SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

 

 

F O R M 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of
August 2023

 

Commission File Number 1-32135

 

SEABRIDGE GOLD INC.

(Name of Registrant)

 

106 Front Street East, Suite 400, Toronto, Ontario, Canada M5A 1E1

(Address of Principal Executive Office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☐      Form 40-F ☒

 

 

 

 

 

 

SEABRIDGE GOLD INC.

(the “Company”)

 

See the Exhibit Index hereto for a list of the documents filed herewith and forming a part of this Form 6-K.

 

Exhibits 99.1 and 99.2 hereto are incorporated by reference (as exhibits) to the Company’s registration statements on Form S-8 (File No. 333-211331) and Form F-10 (File No. 333-268485), as may be amended and supplemented.

 

1

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  Seabridge Gold Inc.
  (Registrant)
   
  By: /s/Chris Reynolds
  Name:  Chris Reynolds
  Title: VP Finance and CFO

 

Date: August 14, 2023

 

2

 

 

EXHIBIT INDEX

 

Exhibit
Number		   Document Description
99.1   Unaudited Interim Condensed Consolidated Financial Statements for the Six Months ended June 30, 2023.
99.2   Management’s Discussion and Analysis for the Three Months ended June 30, 2023.
101.INS   Inline XBRL Instance Document.
101.SCH   Inline XBRL Taxonomy Extension Schema Document.
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

 

3

 

 

2023-06-30

Exhibit 99.1

 

SEABRIDGE GOLD INC.

 

UNAUDITED CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

 

AS AT JUNE 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEABRIDGE GOLD INC.  

Consolidated Statements of Financial Position

 

(Expressed in thousands of Canadian dollars)

(Unaudited)

 

      June 30,   December 31, 
   Note   2023   2022 
Assets            
Current assets            
Cash and cash equivalents   4   $202,642   $46,150 
Short-term deposits   4    
-
    81,690 
Amounts receivable and prepaid expenses   5    10,196    8,220 
Investment in marketable securities   6    3,577    3,696 
Convertible notes receivable        594    631 
         217,009    140,387 
Non-current assets               
Investment in associate   6    1,289    1,389 
Long-term receivables and other assets   7    95,353    51,703 
Mineral interests, property and equipment   8    997,970    881,497 
Reclamation deposits   10    21,183    20,643 
         1,115,795    955,232 
Total assets       $1,332,804   $1,095,619 
                
Liabilities and shareholders’ equity               
Current liabilities               
Accounts payable and accrued liabilities   9   $62,040   $42,956 
Flow-through share premium   12    2,666    4,183 
Lease obligations        750    511 
Provision for reclamation liabilities   10    4,343    4,343 
         69,799    51,993 
Non-current liabilities               
Secured notes   11    456,325    263,541 
Deferred income tax liabilities   17    31,068    31,934 
Lease obligations        1,098    1,115 
Provision for reclamation liabilities   10    5,757    6,503 
         494,248    303,093 
Total liabilities        564,047    355,086 
                
Shareholders’ equity   12    768,757    740,533 
Total liabilities and shareholders’ equity       $1,332,804   $1,095,619 

 

Subsequent events (Note 11 and 12), commitments and contingencies (Note 18)

 

The accompanying notes form an integral part of these unaudited condensed consolidated interim financial statements.

 

Page 2

 

 

SEABRIDGE GOLD INC.

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Expressed in thousands of Canadian dollars except common share and per common share amounts)

(Unaudited)

 

      Three months ended
June 30,		   Six months ended
June 30,		 
   Note   2023   2022   2023   2022 
                     
Remeasurement gain (loss) on secured notes   11   $10,379   $31,566   $(1,367)  $31,566 
Corporate and administrative expenses   15    (3,977)   (2,868)   (7,868)   (7,469)
Impairment of investment in associate   6    -    (873)   -    (873)
Equity loss of associate   6    (60)   (46)   (120)   (90)
Other income - flow-through shares   12    1,371    81    1,516    180 
Environmental rehabilitation (expense) gain   10    -    (26)   -    41 
Unrealized loss on convertible notes receivable        (10)   (13)   (23)   (19)
Foreign exchange gain (loss)        5,111    (822)   5,698    (959)
Finance costs, interest expense and other income        (1,930)   (315)   (2,002)   (3,419)
Interest income        713    30    1,499    76 
Earnings (loss) before income taxes        11,597    26,714    (2,667)   19,034 
Income tax (expense) recovery   17    (2,612)   (7,626)   868    (6,227)
Net earnings (loss) for the period       $8,985   $19,088   $(1,799)  $12,807 
                          
Other comprehensive income (loss)                         
Items that will not be reclassified to net income or loss                         
Remeasurement of secured notes   11   $8,728   $23,544   $1,127   $23,544 
Change in fair value of marketable securities        (267)   (221)   (119)   (47)
Tax impact        (2,320)   (6,327)   (287)   (6,351)
Total other comprehensive income        6,141    16,996    721    17,146 
Comprehensive income (loss) for the period       $15,126   $36,084   $(1,078)  $29,953 
                          
Weighted average number of common shares outstanding                         
Basic   12    82,434,434    80,144,953    81,998,804    79,701,761 
Diluted   12    82,646,724    80,392,391    81,998,804    79,966,924 
                          
Earnings (loss) per common share                         
Basic   12   $0.11   $0.24   $(0.02)  $0.16 
Diluted   12   $0.11   $0.24   $(0.02)  $0.16 

 

The accompanying notes form an integral part of these unaudited condensed consolidated interim financial statements.

 

Page 3

 

 

SEABRIDGE GOLD INC.

Consolidated Statements of Changes in Shareholders’ Equity

(Expressed in thousands of Canadian dollars except number of shares)
(Unaudited)

 

   Number
of Shares		   Share
Capital		   Warrants   Stock-based
Compensation		   Contributed
Surplus		   Deficit   Accumulated Other
Comprehensive
Gain (Loss)		   Total
Equity		 
                                 
As at December 31, 2022   81,339,012   $856,462   $               -   $          4,655   $      36,160   $(157,377)  $           633   $740,533 
Share issuance – At-The-Market offering   1,281,667    23,411    
-
    
-
    
-
    
-
    
-
    23,411 
Share issuance – other (Note 11)   322,084    4,945    -    -    
-
    
-
    
-
    4,945 
Share issuance – RSUs vested   5,000    111    -    (111)   
-
    
-
    
-
    
-
 
Share issuance costs   -    (1,066)   
-
    
-
    
-
    
-
    
-
    (1,066)
Deferred tax on share issuance costs   -    285    
-
    
-
    
-
    
-
    
-
    285 
Stock-based compensation   -    
-
    
-
    1,727    
-
    
-
    
-
    1,727 
Other comprehensive income   -    
-
    
-
    
-
    
-
    
-
    721    721 
Net loss for the period   -    
-
    -    -    
-
    (1,799)   
-
    (1,799)
As at June 30, 2023   82,947,763   $884,148   $-   $6,271   $36,160   $(159,176)  $1,354   $768,757 
As at December 31, 2021   78,975,349   $809,269   $
-
   $8,697   $36,126   $(149,983)  $(1,776)  $702,333 
Share issuance – At-The-Market offering   995,989    22,746    
-
    
-
    
-
    
-
    
-
    22,746 
Share issuance – options exercised   186,007    4,106    
-
    (1,447)   
-
    
-
    
-
    2,659 
Share issuance – RSUs vested   128,800    2,733    
-
    (2,733)   
-
    
-
    
-
    
-
 
Share issuance costs   -    (607)   
-
    
-
    
-
    
-
    
-
    (607)
Deferred tax on share issuance costs   -    162    
-
    
-
    
-
    
-
    
-
    162 
Stock-based compensation   -    
-
    
-
    2,515    
-
    
-
    
-
    2,515 
Other comprehensive income   -    
-
    
-
    
-
    
-
    
-
    17,146    17,146 
Net income for the period   -    
-
    
-
    
-
    
-
    12,807    
-
    12,807 
As at June 30, 2022   80,286,145   $838,409   $-   $7,032   $36,126   $(137,176)  $15,370   $759,761 

 

The accompanying notes form an integral part of these unaudited condensed consolidated interim financial statements.

 

Page 4

 

 

SEABRIDGE GOLD INC.

Consolidated Statements of Cash Flows

(Expressed in thousands of Canadian dollars)
(Unaudited)

 

   Three months ended
June 30,		   Six months ended
June 30,		 
   2023   2022   2023   2022 
                 
Operating Activities                
Net earnings (loss)  $8,985   $19,088   $(1,799)  $12,807 
Adjustment for non-cash items:                    
Remeasurement (gain) loss on secured notes   (10,379)   (31,566)   1,367    (31,566)
Stock-based compensation   859    222    1,727    2,515 
Other income – flow-through shares   (1,371)   (81)   (1,516)   (180)
Income tax recovery (expense)   2,612    7,626    (868)   6,227 
Unrealized foreign exchange (gain) loss   (5,723)   8,266    (6,281)   7,163 
Other non-cash items   387    (399)   556    (333)
Adjustment for cash items:                    
Environmental rehabilitation disbursements   (637)   (356)   (870)   (669)
Changes in working capital items:                    
Amounts receivable and prepaid expenses   (2,030)   609    (1,975)   1,619 
Accounts payable and accrued liabilities   3,810    2,212    (1,486)   (2,690)
Net cash from (used in) operating activities   (3,487)   5,621    (11,145)   (5,107)
                     
Investing Activities                    
Investment in short-term deposits   (11)   (118,621)   (43)   (118,638)
Mineral interests, property and equipment   (47,736)   (27,204)   (90,547)   (37,295)
Long-term receivables   
-
    (13,983)   (43,650)   (30,381)
Redemption of short-term deposits   1,312    
-
    81,732    29,260 
Investment in reclamation deposits   (518)   (398)   (540)   (4,698)
Net cash used in investing activities   (46,953)   (160,206)   (53,048)   (161,752)
                     
Financing Activities                    
Secured notes   198,825    
-
    198,825    282,263 
Share issuance net of costs   17,028    9,370    22,344    22,139 
Exercise of options   
-
    1,039    
-
    2,659 
Payment of lease liabilities   (128)   (43)   (254)   (64)
Net cash from financing activities   215,725    10,366    220,915    306,997 
Effects of exchange rate fluctuation on cash and cash equivalents   (209)   1,430    (230)   1,374 
Net increase (decrease) in cash and cash equivalents during the period   165,076    (142,789)   156,492    141,512 
Cash and cash equivalents, beginning of the period   37,566    295,824    46,150    11,523 
Cash and cash equivalents, end of the period  $202,642   $153,035   $202,642   $153,035 

 

The accompanying notes form an integral part of these unaudited condensed consolidated interim financial statements.

 

Page 5

 

 

SEABRIDGE GOLD INC.

Notes to the condensed consolidated interim financial statements

As at and for the six months ended June 30, 2023 and 2022

(Amounts in notes and in tables are in millions of Canadian dollars, except where otherwise indicated) (Unaudited)

 

1.Reporting entity

 

Seabridge Gold Inc. is comprised of Seabridge Gold Inc. (“Seabridge” or the “Company”) and its subsidiaries, KSM Mining ULC, Seabridge Gold (NWT) Inc., Seabridge Gold (Yukon) Inc., Seabridge Gold Corp., SnipGold Corp. and Snowstorm Exploration (LLC), and is a company engaged in the acquisition and exploration of gold properties located in North America. The Company was incorporated under the laws of British Columbia, Canada on September 4, 1979 and continued under the laws of Canada on October 31, 2002. Its common shares are listed on the Toronto Stock Exchange trading under the symbol “SEA” and on the New York Stock Exchange under the symbol “SA”. The Company is domiciled in Canada, the address of its registered office is 10th Floor, 595 Howe Street, Vancouver, British Columbia, Canada V6C 2T5 and the address of its corporate office is 106 Front Street East, 4th Floor, Toronto, Ontario, Canada M5A 1E1.

 

2.Basis of accounting

 

(a)Statement of compliance

 

These unaudited condensed consolidated interim financial statements (“consolidated interim financial statements”) were prepared in accordance with IAS 34, Interim Financial Reporting, using accounting policies consistent with those used by the Company in preparing the annual consolidated financial statements as at and for the year ended December 31, 2022 and should be read in conjunction with the Company’s annual consolidated financial statements as at and for the year ended December 31, 2022. They do not include all of the information required for a complete set of financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”). However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual financial statements. These consolidated interim financial statements were authorized for issue by the Company’s board of directors on August 14, 2023.

 

(b)Amended IFRS standard effective January 1, 2023

 

In May 2021, the IASB issued Deferred Tax related to Assets and Liabilities Arising from a Single Transaction which amended IAS 12, Income Taxes (“IAS 12”). Prior to the amendments, IAS 12 contained a recognition exemption whereby deferred income tax assets and liabilities were not recognized for temporary differences arising on initial recognition of assets and liabilities, other than in business combinations, that affect neither accounting nor taxable income. The amendments narrowed the scope of the recognition exemption in IAS 12 so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.

 

The Company applied the amendments to IAS 12 to its consolidated financial statements for the annual reporting period beginning on January 1, 2023. The application of these amendments did not have an impact on the Company’s consolidated financial statements.

 

On May 23, 2023, the IASB issued amendments to IAS 12 which introduce a temporary exception from accounting for deferred taxes arising from the implementation of the Organization for Economic Co-operation and Development (“OECD”) Pillar Two model rules. The amendments provide relief from recognizing deferred taxes related to the OECD Pillar two income taxes as well as any related disclosure. The Company has applied the exception immediately upon issuance of the amendment and retrospectively in accordance with IAS 8 for the 2023 fiscal year.

 

Page 6

 

 

(c)Amended IFRS standard not yet effective

 

Certain pronouncements have been issued by the IASB that are mandatory for accounting periods after December 31, 2023:

 

●Classification of Liabilities as Current or Non-current (Amendments to IAS 1) effective for annual periods beginning on or after January 1, 2024

 

●Lease Liability in a Sale and Leaseback (Amendments to IFRS 16 Leases) effective for annual periods beginning on or after January 1, 2024.

 

None of these pronouncements are expected to have a significant impact on the Company’s consolidated financial statements upon adoption.

 

3.Significant accounting judgments, estimates and assumptions

 

The preparation of consolidated interim financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities as at the date of the consolidated interim financial statements and reported amounts of expenses during the six months ended June 30, 2023 and 2022. Estimates and assumptions used in the preparation of these consolidated interim financial statements are consistent with those used by the Company in preparing the annual consolidated financial statements as at and for the year ended December 31, 2022. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events which are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

 

4.Cash and cash equivalents and short-term deposits

 

($000s)   June 30,
2023		    December 31,
2022		 
Cash and cash equivalents   202,642    46,150 
Short-term deposits   
-
    81,690 
    202,642    127,840 

 

All of the cash and cash equivalents are held in Canadian Schedule I banks. Short-term deposits consist of Canadian Schedule I bank guaranteed deposits and are cashable in whole or in part with interest at any time to maturity.

 

 

5.Amounts receivable and prepaid expenses

 

($000s)   June 30,
2023		    December 31,
2022		 
HST   2,436    4,247 
Prepaid expenses and other receivables   7,760    3,973 
    10,196    8,220 

 

As at June 30, 2023, the prepaid expenses and other receivables includes $3.4 million prepayment for camp and helicopter support services (December 31, 2022 - $0.3 million), $1.6 million prepayment for insurance premiums (December 31, 2022 - $0.7 million), and $2.0 million loan receivable from Paramount Gold Nevada Corp. (“Paramount”) (December 31, 2022 - $1.4 million).

 

Page 7

 

 

6.Investments

 

($000s)   January 1,
2023		    Fair value through other comprehensive income (loss)    Loss of associate    

 

 

 

Impairment

    Additions    

June 30,

2023

 
Current assets:                              
Investments in marketable securities   3,696    (119)   
-
    
-
    
-
    3,577 
                               
Non-current assets:                              
Investment in associate   1,389    -    (120)   -    20(b)   1,289 
                               
($000s)   January 1,
2022		    Fair value through other comprehensive income (loss)    Loss of associate    Impairment    Additions    December 31,
2022		 
Current assets:                              
Investments in marketable securities   3,367    329    -    -    -    3,696 
                               
Non-current assets:                              
Investment in associate   2,429    -    (206)   (873)(a)   39(b)   1,389 

 

(a)The Company accounts for its investment in Paramount, a publicly listed company, using the equity method. During 2022, the Company concluded that the fair value of its investment in Paramount, determined based on the market price, had declined significantly and recorded an impairment of $0.9 million in the consolidated statements of operations and comprehensive income (loss).

 

(b)In 2023, the Company received 43,928 common shares of Paramount for payment of interest, on the secured convertible notes, that accrued between July 1, 2022 and December 31, 2022. In 2022, the Company received 55,322 common shares of Paramount for payment of interest on the secured convertible notes accrued between July 1, 2021 and June 30, 2022.

 

The Company holds common shares of several mining companies that were received as consideration for optioned mineral properties and other short-term investments, including one gold exchange traded receipt. These financial assets are recorded at fair value of $3.6 million (December 31, 2022 - $3.7 million) in the consolidated statements of financial position. At June 30, 2023, the Company revalued its holdings in its investments and recorded a fair value decrease of $0.1 million in the statement of operations and comprehensive income (loss).

 

Investment in associate relates to Paramount. As at June 30, 2023, the Company holds a 4.9% (December 31, 2022 – 5.6%) interest in Paramount for which it accounts using the equity method on the basis that the Company has the ability to exert significant influence through its representation on Paramount’s board of directors. During six months ended June 30, 2023, the Company recorded its proportionate share of Paramount’s net loss of $0.1 million (2022 – $0.1 million) within equity loss of associate on the consolidated statements of operations and comprehensive income (loss). As at June 30 2023, the carrying value of the Company’s investment in Paramount was $1.3 million (December 31, 2022 - $1.4 million).

 

Page 8

 

 

7.Long-term receivables and other assets

 

($000s)   June 30,
2023		   December 31,
2022		 
BC Hydro 1   82,150   38,500 
Canadian Exploration Expenses (Note 17)   9,337   9,337 
British Columbia Mineral Exploration Tax Credit 2   3,866   3,866 
    95,353   51,703 

 

1)During the first quarter in 2023, the Company paid $43.6 million (as at December 31, 2022, $38.5 million) to British Columbia Hydro and Power Authority (“BC Hydro”) as advance payment made pursuant to the Company signing a facilities agreement with BC Hydro covering the design and construction of facilities to supply hydro-sourced electricity to the KSM project.

 

2)During 2016, upon the completion of an audit of the application by tax authorities of the British Columbia Mineral Exploration Tax Credit (“BCMETC”) program, the Company was reassessed $3.6 million, including accrued interest for expenditures that the tax authority has categorized as not qualifying for the BCMETC program. The Company recorded a $3.6 million provision within non-trade payables and accrued expenses on the consolidated statements of financial position as at December 31, 2016 with a corresponding increase in mineral interests. In 2017 the Company filed an objection to the reassessment with the appeals division of the tax authorities and paid one-half of the accrued balance to the Receiver General and reduced the provision by $1.8 million. In 2019, the Company received a decision from the appeals division that the Company’s objection was denied, and the Company filed a Notice of Appeal with the British Columbia Supreme Court. The Attorney General of Canada replied to the facts and arguments in the Company’s Notice of Appeal and stated its position that the Company’s expenditures did not qualify for the BCMETC program. During the first quarter of 2023, the Company completed discovery process with the Department of Justice and will continue to move the appeal process forward, including settling an agreed statement of facts and settling court dates for the hearing. The Company intends to continue to fully defend its position. Based on the facts and circumstances of the Company’s objection, the Company concludes that it is more likely than not that it will be successful in its objection. As at June 30, 2023, the Company has paid $1.6 million to the Receiver General, and the Canada Revenue Agency (CRA) has withheld $2.3 million of HST credits due to the Company that would fully cover the residual balance, including interest, should the Company be unsuccessful in its challenge. The amount recorded in long-term receivables as of June 30, 2023 of $3.9 million includes the initial reassessment of $3.6 million, plus accrued interest.

 

8.Mineral Interests, Property and Equipment

 

($000s)  Mineral interests   Construction in progress   Property & equipment 1   Right-of-use assets 1   Total 
Cost                         
As at January 1, 2022   632,005    27,061    3,080    407    662,553 
Additions   55,069    120,287    43,177    2,030    220,563 
As at December 31, 2022   687,074    147,348    46,257    2,437    883,116 
Additions   20,552    96,366    -    781    117,699 
As at June 30, 2023   707,626    243,714    46,257    3,218    1,000,815 
Accumulated Depreciation                         
As at January 1, 2022   
-
    
-
    117    157    274 
Depreciation expense   
-
    
-
    953    392    1,345 
As at December 31, 2022   
-
    
-
    1,070    549    1,619 
Depreciation expense 1   -    -    849    377    1,226 
As at June 30, 2023   
-
    -    1,919    926    2,845 
Net Book Value                         
As at December 31, 2022   687,074    147,348    45,187    1,888    881,497 
As at June 30, 2023   707,626    243,714    44,338    2,292    997,970 

 

1)Depreciation expense related to camps, equipment, and right-of-use assets associated with the KSM construction is capitalized to construction in progress.

 

Page 9

 

 

Mineral interests, property and equipment additions by project are as follows.

 

       Six months ended June 30, 2023     
($000s)  January 1,
2023		   Mineral interests   Construction in progress   Property & equipment   Right-of-
use assets		   Total Additions   June 30,
2023		 
Additions                            
KSM 1   707,190    13,897    95,318    
      -
    781    109,996    817,186 
Courageous Lake   77,999    1,169    
-
    
-
    
-
    1,169    79,168 
Iskut   49,904    3,826    
-
    
-
    
-
    3,826    53,730 
Snowstorm   34,562    495    
-
    
-
    
-
    495    35,057 
3 Aces   12,079    1,165    1,048    
-
    
-
    2,213    14,292 
Grassy Mountain   771    
-
    
-
    
-
    
-
    
-
    771 
Corporate   611    
-
    
-
    
-
    
-
    
-
    611 
    883,116    20,552    96,366    
-
    781    117,699    1,000,815 

 

       Year ended December 31, 2022     
($000s)  January 1,
2022		   Mineral interests   Construction in progress   Property & equipment   Right-of-
use assets		   Total Additions   December 31,
2022		 
Additions                            
KSM 1   502,015    39,985    120,287    43,177    1,726    205,175    707,190 
Courageous Lake   77,176    823    
-
    
-
    
-
    823    77,999 
Iskut   41,779    8,125    
-
    
-
    
-
    8,125    49,904 
Snowstorm   31,471    3,091    
-
    
-
    
-
    3,091    34,562 
3 Aces   9,034    3,045    
-
    
-
    
-
    3,045    12,079 
Grassy Mountain   771    
-
    
-
    
-
    
-
    
-
    771 
Corporate   307    
-
    
-
    
-
    304    304    611 
    662,553    55,069    120,287    43,177    2,030    220,563    883,116 

 

1)The KSM construction in progress additions includes $9.9 million of capitalized borrowing costs (year ended December 31, 2022 - $14.7 million).

 

Continued exploration of the Company’s mineral properties is subject to certain permitting payments, project holding costs, rental fees and filing fees.

 

a)KSM

 

In 2001, the Company purchased a 100% interest in contiguous claim blocks in the Skeena Mining Division, British Columbia. The vendor maintains a 1% net smelter royalty interest on the project, subject to maximum aggregate royalty payments of $4.5 million. The Company is obligated to purchase the net smelter royalty interest for the price of $4.5 million in the event that a positive feasibility study demonstrates a 10% or higher internal rate of return after tax and financing costs.

 

In 2011 and 2012, the Company completed agreements granting a third party an option to acquire a 2% net smelter royalty on all gold and silver production sales from KSM for a payment equal to the lesser of $160 million or an amount in Canadian dollars equal to US$200 million. The option is exercisable for a period of 60 days following the announcement of receipt of all material approvals and permits, full project financing and certain other conditions for the KSM Project.

 

In December 2020, the Company purchased the Snowfield (renamed East Mitchell) property from Pretium Resources Inc. The East Mitchell property, located in the same valley that hosts KSM's Mitchell deposit, was purchased for US$100 million ($127.5 million) in cash, a 1.5% net smelter royalty on East Mitchell property production, and a conditional payment of US$20 million, payable following the earlier of (i) commencement of commercial production from East Mitchell property, and (ii) announcement by the Company of a bankable feasibility study, which includes the East Mitchell property. US$15 million of the conditional payment can be credited against future royalty payments.

 

Additions to mineral interests of $13.9 million (2022 - $40.0 million) consisted of costs incurred to carry out the Company’s environmental, technical support, exploration and drilling programs at KSM.

 

Additions to construction in progress consisted of $84.6 million (2022 - $104.6 million) of KSM assets under construction costs, $9.9 million (2022 - $14.7 million) of capitalized borrowing costs related to the secured notes liability interest expense, and $0.8 million (2022 - $0.9 million) of capitalized depreciation expense.

 

b)Courageous Lake

 

In 2002, the Company purchased a 100% interest in the Courageous Lake gold project from Newmont Canada Limited and Total Resources (Canada) Limited. The Courageous Lake gold project consists of mining leases located in Northwest Territories of Canada.

 

c)Iskut

 

On June 21, 2016, the Company purchased 100% of the common shares of SnipGold Corp. which owns the Iskut Project, located in northwestern British Columbia.

 

Page 10

 

 

d)Snowstorm

 

In 2017, the Company purchased 100% of the common shares of Snowstorm Exploration LLC which owns the Snowstorm Project, located in northern Nevada. In connection with the acquisition, the Company has agreed to make a conditional cash payment of US$2.5 million if exploration activities at the Snowstorm Project result in defining a minimum of five million ounces of gold resources compliant with National Instrument 43-101 and a further cash payment of US$5.0 million on the delineation of an additional five million ounces of gold resources.

 

e)3 Aces

 

In 2020, the Company acquired a 100% interest in the 3 Aces gold project in the Yukon, Canada from Golden Predator Mining Corp. through the issuance of 300,000 common shares valued at $6.6 million. Should the project attain certain milestones, including the confirmation of a National Instrument 43-101 compliant mineral resource of 2.5 million ounces of gold, the Company will pay an additional $1 million, and upon confirmation of an aggregate mineral resource of 5 million ounces of gold, the Company will pay an additional $1.25 million.

 

f)Grassy Mountain

 

In 2013, the Company sold 100% of its interest in the Grassy Mountain Project with a net book value of $0.8 million retained within mineral properties, related to the option to either receive, at the discretion of the Company, a 10% net profits interest royalty or a $10 million cash payment. Settlement is due four months after the later of: the day that the Company receives a feasibility study on the project; and the day that the Company is notified that permitting and bonding for the mine is in place. The current owner of the Grassy Mountain Project is Paramount who completed a feasibility study in 2020 but they have not notified the Company that permitting and bonding for the mine is in place.

 

9.Accounts payable and accrued liabilities

 

($000s)  June 30,
2023		   December 31,
2022		 
Trade payables (a)   16,663    15,686 
Non-trade payables and accrued expenses (b)   45,377    27,270 
    62,040    42,956 

 

(a)Includes accrued interest payable of $4.9 million (December 31, 2022 – nil).

