Courageous Lake: SUMMARY
All disclosure of a scientific or technical nature was prepared by, or under the supervision of, William E. Threlkeld (Licensed Registered Geologist #790 in the State of Washington), a Vice President of Seabridge. Mr. Threlkeld is a "Qualified Person" under National Instrument 43-101.
The Courageous Lake project is a gold project covering approximately 67,000 acres located in the Northwest Territories, Canada. Seabridge has a 100% interest in the project, subject to a 2% NSR on certain portions of the property. Geology of the Courageous Lake Project is characterized by a series of north to northwest trending Archean metavolcanic and metasedimentary rocks that form a portion of the Slave Structural Province. These rocks are within the Yellowknife Supergroup and are locally referred to as the Courageous Lake Greenstone Belt ("CLGB").
Gold was first discovered in the Courageous Lake area in 1936. Beginning in 1976, Noranda Exploration Ltd. initiated exploration in the Courageous Lake Volcanic Belt. Exploration activities included geological reconnaissance, airborne, EM and magnetic surveys, ground follow-up and claim staking. From 1982 to 1987, Noranda conducted extensive core drilling on the property from the surface and also constructed a winter road to the property. In late 1987, Noranda made the decision to sink a vertical shaft to provide access for conducting an underground definition drilling program and to be able to test gold grade continuity and tenor by drifting and raising on ore grade shoots.
Little additional work was performed on the property until Placer Dome optioned the property in 1998. Placer performed regional lithogeochemical sampling/prospecting and detailed mapping and channel sampling on the Courageous Lake property. Placer also conducted a core drilling/sampling program in order to verify Noranda's previous work and to provide infill sample data.
Over the period of exploration at Courageous Lake, several resource estimates have been prepared. Prior to Seabridge's acquisition of the project, detailed resource estimates were prepared by Noranda in 1990 at the conclusion of its underground exploration program and by Placer Dome in 1999 at the conclusion of its exploration program.
In 2002, Seabridge engaged Resource Modeling Inc. ("RMI") of Tucson, Arizona to review the resource model prepared in 1999 by Placer Dome and to independently estimate gold resources based on a geostatistical review of the available data. During 2004, Seabridge conducted additional exploration activities at Courageous Lake, including approximately 7,500 meters of new core drilling. Following these activities, Seabridge commissioned RMI to update the model and estimate new gold resources. In its updated report dated December 30, 2004, RMI calculated a measured resource at a 0.83 gram per tonne cut-off grade of 3.38 million tonnes grading 2.55 grams of gold per tonne (277,000 ounces of gold) and an indicated resource of 47.0 million tonnes grading 2.28 (3,445,000 ounces) for a total measured and indicated gold resource of 3.72 million ounces. In the inferred category, RMI estimated the project contained an additional 77.4 million tonnes of material grading 2.10 grams of gold per tonne (5,229,000 ounces).
In late 2002, Seabridge engaged a group of independent consultants to undertake a scoping study for Courageous Lake. During 2003, preliminary reports were completed on key mining and metallurgical issues relating to the project. In January 2004, Seabridge authorized the independent consultants to upgrade capital and operating cost estimates in the Courageous Lake scoping study and to prepare an NI 43-101 Preliminary Assessment. The study was completed in September, 2005.
After further exploration in 2005 and 2006, RMI undertook to complete an updated NI 43-101 resource calculation which was released in January, 2007.
Courageous Lake Gold Resources at 0.83 grams per tonne cut-off| Measured | Indicated | Inferred | ||||||
| Tonnes | Grade | Ounces | Tonnes | Grade | Ounces | Tonnes | Grade | Ounces |
| (000's) | (g/T) | (000's) | (000's) | (g/T) | (000's) | (000's) | (g/T) | (000's) |
| 6,293 | 2.92 | 591 | 53,020 | 2.14 | 3,648 | 93,720 | 1.98 | 5,966 |
In March 2008, Seabridge released the results of a second Preliminary Assessment (see news release dated March 10, 2008) in which the independent consultants concluded that an open-pit mining operation, with on-site processing, is the most suitable development scenario for the Courageous Lake project. A base case scenario was developed proposing a 25,000 tonne per day operation (9.125 million tonne per year throughput) resulting in a projected 11.6 year operation with average estimated annual production of 500,500 ounces of gold at an estimated life of mine average cash operating cost of US$435 per ounce recovered. The base case scenario utilized measured, indicated and inferred resources in the mine plan. Initial capital costs for the project were estimated at US$848 million, including a contingency of US$111 million. The total cost of gold production (including cash operating costs and total capital costs over the life of the mine) was estimated at US$590 per ounce.
At a gold price of US$690 per ounce, the base case cumulative pre-tax net cash flow over the life of the project was estimated at US$500 million. At a gold price of US$800 per ounce, the cumulative pre-tax net cash flow over the life of the project was estimated at US$ 1.13 billion.
Seabridge notes that the Courageous Lake Preliminary Assessment incorporated inferred mineral resources which are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Therefore, Seabridge advises that there can be no certainty that the estimates contained in the Preliminary Assessment will be realized.
A program planned for 2010 includes environmental and permitting work, engineering and metallurgical consulting and geotechnical, environmental and definition drilling. Approximately 18,000 meters of diamond drilling is planned in 40 holes which will target about 1/2 of the inferred resource. The program started in June 2010.
