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During 1987 and 1988 at least six independent resource models were constructed for Quartz
Mountain which did not conform with National Instrument 43-101. Following the completion
of its acquisition of Quartz Mountain, Seabridge commissioned Winters, Dorsey & Company
LLC (“WD&C”), a mine engineering consulting company based in Tucson, Arizona to construct
a new resource model for the project.
At a 0.34 gram per tonne cut-off grade, the WD&C model for Quartz Mountain estimates
measured resources of 3.5 million tonnes grading 0.98 grams of gold per tonne (110,000 ounces)
plus an indicated resource of 54.3 million tonnes grading 0.91 grams of gold per tonne (1,591,000
ounces) for a total measured and indicated gold resource of 1,701,000 ounces. In the inferred
category, the project contains an additional 44.8 million tonnes grading 0.72 grams of gold per
tonne (1,043,000 ounces). Seabridge has not determined whether any of the stated gold resources
at Quartz Mountain are economic at the current gold price of about US$400 per ounce and therefore
none of the existing gold resources can be classified as a mineral reserve at this time.
The new resource model for Quartz Mountain incorporates 709 drill holes totaling 79,876
metres in two distinct mineralized zones: Crone Hill and Quartz Butte. WD&C was not able
to examine drill core or drill cuttings from previous exploration activities as the material
had been discarded. The assay data provided in the electronic databases were compared by
WD&C to certified assay lab sheets and were found to be accurately entered. Seabridge was
not able to recover sufficient check assay data from the historical exploration programs in
order to fully validate the assay database by rigorous QA/QC protocols. Given that third-party
feasibility studies were prepared for Quartz Mountain in the late 1980s, WD&C noted that this
type of data probably existed at one time. In conclusion WD&C determined that the historic
exploration data were collected and analyzed by reputable drilling and analytical firms and
were sufficient for mineral resource determination.
From the data, WD&C constructed a series of 0.34 gram per metric tonne gold grade envelopes
on bench elevations for each zone in order to constrain the estimate of gold resources. Based
on a review of the distribution of gold metal in each zone by a combination of decile analysis
and cumulative probability distribution graphs, WD&C elected to cap individual gold assays for
the Crone Hill and Quartz Butte zones at 11.4 and 34.2 grams per metric tonne, respectively.
For each block, gold grades were then estimated using ordinary kriging methods. The estimated
block grades were classified into measured, indicated, and inferred categories using the distance
to drilling data as a function of confidence in the grade estimation process. It is the opinion
of WD&C that the gold resources as stated satisfy the requirements of National Instrument 43-101.
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