 

(b)Non-trade payables and accrued expenses include $41.9 million (December 31, 2022 – $26.3 million) of accrued expenses related to construction at KSM.

 

10.Provision for reclamation liabilities

 

($000s)  June 30,
2023		   December 31,
2022		 
Beginning of the period   10,846    8,442 
Disbursements   (870)   (4,519)
Environmental rehabilitation expense   
-
    6,851 
Accretion   124    72 
End of the period   10,100    10,846 
           
Provision for reclamation liabilities – current   4,343    4,343 
Provision for reclamation liabilities – long-term   5,757    6,503 
    10,100    10,846 

 

The estimate of the provision for reclamation obligations, as at June 30, 2023, was calculated using the estimated undiscounted cash flows of future reclamation costs of $10.8 million (December 31, 2022 - $11.5 million) and the expected timing of cash payments required to settle the obligations between 2023 and 2026. As at June 30, 2023, the discounted future cash outflows are estimated at $10.1 million (December 31, 2022 - $10.8 million). The nominal discount rate used to calculate the present value of the reclamation obligations was 4.5% at June 30, 2023 (4.07% - December 31, 2022). During the six months ended June 30, 2023, reclamation disbursements amounted to $0.9 million (six months ended June 30, 2022 - $0.7 million).

 

Page 11

 

 

In 2022, the Company updated the closure plan for the Johnny Mountain mine site and charged an additional $6.6 million of rehabilitation expenses to the consolidated statements of operations and comprehensive income (loss).

 

In 2023, the Company placed $0.5 million on deposit as security for the reclamation obligations at KSM and 3 Aces. As at June 30, 2023, the Company has placed a total of $21.2 million (December 31, 2022 - $20.6 million) on deposit with financial institutions or with government regulators that are pledged as security against reclamation liabilities. The deposits are recorded on the consolidated statements of financial position as reclamation deposit. As at June 30, 2023, the Company had $10.3 million (December 31, 2022, $7.9 million) of uncollateralized surety bond, issued pursuant to arrangements with an insurance company, in support of environmental closure costs obligations related to the KSM and 3 Aces projects.

 

11.Secured notes liability

 

(a)2022 Secured Note

 

On February 25, 2022, the Company, through its wholly-owned subsidiary, KSM Mining ULC (“KSMCo”) signed a definitive agreement to sell a secured note (or “2022 Secured Note”) that is to be exchanged at maturity for a silver royalty on its 100% owned KSM Project (“KSM”) to institutional investors (“Investors”) for US$225 million. The transaction closed on March 24, 2022. The key terms of the 2022 Secured Note include:

 

●When the 2022 Secured Note matures, the Investors will use all of the principal amount repaid on maturity to purchase a 60% gross silver royalty (the “Silver Royalty”). Maturity occurs upon the first to occur of:

 

a)Commercial production being achieved at KSM; and

 

b)Either on February 25, 2032, the 10-year anniversary, or if the Environmental Assessment Certificate (“EAC”) expires and the Investors do not exercise their right to put the 2022 Secured Note to the Company, on February 25, 2032, the 13-year anniversary of the issue date of the 2022 Secured Note.

 

●Prior to its maturity, the 2022 Secured Note bears interest at 6.5% per annum, payable quarterly in arrears. The Company can elect to satisfy interest payments in cash or by delivering common shares.

 

●The Company has the option to buyback 50% of the Silver Royalty, once exchanged on or before 3 years after commercial production has been achieved, for an amount that provides the Investors a minimum guaranteed annualized return.

 

●If project financing to develop, construct and place KSM into commercial production is not in place by February 25, 2027, the Investors can put the 2022 Secured Note back to the Company for US$232.5 million, with the Company able to satisfy such amount in cash or by delivering common shares at its option. This right expires once such project financing is in place. If the Investors exercise this put right, the Investors’ right to purchase the Silver Royalty terminates.

 

●If KSM’s EAC expires at anytime while the 2022 Secured Note is outstanding, the Investors can put the 2022 Secured Note back to the Company for US$247.5 million at any time over the following nine months, with the Company able to satisfy such amount in cash or by delivering common shares at its option. If the Investors exercise this put right, the Investors’ right to purchase the Silver Royalty terminates.

 

●If commercial production is not achieved at KSM prior to the tenth anniversary from closing, the Silver Royalty payable to the Investors will increase to a 75% gross silver royalty (if the EAC expires during the term of the 2022 Secured Note and the corresponding put right is not exercised by the Investors, this uplift will occur at the thirteenth anniversary from closing).

 

●No amount payable shall be paid in common shares if, after the payment, any of the Investors would own more than 9.9% of the Company’s outstanding shares.

 

●The Company’s obligations under the 2022 Secured Note are secured by a charge over all of the assets of KSMCo and a limited recourse guarantee from the Company secured by a pledge of the shares of KSMCo.

 

To satisfy the interest payment on the 2022 Secured Note, during the current quarter, the Company issued 322,084 common shares, and subsequent to the quarter end the Company issued 315,289 common shares, in respect of the interest incurred during the first and second quarter of 2023, respectively.

 

Page 12

 

 

A number of the above noted options within the agreement represent embedded derivatives. Management has elected to not separate these embedded derivatives from the underlying host secured note, and instead account for the entire secured note as a financial liability at fair value through profit or loss.

 

The Company entered into the loan commitment within the scope of IFRS 9 ‘Financial Instruments’ on February 25, 2022 related to the 2022 Secured Note, as at that date, the Company and the Investors were committed under pre-specified terms and conditions to complete the transaction. The loan commitment was initially recognized at a fair value of US$225 million. Upon funding of the 2022 Secured Note on March 24, 2022, the loan commitment was settled with no gain or loss recognized.

 

The 2022 Secured Note was recognized at its estimated fair value at initial recognition of $282.3 million (US$225 million) using a discounted cash flow model with a Monte Carlo simulation. This incorporated several scenarios and probabilities of the EAC expiring, achieving commercial production and securing project financing, silver prices forecast from five year quoted forward price, and the discount rates. During the six months ended June 30, 2023, the fair value of the 2022 Secured Note decreased, and the Company recorded $5.8 million gain (year ended December 31, 2022 - $18.7 million gain) on the remeasurement.

 

The following inputs and assumptions were used in the determination of fair value:

 

Inputs and assumptions  June 30,
2023		   December 31,
2022		 
Forecast silver production in thousands of ounces   166,144    166,144 
Five year quoted future silver price   US$28.27    US$29.38 
Risk-free rate   3.8%   3.4%
Credit spread   5.4%   5.3%
Share price volatility   60%   60%
Silver royalty discount factor   9.1%   8.6%

 

The carrying amount for the 2022 Secured Note is as follows:

 

($000s)   June 30,
2023		    December 31,
2022		 
Fair value beginning of the period   263,541    282,263 
Change in fair value (gain) loss through profit and loss   1,367    (36,967)
Change in fair value (gain) loss through other comprehensive income (loss)   (1,127)   (2,912)
Foreign currency translation (gain) loss   (6,056)   21,157 
Total change in fair value   (5,816)   (18,722)
Fair value end of the period   257,725    263,541 

 

Page 13

 

 

Sensitivity Analysis:

 

For the fair value of the 2022 Secured Note, reasonably possible changes at the reporting date to one of the significant inputs, holding other inputs constant, would have the following effects:

 

Key Inputs   Inter-relationship between significant inputs and
fair value measurement		   Increase
(decrease)
(millions)		  
Key observable inputs   The estimated fair value would increase (decrease) if:      
● Silver price forward curve   ● Future silver prices were 10% higher   $ 13.4  
    ● Future silver prices were 10% lower   $ (13.5 )
             
● Discount rates   ● Discount rates were 1% higher   $ (21.5 )
    ● Discount rates were 1% lower   $ 25.2  
Key unobservable inputs            
● Forecasted silver production   ● Silver production indicated silver ounces were 10% higher   $ 13.4  
    ● Silver production indicated silver ounces were 10% lower   $ (13.5 )

 

(b)2023 Secured Note

 

On June 29, 2023, the Company, through its wholly-owned subsidiary, KSM Mining ULC (“KSMCo”) executed an agreement to sell a secured note and royalty arrangement (collectively referred to as the “2023 Secured Note”) on the KSM Project with Sprott Private Resource Streaming and Royalty (B) Corp. (“Sprott”). The 2023 Secured Note has a principal amount of US$150 million, bears interest at 6.5% per annum and matures upon commercial production, March 24, 2032 or March 24, 2035. The arrangement includes conditions and multiple features that will alter the Company’s obligation to Sprott. The 2023 Secured Note includes options for Sprott to put the royalty back to the Company if the EAC expires or if project financing for construction is not secured. Unless Sprott exercises its put rights at an earlier date, the 2023 Secured Note is to be exchanged at maturity for a net smelter returns royalty (the “NSR”) on all metals produced from the KSM Project and sold, in the range of 1% to 1.5%, to be paid in perpetuity. The Company has the option to reduce the NSR percentage after commercial production.

 

The key terms of the 2023 Secured Note include:

 

●The 2023 Secured Note matures (“Maturity Date”) at the earlier of:

 

a)commercial production being achieved at KSM; and

 

b)either March 24, 2032, or, if the environmental assessment certificate (“EAC”) expires and Sprott does not exercise its right to put the Note to the Company, March 24, 2035.

 

●On the Maturity Date, the NSR is issued and Sprott may satisfy the obligation to pay the NSR purchase price of US$150 million with cash or setting-off the amount against the note principal amount due.

 

●Prior to its maturity, the 2023 Secured Note bears interest at 6.5% per annum, payable quarterly in arrears. Payment of quarterly interest due from the closing date to the second anniversary is deferred and US$21.5 million must be paid on or before 30 months after the closing date. Deferred interest can be satisfied by way of cash, common shares or increasing the NSR percentage from 1 to 1.2%. The Company can elect to satisfy quarterly interest payments in cash or by having Seabridge issue common shares, with a value equal to a 5% discount on the 5-day volume weighted average trading price (“VWAP”).

 

●Project Financing Repayment Amount: If project financing to develop, construct and place the KSM Project into commercial production is not in place by March 24, 2027, Sprott can put the Note back to the Company for:

 

a)if the Company is obligated to sell Sprott a 1% NSR on the Maturity Date at the time US$155 million plus accrued and unpaid interest, or

 

b)if the Company is obligated to sell Sprott a 1.2% or 1.5% NSR on the Maturity Date at the time, US$180 million plus accrued and unpaid interest.

 

●EAC Repayment Amount: If the KSM Project’s EAC expires at anytime while the Note is outstanding, Sprott can put the Note back to the Company at any time over the following nine months for:

 

a)if the Company is obligated to sell Sprott a 1% NSR on the Maturity Date at the time, US$165 million plus accrued and unpaid interest, or

 

b)if the Company is obligated to sell Sprott a 1.2% NSR on the Maturity Date at the time, US$186.5 million plus accrued and unpaid interest.

 

●No amount payable shall be paid in common shares if, after the payment, Sprott would own more than 9.9% of the Company’s outstanding shares.

 

Page 14

 

 

If Sprott exercises these put rights, its right to purchase the NSR terminates. The Company can elect to make payment in the form of Seabridge common shares instead of cash for the EAC and the Project Financing Repayment Amount, the Deferred interest Payment and any Interest Payment described above.

 

A number of the above noted options within the agreement represent embedded derivatives. Management has elected to not separate these embedded derivatives from the underlying host secured note, and instead account for the entire secured note as a financial liability at fair value through profit or loss.

 

The 2023 Secured Note was recognized at its estimated fair value at initial recognition of $198.8 million (US$150 million) using a discounted cash flow model with a Monte Carlo simulation. This incorporated several scenarios and probabilities of the EAC expiring, achieving commercial production and securing project financing, metal prices forecast and discount rates. The fair value of the 2023 Secured Note remained unchanged, from the initial recognition on June 29, 2023 to June 30, 2023, except for a $0.2 million gain due to foreign currency translation.

 

The following inputs and assumptions were used in the determination of fair value:

 

Inputs and assumptions  June 29,
2023		 
Forecast NSR:     
Gold in thousands of ounces   10,500 
Silver in thousands of ounces   29,876 
Copper in millions of pounds   19,322,467 
Molybdenum in millions of pounds   152,310 
Five year quoted future metal price     
Gold per ounce  US$2,352.04 
Silver per ounce  US$27.51 
Copper per pound  US$3.64 
Molybdenum per pound  US$22.99 
Risk-free rate   3.9%
Credit spread   5.4%
Share price volatility   60%
NSR royalty discount factor   9.1%

 

Sensitivity Analysis:

 

For the fair value of the 2023 Secured Note, reasonably possible changes at the reporting date to one of the significant inputs, holding other inputs constant, would have the following effects:

 

Key Inputs   Inter-relationship between significant inputs and
fair value measurement		   Increase
(decrease)
(millions)		  
Key observable inputs   The estimated fair value would increase (decrease) if:      
           
● Metals price forward curve   ● Future metal prices were 10% higher   $ 13.2  
    ● Future metal prices were 10% lower   $ (13.2 )
             
● Discount rates   ● Discount rates were 1% higher   $ (22.5 )
    ● Discount rates were 1% lower   $ 26.2  
Key unobservable inputs            
● Forecasted metal production   ● Metal production indicated volumes were 10% higher  $ 13.2  
    ● Metal production indicated volumes were 10% lower   $ (13.2 )

 

12.Shareholders’ equity

 

The Company is authorized to issue an unlimited number of preferred shares and common shares with no par value. No preferred shares have been issued or were outstanding at June 30, 2023 or December 31, 2022.

 

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition, exploration and development of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business.

 

Page 15

 

 

The properties in which the Company currently has an interest are in the pre-operating stage, as such the Company is dependent on external financing to fund its activities. In order to carry out the planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as needed.

 

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company’s approach to capital management during 2023. The Company considers its capital to be share capital, stock-based compensation, warrants, contributed surplus and deficit. The Company is not subject to externally imposed capital requirements.

 

a)Equity financings

 

During the first quarter of 2021, the Company entered into an agreement with two securities dealers, for an At-The-Market offering program, entitling the Company, at its discretion, and from time to time, to sell up to US$75 million in value of common shares of the Company. This program was in effect until the Company’s US$775 million Shelf Registration Statement, that expired in December 2022, was replaced with a new US$750 million the same month. During the first quarter of 2023, a US$100 million prospectus supplement was filed and the program was renewed. In the first quarter of 2023, the Company entered into a new agreement with two securities dealers, for an At-The-Market offering program, entitling the Company, at its discretion, and from time to time, to sell up to US$100 million in value of common shares of the Company. This program can be in effect until the Company’s US$750 million Shelf Registration Statement expires in 2025. During the six months ended June 30, 2023, the Company issued 1,281,667 shares, at an average selling price of $18.27 per share, for net proceeds of $22.9 million under the Company’s At-The-Market offering. Subsequent to the quarter end, the Company issued 238,489 shares, at an average selling price of $17.00 per share, for net proceeds of $4.0 million under the Company’s At-The-Market offering. In 2022, the Company issued 998,629 shares, at an average selling price of $22.82 per share, for net proceeds of $22.3 million under the Company’s At-The-Market offering.

 

In December 2022, the Company issued a total of 675,400 flow-through common shares at an average $22.24 per common share for aggregate gross proceeds of $15.0 million. The Company committed to renounce its ability to deduct qualifying exploration expenditures for the equivalent value of the gross proceeds of the flow-through financing and transfer the deductibility to the purchasers of the flow-through shares. The effective date of the renouncement was December 31, 2022. At the time of issuance of the flow-through shares, $4.2 million premium was recognized as a liability on the consolidated statements of financial position. During six month ended June 30, 2023, the Company incurred $5.3 million of qualifying exploration expenditures and $1.5 million of the premium was recognized through other income on the consolidated statements of operations and comprehensive income (loss).

 

b)Stock options and restricted share units

 

The Company provides compensation to directors and employees in the form of stock options and RSUs. Pursuant to the Share Option Plan, the Board of Directors has the authority to grant options, and to establish the exercise price and life of the option at the time each option is granted, at a price not less than the closing price of the common shares on the Toronto Stock Exchange on the date of the grant of such option and for a period not exceeding five years. All exercised options are settled in equity. Pursuant to the Company’s RSU Plan, the Board of Directors has the authority to grant RSUs, and to establish terms of the RSUs including the vesting criteria and the life of the RSUs.

 

Page 16

 

 

Stock option and RSU transactions were as follows:

 

   Options   RSUs   Total 
   Number of
Options		   Weighted
Average
Exercise
Price ($)		   Amortized
Value of
options
($000s)		   Number of
RSUs		   Amortized
Value of
RSUs
($000s)		   Stock-based
Compensation
($000s)		 
Outstanding January 1, 2023   477,500    15.85    4,117    345,266    538    4,655 
Granted   
-
    
-
    
-
    20,000    
-
    
-
 
Exercised option or vested RSU   -    -    -    (5,000)   (111)   (111)
Amortized value of stock-based compensation   
-
    
-
    
-
    
-
    1,727    1,727 
Outstanding at June 30, 2023   477,500    15.85    4,117    360,266    2,154    6,271 
                               
Exercisable at June 30, 2023   477,500                          

 

   Options     RSUs    Total  
   Number of Options   Weighted
Average
Exercise
Price ($)		   Amortized
Value of
options
($000s)		    Number of
RSUs		   Amortized
Value of
RSUs
($000s)		   Stock-based Compensation ($000s)  
Outstanding at January 1, 2022   1,023,334    14.61    8,125       173,800    572   8,697  
Granted   
-
    
-
    
-
       320,266    187   187  
Exercised option or vested RSU   (540,834)   13.54    (3,974)      (148,800)   (3,172)  (7,146 )
Expired   (5,000)   13.14    (34)      
-
    
-
   (34 )
Amortized value of stock-based compensation   
-
    
-
    -       
-
    2,951   2,951  
Outstanding at December 31, 2022   477,500    15.85    4,117       345,266    538   4,655  
                                   
Exercisable at December 31, 2022   477,500                              

 

The outstanding share options at June 30, 2023 expire at various dates between October 2023 and June 2024. A summary of options outstanding, their remaining life and exercise prices as at June 30, 2023 is as follows:

 

Options Outstanding   Options Exercisable 
Exercise
   Number   Remaining   Number 
price   outstanding   contractual life   Exercisable 
$16.94    50,000    4 months    50,000 
$15.46    377,500    6 months    377,500 
$17.72    50,000    1 year    50,000 
      477,500         477,500 

 

During the six months ended June 30, 2023, 5,000 RSUs vested and nil options were exercised. During the year ended December 31, 2022, 540,834 options were exercised for proceeds of $3.9 million, and 148,800 RSUs vested. The weighted average share price at the date of exercise of options was $18.74. Subsequent to the quarter end, 5,000 RSUs vested and were exchanged for common shares of the Company.

 

Page 17

 

 

During the current quarter, 20,000 RSUs were granted to two newly appointed Board members. The RSUs vest at the earlier of three years and the date at which the member retires from the Board. The fair value of the grants, of $0.3 million, was estimated as at the grant date to be amortized over the expected service period of the grants.

 

In December 2022, 310,266 RSUs were granted. Of these, 37,500 RSUs were granted to Board members, 232,266 RSUs were granted to members of senior management, and the remaining 40,500 RSUs were granted to other employees of the Company. The fair value of the grants, of $5.1 million, was estimated as at the grant date to be amortized over the expected service period of the grants. The expected service period ranges from six months to three years from the date of the grant and is dependent on certain corporate objectives being met. Of the $5.1 million fair value of the grants, $0.1 million was amortized during the fourth quarter of 2022, $1.5 million was amortized during the six months ended June 30th, and the remaining $3.4 million will be amortized over the remaining estimated service periods of the respective tranches.

 

During the third quarter of 2022, 10,000 RSUs were granted to a Board member. Half of the RSUs vest on the first anniversary of the appointment and the remaining half on the second anniversary. The fair value of the grants, of $0.2 million, was estimated as at the grant date to be amortized over the expected service period of the grants. As at June 30, 2023, $0.1 million of the fair value of the grants was amortized.

 

In December 2021, 123,800 RSUs were granted. Of these, 28,000 RSUs were granted to Board members, 75,200 RSUs were granted to members of senior management, and the remaining 20,600 RSUs were granted to other employees of the Company. The fair value of the grants, of $2.6 million, was estimated as at the grant date to be amortized over the expected service period of the grants. The expected service period of approximately four months from the date of the grant was dependent on certain corporate objectives being met. Of the $2.6 million fair value of the grants, $0.4 million was amortized during the fourth quarter 2021, and the remaining $2.2 million was amortized during the first quarter of 2022. During the second quarter of 2022, 128,800 RSUs were vested and 119,800 RSUs were exchanged for common shares of the Company.

 

During the third and fourth quarter of 2021, 40,000 RSUs were granted to three new members of senior management. Half of the RSUs vested on the first anniversary of employment and the remaining half will vest on the second anniversary. The fair value of the grants, of $0.9 million, was estimated at the grant date to be amortized over the expected service period of the grants. In 2022, 20,000 RSUs were vested, and as at June 30, 2023, $0.9 million of the fair value of the grants was amortized.

 

During the second quarter of 2021, 10,000 RSUs were granted to a Board member. Half of the RSUs vested on the first anniversary of the appointment and the remaining half will vest on the second anniversary. The fair value of the grants, of $0.2 million, was estimated as at the grant date to be amortized over the expected service period of the grants. 5,000 RSUs were vested during the second quarter of 2022, and the remaining 5,000 RSUs were vested during the current quarter, and as at June 30, 2023, $0.2 million fair value of the grants was amortized.

 

c)Basic and diluted net income (loss) per common share

 

Basic and diluted net income (loss) attributable to common shareholders of the Company for the three and six months ended June 30, 2023 was $9.0 million net income and $1.8 million net loss, respectively (three and six months ended June 30, 2022 – $19.1 million and $12.8 million net income, respectively).

 

Page 18

 

 

Earnings per share has been calculated using the weighted average number of common shares and common share equivalents issued and outstanding during the period. Stock options are reflected in diluted earnings per share by application of the treasury method. The following table details the weighted average number of outstanding common shares for the purpose of computing basic and diluted earnings (loss) per common share for the following periods:

 

  Three months ended
June 30,		   Six months ended
June 30,		 
(Number of common shares)  2023   2022   2023   2022 
Basic weighted average shares outstanding   82,434,434    80,144,953    81,998,804    79,701,761 
Weighted average shares dilution adjustments:                    
Stock options 1   62,142    233,552    
-
    250,408 
RSUs   150,149    13,887    
-
    14,755 
Diluted weighted average shares outstanding   82,646,724    80,392,391    81,998,804    79,966,924 
                     
Weighted average shares dilution exclusions: 2
Stock options 1   
-
    
-
    44,492    
  -
 
RSUs   
-
    
-
    141,220    
-
 

 

1)Dilutive stock options were determined using the Company’s average share price for the period. For the three and six months ended June 30, 2023, the average share price used was $18.22 and $17.48, respectively (three and six months ended June 30, 2022 - $20.37 and $20.95, respectively).

 

2)These adjustments were excluded as they are anti-dilutive.

 

13.Cash flow items

 

Adjustment for other non-cash items within operating activities:

 

        Three months ended
June 30,		    Six months ended
June 30,		 
($000s)    Notes    2023    2022    2023    2022 
Impairment of investment in associate   6    -    873    -    873 
Equity loss of associate   6    60    46    120    90 
Environmental rehabilitation expense   10    -    26    -    (41)
Unrealized gain on convertible notes receivable        22    (6)   37    9 
Accrued interest income on convertible notes receivable        -    -    (20)   (19)
Depreciation   8    33    74    65    95 
Finance costs, net        63    18    124    34 
Effects of exchange rate fluctuation on cash and cash equivalents        209    (1,430)   230    (1,374)
         387    (399)   556    (333)

 

Page 19

 

 

14.Fair value of financial assets and liabilities

 

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value.

 

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

 

Level 2: Inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts, volatility measurements used to value option contracts and observable credit default swap spreads to adjust for credit risk where appropriate), or inputs that are derived principally from or corroborated by observable market data or other means.

 

Level 3: Inputs are unobservable (supported by little or no market activity).

 

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

 

The Company’s fair values of financial assets and liabilities were as follows:

 

   June 30, 2023 
($000s)   Carrying
Amount		    Level 1   Level 2   Level 3   Total
Fair Value		 
Assets                      
Cash and cash equivalents   202,642    202,642   
-
   
-
   202,642 
Amounts receivable   6,215    6,215   
-
   
-
   6,215 
Investment in marketable securities   3,577    3,577   
-
   
-
   3,577 
Convertible notes receivable   594    
-
   
-
   594   594 
Long-term receivables   13,203    13,203   
-
   
-
   13,203 
    226,231    225,637   
-
   594   226,231 
Liabilities                      
Accounts payable and accrued liabilities   62,040    62,040   
-
   
-
   62,040 
Secured notes   456,325    
-
   
-
   456,325   456,325 
    518,365    62,040   
-
   456,325   518,365 

 

   December 31, 2022 
($000s)   Carrying
Amount		   Level 1   Level 2   Level 3   Total
Fair Value		 
Assets                     
Cash and cash equivalents   46,150   46,150  
-
  
-
   46,150 
Short-term deposits   81,690   81,690  
-
  
-
   81,690 
Amounts receivable   6,260   6,260  
-
  
-
   6,260 
Investment in marketable securities   3,696   3,696  
-
  
-
   3,696 
Convertible notes receivable   631  
-
  
-
   631   631 
Long-term receivables   13,203   13,203  
-
  
-
   13,203 
    151,630   150,999  
-
   631   151,630 
Liabilities                     
Accounts payable and accrued liabilities   42,956   42,956  
-
  
-
   42,956 
Secured notes   263,541  
-
  
-
   263,541   263,541 
    306,497   42,956  
-
   263,541   306,497 

 

The carrying value of cash and cash equivalents, short-term deposits, amounts receivable and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these financial assets and liabilities.

 

Page 20

 

 

The Company’s financial risk exposures and the impact on the Company’s financial instruments are summarized below:

 

Credit Risk

 

The Company’s credit risk is primarily attributable to short-term deposits, convertible notes receivable, and receivables included in amounts receivable and prepaid expenses. The Company has no significant concentration of credit risk arising from operations. The short-term deposits consist of Canadian Schedule I bank guaranteed notes, with terms up to one year but are cashable in whole or in part with interest at any time to maturity, for which management believes the risk of loss to be remote. Management believes that the risk of loss with respect to financial instruments included in amounts receivable and prepaid expenses to be remote.

 

Liquidity Risk

 

The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at June 30, 2023, the Company had cash and cash equivalents of $202.6 million and short-term deposits of nil (December 31, 2022 - $46.2 million and $81.7 million, respectively) for settlement of current financial liabilities of $66.4 million (December 31, 2022 - $47.3 million). Except for the secured notes liability and the reclamation obligations, the Company’s financial liabilities are primarily subject to normal trade terms. The Company’s ability to fund its operations and capital expenditures and other obligations as they become due is dependent upon market conditions.

 

The following tables detail the Company’s expected remaining contractual cash flow requirements for its financial liabilities on repayment or maturity periods. The amounts presented are based on the contractual undiscounted cash flows and may not agree with the carrying amounts in the Consolidated Statements of Financial Position.

