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In December 2001, Seabridge entered into an Asset Purchase & Sale and Royalty Agreement with
Quartz Mountain Gold Corp. of 800 West Pender Street, Vancouver, B.C. whereby Seabridge agreed
to acquire the Quartz Mountain Gold Project in consideration of the following payments to Quartz
Mountain Gold Corp.: (i) US$100,000 in cash; (ii) the issuance of 300,000 common shares of
Seabridge; (iii) the issuance of 200,000 common share purchase warrants, exercisable for two years
at a price of $0.90 per share; and (iv) a 1% net smelter royalty interest in the project. Closing
of the acquisition was completed in January 2002. Additionally, a 0.50% net smelter royalty
interest will be payable to an unrelated third-party as a finder´s fee.
In October, 2003 Seabridge granted Quincy Resources Inc. (OTC Bulletin Board) an option
to earn a 50% interest in the Quartz Mountain gold project. The existing gold resource at
Quartz Mountain is specifically excluded from the agreement. Quincy will focus on exploring
for high-grade feeder zones to the existing resource with drilling expected to commence in early
2004. Quincy can earn a 50% interest in the project by (i) spending US$1.5 million in exploration
and project holding costs by October 15, 2008 and (ii) issuing Seabridge 250,000 of its common
shares. Quincy may earn an additional 12.5% by funding and completing a feasibility study at
Quartz Mountain within three years of completing its 50% earn-in and paying Seabridge an additional
250,000 of its common shares. If Quincy elects not to complete a feasibility study, or fails to
deliver one within three years, Seabridge has a one time option to purchase Quincy®s interest in
the project for US$750,000.
WD&C examined and performed an evaluation of the exploration to date and prepared a report
on Seabridge®s Quartz Mountain Project. The report of WD&C, prepared by Michael J. Lechner
(Licensed Registered Geologist #564 in the state of Washington), is entitled “Quartz Mountain
Project; Lake County, Oregon U.S.A.; Technical Report” (the “WD&C Report”) and dated April 12,
2002. The following material on the Quartz Mountain Project summarizes information from the
WD&C Report.
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