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In May 2002, Seabridge entered into a purchase agreement with Newmont Canada Limited and Total Resources
Canada Limited on the Courageous Lake project comprised of 17 mining leases covering 18,178 acres. The purchase
by Seabridge closed on July 31, 2002. Under the purchase agreement, Seabridge paid Newmont/Total US$2.5 million
in cash and granted them a 2.0% NSR and agreed that it would be liable to make two (2) further payments of
US$1.5 million, each subject to the price of gold passing certain thresholds, for a 100% interest in the property.
A further US$1.5 million was paid to Newmont/Total in March 2003 as a result of the spot price of gold closing
above US$360 per ounce for 10 consecutive days. The final US$1.5 million was paid to Newmont/Total in February
2004 as a result of the spot price of gold closing above US$400 per ounce for 10 consecutive days. Upon
acquiring the Courageous Lake project, Seabridge assigned its right thereto to its wholly owned subsidiary, 5073 N.W.T.
Ltd. The obligations of 5073 N.W.T. Ltd. under the agreement, including the payment of the royalty, is secured
by a debenture under which the vendors have been granted a security interest in the Courageous Lake property.
Subsequent to this acquisition, Seabridge staked contiguous open ground totalling an additional 49,133
acres in 42 mining claims of which a portion is subject to the terms of the purchase agreement, including
the 2% royalty. In 2004, an additional property was optioned in the area ("Red 25"). Under the terms of the
agreement, the Company paid $50,000 on closing and is required to make option payments of $50,000 on each
of the first two anniversary dates and subsequently $100,000 per year. In addition, the property may be
purchased at any time for $1,250,000 with any option payments being credited against the purchase price.
Following Seabridge's 2006 exploration program at Courageous Lake, Resource Modeling Inc. ("RMI") examined and performed an evaluation
of the exploration to date and prepared an updated report on Seabridge's Courageous Lake Project. The report of RMI,
prepared by independent consultants Michael J. Lechner (Licensed Registered Geologist #37753 in the state of
Arizona and AIPG CPG #10690), is entitled Updated Mineral Resource Estimate, The Courageous Lake Project, Northwest Territories, Canada (the "RMI Report") and dated February 22, 2007. The following material on the
Courageous Lake Project summarizes information from the RMI Update Report.
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