 

($000s)   Less than
1 year		    1-3 years    3-5 years    Greater than
5 years		    Total 
2022 Secured Note including interest   19,364    38,728    38,728    160,905    257,725 
2023 Secured Note including interest   
-
    28,466    25,818    144,316    198,600 
Flow-through share expenditures   9,737    
-
    
-
    
-
    9,737 
Lease obligation   952    728    103    161    1,944 
    30,053    67,922    64,649    305,382    468,006 

 

As the Company does not generate cash inflows from operations, the Company is dependent upon external sources of financing to fund its exploration projects and on-going activities. If required, the Company will seek additional sources of cash to cover its proposed exploration and development programs at its key projects, in the form of equity financing and from the sale of non-core assets. Refer to Note 12 for details on equity financing.

 

Market Risk

 

(a)Interest Rate Risk

 

Interest rate risk is the risk that the future cash flows of a financial instrument or its fair value will fluctuate because of changes in market interest rates. The secured notes liability (Note 11) bear interest at a fixed rate of 6.5% per annum. The Company’s current policy is to invest excess cash in Canadian bank guaranteed notes (short-term deposits). The short-term deposits can be cashed in at any time and can be reinvested if interest rates rise.

 

Page 21

 

 

(b)Foreign Currency Risk

 

The Company’s functional currency is the Canadian dollar and major purchases are transacted in Canadian and US dollars. The secure note liability and the related interest payments are denominated in US dollars. The Company has the option to pay the interest either in cash or in shares. The Company also funds certain operations, exploration and administrative expenses in the United States on a cash call basis using US dollar cash on hand or converted from its Canadian dollar cash. Management believes the foreign exchange risk derived from currency conversions is not significant to its operations and has not entered into any foreign exchange hedges. As at June 30, 2023, the Company had cash and cash equivalents, investment in associate, convertible notes receivable, loan receivable, reclamation deposits, accounts payable, accrued liabilities and secured notes that are in US dollars.

 

(c)Investment Risk

 

The Company has investments in other publicly listed exploration companies which are included in investments. These shares were received as option payments on certain exploration properties the Company owns or has sold. In addition, the Company holds $3.6 million in a gold exchange traded receipt that is recorded on the consolidated statements of financial position in investments. The risk on these investments is significant due to the nature of the investment but the amounts are not significant to the Company.

 

15.Corporate and administrative expenses

 

   Three months ended
June 30,		  

Six months ended

June 30,

 
($000s)   2023   2022   2023   2022 
Employee compensation   1,465   1,302   3,085   2,540 
Stock-based compensation   859   222   1,727   2,515 
Professional fees   662   596   936   855 
Other general and administrative   991   748   2,120   1,559 
    3,977   2,868   7,868   7,469 

 

16.Related party disclosures

 

During the six months ended June 30, 2023 and 2022, there were no payments to related parties other than compensation paid to key management personnel. These transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

 

17.Income taxes

 

As previously disclosed in the Company’s prior years financial statements, in 2019 the Company received a notice from the CRA that it proposed to reduce the amount of expenditures reported as Canadian Exploration Expenses (CEE) for the three-year period ended December 31, 2016. The Company has funded certain of its exploration expenditures, from time-to-time, with the proceeds from the issuance of flow-through shares and renounced, to subscribers, the expenditures which it determined to be CEE. The notice disputes the eligibility of certain types of expenditures previously audited and approved as CEE by the CRA. The Company strongly disagrees with the notice and responded to the CRA auditors with additional information for their consideration. In 2020, the CRA auditors responded to the Company’s submission and, although accepting additional expenditures as CEE, reiterated that their position remains largely unchanged and subsequently issued reassessments to the Company reflecting the additional CEE expenditures accepted and $2.3 million of Part Xll.6 tax owing. The Company has been made aware that the CRA has reassessed certain investors who subscribed for the flow-through shares, reducing CEE deductions. Notice of objections to the Company’s and investors’ reassessments have been filed for all those that have been received and will be appealed to the courts, should the notice of objections be denied. The Company has indemnified the investors that subscribed for the flow-through shares and that have been reassessed by depositing the amount of their reassessments, including interest charges, into the accounts of the reassessed investors with the Receiver General in return for such investors agreement to object to their respective reassessments and to repay the Company any refund of the amount deposited on their behalf upon resolution of the Company’s appeal. During 2021 and 2022, the Company deposited $9.3 million into the accounts of certain investors with the Receiver General. The deposits made have been recorded as long-term receivables on the statement of financial position as at June 30, 2023. The potential tax indemnification to the investors is estimated to be $10.8 million, plus $2.9 million potential interest. No provision has been recorded related to the tax, potential interest, nor the potential indemnity as the Company and its advisors do not consider it probable that there will ultimately be an amount payable.

 

Page 22

 

 

18.Commitments and contingencies

 

   Payments due by years 
($000s)  Total  2023  2024-25  2026-27  2028-29 
2022 Secured Note – interest   125,866   9,682   38,728   38,728   38,728 
2023 Secured Note – interest   80,102   
-
   28,466   25,818   25,818 
Capital expenditure obligations   88,175   82,033   6,142   
-
   
-
 
Flow-through share expenditures   9,737   9,737   
-
   
-
   
-
 
Mineral interests   5,441   485   1,652   1,652   1,652 
Lease obligation   1,851   510   1,143   106   92 
    311,172   102,447   76,131   66,304   66,290 

 

In 2022, the Company entered into a Facilities Agreement with BC Hydro covering the design and construction of facilities by BC Hydro to supply construction phase hydro-sourced electricity to the KSM project.

 

The cost to complete the construction is estimated to be $32.8 million of which the Company has paid $24.9 million to BC Hydro and the remaining balance is due in December 2023. In addition, the Facilities Agreement requires $59.7 million in security or cash from the Company for BC Hydro system reinforcement which is required to make the power available of which the Company has paid $57.1 million to BC Hydro and the balance is due in December 2023. The $59.7 million system reinforcement security will be forgiven annually, typically over a period of less than 8 years, based on project power consumption.

 

Prior to its maturity, the 2022 Secured Notes bear interest at 6.5%, or US$14.6 million per annum, payable quarterly in arrears. The Company can elect to satisfy interest payments in cash or by delivering common shares. Refer to Note 11 for details on the secured notes.

 

Prior to its maturity, the 2023 Secured Note bears interest at 6.5% or US$9.8 million per annum, payable quarterly in arrears. Payment of quarterly interest due from the closing date to the second anniversary is deferred and US$21.5 million must be paid on or before 30 months after the closing date. Deferred interest can be satisfied by way of cash, common shares or increasing the NSR percentage from 1 to 1.2%.

 

 

Page 23

 

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Exhibit 99.2

 

SEABRIDGE GOLD INC.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

SECOND QUARTER ENDED

 

JUNE 30, 2023

 

 

 

 

 

 

 

 

 

 

 

SEABRIDGE GOLD INC.

 

Management’s Discussion and Analysis

 

This management’s discussion and analysis (“MD&A”) of Seabridge Gold Inc. (“Seabridge” or the “Company”) and its subsidiary companies, dated August 14, 2022, is intended to supplement and complement the unaudited condensed consolidated interim financial statements and related notes (“consolidated interim financial statements”) as at and for the three and six months ended June 30, 2023. It should be read in conjunction with the Company’s audited annual consolidated financial statements and annual management’s discussion and analysis for the year ended December 31, 2022, and the 2022 Annual Information Form filed on SEDAR at www.sedarplus.ca. Other corporate documents are also available on SEDAR and EDGAR as well as the Company’s website www.seabridgegold.com. As the Company has no operating projects at this time, its ability to carry out its business plan rests with its ability to sell projects or to secure equity and other financings. All amounts contained in this document are stated in Canadian dollars unless otherwise stated.

 

The consolidated interim financial statements for the three and six months ended June 30, 2023 and the comparative period 2022 have been prepared by the Company in accordance with IAS 34, Interim Financial Reporting.

 

Company Overview

 

Seabridge Gold Inc. is a company engaged in the acquisition and exploration of mineral properties, with an emphasis on gold resources, located in North America. The Company’s objective is to provide its shareholders with exceptional leverage to a rising gold price and the returns from significant copper resources it has acquired. The Company’s business plan is to increase its mineral resources in the ground, through exploration, but not to go into production on its own. The Company intends to sell projects or participate in joint ventures towards production with major mining companies. Since inception in 1999, Seabridge has acquired interests in numerous advanced-stage gold projects situated in North America and its principal projects include the KSM property located in British Columbia and the Courageous Lake property located in the Northwest Territories. The Company also holds a 100% interest in the Iskut Project in British Columbia, the Snowstorm Project in Nevada and the 3 Aces gold project in Yukon. Although focused on gold exploration, the Company has made significant copper discoveries, in particular, at KSM. Seabridge’s common shares trade in Canada on the Toronto Stock Exchange under the symbol “SEA” and in the United States on the New York Stock Exchange under the symbol “SA”.

 

Page 1

 

 

Results of Operations

 

During the current quarter, the Company recorded net earnings of $9.0 million, or $0.11 per share on both a basic and diluted basis. During the comparative period of 2022, the Company recorded net earnings of $19.1 million, or $0.24 per share, on both a basic and diluted basis.

 

During the six months ended June 30, 2023, the Company recorded a net loss of $1.8 million, or ($0.02) per share. During the comparative period in 2022, the Company recorded net earnings of $12.8 million, or $0.16 per share, on both a basic and diluted basis.

 

During the current quarter, unrealized gains due to changes in the fair value of the Company’s secured notes liability and gain on foreign exchange translation, partially offset by corporate and administrative expenses, finance costs, stock-based compensation, and income taxes were the most significant items contributing to net earnings. During the six months ended June 30, 2023, corporate and administrative expenses, finance costs, stock-based compensation and unrealized loss due to change in the fair value of the Company’s secured notes liability, partially offset by the gain on foreign exchange translation were the most significant items contributing to net loss.

 

During the current quarter, the fair value of the secured note liability issued on March 24, 2022 (“2022 Secured Note”) decreased by $19.1 million of which the Company recorded $10.4 million gain through profit or loss, and $8.7 million gain through other comprehensive income (loss). During the six months ended June 30, 2023, the fair value of the 2022 Secured Note liability increased, and the Company recorded $1.4 million loss through profit or loss, partially offset by $1.1 million gain recorded through other comprehensive income (loss).

 

During the six months ended June 30, 2022, the fair value of the 2022 Secured Note decreased by $55.1 million of which the Company recorded $31.6 million gain through profit or loss, and $23.5 million gain through other comprehensive income (loss).

 

The Company measures the fair value of its secured notes liability using a Monte Carlo simulation model. Significant inputs and assumptions into the 2022 Secured Note model are summarized in the following table.

 

Inputs and assumptions  June 30,
2023		   December 31,
2022		 
Forecast silver production in thousands of ounces   166,144    166,144 
Five-year quoted future silver price   US$28.27    US$29.38 
Risk-free rate   3.8%   3.4%
Credit spread   5.4%   5.3%
Share price volatility   60%   60%

 

The fair value of the 2022 Secured Note was estimated using Level 3 inputs and is most sensitive to changes in risk free rate, silver prices and forecasted silver production.

 

It should be noted that the remeasurement of the secured notes liability under IFRS leads to significant gains or losses over time due to changes in the input variables. However, these swings in fair value will have no impact on the actual outcome of the notes at maturity. Either the notes will be put back to the company at the prescribed fixed price under the rights of the noteholders, or the note will be exchanged for the prescribed royalty and NSR, at maturity.

 

Page 2

 

 

During the three and six months ended June 30, 2023, cash compensation and corporate and administrative expenses increased marginally from comparative periods in 2022, mainly due to increase in headcount, travel and insurance costs, and external consulting and professional fees. The Company anticipates that personnel numbers and related remuneration should remain steady in the coming quarters as a significant number of personnel joined the Company in 2022.

 

Stock-based compensation expense related to RSUs decreased by $0.8 million, from $2.5 million in the first six months of 2022 to $1.7 million in the current period. The decrease was mainly due to the fact that the RSUs granted in December 2022 had a range of estimated vesting periods of up to 36 months compared to RSUs granted in December 2021 had a vesting period of 4 months and had vested in the second quarter of 2022.

 

The Company’s stock-based compensation expenses related to restricted share units are illustrated in the following tables:

 

      ($000s) 
RSUs granted  Number
of RSUs		   Grant date
fair value		   Expensed
prior to
2022		   Expensed in
2022		   Expensed in
2023		   Balance
to be
expensed		 
June 24, 2021   10,000    222    0    185    37    - 
September 01, 2021   20,000    454    75    304    75    - 
September 07, 2021   10,000    229    36    155    38    - 
October 01, 2021   10,000    195    24    122    32    17 
December 13, 2021   123,800    2,622    437    2,185    -    - 
July 04, 2022   10,000    159    -    52    54    53 
December 13, 2022   310,266    5,073    -    135    1,491    3,447 
June 28, 2023   20,000    312                   312 
              572    3,138    1,727    3,829 

 

The Company recognized a foreign exchange gain of $5.1 million and $5.7 million in the three and six months ended June 30, 2023, respectively, compared to loss $0.8 million and $1.0 million in the three and six months ended June 30, 2022, respectively.

 

Foreign exchange gain of $5.1 million recognized during the current quarter was the net result of $5.7 million gain associated with the secured notes liability, partially offset by $0.6 million loss recognized mainly on the US dollar-denominated cash translated to Canadian dollars during the period. Foreign exchange gain of $5.7 million recognized during six months ended June 30, 2023, was the net result of $6.3 million gain associated with the secured notes liability, partially offset by $0.6 million loss recognized mainly on the US dollar-denominated cash translated to Canadian dollars during the period.

 

Foreign exchange loss of $0.8 million recognized during the three months ended June 30, 2022, was mainly the net result of $8.3 million loss associated with the secured notes liability, partially offset by $7.4 million gain recognized mainly on the US dollar-denominated cash and short-term investments translated to Canadian dollars during the period. Foreign exchange loss of $1.0 million recognized during the six months ended June 30, 2022, was mainly the net result of $8.3 million loss associated with the secured notes liability, partially offset by $7.3 million gain recognized mainly on the US dollar-denominated cash and short-term investments translated to Canadian dollars during the period.

 

Page 3

 

 

Finance costs amounted to $1.9 million and $2.0 million in the three and six months ended June 30, 2023, respectively, compared to $0.3 million and $3.4 million in the three and six months ended June 30, 2022, respectively. The finance costs incurred during current quarter and first quarter of 2022 were primarily related to the secured notes financings.

 

The Company holds one investment in an associate that is accounted for on an equity basis. During the second quarter of 2022, the Company reviewed the recoverability of the investment in the associate and recorded an impairment of $0.9 million in the consolidated statement of operations and comprehensive income (loss).

 

During the current quarter, the Company recognized income tax expense of $2.6 million, primarily due to the deferred tax liability arising from the gain recognized on remeasurement of the fair value of the 2022 Secured Note, and foreign exchange gain, and the renouncement of expenditures related to the December 2022 flow-through shares issued which are capitalized for accounting purposes. The income tax expense was partially offset by income tax recovery arising from the losses in the period. The income tax impact of the revaluation of the 2022 Secured Note that was recorded through other comprehensive income (loss), was $2.3 million, and was also recorded through other comprehensive income (loss).

 

During the six months ended June 30, 2023, the Company recognized income tax recovery of $0.9 million, primarily due to the taxes arising from the loss during the period, including the loss recognized on remeasurement of the fair value of the 2022 Secured Note, partially offset by foreign exchange gain and from the renouncement of expenditures related to the December 2022 flow-through shares issued which are capitalized for accounting purposes. The income tax expense on the revaluation of the 2022 Secured Note of $0.3 million that was recorded through other comprehensive income (loss), was also recorded through other comprehensive income (loss).

 

During the comparative three and six months ended June 30, 2022, the Company recognized income tax expenses of $7.6 million and $6.2 million, respectively, primarily due to the deferred tax liability arising from the gain recognized on remeasurement of the fair value of the 2022 Secured Note, and from the renouncement of expenditures related to the June 2021 flow-through shares issued which are capitalized for accounting purposes. The impact of the revaluation of the 2022 Secured Note that was recorded through other comprehensive income (loss), of $6.4 million, was also recorded through other comprehensive income (loss). The income tax expense was partially offset by income tax recovery arising from the losses in the period, and unrealized foreign exchange loss related to the 2022 Secured Note.

 

Page 4

 

 

Quarterly Information

 

Selected financial information for the last eight quarters ending June 30, 2023 is as follows:

 

(in thousands of Canadian dollars, except per share  2023   2022   2021 
amounts)  Q2   Q1   Q4   Q3   Q2   Q1   Q4   Q3 
Revenue  -   -   -   -   -   -   -   - 
Earnings (loss) for the period   8,985    (10,784)   (25,246)   5,045    19,088    (6,281)   (8,546)   (822)
Basic earnings (loss) per share   0.11    (0.13)   (0.31)   0.06    0.24    (0.08)   (0.11)   (0.01)
Diluted earnings (loss) per share   0.11    (0.13)   (0.31)   0.06    0.24    (0.08)   (0.11)   (0.01)

 

During the current quarter, the unrealized gain related to the change in the fair value of the 2022 Secured Note was $10.4 million. During the first quarter of 2023 and the fourth quarter of 2022, the unrealized loss related to the change in the fair value of the 2022 Secured Note was $11.7 million and $19.5 million, respectively. During the third and second quarters of 2022, the unrealized gain related to the change in the fair value of the 2022 Secured Note was $24.9 million and $31.6 million, respectively. There was no unrealized gain or loss recognized in the first quarter of 2022 as the 2022 Secured Note was received at the end of March 2022.

 

In the first quarter of 2022, the loss for the period included $2.3 million of stock-based compensation expense related to the amortization of RSUs granted in December 2021 that were vested during the second quarter of 2022. In the fourth quarter 2022, the loss included $6.6 million of rehabilitation expenses related to the Johnny Mountain Mine. In the fourth quarter of 2021, the loss included $5.4 million of rehabilitation expenses related to the Johnny Mountain Mine.

 

Mineral Interests and Site Capture Activities

 

During the six months ended June 30, 2023, the Company’s main efforts and most significant spending were focused on its 2023 site capture and early infrastructure development activities that are designed to ensure that KSM’s Environmental Assessment Certificate (“EAC”) remains in good standing.

 

The site capture expenditures during the six months ended June 30, 2023, are illustrated below:

 

($000s)   Capital
expenditures		    Capitalized
borrowing
costs		    Advance
payment to
BC Hydro		    Total 
Cost                    
As at January 1, 2022   27,061    -    9,620    36,681 
Additions   143,994    14,735    28,880    187,609 
As at December 31, 2022   171,055    14,735    38,500    224,290 
Additions 1   85,463    9,855    43,650    138,968 
As at June 30, 2023   256,518    24,590    82,150    363,258 

 

1)During the first quarter of 2023, the Company paid $43.6 million (as at December 31, 2022, $38.5 million) to British Columbia Hydro and Power Authority (“BC Hydro”) as advance payments made pursuant to the Company signing a facilities agreement with BC Hydro in 2022, covering the design and construction of facilities to supply construction phase hydro-sourced electricity to the KSM project.

 

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Under the B.C. Environmental Assessment Act, a project’s EAC is subject to expiry if the project has not been substantially started (“Substantial Start”) by the deadline specified in the EAC. The expiry date for KSM’s EAC is July 29, 2026. However, if the B.C. Minister of Environment and Climate Change Strategy determines that a project has been Substantially Started on or before the deadline, the EAC remains in effect for the life of the project. Significant site capture activities started in 2022 and are continuing into 2023, including road, bridge, and camp construction, hydro installations, fish habitat offsetting programs, and the acquisition and transport of construction equipment and vehicles. The Company anticipates submitting its Substantial Start application to the BC government in early 2024.

 

The 2023 full-year plan for site capture is approximately $237 million (2022 full-year actual - $180.4 million). Additionally, during 2023, the Company will incur approximately $25.9 million (2022 - $14.7 million) of interest expense related to the 2022 Secured Note and the 2023 Secured Note that will be capitalized at KSM as borrowing costs. The plan, to June 30, 2023 has been funded by the remaining proceeds of the US$225 million 2022 Secured Note issued in March 2022 and proceeds from the ATM. To continue funding its activities, during the current quarter, the Company completed the sale of a net smelter royalty on its KSM project for US$150 million. Refer to the Liquidity and capital resources section for details.

 

During 2022, the Company filed a full updated pre-feasibility study (“PFS”) for KSM. The full study included a preliminary economic assessment (“PEA”) for mineral resources at KSM, not included in the PFS resources. The results of the PFS show a considerably more sustainable and profitable mining operation than its 2016 predecessor. It envisages an all-open pit mine plan that includes the Mitchell, East Mitchell, and Sulphurets deposits only with a 33-year operating life. Mill production increased from an initial 130,000 metric tonnes per day (tpd) to 195,000 tpd in the third year of production. The primary reasons for the improvements in the plan arise from the acquisition of the East Mitchell resource in December 2020 and an expansion to planned mill throughput. The many design improvements over earlier studies include a smaller environmental footprint, reduced waste rock production, a 50% increase in mill throughput, and the elimination of capital-intensive block cave mining. The Company is also studying the use of trolley-assist technology or how the supply of power from BC Hydro and the possible electrification of the entire mine fleet can enhance carbon optimization.

 

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Projected economic results of the study compared to the 2016 study and against alternate scenarios are illustrated below.

 

   2016 PFS
Base Case		   2022 PFS
Base Case		   2022 PFS
Recent Spot
Case		   2022 PFS
Alternate
Case		 
Metal Prices:                
Gold ($/ounce)   1,230    1,742    1,850    1,500
Copper ($/pound)   2.75    3.53    4.25    3.00 
Silver ($/ounce)   17.75    21.90    22.00    20.00 
Molybdenum ($/lb)   8.49    18.00    18.00    18.00 
US$/Cdn$ Exchange Rate:   0.80    0.77    0.77    0.77 
Cost Summary:                    
Operating Costs Per Ounce of Gold Produced (years 1 to 7)  $119   $35   $-83   $118 
Operating Costs Per Ounce of Gold Produced (life of mine)  $277   $275   $164   $351 
Total Cost Per Ounce of Gold Produced (inclusive of all capital and closure)  $673   $601   $490   $677 
Initial Capital (billions)  $5.0   $6.4   $6.4   $6.4 
Sustaining Capital (billions)  $5.5   $3.2   $3.2   $3.2 
Unit Operating Cost (US$/tonne)  $12.36   $11.36   $11.36   $11.36 
Pre-Tax Results:                    
Net Cash Flow (billions)  $15.9   $38.6   $46.1   $27.9 
NPV @ 5% Discount Rate (billions)  $3.3   $13.5   $16.4   $9.2 
Internal Rate of Return   10.4%   20.1%   22.4%   16.5%
Payback Period (years)   6.0    3.4    3.1    4.1 
Post-Tax Results:                    
Net Cash Flow (billions)  $10.0   $23.9   $28.6   $17.1 
NPV @ 5% Discount Rate (billions)  $1.5   $7.9   $9.8   $5.2 
Internal Rate of Return   8.0%   16.1%   18.0%   13.1%
Payback Period (years)   6.8    3.7    3.4    4.3 

 

The results of the PEA announced in 2022 is a stand-alone mine plan that was undertaken to evaluate a potential future expansion of the KSM mine to the copper-rich Iron Cap and Kerr deposits after the PFS mine plan has been completed. The PEA is primarily an underground block cave mining operation supplemented with a small open pit and is planned to operate for 39 years with a peak mill feed production of 170,000 t/d. The PEA demonstrates that KSM is a potential multigenerational mining project with the flexibility to vary the metal output.

 

In July 2023, subsequent to the quarter end, the Company was informed that Tudor Gold Corp (“Tudor”) is requesting that a certain license of occupation (the “Licence”) and Mines Act permit M-245 (the “Permit”) held by the Company’s wholly-owned subsidiary, KSM Mining ULC (KSMCo), be cancelled. The rights conveyed by the Licence and the relevant activities authorized by the Permit were initially conveyed and authorized in September 2014, and include rights and authorizations to engage in certain activities on land to which Tudor only acquired mineral rights in 2016. Tudor is claiming that, as a matter of law, the B.C. government did not have the power to issue this License and Permit. Tudor also argues that the License and Permit destroy the value of their own claims.

 

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Mines Act permit M-245 authorizes various activities, including activities on claims held by Tudor, along the route of, what is projected to be, the tunnels that will connect the east and west sides of the KSM Project. The License provides KSMCo the right to occupy the area in which it intends to construct the tunnels. Once constructed, the Licence will be converted into a statutory right of way including the 12.5 km that pass through mineral claims owned by Tudor. This type of authorizations are commonly used by the B.C. government to manage activities that take place on the government-owned land base. The Licence and Permit have been in place for almost a decade and were granted after a thorough regulatory process that included participation by First Nations as well as Tudor’s joint venture partners, American Creek Resources Ltd. and Teuton Resources Corp., who were the owners of the claims at the time. The Company is of the view that Tudor’s arguments are frivolous and without merit and considers their submission particularly unjustifiable given that the authorized activities and rights held by KSMCo, that Tudor is claiming amount to the destruction of its property rights, were in place and publicly known at the time Tudor acquired its interest in the Treaty Creek Property in June 2016. The Company will actively pursue the dismissal of Tudor’s application.

 

During the six months ended June 30, 2023, the Company added an aggregate of $20.6 million of expenditures that were attributed to mineral interests. The breakdown of the mineral interests expenditures by project is illustrated in the following table:

 

($000s)   Amount    Percentage 
KSM   13,897    68%
Iskut   3,826    18%
3 Aces   1,165    6%
Courageous Lake   1,168    6%
Snowstorm   496    2%
Total expenditures   20,552    100%

 

In addition to the substantial start discussion above and advancing the KSM Project, to achieve its objectives and milestones, the Company also estimates annual costs for each of its mineral interests and tracks the actual costs against those estimates for payroll, environmental and social, technical engineering, exploration, and other holding or property costs. Below is a summary of those costs incurred at its other mineral interests during the six months ended June 30, 2023, with comparison to the Company’s full-year plan:

 

($000s)   Actual    

Plan

(full year)

 
Payroll   2,783    5,585 
Technical and engineering   4,928    17,011 
Environmental and social   9,334    28,885 
Exploration   5,089    18,916 
Other property or holding costs   341    882 
Total   22,475    71,279 

 

Technical and engineering costs include costs related to the continuing geotechnical data collection for the key mine’s infrastructure. Environmental and social endeavors mainly relate to environmental monitoring baseline studies at KSM and Iskut.

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At Iskut, the Company’s full year-plan, and the actual incurred costs during the six months ended June 30, 2023 were:

 

($000s)   Actual    

Plan

(full year)

 
Payroll   511    766 
Exploration   2,281    8,001 
Environmental and social   1,005    5,300 
Other property or holding costs   29    - 
Total   3,826    14,067 

 

The Company is conducting an extensive drilling program at Iskut based on the analysis of the 2022 drilling and geophysical surveying programs. The work program is designed to test for deeper copper-gold porphyry systems and to expand the Bronson Slope mineral resource. Three helicopter-portable core drills have been reserved for this program that anticipates completion of 12 to 15 drill holes exceeding 12,000 meters of core.

