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The Grassy Mountain Property covers approximately 6.7 square miles or 4,300 acres, and is located
approximately 22 miles southwest of Vale, Oregon. The property is situated in the Oregon Plateau portion
of the northern Great Basin and is characterized by abundant Cenozoic volcanism. The rocks exposed at
Grassy Mountain are part of the late to middle-Miocene Grassy Mountain Formation, a sequence of volcanic
and volcaniclastic rocks made up primarily of olivine-rich basalt and intercalated tufaceous siltstones,
sandstones and conglomerates.
Atlas acquired the property in 1986 and discovered the Grassy Mountain deposit in 1987. Mineralization
is associated with a low-grade gold-silver bearing siliceous hot springs system with enrichment along
multi-stage quartz-adularia veins and favourable lithologies. Numerous open pit and underground studies
have been completed since 1987. In 1990 Kilborn Engineering (“Kilborn”) completed a feasibility study
at Grassy Mountain based on a measured and indicated open-pitable geologic resource of 1.05 million ounces
of gold contained in 17.2 million tons at a grade of 0.061 ounces per ton (“opt”). The feasibility study
contemplated constructing an open-pit mine employing heap-leach technology for the lower grade ore, and
conventional milling for the higher grade ore. Total recoverable gold was estimated at over 800,000 ounces.
The 1990 feasibility study forecasted life of mine cash operating costs of US$127 per ounce, and total costs
of US$241 per ounce, before financing costs. In 1992 Atlas sold the project to Newmont Gold Company for
US$30 million in cash plus a 5% net smelter royalty interest.
Following additional exploration that focused on the high-grade core of the deposit, Newmont returned the
property to Atlas in 1996 due to size constraints. In a 1997 study, Pincock Allen & Holt (“PAH”) estimated
a measured and indicated underground diluted mineable resource of 1.56 million tons grading 0.265 opt Au
(414,000 ounces gold) that would be amenable to open stope and drift and fill mining methods. The PAH
study suggested that at gold prices above US$350 per ounce, an underground operation with on-site processing
facilities at Grassy Mountain could be economically attractive.
In 2006, Seabridge completed a program to re-examine the economic potential for both
the open pit and underground development scenarios at Grassy Mountain. The initial phase of the program involved remodeling of both the open-pit and
underground resources incorporating a re-interpretation of geology and ore controls and data from the 39 drill holes not included in the original block model. A 43-101 compliant resource estimation was subsequently prepared by Resource Modeling Inc. which confirmed an indicated resource of 18.7 million tonnes grading 1.54 grams per tonne of gold (924,000 ounces) and an inferred resource of 1.7 million tonnes grading 1.10 grams per tonne (61,000 ounces) assuming a US$600 gold price and a cut-off grade of 0.55 grams per tonne. These results were released on May 1, 2007.
The Grassy Mountain property remains under-explored with multiple gold anomalies yet to be
fully tested. Several defined targets are drill-ready. Annual holding costs, excluding option
payments, are approximately US$65,000.
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