartz Mountain are not economic at
the current gold price.
The Quartz Mountain project is a volcanic-hosted, hot-spring
gold deposit located in the Basin and Range Province of south-central
Oregon. Gold mineralization occurs extensively within Late Miocene,
endogenous, rhyolite porphyry domes and within the adjacent basaltic flows,
tuffs and volcaniclastic country rocks. Disseminated, micron-size, native
gold mineralization at Quartz Mountain accompanies pervasive silica flooding
and quartz veining and is associated with pyrite, maracasite, and stibnite or
their oxidized equivalents. Mineralized zones measure up to 300 feet in thickness
and 3000 feet in diameter on Crone Hill and up to 100 feet in thickness and 1000
feet in diameter on Quartz Butte. Gold mineralization at Quartz Mountain occurs
with silicification and quartz veining in (i) hot spring sinters and vent breccias;
(ii) stockworks and hydrothermal breccias within volcanic vents and along intrusive
and stratigraphic contacts; and (iii) stratabound zones of replacement mineralization
occupying select lapilli tuff and basaltic agglomerate horizons. Structural ground
preparation along with primary porosity and permeability are the ore controls evident
in all three cases.
At closing, Seabridge issued Quartz Mountain Resources (i) 300,000
Seabridge common shares; (ii) 200,000 common share purchase warrants,
exercisable by Quartz Mountain Resources at C$0.90 per share for two years;
(iii) US$100,000 in cash; and (iv) a 1% net smelter royalty interest on the
unpatented mining claims acquired. Additionally, a 0.50% net smelter royalty
interest will be payable to an unrelated third-party as a finder's fee.
Seabridge has been designed to provide its shareholders maximum leverage to
the price of gold. The Company has entered into agreements covering 13.8 million
ounces of gold resources in North America, of which 8.0 million ounces are
measured and indicated. (See Gold Resources Table).
The Company continues to seek expansion of its gold
resource base by acquisition of new projects and exploration
programs largely funded by partners.
All resource estimates reported in this
disclosure are calculated in accordance with the Canadian
National Instrument 43-101 and the Canadian Institute
of Mining and Metallurgy Classification system. These
standards differ significantly from the requirements of
the U.S. Securities and Exchange Commission.
Statements relating to the estimated or expected future
production and operating results and costs and financial
condition of Seabridge, planned work at the Company¬s
projects and the expected results of such work are forward-looking
statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are statements that are not historical facts
and are generally, but not always, identified by words
such as the following: expects, plans, anticipates, believes,
intends, estimates, projects, assumes, potential and similar
expressions. Forward-looking statements also include
reference to events or conditions that will, would, may,
could or should occur. Information concerning exploration
results and mineral reserve and resource estimates may
also be deemed to be forward-looking statements, as it
constitutes a prediction of what might be found to be
present when and if a project is actually developed. These
forward-looking statements are necessarily based upon
a number of estimates and assumptions that, while considered
reasonable at the time they are made, are inherently subject
to a variety of risks and uncertainties which could cause
actual events or results to differ materially from those
reflected in the forward-looking statements, including,
without limitation: uncertainties related to raising sufficient
financing to fund the planned work in a timely manner
and on acceptable terms; changes in planned work resulting
from logistical, technical or other factors; the possibility
that results of work will not fulfill projections/expectations
and realize the perceived potential of the Company¬s projects;
uncertainties involved in the interpretation of drilling
results and other tests and the estimation of gold reserves
and resources; risk of accidents, equipment breakdowns
and labour disputes or other unanticipated difficulties
or interruptions; the possibility of environmental issues
at the Company¬s projects; the possibility of cost overruns
or unanticipated expenses in work programs; the need to
obtain permits and comply with environmental laws and
regulations and other government requirements; fluctuations
in the price of gold and other risks and uncertainties,
including those described in the Company¬s Annual Information
Form filed with SEDAR (available at www.sedar.com)
for the year ended December 31, 2002.
Forward-looking statements
are based on the beliefs, estimates and opinions of the
Company¬s management or its independent professional consultants
on the date the statements are made. Seabridge undertakes
no obligation to update these forward-looking statements
if such beliefs, estimates or opinions or other factors
should change.
ON BEHALF OF THE BOARD
"Rudi Fronk,"
President & C.E.O.
For further information please contact:
Rudi P. Fronk, President and C.E.O.
Tel: (416) 367-9292 Fax: (416) 367-2711
Email: info@seabridgegold.net
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