 

In 2022, the exploration and drilling program led to the discovery of a large, well-mineralized breccia pipe beneath the historic Bronson Slope skarn deposit. The extensive quartz-magnetite pipe, which has been identified as the source of the Bronson Slope deposit, holds broadly disseminated gold and copper mineralization from multiple hydrothermal eruptive events believed to originate from a major porphyry intrusive source. A 2023 drill program is planned to target an increase in the Bronson gold-copper resource and find the intrusive source of the breccia pipe. The current resource at Bronson Slope contains a measured and indicated resource of 187Mt of 0.36 g/t gold and 0.12% copper.

 

Regional geophysical surveys and continuous surface geology work on the property point to a distinct structural feature that connects the Quartz Rise, Bronson Slope and Snip North targets. All the prospective gold-copper intrusions recognized on the property fall along this regional trend and this observation has led us to envision a cluster of gold-copper deposits. Prior drilling at the lithocap on Quartz Rise and historical drilling at the Snip North target has encountered gold-copper grades that will be explored further in 2023.

 

In addition to exploration work at Iskut, the Company is continuing its reclamation and closure activities at the Johnny Mountain mine site. Work includes, among other items, general cleanup activities, monitoring of the tailing management facility, permanent storage of waste rock, and hydrocarbon remediation. Reported within the provision for reclamation liabilities and in support of the reclamation and closure of the Johnny Mountain Mine, the Company incurred $0.9 million of expenditures in the six months of 2023 versus $0.7 million in the comparative period.

 

At Snowstorm, the Company’s full year-plan, and the actual incurred costs during the six months ended June 30, 2023 were:

 

($000s)   Actual    Plan
(full year)		 
Payroll   216    487 
Exploration   209    3,056 
Environmental and social   10    75 
Other property or holding costs   61    390 
Total   496    4,008 

 

At Snowstorm, during the current period ended June 30, 2023, the Company evaluated the results of the drilling program completed in the second quarter of 2022 and based on those results, planned and commenced its 2023 drilling program. The 2023 program is to test the potential for mineralized faults along a zone of uplifted host stratigraphy.

 

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At the 3 Aces project, the Company’s full year-plan, and the actual incurred costs during the six months ended June 30, 2023, were:

 

($000s)   Actual    Plan
(full year)		 
Payroll   488    816 
Exploration   474    7,000 
Environmental and social   129    1,692 
Other holding or property   74    45 
Total   1,165    9,553 

 

The Company successfully secured a five-year, Class 4 permit for 3 Aces in 2022 and commenced work on camp repairs, securing water sources and the drilling program. The 2022 program was designed to test the exploration model developed for a central core area that would confirm the potential for resource expansion and evaluate the applicability of the model to establish drill targets within the 3 Aces claims. The 2023 exploration objective is to complete drill testing of the geologic model and prioritize areas for resource definition. The program will focus on advancing and refining the 3-dimensional exploration model and will include geophysical surveys drilling approximately 10,000 meters in three target zones. Additionally, the work program will provide a prioritized list of targets and drill plans to initiate resource definition on the identified target areas.

 

At the Courageous Lake project, the Company’s full year-plan, and the actual incurred costs during the six months ended June 30, 2023, were:

 

($000s)   Actual    Plan
(full year)		 
Payroll   196    288 
Environmental and social   80    864 
Technical and engineering   612    2,675 
Exploration   178    457 
Other property or holding costs   102    148 
Total   1,168    4,432 

 

As reported in prior periods, the Company continues to study the best path forward at its Courageous Lake project in NWT. Options include securing a joint venture partner, the sale of all or a portion of the project, updating the 2012 PFS with a smaller initial project, or conducting additional exploration outside the area of known reserves and resources.

 

In response to the COVID-19 pandemic, the Company implemented measures to safeguard the health and well-being of its employees, contractors, consultants, and community members. Many of the Company’s employees worked remotely prior to the pandemic, and from March 2020 through to 2022, employees have been working remotely during ongoing periods of lockdowns in various jurisdictions. The Company is conducting its 2023 programs around social distancing protocols that include safety and preventative actions at its camps. The Company executed its 2022 exploration and development work at KSM, Iskut, Snowstorm, and 3 Aces projects under the same successful protocols it implemented in 2020 and 2021. The Company’s engagement with potential joint venture partners, or potential acquirers of KSM or Courageous Lake diminished in both 2020 and 2021 as major mining companies focused on addressing the needs of their existing operations as a result of the pandemic.

 

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The Company has full access to its properties in Canada and the United States and has managed to adequately staff its camps for conducting its programs. The Company has not experienced problems obtaining the supplies and services needed for its work programs. The Company will follow the advice of local governments and health authorities where it operates. The Company plans work programs on an annual basis and adjusts its plans to the conditions it faces. Now with many of the travel and other restrictions eliminated, the Company fully expects to be able to continue operating its planned programs. One factor that the Company must plan for is the recent resurgence of inflation above past multi-decade levels. Budgets prepared for 2023 have incorporated inflation factors, including labour costs, fuel and energy costs and camp operations and supplies. These increases have not materially impacted planned operations or the Company’s ability to fund and execute its plans.

 

Liquidity and Capital Resources

 

The Company’s working capital position at June 30, 2023, was $147.2 million compared to $88.4 million on December 31, 2022. Increased cash resources were the net result of cash raised through financings (discussed below), offset by cash used in early infrastructure development and corresponding equipment, the advance payment to the BC Hydro related to the KSM Facility Agreement, environmental, reclamation, and exploration projects, and corporate and administrative costs. Included in current liabilities at June 30, 2023 is $2.7 million of flow-through premium liability which is a non-cash item (December 31, 2022 - $4.2 million) and will be reduced as flow-through expenditures are incurred.

 

The Company’s ability to fund its operations and capital expenditures and other obligations as they become due is dependent upon market conditions. The Company has in place an At-the-Market Offering that allows for the issuance of up to US$100 million of its common shares and has been an effective source of funding. During the six months ended June 30, 2023, the Company raised $23.4 million, and subsequent to the quarter end, the Company raised a further $4.0 million through the program and has room for an additional US$79.5 million. The Company intends to fully utilize the At-the-Market Offering currently in place.

 

  June 30,   December 31, 
($000s)  2023   2022 
         
Assets        
Current assets        
Cash and cash equivalents  $202,642   $46,150 
Short-term deposits   -    81,690 
Amounts receivable and prepaid expenses   10,196    8,220 
Investment in marketable securities   3,577    3,696 
Convertible notes receivable   594    631 
Total current assets   217,009    140,387 
           
Liabilities and shareholders’ equity          
Current liabilities          
Accounts payable and accrued liabilities  $62,040   $42,956 
Flow-through share premium   2,666    4,183 
Lease obligations   750    511 
Provision for reclamation liabilities   4,343    4,343 
Total current liabilities   69,799    51,993 
Working Capital (1)   147,210    88,394 

 

(1)This is a non-GAAP financial performance measure with no standard definition under IFRS.

 

Page 11

 

 

On June 29, 2023, the Company, through its wholly-owned subsidiary, KSM Mining ULC (“KSMCo”) issued a secured note and royalty arrangement (collectively referred to as the “2023 Secured Note”) on the KSM Project with Sprott Private Resource Streaming and Royalty (B) Corp. (“Sprott”). The 2023 Secured Note has a principal amount of US$150 million, bears interest at 6.5% per annum and matures upon the earlier of commercial production and March 24, 2032 or March 24, 2035 if certain events occur, described below. The arrangement includes conditions and multiple features that could alter the Company’s obligation to Sprott. The 2023 Secured Note includes options for Sprott to put the royalty back to the Company if KSM’s Environmental Assessment Certificate (the “EAC”) expires or if project financing for construction is not secured. Unless Sprott exercises its put rights at an earlier date, the 2023 Secured Note is to be exchanged at maturity for a net smelter returns royalty (the “NSR”) on all metals produced from the KSM Project and sold, in the range of 1% to 1.5%, to be paid in perpetuity. The Company has the option to reduce the royalty percentage after commercial production.

 

The key terms of the 2023 Secured Note include:

 

●The 2023 Secured Note matures (“Maturity Date”) at the earlier of:

 

a)commercial production being achieved at KSM; and

 

b)either March 24, 2032, or, if the environmental assessment certificate (“EAC”) expires and Sprott does not exercise its right to put the Note to the Company, March 24, 2035.

 

●On the Maturity Date, the NSR is issued and Sprott may satisfy the obligation to pay the NSR purchase price of US$150 million with cash or setting-off the amount against the note principal amount due.

 

●Prior to its maturity, the 2023 Secured Note bears interest at 6.5% per annum, payable quarterly in arrears. Payment of quarterly interest due from the closing date to the second anniversary is deferred (“Deferred Interest Payment”) and US$21.5 million must be paid on or before 30 months after the closing date. Deferred interest can be satisfied by way of cash, common shares or increasing the NSR percentage from 1% to 1.2%. The Company can elect to satisfy quarterly interest payments in cash or by having Seabridge issue common shares, with a value equal to a 5% discount on the 5-day volume weighted average trading price (“VWAP”).

 

●Project Financing Repayment Amount: If project financing to develop, construct and place the KSM Project into commercial production is not in place by March 24, 2027, Sprott can put the 2023 Secured Note back to the Company for:

 

a)if the Company is obligated to sell Sprott a 1% NSR on the Maturity Date at the time US$155 million plus accrued and unpaid interest, or

 

b)if the Company is obligated to sell Sprott a 1.2% or 1.5% NSR on the Maturity Date at the time, US$180 million plus accrued and unpaid interest.

 

●EAC Repayment Amount: If the KSM Project’s EAC expires at any time while the 2023 Secured Note is outstanding, Sprott can put the note back to the Company at any time over the following nine months for:

 

a)if the Company is obligated to sell Sprott a 1% NSR on the Maturity Date at the time, US$165 million plus accrued and unpaid interest, or

 

b)if the Company is obligated to sell Sprott a 1.2% NSR on the Maturity Date at the time, US$186.5 million plus accrued and unpaid interest.

 

If Sprott exercises these put rights, its right to purchase the NSR terminates. The Company can elect to make payment in the form of Seabridge common shares instead of cash for the EAC Repayment Amount, the Project Financing Repayment Amount, and any interest payments, including the Deferred Interest Payment.

 

A number of the above-noted options within the agreement represent embedded derivatives. Management has elected to not separate these embedded derivatives from the underlying host secured note, and instead account for the entire secured note as a financial liability at fair value through profit or loss.

 

The 2023 Secured Note was recognized at its estimated fair value at initial recognition of $198.8 million (US$150 million) using a discounted cash flow model with a Monte Carlo simulation. This incorporated several scenarios and probabilities of the EAC expiring, achieving commercial production and securing project financing, metal prices forecasts and discount rates. During the current quarter, the fair value of the 2023 Secured Note decreased, and the Company recorded $0.2 million foreign currency translation gain on the remeasurement.

 

On March 24, 2022, the Company entered into an agreement selling the 2022 Secured Note that is to be exchanged at maturity for a 60% gross silver royalty (the “Silver Royalty”) on the KSM project to Sprott Resource Streaming and Royalty Corp. and Ontario Teachers’ Pension Plan (jointly, the “Investors”) for US$225 million. The proceeds of the financing are to be used to continue ongoing physical works at KSM and advance the project toward a designation of Substantially Started. The Substantially Started designation ensures the continuity of the KSM project’s approved EAC for the life of the project.

 

Page 12

 

 

The 2022 Secured Note bears interest at 6.5% per annum, payable quarterly in arrears. The Company can elect to satisfy interest payments in cash or by delivering common shares. In 2022, the interest was paid in cash. The Company’s obligations under the 2022 Secured Note are secured by a charge over all of the assets of its wholly owned subsidiary, KSM Mining ULC, and a limited recourse guarantee from the Company secured by a pledge of the shares of KSM Mining ULC.

 

If project financing to develop, construct and place KSM into commercial production is not in place by March 24, 2027, the Investors can put the 2022 Secured Note back to the Company for US$232.5 million in cash or common shares at the Company’s option. This right expires once such project financing is in place. If the Investors exercise this put right, the Investors’ right to purchase the Silver Royalty terminates.

 

If the EAC expires at any time while the 2022 Secured Note is outstanding, the Investors can put the 2022 Secured Note back to the Company for US$247.5 million at any time over the following nine months, in cash or common shares at the Company’s option. If the Investors exercise this put right, the Investors’ right to purchase the Silver Royalty terminates.

 

When the 2022 Secured Note matures, the Investors will use all of the principal amount repaid on maturity to purchase the Silver Royalty. The 2022 Secured Note matures upon the first of either commercial production being achieved at KSM and either the 10-year anniversary or if the EAC expires and the Investors do not exercise their right to put the 2022 Secured Note to the Company, the 13-year anniversary of the issue date of the 2022 Secured Note.

 

If commercial production is not achieved at KSM prior to the tenth anniversary from closing, the Silver Royalty payable to the Investors will increase to a 75% gross silver royalty. If the EAC expires during the term of the 2022 Secured Note and the corresponding put right is not exercised, the increase will occur at the thirteenth anniversary from closing. The Company has the option to buy back 50% of the Silver Royalty, once exchanged on or before 3 years after commercial production has been achieved, for an amount that provides the Investors a minimum guaranteed annualized return.

 

No amount payable may be paid in common shares of Seabridge if, after the payment, any of the Investors would own more than 9.9% of the Company’s outstanding shares.

 

The 2022 Secured Note and the 2023 Secured Note financings and the At-the-Market Offering provide most of the capital necessary to attain Substantial Start and reduces the time from the construction schedule once a construction decision has been made.

 

During the first quarter of 2021, the Company entered into an agreement with two securities dealers, for an At-The-Market offering program, entitling the Company, at its discretion, and from time to time, to sell up to US$75 million in value of common shares of the Company. This program was in effect until the Company’s US$775 million Shelf Registration Statement which expired in December 2022, was replaced with a new US$750 million during the same month. During the first quarter of 2023, a US$100 million prospectus supplement was filed and the program was renewed. During the six months ended June 30, 2023, the Company issued 1,281,667 shares, at an average selling price of $18.27 per share, for net proceeds of $22.9 million under the Company’s At-The-Market offering. In 2022, the Company issued 998,629 shares, at an average selling price of $22.82 per share, for net proceeds of $22.3 million under the Company’s At-The-Market offering.

 

Page 13

 

 

During the six months ended June 30, 2022, the Company received $2.7 million upon the exercise of 186,007 stock options.

 

In December 2022, the Company issued a total of 675,400 flow-through common shares at an average $22.24 per common share for aggregate gross proceeds of $15.0 million. The Company committed to renounce its ability to deduct qualifying exploration expenditures for the equivalent value of the gross proceeds of the flow-through financing and transfer the deductibility to the purchasers of the flow-through shares. The effective date of the renouncement was December 31, 2022. At the time of issuance of the flow-through shares, $4.2 million premium was recognized as a liability on the consolidated statements of financial position. During the six months ended June 30, 2023, the Company incurred $5.3 million of qualifying exploration expenditures and $1.5 million of the premium was recognized through other income on the consolidated statements of operations and comprehensive income (loss).

 

During the six months ended June 30, 2023, operating activities, including working capital adjustments, used $11.1 million cash compared to $5.1 million cash used in operating activities in comparative period in 2022. The increase in cash used in operating activities was mainly due to higher cash compensation and general and administrative expenses, and working capital movement that was partially offset by lower financing costs and higher interest income. Cash used in operating activities in 2023 included $0.6 million foreign exchange loss. Cash used in the comparative period in 2022 was partially offset by $6.2 million foreign exchange gain. Operating activities in the near term are expected to remain stable or increase marginally given the growth in project and corporate activity in the Company.

 

As previously disclosed in the Company’s prior years financial statements, in 2019 the Company received a notice from the CRA that it proposed to reduce the amount of expenditures reported as Canadian Exploration Expenses (CEE) for the three-year period ended December 31, 2016. The Company has funded certain of its exploration expenditures, from time-to-time, with the proceeds from the issuance of flow-through shares and renounced, to subscribers, the expenditures which it determined to be CEE. The notice disputes the eligibility of certain types of expenditures previously audited and approved as CEE by the CRA. The Company strongly disagrees with the notice and responded to the CRA auditors with additional information for their consideration. In 2020, the CRA auditors responded to the Company’s submission and, although accepting additional expenditures as CEE, reiterated that their position remains largely unchanged and subsequently issued reassessments to the Company reflecting the additional CEE expenditures accepted and $2.3 million of Part Xll.6 tax owing. The Company has been made aware that the CRA has reassessed certain investors who subscribed for the flow-through shares, reducing CEE deductions. Notice of objections to the Company’s and investors’ reassessments have been filed for all those that have been received and will be appealed to the courts, should the notice of objections be denied. The Company has indemnified the investors that subscribed for the flow-through shares and that have been reassessed by depositing the amount of their reassessments, including interest charges, into the accounts of the reassessed investors with the Receiver General in return for such investors agreement to object to their respective reassessments and to repay the Company any refund of the amount deposited on their behalf upon resolution of the Company’s appeal. During 2021 and 2022, the Company deposited $9.3 million into the accounts of certain investors with the Receiver General. The deposits made have been recorded as long-term receivables on the statement of financial position as at June 30, 2023. The potential tax indemnification to the investors is estimated to be $10.8 million, plus $2.9 million potential interest. No provision has been recorded related to the tax, potential interest, nor the potential indemnity as the Company and its advisors do not consider it probable that there will ultimately be an amount payable.

 

During 2016, upon the completion of an audit of the application by tax authorities of the British Columbia Mineral Exploration Tax Credit (“BCMETC”) program, the Company was reassessed $3.6 million, including accrued interest for expenditures that the tax authority has categorized as not qualifying for the BCMETC program. The Company recorded a $3.6 million provision within non-trade payables and accrued expenses on the consolidated statements of financial position as at December 31, 2016 with a corresponding increase in mineral interests. In 2017 the Company filed an objection to the reassessment with the appeals division of the tax authorities and paid one-half of the accrued balance to the Receiver General and reduced the provision by $1.8 million. In 2019, the Company received a decision from the appeals division that the Company’s objection was denied, and the Company filed a Notice of Appeal with the British Columbia Supreme Court. The Attorney General of Canada replied to the facts and arguments in the Company’s Notice of Appeal and stated its position that the Company’s expenditures did not qualify for the BCMETC program. During the first quarter of 2023, the Company completed discovery process with the Department of Justice and will continue to move the appeal process forward, including settling an agreed statement of facts and settling court dates for the hearing. The Company intends to continue to fully defend its position. Based on the facts and circumstances of the Company’s objection, the Company concludes that it is more likely than not that it will be successful in its objection. As at June 30, 2023, the Company has paid $1.6 million to the Receiver General, and the Canada Revenue Agency (CRA) has withheld $2.3 million of HST credits due to the Company that would fully cover the residual balance, including interest, should the Company be unsuccessful in its challenge. The amount recorded in long-term receivables as of June 30, 2023 of $3.9 million includes the initial reassessment of $3.6 million, plus accrued interest.

 

Page 14

 

 

The Company will continue its objective of advancing its major gold projects, KSM and Courageous Lake, and to further explore the Iskut, Snowstorm and 3 Aces projects to either sell or enter into joint venture arrangements with major mining companies. The market for metals streams and royalty interests seems to be growing and the Company will determine the merits of disposing of options it holds on non-core net profits interests and net smelter returns. Financing future exploration and development may include the selling or entering into new streaming and royalty arrangements.

 

Contractual Obligations

 

The Company has the following commitments as at June 30, 20223:

 

   Payments due by years 
($000s)  Total   2023   2024-25   2026-27   2028-29 
2022 Secured Note – interest   125,866    9,682    38,728    38,728    38,728 
2023 Secured Note – interest   80,102    -    28,466    25,818    25,818 
Capital expenditure obligations   88,175    82,033    6,142    -    - 
Flow-through share expenditures   9,737    9,737    -    -    - 
Mineral interests   5,441    485    1,652    1,652    1,652 
Lease obligation   1,851    510    1,143    106    92 
    311,172    102,447    76,131    66,304    66,290 

 

During the first quarter of 2022, the Company entered into a Facilities Agreement with BC Hydro covering the design and construction of facilities by BC Hydro to supply construction phase hydro-sourced electricity to the KSM project.

 

The cost to complete the construction is estimated to be $32.8 million of which the Company has paid $24.9 million to BC Hydro and the remaining balance is due in December 2023. In addition, the Facilities Agreement requires $59.7 million in security or cash from the Company for BC Hydro system reinforcement which is required to make the power available of which the Company has paid $57.1 million to BC Hydro and the balance is due in December 2023. The $59.7 million system reinforcement security will be forgiven annually, typically over a period of less than 8 years, based on project power consumption.

 

Prior to its maturity, the 2022 Secured Note bears interest at 6.5%, or US$14.6 million per annum, payable quarterly in arrears. The Company can elect to satisfy interest payments in cash or by delivering common shares. The 2023 Secured Note also bears interest at 6.5%, or US$9.8 million, but is subject to deferment until December 2026.

 

Page 15

 

 

Outlook

 

As mentioned above, the COVID-19 pandemic has not materially impacted the Company’s operations, financial condition or financial performance in 2022 or 2023 but in 2020 and 2021 it caused it to reduce the scale of certain programs as it hindered the pace of advancement at the affected projects in those years. The Company is executing its 2023 exploration, and monitoring programs at its projects as well as the site capture and early infrastructure development activities at KSM, safely and within the constraints and safety measures implemented. Although the capital markets have been relatively volatile, the Company has not experienced limitations nor does it foresee limitations to accessing capital on acceptable terms. No disruptions to supply chains have been experienced nor have there been delays in project activity.

 

In 2022 and so far in 2023, the Company enjoyed favorable capital markets, issuing its US$225 million 2022 Secured Note and its US$150 million 2023 Secured Note at the end of the current quarter. In addition, the Company has successfully raised funds under its ATM offering of common shares and other financings mentioned above and its financial condition has not been adversely impacted by the pandemic.

 

In addition to the extensive Substantial Start work that the Company is carrying out, it also continues its pursuit of a joint venture agreement on the KSM project with a suitable partner on terms advantageous to the Company, since it does not intend to build or operate the project alone. The KSM project includes multiple deposits and provides a joint venture partner, or purchaser, flexibility in the design of the project. In accordance with its priorities and risk tolerance, the Company believes that it does not make sense for it to start preparing a feasibility study on the KSM project on its own. The 2022 KSM PFS includes recommendations on additional work that could be completed to advance the project, including budget estimates. The work that a joint venture partner might choose to complete might include some or all of this recommended work and might include significantly more work, and so the timing and cost for a joint venture partner to conclude the recommended work or a feasibility study is difficult to predict. The Company plans its work to advance the KSM project on an annual basis, when the results of one year’s work have been received and analyzed, planning for the next year begins. Currently, the Company is focused on Substantial Start activities and while planning its programs, the Company will consider the recommended work in the PFS, but the Company will decide work based on its priorities, the results of its advancement work and the items it believes are best left for a joint venture partner to decide. Plans for each year are typically drafted in the second quarter of the previous year and budgets are established at the beginning of that year.

 

The early construction work the Company is considering for completion in 2024 and 2025 includes completing construction of the Taft Creek fish habitat offsetting ponds, constructing the powerline from the Treaty Creek switching station to the area of the proposed processing plant and MTT portals in the North Treaty Creek valley, constructing the power substation at the area of the processing plant, constructing the Coulter Creek Access Road to the 8.6 km mark and clearing of many of the sites for location of proposed KSM Project infrastructure. The Company anticipates submitting an application to the EAO for a decision that the KSM Project has been “substantially started” well before the deadline and believes it is keeping itself on course for a positive decision.

 

Page 16

 

 

The Company has only prepared preliminary estimates for the cost of all of this work and certain of the work requires further engineering before reasonable cost estimates can be established. The Company may elect not to complete some or many elements of this work and may elect to engage in construction of other elements of the KSM Project infrastructure instead, including in respect of the work for 2023. However, its budget for 2023 early construction activities is estimated at $237 million. During the six months ended June 30, 2023, The Company incurred $128 million in early construction activities. The remaining $109 million will be funded with the US$150 million ($199 million) funds raised through the 2023 Secured Note financing.

 

At Iskut, the Company is conducting the 2023 exploration program that is focused on the Bronson Slope copper-gold resource and test porphyry occurrences in other targets on the property. Environmental work is also continuing on the reclamation and closure plan for the Johnny Mountain mine.

 

At the Company’s 3 Aces project, the Company is conducting the 2023 exploration program that will include drill testing of the exploration model for extrapolation across the entire property. Additionally, the work program will provide a prioritized list of targets and drill plans to initiate resource definition on the identified target areas. The overall program is focused on the discovery of a high-grade mineralized deposit.

 

At Snowstorm, the Company will continue exploration efforts to determine the potential for mineralized faults. Past exploration efforts have identified the geophysical signature of several parallel structures on the eastern margin of an uplifted formation block. This setting is consistent with the large mines and the projected structures are orientated parallel with mineralizing faults in the Getchell Trend. The exploration program is to test across two of these structures.

 

At Courageous Lake, the Company is conducting internal studies to determine the best approach and model for a potential updated commencing a preliminary feasibility study and determine the best path forward to unlock value.

 

The Company is exploring various alternatives for raising the funding necessary to pay for these construction and exploration activities and other business objectives. Possible financing options include the sale of royalty or streaming interest in the KSM Project, funding from a joint venture partner as part of earning into an interest in the KSM Project, the sale of all or some form of interest in one of the Company’s other projects or the sale of shares or debt issued by the Company, including possible financing under a Prospectus Supplement. The Company also has an At-the-Market Offering in the United States which has been an effective source of meaningful funding for the Company.

 

Environment, Social and Governance

 

Management and the Board of Directors have formalized several key policies that entrench the Company’s environmental, social and governance (ESG) goals, priorities and strategies to operate safely, sustainably and with the highest governance standards. The Board of Directors has established a Sustainability Committee and granted that committee the authority to investigate any activity of the Corporation and its affiliates relating to sustainability and ESG. As the Company operates in the natural resource extraction industry, the Company strives to achieve the highest operating standards, assessing and mitigating the impacts on the physical environment and the communities in which the Company operates. The Company is committed to sustainability and the integration of sustainability principles into all of our activities and has adopted its Sustainability Policy.

 

Page 17

 

 

During the current quarter, the Company published its 2022 Sustainability Report providing insight to the Company’s commitment to local communities, environment, and sustainability. The report captures all of 2022 and highlights the Company’s progress towards integrating sustainability into its operations. The Company’s Sustainability Reports are prepared with select disclosures and guidance from the Sustainability Standards Accounting Board Metals and Mining Industry Standards and the Global Reporting Initiative Standards, as well as metrics designed for specifically for the Company.

 

Also in early 2023, the Company issued its inaugural Climate Strategy Report disclosing Scope 1, 2 and 3 emissions, compliant with the Task Force on Climate-Related Financial Disclosures and concurrently made submissions for CDP scoring that will provide a snapshot of the Company’s disclosure and environmental performance.

 

The Company also published its ESG Performance Tables for 2022. The report highlights the Company’s accomplishments and approach to three critical pillars: the economy, society, and the environment. These pillars are seen as interdependent, each necessary and supportive to the other. The Company recognizes that sustainability involves protecting environmental values in the area of our projects, contributing to the health and the economic and social well-being of our employees and the local communities, and taking action on national and global priorities. A sustainable human environment requires the Company to consider issues such as cultural respect, inclusiveness, diversity, and broad participation in the opportunities and benefits which derive from our efforts.

 

In addition to the Sustainability Policy, the Company has also implemented its Environmental Policy; Health and Safety Policy including a separate policy on discrimination, bullying, harassment, and violence; a Workplace Employment Policy; and its Policy Statement on Diversity. The Inaugural Sustainability Report and all of the Company’s policies related to ESG can be found on the Company’s website www.seabridgegold.com.

 

Internal Controls Over Financial Reporting

 

The Company’s management under the supervision of the Chief Executive Officer and Chief Financial Officer are responsible for designing adequate internal controls over financial reporting or causing them to be designed under their supervision in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Management is responsible for establishing and maintaining adequate internal controls over financial reporting. The control framework used is Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 

Disclosure Controls and Procedures and Internal Controls over Financial Reporting

 

Pursuant to regulations adopted by the U.S. Securities and Exchange Commission, under the U.S. Sarbanes-Oxley Act of 2002 and those of the Canadian Securities Administrators, management evaluates the effectiveness of the design and operation of the Company’s disclosure controls and procedures, and internal control over financial reporting. This evaluation is done under the supervision of, and with the participation of, the Chief Executive Officer and the Chief Financial Officer.

 

For the quarter ended June 30, 2023, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures, and internal control over financial reporting are designed to provide reasonable assurance regarding the reliability of information disclosed in its filings, including its interim financial statements prepared in accordance with IFRS. There has been no change in the Company’s internal control over financial reporting during the quarter ended June 30, 2023, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

Page 18

 

 

Limitations of Controls and Procedures

 

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, believe that any internal controls over financial reporting and disclosure controls and procedures, no matter how well designed, can have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance that the objectives of the control system are met.

 

Cybersecurity

 

The Company’s management is responsible for cybersecurity risks that face the Company, and the Board of Directors has granted the Audit Committee the authority to oversee management’s assessment of those risks and their prevention and mitigation approaches and to investigate any material breaches. To date, there have been no material breaches of security measures.

 

An independent review of access to information and other security protocols around the Company’s IT systems was completed in the current quarter. The review, among other items, verified all employees’ ability to recognize potentially malicious emails or other communications that could enable an intruder to download malware onto the Company’s systems leading to the potential circumventing of the Company’s security protocols and to potentially steal or hold ransom Company data.

 

Shares Issued and Outstanding

 

At August 14, 2023, the issued and outstanding common shares of the Company totaled 83,506,550. In addition, there were 477,500 stock options, and 355,266 RSUs. Assuming the conversion of all of these instruments outstanding, there would be 84,339,316 common shares issued and outstanding.

 

Related Party Transactions

 

During the current six months ended June 30, 2023 and the comparative quarter in 2022, there were no payments to related parties other than compensation paid to key management personnel. These transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

 

Recent Accounting Pronouncements

 

Refer to Note 2 in the Company’s unaudited condensed consolidated interim financial statements for the period ended June 30, 2023.

 

Page 19

 

 

Critical Accounting Estimates

 

Refer to Note 3 (C) in the Company’s audited consolidated financial statements for the year ended December 31, 2022.

 

Risks and Uncertainties

 

There is uncertainty related to title to the Company’s mineral properties and rights of access over or through lands subject to third party rights, interests and mineral tenures.

 

Other risks and uncertainties are discussed within the Company’s most recent Annual Information Form filed on SEDAR at www.sedarplus.ca, and the Annual Report on Form 40-F filed on EDGAR at www.sec.gov/edgar.shtml.

 

Forward Looking Statements

 

The consolidated financial statements and management’s discussion and analysis and any other materials included with them, contain certain forward-looking statements relating but not limited to the Company’s expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “intend”, “estimate”, “may” and “will” or similar words suggesting future outcomes, or other expectations, beliefs, estimates, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information may include reserve and resource estimates and expected changes to them, estimates of future production and related financial analysis, unit costs, costs of capital projects and timing of commencement of operations, and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from expected results.

 

Potential shareholders and prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Shareholders are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

 

 

Page 20

 

 

v3.23.2
Document And Entity Information
 6 Months Ended
Jun. 30, 2023
Document Information Line Items  
Entity Registrant Name SEABRIDGE GOLD INC.
Document Type 6-K
Current Fiscal Year End Date --12-31
Amendment Flag false
Entity Central Index Key 0001231346
Document Period End Date Jun. 30, 2023
Document Fiscal Year Focus 2023
Document Fiscal Period Focus Q2
Entity File Number 1-32135
v3.23.2
Consolidated Statements of Financial Position (Unaudited)
$ in Thousands, $ in Thousands
Jun. 30, 2023
CAD ($)
Dec. 31, 2022
CAD ($)
Current assets    
Cash and cash equivalents $ 202,642 $ 46,150
Short-term deposits 81,690
Amounts receivable and prepaid expenses 10,196 8,220
Investment in marketable securities 3,577 3,696
Convertible notes receivable 594 631
Total current assets 217,009 140,387
Non-current assets    
Investment in associate 1,289 1,389
Long-term receivables and other assets 95,353 51,703
Mineral interests, property and equipment 997,970 881,497
Reclamation deposits 21,183 20,643
Total non-current assets 1,115,795 955,232
Total assets 1,332,804 1,095,619
Current liabilities    
Accounts payable and accrued liabilities 62,040 42,956
Flow-through share premium 2,666 4,183
Lease obligations 750 511
Provision for reclamation liabilities 4,343 4,343
Total current liabilities 69,799 51,993
Non-current liabilities    
Secured notes 456,325 263,541
Deferred income tax liabilities 31,068 31,934
Lease obligations 1,098 1,115
Provision for reclamation liabilities 5,757 6,503
Total non-current liabilities 494,248 303,093
Total liabilities 564,047 355,086
Shareholders’ equity 768,757 740,533
Total liabilities and shareholders’ equity $ 1,332,804 $ 1,095,619
v3.23.2
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - CAD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Profit or loss [abstract]        
Remeasurement gain (loss) on secured notes $ 10,379 $ 31,566 $ (1,367) $ 31,566
Corporate and administrative expenses (3,977) (2,868) (7,868) (7,469)
Impairment of investment in associate   (873)   (873)
Equity loss of associate (60) (46) (120) (90)
Other income - flow-through shares 1,371 81 1,516 180
Environmental rehabilitation (expense) gain   (26)   41
Unrealized loss on convertible notes receivable (10) (13) (23) (19)
Foreign exchange gain (loss) 5,111 (822) 5,698 (959)
Finance costs, interest expense and other income (1,930) (315) (2,002) (3,419)
Interest income 713 30 1,499 76
Earnings (loss) before income taxes 11,597 26,714 (2,667) 19,034
Income tax (expense) recovery (2,612) (7,626) 868 (6,227)
Net earnings (loss) for the period 8,985 19,088 (1,799) 12,807
Items that will not be reclassified to net income or loss        
Remeasurement of secured notes 8,728 23,544 1,127 23,544
Change in fair value of marketable securities (267) (221) (119) (47)
Tax impact (2,320) (6,327) (287) (6,351)
Total other comprehensive income 6,141 16,996 721 17,146
Comprehensive income (loss) for the period $ 15,126 $ 36,084 $ (1,078) $ 29,953
Weighted average number of common shares outstanding        
Basic (in Shares) 82,434,434 80,144,953 81,998,804 79,701,761
Diluted (in Shares) 82,646,724 80,392,391 81,998,804 79,966,924
Earnings (loss) per common share        
Basic (in Dollars per share) $ 0.11 $ 0.24 $ (0.02) $ 0.16
Diluted (in Dollars per share) $ 0.11 $ 0.24 $ (0.02) $ 0.16
v3.23.2
Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - CAD ($)
$ in Thousands
Share capital
Stock-based Compensation
Contributed Surplus
Deficit
Accumulated Other Comprehensive Gain (loss)
Warrants
Total
Balance at Dec. 31, 2021 $ 809,269 $ 8,697 $ 36,126 $ (149,983) $ (1,776) $ 702,333
Balance (in Shares) at Dec. 31, 2021 78,975,349            
Share issuance - At-The-Market offering $ 22,746 22,746
Share issuance - At-The-Market offering (in Shares) 995,989            
Share issuance - options exercised $ 4,106 (1,447) 2,659
Share issuance - options exercised (in Shares) 186,007            
Share issuance – RSUs vested $ 2,733 (2,733)
Share issuance – RSUs vested (in Shares) 128,800            
Share issuance costs $ (607) (607)
Deferred tax on share issuance costs 162 162
Stock-based compensation 2,515 2,515
Other comprehensive income 17,146 17,146
Net income (loss) for the period 12,807 12,807
Balance at Jun. 30, 2022 $ 838,409 7,032 36,126 (137,176) 15,370   759,761
Balance (in Shares) at Jun. 30, 2022 80,286,145            
Balance at Dec. 31, 2022 $ 856,462 4,655 36,160 (157,377) 633   740,533
Balance (in Shares) at Dec. 31, 2022 81,339,012            
Share issuance - At-The-Market offering $ 23,411 23,411
Share issuance - At-The-Market offering (in Shares) 1,281,667            
Share issuance – other (Note 11) $ 4,945     4,945
Share issuance – other (Note 11) (in Shares) 322,084            
Share issuance – RSUs vested $ 111 (111)  
Share issuance – RSUs vested (in Shares) 5,000            
Share issuance costs $ (1,066) (1,066)
Deferred tax on share issuance costs 285 285
Stock-based compensation 1,727 1,727
Other comprehensive income 721 721
Net income (loss) for the period   (1,799)   (1,799)
Balance at Jun. 30, 2023 $ 884,148 $ 6,271 $ 36,160 $ (159,176) $ 1,354   $ 768,757
Balance (in Shares) at Jun. 30, 2023 82,947,763           9.9
v3.23.2
Consolidated Statements of Cash Flows (Unaudited) - CAD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Operating Activities        
Net earnings (loss) $ 8,985 $ 19,088 $ (1,799) $ 12,807
Adjustment for non-cash items:        
Remeasurement (gain) loss on secured notes (10,379) (31,566) 1,367 (31,566)
Stock-based compensation 859 222 1,727 2,515
Other income – flow-through shares (1,371) (81) (1,516) (180)
Income tax recovery (expense) 2,612 7,626 (868) 6,227
Unrealized foreign exchange (gain) loss (5,723) 8,266 (6,281) 7,163
Other non-cash items 387 (399) 556 (333)
Adjustment for cash items:        
Environmental rehabilitation disbursements (637) (356) (870) (669)
Changes in working capital items:        
Amounts receivable and prepaid expenses (2,030) 609 (1,975) 1,619
Accounts payable and accrued liabilities 3,810 2,212 (1,486) (2,690)
Net cash from (used in) operating activities (3,487) 5,621 (11,145) (5,107)
Investing Activities        
Investment in short-term deposits (11) (118,621) (43) (118,638)
Mineral interests, property and equipment (47,736) (27,204) (90,547) (37,295)
Long-term receivables (13,983) (43,650) (30,381)
Redemption of short-term deposits 1,312 81,732 29,260
Investment in reclamation deposits (518) (398) (540) (4,698)
Net cash used in investing activities (46,953) (160,206) (53,048) (161,752)
Financing Activities        
Secured notes 198,825 198,825 282,263
Share issuance net of costs 17,028 9,370 22,344 22,139
Exercise of options 1,039 2,659
Payment of lease liabilities (128) (43) (254) (64)
Net cash from financing activities 215,725 10,366 220,915 306,997
Effects of exchange rate fluctuation on cash and cash equivalents (209) 1,430 (230) 1,374
Net increase (decrease) in cash and cash equivalents during the period 165,076 (142,789) 156,492 141,512
Cash and cash equivalents, beginning of the period 37,566 295,824 46,150 11,523
Cash and cash equivalents, end of the period $ 202,642 $ 153,035 $ 202,642 $ 153,035
v3.23.2
Reporting Entity
 6 Months Ended
Jun. 30, 2023
Reporting Entity [Abstract]  
Reporting entity
1.Reporting entity

 

Seabridge Gold Inc. is comprised of Seabridge Gold Inc. (“Seabridge” or the “Company”) and its subsidiaries, KSM Mining ULC, Seabridge Gold (NWT) Inc., Seabridge Gold (Yukon) Inc., Seabridge Gold Corp., SnipGold Corp. and Snowstorm Exploration (LLC), and is a company engaged in the acquisition and exploration of gold properties located in North America. The Company was incorporated under the laws of British Columbia, Canada on September 4, 1979 and continued under the laws of Canada on October 31, 2002. Its common shares are listed on the Toronto Stock Exchange trading under the symbol “SEA” and on the New York Stock Exchange under the symbol “SA”. The Company is domiciled in Canada, the address of its registered office is 10th Floor, 595 Howe Street, Vancouver, British Columbia, Canada V6C 2T5 and the address of its corporate office is 106 Front Street East, 4th Floor, Toronto, Ontario, Canada M5A 1E1.
v3.23.2
Basis of Accounting
 6 Months Ended
Jun. 30, 2023
Basis of Accounting [Abstract]  
Basis of accounting
2.Basis of accounting

 

(a)Statement of compliance

 

These unaudited condensed consolidated interim financial statements (“consolidated interim financial statements”) were prepared in accordance with IAS 34, Interim Financial Reporting, using accounting policies consistent with those used by the Company in preparing the annual consolidated financial statements as at and for the year ended December 31, 2022 and should be read in conjunction with the Company’s annual consolidated financial statements as at and for the year ended December 31, 2022. They do not include all of the information required for a complete set of financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”). However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual financial statements. These consolidated interim financial statements were authorized for issue by the Company’s board of directors on August 14, 2023.

 

(b)Amended IFRS standard effective January 1, 2023

 

In May 2021, the IASB issued Deferred Tax related to Assets and Liabilities Arising from a Single Transaction which amended IAS 12, Income Taxes (“IAS 12”). Prior to the amendments, IAS 12 contained a recognition exemption whereby deferred income tax assets and liabilities were not recognized for temporary differences arising on initial recognition of assets and liabilities, other than in business combinations, that affect neither accounting nor taxable income. The amendments narrowed the scope of the recognition exemption in IAS 12 so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.

 

The Company applied the amendments to IAS 12 to its consolidated financial statements for the annual reporting period beginning on January 1, 2023. The application of these amendments did not have an impact on the Company’s consolidated financial statements.

 

On May 23, 2023, the IASB issued amendments to IAS 12 which introduce a temporary exception from accounting for deferred taxes arising from the implementation of the Organization for Economic Co-operation and Development (“OECD”) Pillar Two model rules. The amendments provide relief from recognizing deferred taxes related to the OECD Pillar two income taxes as well as any related disclosure. The Company has applied the exception immediately upon issuance of the amendment and retrospectively in accordance with IAS 8 for the 2023 fiscal year.

 

(c)Amended IFRS standard not yet effective

 

Certain pronouncements have been issued by the IASB that are mandatory for accounting periods after December 31, 2023:

 

●Classification of Liabilities as Current or Non-current (Amendments to IAS 1) effective for annual periods beginning on or after January 1, 2024

 

●Lease Liability in a Sale and Leaseback (Amendments to IFRS 16 Leases) effective for annual periods beginning on or after January 1, 2024.

 

None of these pronouncements are expected to have a significant impact on the Company’s consolidated financial statements upon adoption.
v3.23.2
Significant Accounting Judgments, Estimates and Assumptions
 6 Months Ended
Jun. 30, 2023
Significant Accounting Judgments, Estimates and Assumptions [Abstarct]  
Significant accounting judgments, estimates and assumptions
3.Significant accounting judgments, estimates and assumptions

 

The preparation of consolidated interim financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities as at the date of the consolidated interim financial statements and reported amounts of expenses during the six months ended June 30, 2023 and 2022. Estimates and assumptions used in the preparation of these consolidated interim financial statements are consistent with those used by the Company in preparing the annual consolidated financial statements as at and for the year ended December 31, 2022. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events which are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
v3.23.2
Cash and Cash Equivalents and Short-Term Deposits
 6 Months Ended
Jun. 30, 2023
Cash and Cash Equivalents and Short-Term Deposits [Abstarct]  
Cash and cash equivalents and short-term deposits
4.Cash and cash equivalents and short-term deposits

 

($000s)   June 30,
2023		    December 31,
2022		 
Cash and cash equivalents   202,642    46,150 
Short-term deposits   
-
    81,690 
    202,642    127,840 

 

All of the cash and cash equivalents are held in Canadian Schedule I banks. Short-term deposits consist of Canadian Schedule I bank guaranteed deposits and are cashable in whole or in part with interest at any time to maturity.
v3.23.2
Amounts Receivable and Prepaid Expenses
 6 Months Ended
Jun. 30, 2023
Disclosure of Amounts Receivable and Prepaid Expenses Explanatory [Abstract]  
Amounts receivable and prepaid expenses
5.Amounts receivable and prepaid expenses

 

($000s)   June 30,
2023		    December 31,
2022		 
HST   2,436    4,247 
Prepaid expenses and other receivables   7,760    3,973 
    10,196    8,220 

 

As at June 30, 2023, the prepaid expenses and other receivables includes $3.4 million prepayment for camp and helicopter support services (December 31, 2022 - $0.3 million), $1.6 million prepayment for insurance premiums (December 31, 2022 - $0.7 million), and $2.0 million loan receivable from Paramount Gold Nevada Corp. (“Paramount”) (December 31, 2022 - $1.4 million).
v3.23.2
Investments
 6 Months Ended
Jun. 30, 2023
Investments [Abstract]  
Investments
6.Investments

 

($000s)   January 1,
2023		    Fair value through other comprehensive income (loss)    Loss of associate    

 

 

 

Impairment

    Additions    

June 30,

2023

 
Current assets:                              
Investments in marketable securities   3,696    (119)   
-
    
-
    
-
    3,577 
                               
Non-current assets:                              
Investment in associate   1,389    -    (120)   -    20(b)   1,289 
                               
($000s)   January 1,
2022		    Fair value through other comprehensive income (loss)    Loss of associate    Impairment    Additions    December 31,
2022		 
Current assets:                              
Investments in marketable securities   3,367    329    -    -    -    3,696 
                               
Non-current assets:                              
Investment in associate   2,429    -    (206)   (873)(a)   39(b)   1,389 

 

(a)The Company accounts for its investment in Paramount, a publicly listed company, using the equity method. During 2022, the Company concluded that the fair value of its investment in Paramount, determined based on the market price, had declined significantly and recorded an impairment of $0.9 million in the consolidated statements of operations and comprehensive income (loss).

 

(b)In 2023, the Company received 43,928 common shares of Paramount for payment of interest, on the secured convertible notes, that accrued between July 1, 2022 and December 31, 2022. In 2022, the Company received 55,322 common shares of Paramount for payment of interest on the secured convertible notes accrued between July 1, 2021 and June 30, 2022.

 

The Company holds common shares of several mining companies that were received as consideration for optioned mineral properties and other short-term investments, including one gold exchange traded receipt. These financial assets are recorded at fair value of $3.6 million (December 31, 2022 - $3.7 million) in the consolidated statements of financial position. At June 30, 2023, the Company revalued its holdings in its investments and recorded a fair value decrease of $0.1 million in the statement of operations and comprehensive income (loss).

 

Investment in associate relates to Paramount. As at June 30, 2023, the Company holds a 4.9% (December 31, 2022 – 5.6%) interest in Paramount for which it accounts using the equity method on the basis that the Company has the ability to exert significant influence through its representation on Paramount’s board of directors. During six months ended June 30, 2023, the Company recorded its proportionate share of Paramount’s net loss of $0.1 million (2022 – $0.1 million) within equity loss of associate on the consolidated statements of operations and comprehensive income (loss). As at June 30 2023, the carrying value of the Company’s investment in Paramount was $1.3 million (December 31, 2022 - $1.4 million).
v3.23.2
Long-Term Receivables and Other Assets
 6 Months Ended
Jun. 30, 2023
Long-Term Receivables and Other Assets [Abstract]  
Long-term receivables and other assets
7.Long-term receivables and other assets

 

($000s)   June 30,
2023		   December 31,
2022		 
BC Hydro 1   82,150   38,500 
Canadian Exploration Expenses (Note 17)   9,337   9,337 
British Columbia Mineral Exploration Tax Credit 2   3,866   3,866 
    95,353   51,703 

 

1)During the first quarter in 2023, the Company paid $43.6 million (as at December 31, 2022, $38.5 million) to British Columbia Hydro and Power Authority (“BC Hydro”) as advance payment made pursuant to the Company signing a facilities agreement with BC Hydro covering the design and construction of facilities to supply hydro-sourced electricity to the KSM project.

 

2)During 2016, upon the completion of an audit of the application by tax authorities of the British Columbia Mineral Exploration Tax Credit (“BCMETC”) program, the Company was reassessed $3.6 million, including accrued interest for expenditures that the tax authority has categorized as not qualifying for the BCMETC program. The Company recorded a $3.6 million provision within non-trade payables and accrued expenses on the consolidated statements of financial position as at December 31, 2016 with a corresponding increase in mineral interests. In 2017 the Company filed an objection to the reassessment with the appeals division of the tax authorities and paid one-half of the accrued balance to the Receiver General and reduced the provision by $1.8 million. In 2019, the Company received a decision from the appeals division that the Company’s objection was denied, and the Company filed a Notice of Appeal with the British Columbia Supreme Court. The Attorney General of Canada replied to the facts and arguments in the Company’s Notice of Appeal and stated its position that the Company’s expenditures did not qualify for the BCMETC program. During the first quarter of 2023, the Company completed discovery process with the Department of Justice and will continue to move the appeal process forward, including settling an agreed statement of facts and settling court dates for the hearing. The Company intends to continue to fully defend its position. Based on the facts and circumstances of the Company’s objection, the Company concludes that it is more likely than not that it will be successful in its objection. As at June 30, 2023, the Company has paid $1.6 million to the Receiver General, and the Canada Revenue Agency (CRA) has withheld $2.3 million of HST credits due to the Company that would fully cover the residual balance, including interest, should the Company be unsuccessful in its challenge. The amount recorded in long-term receivables as of June 30, 2023 of $3.9 million includes the initial reassessment of $3.6 million, plus accrued interest.
v3.23.2
Mineral Interests, Property and Equipment
 6 Months Ended
Jun. 30, 2023
Mineral Interests, Property and Equipment [Abstract]  
Mineral Interests, Property and Equipment
8.Mineral Interests, Property and Equipment

 

($000s)  Mineral interests   Construction in progress   Property & equipment 1   Right-of-use assets 1   Total 
Cost                         
As at January 1, 2022   632,005    27,061    3,080    407    662,553 
Additions   55,069    120,287    43,177    2,030    220,563 
As at December 31, 2022   687,074    147,348    46,257    2,437    883,116 
Additions   20,552    96,366    -    781    117,699 
As at June 30, 2023   707,626    243,714    46,257    3,218    1,000,815 
Accumulated Depreciation                         
As at January 1, 2022   
-
    
-
    117    157    274 
Depreciation expense   
-
    
-
    953    392    1,345 
As at December 31, 2022   
-
    
-
    1,070    549    1,619 
Depreciation expense 1   -    -    849    377    1,226 
As at June 30, 2023   
-
    -    1,919    926    2,845 
Net Book Value                         
As at December 31, 2022   687,074    147,348    45,187    1,888    881,497 
As at June 30, 2023   707,626    243,714    44,338    2,292    997,970 

 

1)Depreciation expense related to camps, equipment, and right-of-use assets associated with the KSM construction is capitalized to construction in progress.

 

Mineral interests, property and equipment additions by project are as follows.

 

       Six months ended June 30, 2023     
($000s)  January 1,
2023		   Mineral interests   Construction in progress   Property & equipment   Right-of-
use assets		   Total Additions   June 30,
2023		 
Additions                            
KSM 1   707,190    13,897    95,318    
      -
    781    109,996    817,186 
Courageous Lake   77,999    1,169    
-
    
-
    
-
    1,169    79,168 
Iskut   49,904    3,826    
-
    
-
    
-
    3,826    53,730 
Snowstorm   34,562    495    
-
    
-
    
-
    495    35,057 
3 Aces   12,079    1,165    1,048    
-
    
-
    2,213    14,292 
Grassy Mountain   771    
-
    
-
    
-
    
-
    
-
    771 
Corporate   611    
-
    
-
    
-
    
-
    
-
    611 
    883,116    20,552    96,366    
-
    781    117,699    1,000,815 

 

       Year ended December 31, 2022     
($000s)  January 1,
2022		   Mineral interests   Construction in progress   Property & equipment   Right-of-
use assets		   Total Additions   December 31,
2022		 
Additions                            
KSM 1   502,015    39,985    120,287    43,177    1,726    205,175    707,190 
Courageous Lake   77,176    823    
-
    
-
    
-
    823    77,999 
Iskut   41,779    8,125    
-
    
-
    
-
    8,125    49,904 
Snowstorm   31,471    3,091    
-
    
-
    
-
    3,091    34,562 
3 Aces   9,034    3,045    
-
    
-
    
-
    3,045    12,079 
Grassy Mountain   771    
-
    
-
    
-
    
-
    
-
    771 
Corporate   307    
-
    
-
    
-
    304    304    611 
    662,553    55,069    120,287    43,177    2,030    220,563    883,116 

 

1)The KSM construction in progress additions includes $9.9 million of capitalized borrowing costs (year ended December 31, 2022 - $14.7 million).

 

Continued exploration of the Company’s mineral properties is subject to certain permitting payments, project holding costs, rental fees and filing fees.

 

a)KSM

 

In 2001, the Company purchased a 100% interest in contiguous claim blocks in the Skeena Mining Division, British Columbia. The vendor maintains a 1% net smelter royalty interest on the project, subject to maximum aggregate royalty payments of $4.5 million. The Company is obligated to purchase the net smelter royalty interest for the price of $4.5 million in the event that a positive feasibility study demonstrates a 10% or higher internal rate of return after tax and financing costs.

 

In 2011 and 2012, the Company completed agreements granting a third party an option to acquire a 2% net smelter royalty on all gold and silver production sales from KSM for a payment equal to the lesser of $160 million or an amount in Canadian dollars equal to US$200 million. The option is exercisable for a period of 60 days following the announcement of receipt of all material approvals and permits, full project financing and certain other conditions for the KSM Project.

 

In December 2020, the Company purchased the Snowfield (renamed East Mitchell) property from Pretium Resources Inc. The East Mitchell property, located in the same valley that hosts KSM's Mitchell deposit, was purchased for US$100 million ($127.5 million) in cash, a 1.5% net smelter royalty on East Mitchell property production, and a conditional payment of US$20 million, payable following the earlier of (i) commencement of commercial production from East Mitchell property, and (ii) announcement by the Company of a bankable feasibility study, which includes the East Mitchell property. US$15 million of the conditional payment can be credited against future royalty payments.

 

Additions to mineral interests of $13.9 million (2022 - $40.0 million) consisted of costs incurred to carry out the Company’s environmental, technical support, exploration and drilling programs at KSM.

 

Additions to construction in progress consisted of $84.6 million (2022 - $104.6 million) of KSM assets under construction costs, $9.9 million (2022 - $14.7 million) of capitalized borrowing costs related to the secured notes liability interest expense, and $0.8 million (2022 - $0.9 million) of capitalized depreciation expense.

 

b)Courageous Lake

 

In 2002, the Company purchased a 100% interest in the Courageous Lake gold project from Newmont Canada Limited and Total Resources (Canada) Limited. The Courageous Lake gold project consists of mining leases located in Northwest Territories of Canada.

 

c)Iskut

 

On June 21, 2016, the Company purchased 100% of the common shares of SnipGold Corp. which owns the Iskut Project, located in northwestern British Columbia.

 

d)Snowstorm

 

In 2017, the Company purchased 100% of the common shares of Snowstorm Exploration LLC which owns the Snowstorm Project, located in northern Nevada. In connection with the acquisition, the Company has agreed to make a conditional cash payment of US$2.5 million if exploration activities at the Snowstorm Project result in defining a minimum of five million ounces of gold resources compliant with National Instrument 43-101 and a further cash payment of US$5.0 million on the delineation of an additional five million ounces of gold resources.

 

e)3 Aces

 

In 2020, the Company acquired a 100% interest in the 3 Aces gold project in the Yukon, Canada from Golden Predator Mining Corp. through the issuance of 300,000 common shares valued at $6.6 million. Should the project attain certain milestones, including the confirmation of a National Instrument 43-101 compliant mineral resource of 2.5 million ounces of gold, the Company will pay an additional $1 million, and upon confirmation of an aggregate mineral resource of 5 million ounces of gold, the Company will pay an additional $1.25 million.

 

f)Grassy Mountain

 

In 2013, the Company sold 100% of its interest in the Grassy Mountain Project with a net book value of $0.8 million retained within mineral properties, related to the option to either receive, at the discretion of the Company, a 10% net profits interest royalty or a $10 million cash payment. Settlement is due four months after the later of: the day that the Company receives a feasibility study on the project; and the day that the Company is notified that permitting and bonding for the mine is in place. The current owner of the Grassy Mountain Project is Paramount who completed a feasibility study in 2020 but they have not notified the Company that permitting and bonding for the mine is in place.
v3.23.2
Accounts Payable and Accrued Liabilities
 6 Months Ended
Jun. 30, 2023
Accounts Payable and Accrued Liabilities [Abstract]  
Accounts Payable and Accrued Liabilities
9.Accounts payable and accrued liabilities

 

($000s)  June 30,
2023		   December 31,
2022		 
Trade payables (a)   16,663    15,686 
Non-trade payables and accrued expenses (b)   45,377    27,270 
    62,040    42,956 

 

(a)Includes accrued interest payable of $4.9 million (December 31, 2022 – nil).

 

(b)Non-trade payables and accrued expenses include $41.9 million (December 31, 2022 – $26.3 million) of accrued expenses related to construction at KSM.
v3.23.2
Provision for Reclamation Liabilities
 6 Months Ended
Jun. 30, 2023
Provision for Reclamation Liabilities [Abstract]  
Provision for reclamation liabilities
10.Provision for reclamation liabilities

 

($000s)  June 30,
2023		   December 31,
2022		 
Beginning of the period   10,846    8,442 
Disbursements   (870)   (4,519)
Environmental rehabilitation expense   
-
    6,851 
Accretion   124    72 
End of the period   10,100    10,846 
           
Provision for reclamation liabilities – current   4,343    4,343 
Provision for reclamation liabilities – long-term   5,757    6,503 
    10,100    10,846 

 

The estimate of the provision for reclamation obligations, as at June 30, 2023, was calculated using the estimated undiscounted cash flows of future reclamation costs of $10.8 million (December 31, 2022 - $11.5 million) and the expected timing of cash payments required to settle the obligations between 2023 and 2026. As at June 30, 2023, the discounted future cash outflows are estimated at $10.1 million (December 31, 2022 - $10.8 million). The nominal discount rate used to calculate the present value of the reclamation obligations was 4.5% at June 30, 2023 (4.07% - December 31, 2022). During the six months ended June 30, 2023, reclamation disbursements amounted to $0.9 million (six months ended June 30, 2022 - $0.7 million).

 

In 2022, the Company updated the closure plan for the Johnny Mountain mine site and charged an additional $6.6 million of rehabilitation expenses to the consolidated statements of operations and comprehensive income (loss).

 

In 2023, the Company placed $0.5 million on deposit as security for the reclamation obligations at KSM and 3 Aces. As at June 30, 2023, the Company has placed a total of $21.2 million (December 31, 2022 - $20.6 million) on deposit with financial institutions or with government regulators that are pledged as security against reclamation liabilities. The deposits are recorded on the consolidated statements of financial position as reclamation deposit. As at June 30, 2023, the Company had $10.3 million (December 31, 2022, $7.9 million) of uncollateralized surety bond, issued pursuant to arrangements with an insurance company, in support of environmental closure costs obligations related to the KSM and 3 Aces projects.
v3.23.2
Secured note liability
 6 Months Ended
Jun. 30, 2023
Secured note liability [Abstract]  
Secured note liability
11.Secured notes liability

 

(a)2022 Secured Note

 

On February 25, 2022, the Company, through its wholly-owned subsidiary, KSM Mining ULC (“KSMCo”) signed a definitive agreement to sell a secured note (or “2022 Secured Note”) that is to be exchanged at maturity for a silver royalty on its 100% owned KSM Project (“KSM”) to institutional investors (“Investors”) for US$225 million. The transaction closed on March 24, 2022. The key terms of the 2022 Secured Note include:

 

●When the 2022 Secured Note matures, the Investors will use all of the principal amount repaid on maturity to purchase a 60% gross silver royalty (the “Silver Royalty”). Maturity occurs upon the first to occur of:

 

a)Commercial production being achieved at KSM; and

 

b)Either on February 25, 2032, the 10-year anniversary, or if the Environmental Assessment Certificate (“EAC”) expires and the Investors do not exercise their right to put the 2022 Secured Note to the Company, on February 25, 2032, the 13-year anniversary of the issue date of the 2022 Secured Note.

 

●Prior to its maturity, the 2022 Secured Note bears interest at 6.5% per annum, payable quarterly in arrears. The Company can elect to satisfy interest payments in cash or by delivering common shares.

 

●The Company has the option to buyback 50% of the Silver Royalty, once exchanged on or before 3 years after commercial production has been achieved, for an amount that provides the Investors a minimum guaranteed annualized return.

 

●If project financing to develop, construct and place KSM into commercial production is not in place by February 25, 2027, the Investors can put the 2022 Secured Note back to the Company for US$232.5 million, with the Company able to satisfy such amount in cash or by delivering common shares at its option. This right expires once such project financing is in place. If the Investors exercise this put right, the Investors’ right to purchase the Silver Royalty terminates.

 

●If KSM’s EAC expires at anytime while the 2022 Secured Note is outstanding, the Investors can put the 2022 Secured Note back to the Company for US$247.5 million at any time over the following nine months, with the Company able to satisfy such amount in cash or by delivering common shares at its option. If the Investors exercise this put right, the Investors’ right to purchase the Silver Royalty terminates.

 

●If commercial production is not achieved at KSM prior to the tenth anniversary from closing, the Silver Royalty payable to the Investors will increase to a 75% gross silver royalty (if the EAC expires during the term of the 2022 Secured Note and the corresponding put right is not exercised by the Investors, this uplift will occur at the thirteenth anniversary from closing).

 

●No amount payable shall be paid in common shares if, after the payment, any of the Investors would own more than 9.9% of the Company’s outstanding shares.

 

●The Company’s obligations under the 2022 Secured Note are secured by a charge over all of the assets of KSMCo and a limited recourse guarantee from the Company secured by a pledge of the shares of KSMCo.

 

To satisfy the interest payment on the 2022 Secured Note, during the current quarter, the Company issued 322,084 common shares, and subsequent to the quarter end the Company issued 315,289 common shares, in respect of the interest incurred during the first and second quarter of 2023, respectively.

 

A number of the above noted options within the agreement represent embedded derivatives. Management has elected to not separate these embedded derivatives from the underlying host secured note, and instead account for the entire secured note as a financial liability at fair value through profit or loss.

 

The Company entered into the loan commitment within the scope of IFRS 9 ‘Financial Instruments’ on February 25, 2022 related to the 2022 Secured Note, as at that date, the Company and the Investors were committed under pre-specified terms and conditions to complete the transaction. The loan commitment was initially recognized at a fair value of US$225 million. Upon funding of the 2022 Secured Note on March 24, 2022, the loan commitment was settled with no gain or loss recognized.

 

The 2022 Secured Note was recognized at its estimated fair value at initial recognition of $282.3 million (US$225 million) using a discounted cash flow model with a Monte Carlo simulation. This incorporated several scenarios and probabilities of the EAC expiring, achieving commercial production and securing project financing, silver prices forecast from five year quoted forward price, and the discount rates. During the six months ended June 30, 2023, the fair value of the 2022 Secured Note decreased, and the Company recorded $5.8 million gain (year ended December 31, 2022 - $18.7 million gain) on the remeasurement.

 

The following inputs and assumptions were used in the determination of fair value:

 

Inputs and assumptions  June 30,
2023		   December 31,
2022		 
Forecast silver production in thousands of ounces   166,144    166,144 
Five year quoted future silver price   US$28.27    US$29.38 
Risk-free rate   3.8%   3.4%
Credit spread   5.4%   5.3%
Share price volatility   60%   60%
Silver royalty discount factor   9.1%   8.6%

 

The carrying amount for the 2022 Secured Note is as follows:

 

($000s)   June 30,
2023		    December 31,
2022		 
Fair value beginning of the period   263,541    282,263 
Change in fair value (gain) loss through profit and loss   1,367    (36,967)
Change in fair value (gain) loss through other comprehensive income (loss)   (1,127)   (2,912)
Foreign currency translation (gain) loss   (6,056)   21,157 
Total change in fair value   (5,816)   (18,722)
Fair value end of the period   257,725    263,541 

 

Sensitivity Analysis:

 

For the fair value of the 2022 Secured Note, reasonably possible changes at the reporting date to one of the significant inputs, holding other inputs constant, would have the following effects:

 

Key Inputs   Inter-relationship between significant inputs and
fair value measurement		   Increase
(decrease)
(millions)		  
Key observable inputs   The estimated fair value would increase (decrease) if:      
● Silver price forward curve   ● Future silver prices were 10% higher   $ 13.4  
    ● Future silver prices were 10% lower   $ (13.5 )
             
● Discount rates   ● Discount rates were 1% higher   $ (21.5 )
    ● Discount rates were 1% lower   $ 25.2  
Key unobservable inputs            
● Forecasted silver production   ● Silver production indicated silver ounces were 10% higher   $ 13.4  
    ● Silver production indicated silver ounces were 10% lower   $ (13.5 )

 

(b)2023 Secured Note

 

On June 29, 2023, the Company, through its wholly-owned subsidiary, KSM Mining ULC (“KSMCo”) executed an agreement to sell a secured note and royalty arrangement (collectively referred to as the “2023 Secured Note”) on the KSM Project with Sprott Private Resource Streaming and Royalty (B) Corp. (“Sprott”). The 2023 Secured Note has a principal amount of US$150 million, bears interest at 6.5% per annum and matures upon commercial production, March 24, 2032 or March 24, 2035. The arrangement includes conditions and multiple features that will alter the Company’s obligation to Sprott. The 2023 Secured Note includes options for Sprott to put the royalty back to the Company if the EAC expires or if project financing for construction is not secured. Unless Sprott exercises its put rights at an earlier date, the 2023 Secured Note is to be exchanged at maturity for a net smelter returns royalty (the “NSR”) on all metals produced from the KSM Project and sold, in the range of 1% to 1.5%, to be paid in perpetuity. The Company has the option to reduce the NSR percentage after commercial production.

 

The key terms of the 2023 Secured Note include:

 

●The 2023 Secured Note matures (“Maturity Date”) at the earlier of:

 

a)commercial production being achieved at KSM; and

 

b)either March 24, 2032, or, if the environmental assessment certificate (“EAC”) expires and Sprott does not exercise its right to put the Note to the Company, March 24, 2035.

 

●On the Maturity Date, the NSR is issued and Sprott may satisfy the obligation to pay the NSR purchase price of US$150 million with cash or setting-off the amount against the note principal amount due.

 

●Prior to its maturity, the 2023 Secured Note bears interest at 6.5% per annum, payable quarterly in arrears. Payment of quarterly interest due from the closing date to the second anniversary is deferred and US$21.5 million must be paid on or before 30 months after the closing date. Deferred interest can be satisfied by way of cash, common shares or increasing the NSR percentage from 1 to 1.2%. The Company can elect to satisfy quarterly interest payments in cash or by having Seabridge issue common shares, with a value equal to a 5% discount on the 5-day volume weighted average trading price (“VWAP”).

 

●Project Financing Repayment Amount: If project financing to develop, construct and place the KSM Project into commercial production is not in place by March 24, 2027, Sprott can put the Note back to the Company for:

 

a)if the Company is obligated to sell Sprott a 1% NSR on the Maturity Date at the time US$155 million plus accrued and unpaid interest, or

 

b)if the Company is obligated to sell Sprott a 1.2% or 1.5% NSR on the Maturity Date at the time, US$180 million plus accrued and unpaid interest.

 

●EAC Repayment Amount: If the KSM Project’s EAC expires at anytime while the Note is outstanding, Sprott can put the Note back to the Company at any time over the following nine months for:

 

a)if the Company is obligated to sell Sprott a 1% NSR on the Maturity Date at the time, US$165 million plus accrued and unpaid interest, or

 

b)if the Company is obligated to sell Sprott a 1.2% NSR on the Maturity Date at the time, US$186.5 million plus accrued and unpaid interest.

 

●No amount payable shall be paid in common shares if, after the payment, Sprott would own more than 9.9% of the Company’s outstanding shares.

 

If Sprott exercises these put rights, its right to purchase the NSR terminates. The Company can elect to make payment in the form of Seabridge common shares instead of cash for the EAC and the Project Financing Repayment Amount, the Deferred interest Payment and any Interest Payment described above.

 

A number of the above noted options within the agreement represent embedded derivatives. Management has elected to not separate these embedded derivatives from the underlying host secured note, and instead account for the entire secured note as a financial liability at fair value through profit or loss.

 

The 2023 Secured Note was recognized at its estimated fair value at initial recognition of $198.8 million (US$150 million) using a discounted cash flow model with a Monte Carlo simulation. This incorporated several scenarios and probabilities of the EAC expiring, achieving commercial production and securing project financing, metal prices forecast and discount rates. The fair value of the 2023 Secured Note remained unchanged, from the initial recognition on June 29, 2023 to June 30, 2023, except for a $0.2 million gain due to foreign currency translation.

 

The following inputs and assumptions were used in the determination of fair value:

 

Inputs and assumptions  June 29,
2023		 
Forecast NSR:     
Gold in thousands of ounces   10,500 
Silver in thousands of ounces   29,876 
Copper in millions of pounds   19,322,467 
Molybdenum in millions of pounds   152,310 
Five year quoted future metal price     
Gold per ounce  US$2,352.04 
Silver per ounce  US$27.51 
Copper per pound  US$3.64 
Molybdenum per pound  US$22.99 
Risk-free rate   3.9%
Credit spread   5.4%
Share price volatility   60%
NSR royalty discount factor   9.1%

 

Sensitivity Analysis:

 

For the fair value of the 2023 Secured Note, reasonably possible changes at the reporting date to one of the significant inputs, holding other inputs constant, would have the following effects:

 

Key Inputs   Inter-relationship between significant inputs and
fair value measurement		   Increase
(decrease)
(millions)		  
Key observable inputs   The estimated fair value would increase (decrease) if:      
           
● Metals price forward curve   ● Future metal prices were 10% higher   $ 13.2  
    ● Future metal prices were 10% lower   $ (13.2 )
             
● Discount rates   ● Discount rates were 1% higher   $ (22.5 )
    ● Discount rates were 1% lower   $ 26.2  
Key unobservable inputs            
● Forecasted metal production   ● Metal production indicated volumes were 10% higher  $ 13.2  
    ● Metal production indicated volumes were 10% lower   $ (13.2 )
v3.23.2
Shareholders' Equity
 6 Months Ended
Jun. 30, 2023
Shareholders [Abstract]  
Shareholders’ equity
12.Shareholders’ equity

 

The Company is authorized to issue an unlimited number of preferred shares and common shares with no par value. No preferred shares have been issued or were outstanding at June 30, 2023 or December 31, 2022.

 

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition, exploration and development of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business.

 

The properties in which the Company currently has an interest are in the pre-operating stage, as such the Company is dependent on external financing to fund its activities. In order to carry out the planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as needed.

 

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company’s approach to capital management during 2023. The Company considers its capital to be share capital, stock-based compensation, warrants, contributed surplus and deficit. The Company is not subject to externally imposed capital requirements.

 

a)Equity financings

 

During the first quarter of 2021, the Company entered into an agreement with two securities dealers, for an At-The-Market offering program, entitling the Company, at its discretion, and from time to time, to sell up to US$75 million in value of common shares of the Company. This program was in effect until the Company’s US$775 million Shelf Registration Statement, that expired in December 2022, was replaced with a new US$750 million the same month. During the first quarter of 2023, a US$100 million prospectus supplement was filed and the program was renewed. In the first quarter of 2023, the Company entered into a new agreement with two securities dealers, for an At-The-Market offering program, entitling the Company, at its discretion, and from time to time, to sell up to US$100 million in value of common shares of the Company. This program can be in effect until the Company’s US$750 million Shelf Registration Statement expires in 2025. During the six months ended June 30, 2023, the Company issued 1,281,667 shares, at an average selling price of $18.27 per share, for net proceeds of $22.9 million under the Company’s At-The-Market offering. Subsequent to the quarter end, the Company issued 238,489 shares, at an average selling price of $17.00 per share, for net proceeds of $4.0 million under the Company’s At-The-Market offering. In 2022, the Company issued 998,629 shares, at an average selling price of $22.82 per share, for net proceeds of $22.3 million under the Company’s At-The-Market offering.

 

In December 2022, the Company issued a total of 675,400 flow-through common shares at an average $22.24 per common share for aggregate gross proceeds of $15.0 million. The Company committed to renounce its ability to deduct qualifying exploration expenditures for the equivalent value of the gross proceeds of the flow-through financing and transfer the deductibility to the purchasers of the flow-through shares. The effective date of the renouncement was December 31, 2022. At the time of issuance of the flow-through shares, $4.2 million premium was recognized as a liability on the consolidated statements of financial position. During six month ended June 30, 2023, the Company incurred $5.3 million of qualifying exploration expenditures and $1.5 million of the premium was recognized through other income on the consolidated statements of operations and comprehensive income (loss).

 

b)Stock options and restricted share units

 

The Company provides compensation to directors and employees in the form of stock options and RSUs. Pursuant to the Share Option Plan, the Board of Directors has the authority to grant options, and to establish the exercise price and life of the option at the time each option is granted, at a price not less than the closing price of the common shares on the Toronto Stock Exchange on the date of the grant of such option and for a period not exceeding five years. All exercised options are settled in equity. Pursuant to the Company’s RSU Plan, the Board of Directors has the authority to grant RSUs, and to establish terms of the RSUs including the vesting criteria and the life of the RSUs.

 

Stock option and RSU transactions were as follows:

 

   Options   RSUs   Total 
   Number of
Options		   Weighted
Average
Exercise
Price ($)		   Amortized
Value of
options
($000s)		   Number of
RSUs		   Amortized
Value of
RSUs
($000s)		   Stock-based
Compensation
($000s)		 
Outstanding January 1, 2023   477,500    15.85    4,117    345,266    538    4,655 
Granted   
-
    
-
    
-
    20,000    
-
    
-
 
Exercised option or vested RSU   -    -    -    (5,000)   (111)   (111)
Amortized value of stock-based compensation   
-
    
-
    
-
    
-
    1,727    1,727 
Outstanding at June 30, 2023   477,500    15.85    4,117    360,266    2,154    6,271 
                               
Exercisable at June 30, 2023   477,500                          

 

   Options     RSUs    Total  
   Number of Options   Weighted
Average
Exercise
Price ($)		   Amortized
Value of
options
($000s)		    Number of
RSUs		   Amortized
Value of
RSUs
($000s)		   Stock-based Compensation ($000s)  
Outstanding at January 1, 2022   1,023,334    14.61    8,125       173,800    572   8,697  
Granted   
-
    
-
    
-
       320,266    187   187  
Exercised option or vested RSU   (540,834)   13.54    (3,974)      (148,800)   (3,172)  (7,146 )
Expired   (5,000)   13.14    (34)      
-
    
-
   (34 )
Amortized value of stock-based compensation   
-
    
-
    -       
-
    2,951   2,951  
Outstanding at December 31, 2022   477,500    15.85    4,117       345,266    538   4,655  
                                   
Exercisable at December 31, 2022   477,500                              

 

The outstanding share options at June 30, 2023 expire at various dates between October 2023 and June 2024. A summary of options outstanding, their remaining life and exercise prices as at June 30, 2023 is as follows:

 

Options Outstanding   Options Exercisable 
Exercise
   Number   Remaining   Number 
price   outstanding   contractual life   Exercisable 
$16.94    50,000    4 months    50,000 
$15.46    377,500    6 months    377,500 
$17.72    50,000    1 year    50,000 
      477,500         477,500 

 

During the six months ended June 30, 2023, 5,000 RSUs vested and nil options were exercised. During the year ended December 31, 2022, 540,834 options were exercised for proceeds of $3.9 million, and 148,800 RSUs vested. The weighted average share price at the date of exercise of options was $18.74. Subsequent to the quarter end, 5,000 RSUs vested and were exchanged for common shares of the Company.

 

During the current quarter, 20,000 RSUs were granted to two newly appointed Board members. The RSUs vest at the earlier of three years and the date at which the member retires from the Board. The fair value of the grants, of $0.3 million, was estimated as at the grant date to be amortized over the expected service period of the grants.

 

In December 2022, 310,266 RSUs were granted. Of these, 37,500 RSUs were granted to Board members, 232,266 RSUs were granted to members of senior management, and the remaining 40,500 RSUs were granted to other employees of the Company. The fair value of the grants, of $5.1 million, was estimated as at the grant date to be amortized over the expected service period of the grants. The expected service period ranges from six months to three years from the date of the grant and is dependent on certain corporate objectives being met. Of the $5.1 million fair value of the grants, $0.1 million was amortized during the fourth quarter of 2022, $1.5 million was amortized during the six months ended June 30th, and the remaining $3.4 million will be amortized over the remaining estimated service periods of the respective tranches.

 

During the third quarter of 2022, 10,000 RSUs were granted to a Board member. Half of the RSUs vest on the first anniversary of the appointment and the remaining half on the second anniversary. The fair value of the grants, of $0.2 million, was estimated as at the grant date to be amortized over the expected service period of the grants. As at June 30, 2023, $0.1 million of the fair value of the grants was amortized.

 

In December 2021, 123,800 RSUs were granted. Of these, 28,000 RSUs were granted to Board members, 75,200 RSUs were granted to members of senior management, and the remaining 20,600 RSUs were granted to other employees of the Company. The fair value of the grants, of $2.6 million, was estimated as at the grant date to be amortized over the expected service period of the grants. The expected service period of approximately four months from the date of the grant was dependent on certain corporate objectives being met. Of the $2.6 million fair value of the grants, $0.4 million was amortized during the fourth quarter 2021, and the remaining $2.2 million was amortized during the first quarter of 2022. During the second quarter of 2022, 128,800 RSUs were vested and 119,800 RSUs were exchanged for common shares of the Company.

 

During the third and fourth quarter of 2021, 40,000 RSUs were granted to three new members of senior management. Half of the RSUs vested on the first anniversary of employment and the remaining half will vest on the second anniversary. The fair value of the grants, of $0.9 million, was estimated at the grant date to be amortized over the expected service period of the grants. In 2022, 20,000 RSUs were vested, and as at June 30, 2023, $0.9 million of the fair value of the grants was amortized.

 

During the second quarter of 2021, 10,000 RSUs were granted to a Board member. Half of the RSUs vested on the first anniversary of the appointment and the remaining half will vest on the second anniversary. The fair value of the grants, of $0.2 million, was estimated as at the grant date to be amortized over the expected service period of the grants. 5,000 RSUs were vested during the second quarter of 2022, and the remaining 5,000 RSUs were vested during the current quarter, and as at June 30, 2023, $0.2 million fair value of the grants was amortized.

 

c)Basic and diluted net income (loss) per common share

 

Basic and diluted net income (loss) attributable to common shareholders of the Company for the three and six months ended June 30, 2023 was $9.0 million net income and $1.8 million net loss, respectively (three and six months ended June 30, 2022 – $19.1 million and $12.8 million net income, respectively).

 

Earnings per share has been calculated using the weighted average number of common shares and common share equivalents issued and outstanding during the period. Stock options are reflected in diluted earnings per share by application of the treasury method. The following table details the weighted average number of outstanding common shares for the purpose of computing basic and diluted earnings (loss) per common share for the following periods:

 

  Three months ended
June 30,		   Six months ended
June 30,		 
(Number of common shares)  2023   2022   2023   2022 
Basic weighted average shares outstanding   82,434,434    80,144,953    81,998,804    79,701,761 
Weighted average shares dilution adjustments:                    
Stock options 1   62,142    233,552    
-
    250,408 
RSUs   150,149    13,887    
-
    14,755 
Diluted weighted average shares outstanding   82,646,724    80,392,391    81,998,804    79,966,924 
                     
Weighted average shares dilution exclusions: 2
Stock options 1   
-
    
-
    44,492    
  -
 
RSUs   
-
    
-
    141,220    
-
 

 

1)Dilutive stock options were determined using the Company’s average share price for the period. For the three and six months ended June 30, 2023, the average share price used was $18.22 and $17.48, respectively (three and six months ended June 30, 2022 - $20.37 and $20.95, respectively).

 

2)These adjustments were excluded as they are anti-dilutive.
v3.23.2
Cash Flow Items
 6 Months Ended
Jun. 30, 2023
Cash Flow Items [Abstract]  
Cash Flow Items
13.Cash flow items

 

Adjustment for other non-cash items within operating activities:

 

        Three months ended
June 30,		    Six months ended
June 30,		 
($000s)    Notes    2023    2022    2023    2022 
Impairment of investment in associate   6    -    873    -    873 
Equity loss of associate   6    60    46    120    90 
Environmental rehabilitation expense   10    -    26    -    (41)
Unrealized gain on convertible notes receivable        22    (6)   37    9 
Accrued interest income on convertible notes receivable        -    -    (20)   (19)
Depreciation   8    33    74    65    95 
Finance costs, net        63    18    124    34 
Effects of exchange rate fluctuation on cash and cash equivalents        209    (1,430)   230    (1,374)
         387    (399)   556    (333)
v3.23.2
Fair Value of Financial Assets and Liabilities
 6 Months Ended
Jun. 30, 2023
Fair Value of Financial Assets and Liabilities [Abstract]  
Fair Value of Financial Assets and Liabilities
14.Fair value of financial assets and liabilities

 

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value.

 

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

 

Level 2: Inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts, volatility measurements used to value option contracts and observable credit default swap spreads to adjust for credit risk where appropriate), or inputs that are derived principally from or corroborated by observable market data or other means.

 

Level 3: Inputs are unobservable (supported by little or no market activity).

 

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

 

The Company’s fair values of financial assets and liabilities were as follows:

 

   June 30, 2023 
($000s)   Carrying
Amount		    Level 1   Level 2   Level 3   Total
Fair Value		 
Assets                      
Cash and cash equivalents   202,642    202,642   
-
   
-
   202,642 
Amounts receivable   6,215    6,215   
-
   
-
   6,215 
Investment in marketable securities   3,577    3,577   
-
   
-
   3,577 
Convertible notes receivable   594    
-
   
-
   594   594 
Long-term receivables   13,203    13,203   
-
   
-
   13,203 
    226,231    225,637   
-
   594   226,231 
Liabilities                      
Accounts payable and accrued liabilities   62,040    62,040   
-
   
-
   62,040 
Secured notes   456,325    
-
   
-
   456,325   456,325 
    518,365    62,040   
-
   456,325   518,365 

 

   December 31, 2022 
($000s)   Carrying
Amount		   Level 1   Level 2   Level 3   Total
Fair Value		 
Assets                     
Cash and cash equivalents   46,150   46,150  
-
  
-
   46,150 
Short-term deposits   81,690   81,690  
-
  
-
   81,690 
Amounts receivable   6,260   6,260  
-
  
-
   6,260 
Investment in marketable securities   3,696   3,696  
-
  
-
   3,696 
Convertible notes receivable   631  
-
  
-
   631   631 
Long-term receivables   13,203   13,203  
-
  
-
   13,203 
    151,630   150,999  
-
   631   151,630 
Liabilities                     
Accounts payable and accrued liabilities   42,956   42,956  
-
  
-
   42,956 
Secured notes   263,541  
-
  
-
   263,541   263,541 
    306,497   42,956  
-
   263,541   306,497 

 

The carrying value of cash and cash equivalents, short-term deposits, amounts receivable and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these financial assets and liabilities.

 

The Company’s financial risk exposures and the impact on the Company’s financial instruments are summarized below:

 

Credit Risk

 

The Company’s credit risk is primarily attributable to short-term deposits, convertible notes receivable, and receivables included in amounts receivable and prepaid expenses. The Company has no significant concentration of credit risk arising from operations. The short-term deposits consist of Canadian Schedule I bank guaranteed notes, with terms up to one year but are cashable in whole or in part with interest at any time to maturity, for which management believes the risk of loss to be remote. Management believes that the risk of loss with respect to financial instruments included in amounts receivable and prepaid expenses to be remote.

 

Liquidity Risk

 

The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at June 30, 2023, the Company had cash and cash equivalents of $202.6 million and short-term deposits of nil (December 31, 2022 - $46.2 million and $81.7 million, respectively) for settlement of current financial liabilities of $66.4 million (December 31, 2022 - $47.3 million). Except for the secured notes liability and the reclamation obligations, the Company’s financial liabilities are primarily subject to normal trade terms. The Company’s ability to fund its operations and capital expenditures and other obligations as they become due is dependent upon market conditions.

 

The following tables detail the Company’s expected remaining contractual cash flow requirements for its financial liabilities on repayment or maturity periods. The amounts presented are based on the contractual undiscounted cash flows and may not agree with the carrying amounts in the Consolidated Statements of Financial Position.

 

($000s)   Less than
1 year		    1-3 years    3-5 years    Greater than
5 years		    Total 
2022 Secured Note including interest   19,364    38,728    38,728    160,905    257,725 
2023 Secured Note including interest   
-
    28,466    25,818    144,316    198,600 
Flow-through share expenditures   9,737    
-
    
-
    
-
    9,737 
Lease obligation   952    728    103    161    1,944 
    30,053    67,922    64,649    305,382    468,006 

 

As the Company does not generate cash inflows from operations, the Company is dependent upon external sources of financing to fund its exploration projects and on-going activities. If required, the Company will seek additional sources of cash to cover its proposed exploration and development programs at its key projects, in the form of equity financing and from the sale of non-core assets. Refer to Note 12 for details on equity financing.

 

Market Risk

 

(a)Interest Rate Risk

 

Interest rate risk is the risk that the future cash flows of a financial instrument or its fair value will fluctuate because of changes in market interest rates. The secured notes liability (Note 11) bear interest at a fixed rate of 6.5% per annum. The Company’s current policy is to invest excess cash in Canadian bank guaranteed notes (short-term deposits). The short-term deposits can be cashed in at any time and can be reinvested if interest rates rise.

 

(b)Foreign Currency Risk

 

The Company’s functional currency is the Canadian dollar and major purchases are transacted in Canadian and US dollars. The secure note liability and the related interest payments are denominated in US dollars. The Company has the option to pay the interest either in cash or in shares. The Company also funds certain operations, exploration and administrative expenses in the United States on a cash call basis using US dollar cash on hand or converted from its Canadian dollar cash. Management believes the foreign exchange risk derived from currency conversions is not significant to its operations and has not entered into any foreign exchange hedges. As at June 30, 2023, the Company had cash and cash equivalents, investment in associate, convertible notes receivable, loan receivable, reclamation deposits, accounts payable, accrued liabilities and secured notes that are in US dollars.

 

(c)Investment Risk

 

The Company has investments in other publicly listed exploration companies which are included in investments. These shares were received as option payments on certain exploration properties the Company owns or has sold. In addition, the Company holds $3.6 million in a gold exchange traded receipt that is recorded on the consolidated statements of financial position in investments. The risk on these investments is significant due to the nature of the investment but the amounts are not significant to the Company.
v3.23.2
Corporate and Administrative expenses
 6 Months Ended
Jun. 30, 2023
Corporate and Administrative Expense [Abstract]  
Corporate and administrative expenses
15.Corporate and administrative expenses

 

   Three months ended
June 30,		  

Six months ended

June 30,

 
($000s)   2023   2022   2023   2022 
Employee compensation   1,465   1,302   3,085   2,540 
Stock-based compensation   859   222   1,727   2,515 
Professional fees   662   596   936   855 
Other general and administrative   991   748   2,120   1,559 
    3,977   2,868   7,868   7,469 
v3.23.2
Related party disclosures
 6 Months Ended
Jun. 30, 2023
Related party disclosures [Abstract]  
Related party disclosures
16.Related party disclosures

 

During the six months ended June 30, 2023 and 2022, there were no payments to related parties other than compensation paid to key management personnel. These transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.
v3.23.2
Income Taxes
 6 Months Ended
Jun. 30, 2023
Income Taxes [Abstract]  
Income taxes
17.Income taxes

 

As previously disclosed in the Company’s prior years financial statements, in 2019 the Company received a notice from the CRA that it proposed to reduce the amount of expenditures reported as Canadian Exploration Expenses (CEE) for the three-year period ended December 31, 2016. The Company has funded certain of its exploration expenditures, from time-to-time, with the proceeds from the issuance of flow-through shares and renounced, to subscribers, the expenditures which it determined to be CEE. The notice disputes the eligibility of certain types of expenditures previously audited and approved as CEE by the CRA. The Company strongly disagrees with the notice and responded to the CRA auditors with additional information for their consideration. In 2020, the CRA auditors responded to the Company’s submission and, although accepting additional expenditures as CEE, reiterated that their position remains largely unchanged and subsequently issued reassessments to the Company reflecting the additional CEE expenditures accepted and $2.3 million of Part Xll.6 tax owing. The Company has been made aware that the CRA has reassessed certain investors who subscribed for the flow-through shares, reducing CEE deductions. Notice of objections to the Company’s and investors’ reassessments have been filed for all those that have been received and will be appealed to the courts, should the notice of objections be denied. The Company has indemnified the investors that subscribed for the flow-through shares and that have been reassessed by depositing the amount of their reassessments, including interest charges, into the accounts of the reassessed investors with the Receiver General in return for such investors agreement to object to their respective reassessments and to repay the Company any refund of the amount deposited on their behalf upon resolution of the Company’s appeal. During 2021 and 2022, the Company deposited $9.3 million into the accounts of certain investors with the Receiver General. The deposits made have been recorded as long-term receivables on the statement of financial position as at June 30, 2023. The potential tax indemnification to the investors is estimated to be $10.8 million, plus $2.9 million potential interest. No provision has been recorded related to the tax, potential interest, nor the potential indemnity as the Company and its advisors do not consider it probable that there will ultimately be an amount payable.
v3.23.2
Commitments and Contingencies
 6 Months Ended
Jun. 30, 2023
Commitments and Contingencies [Abstract]  
Commitments and contingencies
18.Commitments and contingencies

 

   Payments due by years 
($000s)  Total  2023  2024-25  2026-27  2028-29 
2022 Secured Note – interest   125,866   9,682   38,728   38,728   38,728 
2023 Secured Note – interest   80,102   
-
   28,466   25,818   25,818 
Capital expenditure obligations   88,175   82,033   6,142   
-
   
-
 
Flow-through share expenditures   9,737   9,737   
-
   
-
   
-
 
Mineral interests   5,441   485   1,652   1,652   1,652 
Lease obligation   1,851   510   1,143   106   92 
    311,172   102,447   76,131   66,304   66,290 

 

In 2022, the Company entered into a Facilities Agreement with BC Hydro covering the design and construction of facilities by BC Hydro to supply construction phase hydro-sourced electricity to the KSM project.

 

The cost to complete the construction is estimated to be $32.8 million of which the Company has paid $24.9 million to BC Hydro and the remaining balance is due in December 2023. In addition, the Facilities Agreement requires $59.7 million in security or cash from the Company for BC Hydro system reinforcement which is required to make the power available of which the Company has paid $57.1 million to BC Hydro and the balance is due in December 2023. The $59.7 million system reinforcement security will be forgiven annually, typically over a period of less than 8 years, based on project power consumption.

 

Prior to its maturity, the 2022 Secured Notes bear interest at 6.5%, or US$14.6 million per annum, payable quarterly in arrears. The Company can elect to satisfy interest payments in cash or by delivering common shares. Refer to Note 11 for details on the secured notes.

 

Prior to its maturity, the 2023 Secured Note bears interest at 6.5% or US$9.8 million per annum, payable quarterly in arrears. Payment of quarterly interest due from the closing date to the second anniversary is deferred and US$21.5 million must be paid on or before 30 months after the closing date. Deferred interest can be satisfied by way of cash, common shares or increasing the NSR percentage from 1 to 1.2%.
v3.23.2
Cash and Cash Equivalents and Short-Term Deposits (Tables)
 6 Months Ended
Jun. 30, 2023
Cash and Cash Equivalents and Short-Term Deposits [Abstarct]  
Schedule of Cash and Cash Equivalents and Short-Term Deposits
($000s)   June 30,
2023		    December 31,
2022		 
Cash and cash equivalents   202,642    46,150 
Short-term deposits   
-
    81,690 
    202,642    127,840 
v3.23.2
Amounts Receivable and Prepaid Expenses (Tables)
 6 Months Ended
Jun. 30, 2023
Amounts Receivable and Prepaid Expenses Explanatory [Abstract]  
Schedule of Receivable and Prepaid Expenses
($000s)   June 30,
2023		    December 31,
2022		 
HST   2,436    4,247 
Prepaid expenses and other receivables   7,760    3,973 
    10,196    8,220 
v3.23.2
Investments (Tables)
 6 Months Ended
Jun. 30, 2023
Investments Explanatory [Abstract]  
Schedule of Investments Investments
($000s)   January 1,
2023		    Fair value through other comprehensive income (loss)    Loss of associate    

 

 

 

Impairment

    Additions    

June 30,

2023

 
Current assets:                              
Investments in marketable securities   3,696    (119)   
-
    
-
    
-
    3,577 
                               
Non-current assets:                              
Investment in associate   1,389    -    (120)   -    20(b)   1,289 
                               
($000s)   January 1,
2022		    Fair value through other comprehensive income (loss)    Loss of associate    Impairment    Additions    December 31,
2022		 
Current assets:                              
Investments in marketable securities   3,367    329    -    -    -    3,696 
                               
Non-current assets:                              
Investment in associate   2,429    -    (206)   (873)(a)   39(b)   1,389 
(a)The Company accounts for its investment in Paramount, a publicly listed company, using the equity method. During 2022, the Company concluded that the fair value of its investment in Paramount, determined based on the market price, had declined significantly and recorded an impairment of $0.9 million in the consolidated statements of operations and comprehensive income (loss).
(b)In 2023, the Company received 43,928 common shares of Paramount for payment of interest, on the secured convertible notes, that accrued between July 1, 2022 and December 31, 2022. In 2022, the Company received 55,322 common shares of Paramount for payment of interest on the secured convertible notes accrued between July 1, 2021 and June 30, 2022.
v3.23.2
Long-Term Receivables and Other Assets (Tables)
 6 Months Ended
Jun. 30, 2023
Long-Term Receivables Explanatory [Abstract]  
Schedule of Long-Term Receivables and Other Assets
($000s)   June 30,
2023		   December 31,
2022		 
BC Hydro 1   82,150   38,500 
Canadian Exploration Expenses (Note 17)   9,337   9,337 
British Columbia Mineral Exploration Tax Credit 2   3,866   3,866 
    95,353   51,703 
1)During the first quarter in 2023, the Company paid $43.6 million (as at December 31, 2022, $38.5 million) to British Columbia Hydro and Power Authority (“BC Hydro”) as advance payment made pursuant to the Company signing a facilities agreement with BC Hydro covering the design and construction of facilities to supply hydro-sourced electricity to the KSM project.
2)During 2016, upon the completion of an audit of the application by tax authorities of the British Columbia Mineral Exploration Tax Credit (“BCMETC”) program, the Company was reassessed $3.6 million, including accrued interest for expenditures that the tax authority has categorized as not qualifying for the BCMETC program. The Company recorded a $3.6 million provision within non-trade payables and accrued expenses on the consolidated statements of financial position as at December 31, 2016 with a corresponding increase in mineral interests. In 2017 the Company filed an objection to the reassessment with the appeals division of the tax authorities and paid one-half of the accrued balance to the Receiver General and reduced the provision by $1.8 million. In 2019, the Company received a decision from the appeals division that the Company’s objection was denied, and the Company filed a Notice of Appeal with the British Columbia Supreme Court. The Attorney General of Canada replied to the facts and arguments in the Company’s Notice of Appeal and stated its position that the Company’s expenditures did not qualify for the BCMETC program. During the first quarter of 2023, the Company completed discovery process with the Department of Justice and will continue to move the appeal process forward, including settling an agreed statement of facts and settling court dates for the hearing. The Company intends to continue to fully defend its position. Based on the facts and circumstances of the Company’s objection, the Company concludes that it is more likely than not that it will be successful in its objection. As at June 30, 2023, the Company has paid $1.6 million to the Receiver General, and the Canada Revenue Agency (CRA) has withheld $2.3 million of HST credits due to the Company that would fully cover the residual balance, including interest, should the Company be unsuccessful in its challenge. The amount recorded in long-term receivables as of June 30, 2023 of $3.9 million includes the initial reassessment of $3.6 million, plus accrued interest.
v3.23.2
Mineral Interests, Property and Equipment (Tables)
 6 Months Ended
Jun. 30, 2023
Mineral Interests, Property and Equipment Explanatory [Abstract]  
Schedule of Mineral Interest, Property and Equipment
($000s)  Mineral interests   Construction in progress   Property & equipment 1   Right-of-use assets 1   Total 
Cost                         
As at January 1, 2022   632,005    27,061    3,080    407    662,553 
Additions   55,069    120,287    43,177    2,030    220,563 
As at December 31, 2022   687,074    147,348    46,257    2,437    883,116 
Additions   20,552    96,366    -    781    117,699 
As at June 30, 2023   707,626    243,714    46,257    3,218    1,000,815 
Accumulated Depreciation                         
As at January 1, 2022   
-
    
-
    117    157    274 
Depreciation expense   
-
    
-
    953    392    1,345 
As at December 31, 2022   
-
    
-
    1,070    549    1,619 
Depreciation expense 1   -    -    849    377    1,226 
As at June 30, 2023   
-
    -    1,919    926    2,845 
Net Book Value                         
As at December 31, 2022   687,074    147,348    45,187    1,888    881,497 
As at June 30, 2023   707,626    243,714    44,338    2,292    997,970 
1)Depreciation expense related to camps, equipment, and right-of-use assets associated with the KSM construction is capitalized to construction in progress.

 
Schedule of Mineral Interests Expenditures
       Six months ended June 30, 2023     
($000s)  January 1,
2023		   Mineral interests   Construction in progress   Property & equipment   Right-of-
use assets		   Total Additions   June 30,
2023		 
Additions                            
KSM 1   707,190    13,897    95,318    
      -
    781    109,996    817,186 
Courageous Lake   77,999    1,169    
-
    
-
    
-
    1,169    79,168 
Iskut   49,904    3,826    
-
    
-
    
-
    3,826    53,730 
Snowstorm   34,562    495    
-
    
-
    
-
    495    35,057 
3 Aces   12,079    1,165    1,048    
-
    
-
    2,213    14,292 
Grassy Mountain   771    
-
    
-
    
-
    
-
    
-
    771 
Corporate   611    
-
    
-
    
-
    
-
    
-
    611 
    883,116    20,552    96,366    
-
    781    117,699    1,000,815 
       Year ended December 31, 2022     
($000s)  January 1,
2022		   Mineral interests   Construction in progress   Property & equipment   Right-of-
use assets		   Total Additions   December 31,
2022		 
Additions                            
KSM 1   502,015    39,985    120,287    43,177    1,726    205,175    707,190 
Courageous Lake   77,176    823    
-
    
-
    
-
    823    77,999 
Iskut   41,779    8,125    
-
    
-
    
-
    8,125    49,904 
Snowstorm   31,471    3,091    
-
    
-
    
-
    3,091    34,562 
3 Aces   9,034    3,045    
-
    
-
    
-
    3,045    12,079 
Grassy Mountain   771    
-
    
-
    
-
    
-
    
-
    771 
Corporate   307    
-
    
-
    
-
    304    304    611 
    662,553    55,069    120,287    43,177    2,030    220,563    883,116 
1)The KSM construction in progress additions includes $9.9 million of capitalized borrowing costs (year ended December 31, 2022 - $14.7 million).
v3.23.2
Accounts Payable and Accrued Liabilities (Tables)
 6 Months Ended
Jun. 30, 2023
Accounts Payable and Accrued Liabilities [Abstract]  
Schedule of Accounts Payable and Accrued Liabilities
($000s)  June 30,
2023		   December 31,
2022		 
Trade payables (a)   16,663    15,686 
Non-trade payables and accrued expenses (b)   45,377    27,270 
    62,040    42,956 
(a)Includes accrued interest payable of $4.9 million (December 31, 2022 – nil).
(b)Non-trade payables and accrued expenses include $41.9 million (December 31, 2022 – $26.3 million) of accrued expenses related to construction at KSM.
v3.23.2
Provision for Reclamation Liabilities (Tables)
 6 Months Ended
Jun. 30, 2023
Provision for Reclamation Liabilities Explanatory [Abstract]  
Schedule of Provision for Reclamation Liabilities
($000s)  June 30,
2023		   December 31,
2022		 
Beginning of the period   10,846    8,442 
Disbursements   (870)   (4,519)
Environmental rehabilitation expense   
-
    6,851 
Accretion   124    72 
End of the period   10,100    10,846 
           
Provision for reclamation liabilities – current   4,343    4,343 
Provision for reclamation liabilities – long-term   5,757    6,503 
    10,100    10,846 
v3.23.2
Secured note liability (Tables)
 6 Months Ended
Jun. 30, 2023
Secured note liability [Abstract]  
Schedule of Inputs and Assumptions The following inputs and assumptions were used in the determination of fair value:
Inputs and assumptions  June 30,
2023		   December 31,
2022		 
Forecast silver production in thousands of ounces   166,144    166,144 
Five year quoted future silver price   US$28.27    US$29.38 
Risk-free rate   3.8%   3.4%
Credit spread   5.4%   5.3%
Share price volatility   60%   60%
Silver royalty discount factor   9.1%   8.6%
Inputs and assumptions  June 29,
2023		 
Forecast NSR:     
Gold in thousands of ounces   10,500 
Silver in thousands of ounces   29,876 
Copper in millions of pounds   19,322,467 
Molybdenum in millions of pounds   152,310 
Five year quoted future metal price     
Gold per ounce  US$2,352.04 
Silver per ounce  US$27.51 
Copper per pound  US$3.64 
Molybdenum per pound  US$22.99 
Risk-free rate   3.9%
Credit spread   5.4%
Share price volatility   60%
NSR royalty discount factor   9.1%
Schedule of Carrying Amount for the Secured Note The carrying amount for the 2022 Secured Note is as follows:
($000s)   June 30,
2023		    December 31,
2022		 
Fair value beginning of the period   263,541    282,263 
Change in fair value (gain) loss through profit and loss   1,367    (36,967)
Change in fair value (gain) loss through other comprehensive income (loss)   (1,127)   (2,912)
Foreign currency translation (gain) loss   (6,056)   21,157 
Total change in fair value   (5,816)   (18,722)
Fair value end of the period   257,725    263,541 

 
Schedule of Fair Value of the 2022 Secured Note For the fair value of the 2022 Secured Note, reasonably possible changes at the reporting date to one of the significant inputs, holding other inputs constant, would have the following effects:
Key Inputs   Inter-relationship between significant inputs and
fair value measurement		   Increase
(decrease)
(millions)		  
Key observable inputs   The estimated fair value would increase (decrease) if:      
● Silver price forward curve   ● Future silver prices were 10% higher   $ 13.4  
    ● Future silver prices were 10% lower   $ (13.5 )
             
● Discount rates   ● Discount rates were 1% higher   $ (21.5 )
    ● Discount rates were 1% lower   $ 25.2  
Key unobservable inputs            
● Forecasted silver production   ● Silver production indicated silver ounces were 10% higher   $ 13.4  
    ● Silver production indicated silver ounces were 10% lower   $ (13.5 )
(b)2023 Secured Note
Key Inputs   Inter-relationship between significant inputs and
fair value measurement		   Increase
(decrease)
(millions)		  
Key observable inputs   The estimated fair value would increase (decrease) if:      
           
● Metals price forward curve   ● Future metal prices were 10% higher   $ 13.2  
    ● Future metal prices were 10% lower   $ (13.2 )
             
● Discount rates   ● Discount rates were 1% higher   $ (22.5 )
    ● Discount rates were 1% lower   $ 26.2  
Key unobservable inputs            
● Forecasted metal production   ● Metal production indicated volumes were 10% higher  $ 13.2  
    ● Metal production indicated volumes were 10% lower   $ (13.2 )
v3.23.2
Shareholders' Equity (Tables)
 6 Months Ended
Jun. 30, 2023
Shareholders [Abstract]  
Schedule of Stock Option and RSU Transactions Stock option and RSU transactions were as follows:
   Options   RSUs   Total 
   Number of
Options		   Weighted
Average
Exercise
Price ($)		   Amortized
Value of
options
($000s)		   Number of
RSUs		   Amortized
Value of
RSUs
($000s)		   Stock-based
Compensation
($000s)		 
Outstanding January 1, 2023   477,500    15.85    4,117    345,266    538    4,655 
Granted   
-
    
-
    
-
    20,000    
-
    
-
 
Exercised option or vested RSU   -    -    -    (5,000)   (111)   (111)
Amortized value of stock-based compensation   
-
    
-
    
-
    
-
    1,727    1,727 
Outstanding at June 30, 2023   477,500    15.85    4,117    360,266    2,154    6,271 
                               
Exercisable at June 30, 2023   477,500                          
   Options     RSUs    Total  
   Number of Options   Weighted
Average
Exercise
Price ($)		   Amortized
Value of
options
($000s)		    Number of
RSUs		   Amortized
Value of
RSUs
($000s)		   Stock-based Compensation ($000s)  
Outstanding at January 1, 2022   1,023,334    14.61    8,125       173,800    572   8,697  
Granted   
-
    
-
    
-
       320,266    187   187  
Exercised option or vested RSU   (540,834)   13.54    (3,974)      (148,800)   (3,172)  (7,146 )
Expired   (5,000)   13.14    (34)      
-
    
-
   (34 )
Amortized value of stock-based compensation   
-
    
-
    -       
-
    2,951   2,951  
Outstanding at December 31, 2022   477,500    15.85    4,117       345,266    538   4,655  
                                   
Exercisable at December 31, 2022   477,500                              
Schedule of Outstanding Share The outstanding share options at June 30, 2023 expire at various dates between October 2023 and June 2024. A summary of options outstanding, their remaining life and exercise prices as at June 30, 2023 is as follows:
Options Outstanding   Options Exercisable 
Exercise
   Number   Remaining   Number 
price   outstanding   contractual life   Exercisable 
$16.94    50,000    4 months    50,000 
$15.46    377,500    6 months    377,500 
$17.72    50,000    1 year    50,000 
      477,500         477,500 
Schedule of Basic and Diluted Earnings Per Common Share Earnings per share has been calculated using the weighted average number of common shares and common share equivalents issued and outstanding during the period. Stock options are reflected in diluted earnings per share by application of the treasury method. The following table details the weighted average number of outstanding common shares for the purpose of computing basic and diluted earnings (loss) per common share for the following periods:
  Three months ended
June 30,		   Six months ended
June 30,		 
(Number of common shares)  2023   2022   2023   2022 
Basic weighted average shares outstanding   82,434,434    80,144,953    81,998,804    79,701,761 
Weighted average shares dilution adjustments:                    
Stock options 1   62,142    233,552    
-
    250,408 
RSUs   150,149    13,887    
-
    14,755 
Diluted weighted average shares outstanding   82,646,724    80,392,391    81,998,804    79,966,924 
                     
Weighted average shares dilution exclusions: 2
Stock options 1   
-
    
-
    44,492    
  -
 
RSUs   
-
    
-
    141,220    
-
 
1)Dilutive stock options were determined using the Company’s average share price for the period. For the three and six months ended June 30, 2023, the average share price used was $18.22 and $17.48, respectively (three and six months ended June 30, 2022 - $20.37 and $20.95, respectively).
2)These adjustments were excluded as they are anti-dilutive.
v3.23.2
Cash Flow Items (Tables)
 6 Months Ended
Jun. 30, 2023
Cash Flow Items [Abstract]  
Schedule of Adjustment for Other Non-Cash Items within Operating Activities Adjustment for other non-cash items within operating activities:
        Three months ended
June 30,		    Six months ended
June 30,		 
($000s)    Notes    2023    2022    2023    2022 
Impairment of investment in associate   6    -    873    -    873 
Equity loss of associate   6    60    46    120    90 
Environmental rehabilitation expense   10    -    26    -    (41)
Unrealized gain on convertible notes receivable        22    (6)   37    9 
Accrued interest income on convertible notes receivable        -    -    (20)   (19)
Depreciation   8    33    74    65    95 
Finance costs, net        63    18    124    34 
Effects of exchange rate fluctuation on cash and cash equivalents        209    (1,430)   230    (1,374)
         387    (399)   556    (333)
v3.23.2
Fair Value of Financial Assets and Liabilities (Tables)
 6 Months Ended
Jun. 30, 2023
Fair Value of Financial Assets and Liabilities [Abstract]  
Schedule of Fair Values of Financial Assets and Liabilities The Company’s fair values of financial assets and liabilities were as follows:
   June 30, 2023 
($000s)   Carrying
Amount		    Level 1   Level 2   Level 3   Total
Fair Value		 
Assets                      
Cash and cash equivalents   202,642    202,642   
-
   
-
   202,642 
Amounts receivable   6,215    6,215   
-
   
-
   6,215 
Investment in marketable securities   3,577    3,577   
-
   
-
   3,577 
Convertible notes receivable   594    
-
   
-
   594   594 
Long-term receivables   13,203    13,203   
-
   
-
   13,203 
    226,231    225,637   
-
   594   226,231 
Liabilities                      
Accounts payable and accrued liabilities   62,040    62,040   
-
   
-
   62,040 
Secured notes   456,325    
-
   
-
   456,325   456,325 
    518,365    62,040   
-
   456,325   518,365 
   December 31, 2022 
($000s)   Carrying
Amount		   Level 1   Level 2   Level 3   Total
Fair Value		 
Assets                     
Cash and cash equivalents   46,150   46,150  
-
  
-
   46,150 
Short-term deposits   81,690   81,690  
-
  
-
   81,690 
Amounts receivable   6,260   6,260  
-
  
-
   6,260 
Investment in marketable securities   3,696   3,696  
-
  
-
   3,696 
Convertible notes receivable   631  
-
  
-
   631   631 
Long-term receivables   13,203   13,203  
-
  
-
   13,203 
    151,630   150,999  
-
   631   151,630 
Liabilities                     
Accounts payable and accrued liabilities   42,956   42,956  
-
  
-
   42,956 
Secured notes   263,541  
-
  
-
   263,541   263,541 
    306,497   42,956  
-
   263,541   306,497 
Schedule of Consolidated Statements of Financial Position The following tables detail the Company’s expected remaining contractual cash flow requirements for its financial liabilities on repayment or maturity periods. The amounts presented are based on the contractual undiscounted cash flows and may not agree with the carrying amounts in the Consolidated Statements of Financial Position.
($000s)   Less than
1 year		    1-3 years    3-5 years    Greater than
5 years		    Total 
2022 Secured Note including interest   19,364    38,728    38,728    160,905    257,725 
2023 Secured Note including interest   
-
    28,466    25,818    144,316    198,600 
Flow-through share expenditures   9,737    
-
    
-
    
-
    9,737 
Lease obligation   952    728    103    161    1,944 
    30,053    67,922    64,649    305,382    468,006 
v3.23.2
Corporate and Administrative expenses (Tables)
 6 Months Ended
Jun. 30, 2023
Corporate and Administrative Expense [Abstract]  
Schedule of Corporate and Administrative Expenses
   Three months ended
June 30,		  

Six months ended

June 30,

 
($000s)   2023   2022   2023   2022 
Employee compensation   1,465   1,302   3,085   2,540 
Stock-based compensation   859   222   1,727   2,515 
Professional fees   662   596   936   855 
Other general and administrative   991   748   2,120   1,559 
    3,977   2,868   7,868   7,469 
v3.23.2
Commitments and Contingencies (Tables)
 6 Months Ended
Jun. 30, 2023
Commitments and Contingencies [Abstract]  
Schedule of Commitments and Contingencies
   Payments due by years 
($000s)  Total  2023  2024-25  2026-27  2028-29 
2022 Secured Note – interest   125,866   9,682   38,728   38,728   38,728 
2023 Secured Note – interest   80,102   
-
   28,466   25,818   25,818 
Capital expenditure obligations   88,175   82,033   6,142   
-
   
-
 
Flow-through share expenditures   9,737   9,737   
-
   
-
   
-
 
Mineral interests   5,441   485   1,652   1,652   1,652 
Lease obligation   1,851   510   1,143   106   92 
    311,172   102,447   76,131   66,304   66,290 
v3.23.2
Cash and Cash Equivalents and Short-Term Deposits (Details) - Schedule of Cash and Cash Equivalents and Short-Term Deposits
$ in Thousands, $ in Thousands
Jun. 30, 2023
CAD ($)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CAD ($)
Dec. 31, 2022
USD ($)
Schedule Of Cash And Cash Equivalents And Short Term Deposits Abstract        
Cash and cash equivalents   $ 202,642   $ 46,150
Short-term deposits $ 81,690 81,690
Total   $ 202,642   $ 127,840
v3.23.2
Amounts Receivable and Prepaid Expenses (Details) - CAD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Amounts Receivable and Prepaid Expenses [Abstract]    
Prepaid expenses $ 3.4 $ 0.3
Insurance premiums 1.6 0.7
Loans receivable $ 2.0 $ 1.4
v3.23.2
Amounts Receivable and Prepaid Expenses (Details) - Schedule of Receivable and Prepaid Expenses - CAD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Schedule Of Receivable And Prepaid Expenses Abstract    
HST $ 2,436 $ 4,247
Prepaid expenses and other receivables 7,760 3,973
Total $ 10,196 $ 8,220
v3.23.2
Investments (Details) - CAD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Mar. 31, 2023
Investments (Details) [Line Items]        
Impairment loss     $ 0.9  
Common shares received (in Shares) 315,289   55,322 322,084
Financial assets are recorded at fair value   $ 3.6 $ 3.7  
Fair value of investments   0.1    
Net loss   $ 0.1    
Paramount Gold Nevada Corp [Member]        
Investments (Details) [Line Items]        
Common shares issued (in Shares) 43,928      
Interest, percentage   4.90% 5.60%  
Net loss   $ 0.1    
Carrying value of investment   $ 1.3 $ 1.4  
v3.23.2
Investments (Details) - Schedule of Investments - CAD ($)
$ in Thousands
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Investment in marketable securities [Member]    
Current assets:    
Beginning balance $ 3,696 $ 3,367
Fair value through other comprehensive (loss) (119) 329
Loss of associates  
Impairment  
Additions  
Ending balance 3,577 3,696
Investment in associate [Member]    
Current assets:    
Beginning balance 1,389 2,429
Loss of associates (120) (206)
Impairment [1]   (873)
Additions [2] 20 39
Ending balance $ 1,289 $ 1,389
[1] The Company accounts for its investment in Paramount, a publicly listed company, using the equity method. During 2022, the Company concluded that the fair value of its investment in Paramount, determined based on the market price, had declined significantly and recorded an impairment of $0.9 million in the consolidated statements of operations and comprehensive income (loss).
[2] In 2023, the Company received 43,928 common shares of Paramount for payment of interest, on the secured convertible notes, that accrued between July 1, 2022 and December 31, 2022. In 2022, the Company received 55,322 common shares of Paramount for payment of interest on the secured convertible notes accrued between July 1, 2021 and June 30, 2022.
v3.23.2
Long-Term Receivables and Other Assets (Details)
$ in Millions, $ in Millions
 3 Months Ended 6 Months Ended 12 Months Ended
Dec. 31, 2017
CAD ($)
Dec. 31, 2016
CAD ($)
Mar. 31, 2023
CAD ($)
Jun. 30, 2023
CAD ($)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CAD ($)
Long-Term Receivables and Other Assets [Abstract]            
Company paid     $ 43.6     $ 38.5
Accrued interest   $ 3.6        
Non trade payables and accrued expenses   $ 3.6        
Accrued balance $ 1.8          
Canada Revenue       $ 1.6    
Cash with held (in Dollars)         $ 2.3  
Long-term receivables       3.9    
Initial reassessment of accrued interest       $ 3.6    
v3.23.2
Long-Term Receivables and Other Assets (Details) - Schedule of Long-Term Receivables and Other Assets - CAD ($)
$ in Thousands
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Schedule Of Long Term Receivables And Other Assets Abstract    
BC Hydro [1] $ 82,150 $ 38,500
Canadian Exploration Expenses (Note 17) 9,337 9,337
British Columbia Mineral Exploration Tax Credit [2] 3,866 3,866
Long-term receivables and other assets $ 95,353 $ 51,703
[1] During the first quarter in 2023, the Company paid $43.6 million (as at December 31, 2022, $38.5 million) to British Columbia Hydro and Power Authority (“BC Hydro”) as advance payment made pursuant to the Company signing a facilities agreement with BC Hydro covering the design and construction of facilities to supply hydro-sourced electricity to the KSM project.
[2] During 2016, upon the completion of an audit of the application by tax authorities of the British Columbia Mineral Exploration Tax Credit (“BCMETC”) program, the Company was reassessed $3.6 million, including accrued interest for expenditures that the tax authority has categorized as not qualifying for the BCMETC program. The Company recorded a $3.6 million provision within non-trade payables and accrued expenses on the consolidated statements of financial position as at December 31, 2016 with a corresponding increase in mineral interests. In 2017 the Company filed an objection to the reassessment with the appeals division of the tax authorities and paid one-half of the accrued balance to the Receiver General and reduced the provision by $1.8 million. In 2019, the Company received a decision from the appeals division that the Company’s objection was denied, and the Company filed a Notice of Appeal with the British Columbia Supreme Court. The Attorney General of Canada replied to the facts and arguments in the Company’s Notice of Appeal and stated its position that the Company’s expenditures did not qualify for the BCMETC program. During the first quarter of 2023, the Company completed discovery process with the Department of Justice and will continue to move the appeal process forward, including settling an agreed statement of facts and settling court dates for the hearing. The Company intends to continue to fully defend its position. Based on the facts and circumstances of the Company’s objection, the Company concludes that it is more likely than not that it will be successful in its objection. As at June 30, 2023, the Company has paid $1.6 million to the Receiver General, and the Canada Revenue Agency (CRA) has withheld $2.3 million of HST credits due to the Company that would fully cover the residual balance, including interest, should the Company be unsuccessful in its challenge. The amount recorded in long-term receivables as of June 30, 2023 of $3.9 million includes the initial reassessment of $3.6 million, plus accrued interest.
v3.23.2
Mineral Interests, Property and Equipment (Details)
$ in Millions, $ in Millions
 1 Months Ended 6 Months Ended 12 Months Ended
Dec. 31, 2017
Jun. 21, 2016
Dec. 31, 2013
Jan. 31, 2012
CAD ($)
Jan. 31, 2012
USD ($)
Jan. 31, 2011
CAD ($)
Jan. 31, 2011
USD ($)
Jan. 31, 2002
CAD ($)
Dec. 31, 2001
Jun. 30, 2023
CAD ($)
Jun. 30, 2022
CAD ($)
Dec. 31, 2022
CAD ($)
Dec. 31, 2020
Mineral Interests, Property and Equipment (Details) [Line Items]                          
Capitalized borrowing costs                   $ 9.9 $ 14.7 $ 14.7  
Purchased of interest, percentage               100.00%          
Royalty interest               1.00%          
Royalty payment               $ 4.5          
Royalty expenses               $ 4.5          
Percentage of option to acquire from related party       2.00% 2.00% 2.00% 2.00%            
Revenue arising from the sale of gold and silver.       $ 160.0 $ 200 $ 160.0 $ 200            
Company purchased, description                         In December 2020, the Company purchased the Snowfield (renamed East Mitchell) property from Pretium Resources Inc. The East Mitchell property, located in the same valley that hosts KSM's Mitchell deposit, was purchased for US$100 million ($127.5 million) in cash, a 1.5% net smelter royalty on East Mitchell property production, and a conditional payment of US$20 million, payable following the earlier of (i) commencement of commercial production from East Mitchell property, and (ii) announcement by the Company of a bankable feasibility study, which includes the East Mitchell property. US$15 million of the conditional payment can be credited against future royalty payments.
Related costs                   13.9      
Interest expense                   0.8 0.9    
KSM [Member]                          
Mineral Interests, Property and Equipment (Details) [Line Items]                          
Capitalized borrowing costs                   9.9      
Related costs                   $ 84.6      
Courageous Lake [Member]                          
Mineral Interests, Property and Equipment (Details) [Line Items]                          
Purchased of interest, percentage               100.00%          
KSM [Member]                          
Mineral Interests, Property and Equipment (Details) [Line Items]                          
Purchased, description                 In 2001, the Company purchased a 100% interest in contiguous claim blocks in the Skeena Mining Division, British Columbia. The vendor maintains a 1% net smelter royalty interest on the project, subject to maximum aggregate royalty payments of $4.5 million. The Company is obligated to purchase the net smelter royalty interest for the price of $4.5 million in the event that a positive feasibility study demonstrates a 10% or higher internal rate of return after tax and financing costs.        
BCMETC Audit [Member]                          
Mineral Interests, Property and Equipment (Details) [Line Items]                          
Related costs                     40.0    
BC Hydro Project [Member]                          
Mineral Interests, Property and Equipment (Details) [Line Items]                          
Related costs                     $ 104.6    
Iskut [Member] | SnipGold Corp [Member]                          
Mineral Interests, Property and Equipment (Details) [Line Items]                          
Purchased of interest, percentage   100.00%                      
Snowstorm [Member]                          
Mineral Interests, Property and Equipment (Details) [Line Items]                          
Company purchased, description In 2017, the Company purchased 100% of the common shares of Snowstorm Exploration LLC which owns the Snowstorm Project, located in northern Nevada. In connection with the acquisition, the Company has agreed to make a conditional cash payment of US$2.5 million if exploration activities at the Snowstorm Project result in defining a minimum of five million ounces of gold resources compliant with National Instrument 43-101 and a further cash payment of US$5.0 million on the delineation of an additional five million ounces of gold resources.                        
3 Aces [Member]                          
Mineral Interests, Property and Equipment (Details) [Line Items]                          
Company purchased, description                         In 2020, the Company acquired a 100% interest in the 3 Aces gold project in the Yukon, Canada from Golden Predator Mining Corp. through the issuance of 300,000 common shares valued at $6.6 million. Should the project attain certain milestones, including the confirmation of a National Instrument 43-101 compliant mineral resource of 2.5 million ounces of gold, the Company will pay an additional $1 million, and upon confirmation of an aggregate mineral resource of 5 million ounces of gold, the Company will pay an additional $1.25 million.
Grassy Mountain [Member]                          
Mineral Interests, Property and Equipment (Details) [Line Items]                          
Company sold, description     In 2013, the Company sold 100% of its interest in the Grassy Mountain Project with a net book value of $0.8 million retained within mineral properties, related to the option to either receive, at the discretion of the Company, a 10% net profits interest royalty or a $10 million cash payment. Settlement is due four months after the later of: the day that the Company receives a feasibility study on the project; and the day that the Company is notified that permitting and bonding for the mine is in place. The current owner of the Grassy Mountain Project is Paramount who completed a feasibility study in 2020 but they have not notified the Company that permitting and bonding for the mine is in place.                    
v3.23.2
Mineral Interests, Property and Equipment (Details) - Schedule of Mineral Interest, Property and Equipment - CAD ($)
$ in Thousands
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Cost    
Cost, Beginning Balance $ 883,116 $ 662,553
Cost, Additions 117,699 220,563
Cost, Ending Balance 1,000,815 883,116
Accumulated Depreciation    
Accumulated Depreciation, Beginning Balance 1,619 274
Accumulated Depreciation, Depreciation expense 1,226 [1] 1,345
Accumulated Depreciation, Ending Balance 2,845 1,619
Net Book Value    
Net Book Value 997,970 881,497
Mineral interests [Member]    
Cost    
Cost, Beginning Balance 687,074 632,005
Cost, Additions 20,552 55,069
Cost, Ending Balance 707,626 687,074
Accumulated Depreciation    
Accumulated Depreciation, Beginning Balance
Accumulated Depreciation, Depreciation expense [1]
Accumulated Depreciation, Ending Balance
Net Book Value    
Net Book Value 707,626 687,074
Construction in progress [Member]    
Cost    
Cost, Beginning Balance 147,348 27,061
Cost, Additions 96,366 120,287
Cost, Ending Balance 243,714 147,348
Accumulated Depreciation    
Accumulated Depreciation, Beginning Balance
Accumulated Depreciation, Depreciation expense [1]
Accumulated Depreciation, Ending Balance
Net Book Value    
Net Book Value 243,714 147,348
Property & Equipment [Member]    
Cost    
Cost, Beginning Balance [1] 46,257 3,080
Cost, Additions [1] 43,177
Cost, Ending Balance [1] 46,257 46,257
Accumulated Depreciation    
Accumulated Depreciation, Beginning Balance [1] 1,070 117
Accumulated Depreciation, Depreciation expense [1] 849 953
Accumulated Depreciation, Ending Balance [1] 1,919 1,070
Net Book Value    
Net Book Value [1] 44,338 45,187
Right-of-use assets [Member]    
Cost    
Cost, Beginning Balance [1] 2,437 407
Cost, Additions [1] 781 2,030
Cost, Ending Balance [1] 3,218 2,437
Accumulated Depreciation    
Accumulated Depreciation, Beginning Balance [1] 549 157
Accumulated Depreciation, Depreciation expense [1] 377 392
Accumulated Depreciation, Ending Balance [1] 926 549
Net Book Value    
Net Book Value [1] $ 2,292 $ 1,888
[1] Depreciation expense related to camps, equipment, and right-of-use assets associated with the KSM construction is capitalized to construction in progress.
v3.23.2
Mineral Interests, Property and Equipment (Details) - Schedule of Mineral Interests Expenditures - CAD ($)
$ in Thousands
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
KSM [Member]    
Additions    
Balance [1] $ 707,190 $ 502,015
Mineral interests [1] 13,897 39,985
Construction in progress [1] 95,318 120,287
Property & equipment [1] 43,177
Right-of-use assets [1] 781 1,726
Total Additions [1] 109,996 205,175
Balance [1] 817,186 707,190
Courageous Lake [Member]    
Additions    
Balance 77,999 77,176
Mineral interests 1,169 823
Construction in progress
Property & equipment
Right-of-use assets
Total Additions 1,169 823
Balance 79,168 77,999
Iskut [Member]    
Additions    
Balance 49,904 41,779
Mineral interests 3,826 8,125
Construction in progress
Property & equipment
Right-of-use assets
Total Additions 3,826 8,125
Balance 53,730 49,904
Snowstorm [Member]    
Additions    
Balance 34,562 31,471
Mineral interests 495 3,091
Construction in progress
Property & equipment
Right-of-use assets
Total Additions 495 3,091
Balance 35,057 34,562
3 Aces [Member]    
Additions    
Balance 12,079 9,034
Mineral interests 1,165 3,045
Construction in progress 1,048
Property & equipment
Right-of-use assets
Total Additions 2,213 3,045
Balance 14,292 12,079
Grassy Mountain [Member]    
Additions    
Balance 771 771
Mineral interests
Construction in progress
Property & equipment
Right-of-use assets
Total Additions
Balance 771 771
Corporate [Member]    
Additions    
Balance 611 307
Mineral interests
Construction in progress
Property & equipment
Right-of-use assets 304
Total Additions 304
Balance 611 611
Total [Member]    
Additions    
Balance 883,116 662,553
Mineral interests 20,552 55,069
Construction in progress 96,366 120,287
Property & equipment 43,177
Right-of-use assets 781 2,030
Total Additions 117,699 220,563
Balance $ 1,000,815 $ 883,116
[1] The KSM construction in progress additions includes $9.9 million of capitalized borrowing costs (year ended December 31, 2022 - $14.7 million).
v3.23.2
Accounts Payable and Accrued Liabilities (Details) - CAD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Accounts Payable and Accrued Liabilities [Abstract]    
Accrued interest payable $ 4.9
Non-trade payables $ 41.9 $ 26.3
v3.23.2
Accounts Payable and Accrued Liabilities (Details) - Schedule of Accounts Payable and Accrued Liabilities - CAD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Accounts Payable and Accrued Liabilities [Abstract]    
Trade payables [1] $ 16,663 $ 15,686
Non-trade payables and accrued expenses [2] 45,377 27,270
Accounts payable and accrued liabilities $ 62,040 $ 42,956
[1] Includes accrued interest payable of $4.9 million (December 31, 2022 – nil).
[2] Non-trade payables and accrued expenses include $41.9 million (December 31, 2022 – $26.3 million) of accrued expenses related to construction at KSM.
v3.23.2
Provision for Reclamation Liabilities (Details) - CAD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Provision for Reclamation Liabilities (Details) [Line Items]      
Estimated discounted cash flows of future reclamation costs $ 10.8   $ 11.5
Undiscounted future cash outflows $ 10.1   $ 10.8
Nominal discount rate, percentage 4.50%   4.07%
Reclamation disbursements amount $ 0.9 $ 0.7  
Rehabilitation expenses     $ 6.6
Uncollateralized surety bond 10.3   7.9
Reclamation Liabilities [Member]      
Provision for Reclamation Liabilities (Details) [Line Items]      
Deposit with financial institution pledged as security 21.2   $ 20.6
KSM [Member]      
Provision for Reclamation Liabilities (Details) [Line Items]      
Security deposit $ 0.5    
v3.23.2
Provision for Reclamation Liabilities (Details) - Schedule of Provision for Reclamation Liabilities - CAD ($)
$ in Thousands
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Schedule of Provision for Reclamation Liabilities [Abstract]    
Beginning of the period $ 10,846 $ 8,442
Disbursements (870) (4,519)
Environmental rehabilitation expense 6,851
Accretion 124 72
End of the period 10,100 10,846
Provision for reclamation liabilities – current 4,343 4,343
Provision for reclamation liabilities – long-term 5,757 6,503
Total $ 10,100 $ 10,846
v3.23.2
Secured note liability (Details)
$ in Millions, $ in Millions
 6 Months Ended 12 Months Ended
Jun. 30, 2023
CAD ($)
shares
Dec. 31, 2022
CAD ($)
shares
Jun. 30, 2023
USD ($)
shares
Mar. 31, 2023
shares
Jun. 30, 2022
CAD ($)
Jun. 30, 2022
USD ($)
Secured note liability (Details) [Line Items]            
Institutional investors rate         100.00% 100.00%
Institutional investors           $ 225
Investors right to purchase description ●When the 2022 Secured Note matures, the Investors will use all of the principal amount repaid on maturity to purchase a 60% gross silver royalty (the “Silver Royalty”). Maturity occurs upon the first to occur of: a)Commercial production being achieved at KSM; and b)Either on February 25, 2032, the 10-year anniversary, or if the Environmental Assessment Certificate (“EAC”) expires and the Investors do not exercise their right to put the 2022 Secured Note to the Company, on February 25, 2032, the 13-year anniversary of the issue date of the 2022 Secured Note. ●Prior to its maturity, the 2022 Secured Note bears interest at 6.5% per annum, payable quarterly in arrears. The Company can elect to satisfy interest payments in cash or by delivering common shares. ●The Company has the option to buyback 50% of the Silver Royalty, once exchanged on or before 3 years after commercial production has been achieved, for an amount that provides the Investors a minimum guaranteed annualized return. ●If project financing to develop, construct and place KSM into commercial production is not in place by February 25, 2027, the Investors can put the 2022 Secured Note back to the Company for US$232.5 million, with the Company able to satisfy such amount in cash or by delivering common shares at its option. This right expires once such project financing is in place. If the Investors exercise this put right, the Investors’ right to purchase the Silver Royalty terminates. ●If KSM’s EAC expires at anytime while the 2022 Secured Note is outstanding, the Investors can put the 2022 Secured Note back to the Company for US$247.5 million at any time over the following nine months, with the Company able to satisfy such amount in cash or by delivering common shares at its option. If the Investors exercise this put right, the Investors’ right to purchase the Silver Royalty terminates. ●If commercial production is not achieved at KSM prior to the tenth anniversary from closing, the Silver Royalty payable to the Investors will increase to a 75% gross silver royalty (if the EAC expires during the term of the 2022 Secured Note and the corresponding put right is not exercised by the Investors, this uplift will occur at the thirteenth anniversary from closing). ●No amount payable shall be paid in common shares if, after the payment, any of the Investors would own more than 9.9% of the Company’s outstanding shares. ●The Company’s obligations under the 2022 Secured Note are secured by a charge over all of the assets of KSMCo and a limited recourse guarantee from the Company secured by a pledge of the shares of KSMCo.To satisfy the interest payment on the 2022 Secured Note, during the current quarter, the Company issued 322,084 common shares, and subsequent to the quarter end the Company issued 315,289 common shares, in respect of the interest incurred during the first and second quarter of 2023, respectively. A number of the above noted options within the agreement represent embedded derivatives. Management has elected to not separate these embedded derivatives from the underlying host secured note, and instead account for the entire secured note as a financial liability at fair value through profit or loss.The Company entered into the loan commitment within the scope of IFRS 9 ‘Financial Instruments’ on February 25, 2022 related to the 2022 Secured Note, as at that date, the Company and the Investors were committed under pre-specified terms and conditions to complete the transaction. The loan commitment was initially recognized at a fair value of US$225 million. Upon funding of the 2022 Secured Note on March 24, 2022, the loan commitment was settled with no gain or loss recognized.The 2022 Secured Note was recognized at its estimated fair value at initial recognition of $282.3 million (US$225 million) using a discounted cash flow model with a Monte Carlo simulation. This incorporated several scenarios and probabilities of the EAC expiring, achieving commercial production and securing project financing, silver prices forecast from five year quoted forward price, and the discount rates. During the six months ended June 30, 2023, the fair value of the 2022 Secured Note decreased, and the Company recorded $5.8 million gain (year ended December 31, 2022 - $18.7 million gain) on the remeasurement.The following inputs and assumptions were used in the determination of fair value: Inputs and assumptions  June 30, 2023   December 31, 2022  Forecast silver production in thousands of ounces   166,144    166,144  Five year quoted future silver price   US$28.27    US$29.38  Risk-free rate   3.8%   3.4% Credit spread   5.4%   5.3% Share price volatility   60%   60% Silver royalty discount factor   9.1%   8.6% The carrying amount for the 2022 Secured Note is as follows: ($000s)   June 30, 2023    December 31, 2022  Fair value beginning of the period   263,541    282,263  Change in fair value (gain) loss through profit and loss   1,367    (36,967) Change in fair value (gain) loss through other comprehensive income (loss)   (1,127)   (2,912) Foreign currency translation (gain) loss   (6,056)   21,157  Total change in fair value   (5,816)   (18,722) Fair value end of the period   257,725    263,541   Sensitivity Analysis:For the fair value of the 2022 Secured Note, reasonably possible changes at the reporting date to one of the significant inputs, holding other inputs constant, would have the following effects: Key Inputs   Inter-relationship between significant inputs and fair value measurement   Increase (decrease) (millions)   Key observable inputs   The estimated fair value would increase (decrease) if:       ● Silver price forward curve   ● Future silver prices were 10% higher   $ 13.4       ● Future silver prices were 10% lower   $ (13.5 )               ● Discount rates   ● Discount rates were 1% higher   $ (21.5 )     ● Discount rates were 1% lower   $ 25.2   Key unobservable inputs             ● Forecasted silver production   ● Silver production indicated silver ounces were 10% higher   $ 13.4       ● Silver production indicated silver ounces were 10% lower   $ (13.5 ) (b)2023 Secured Note On June 29, 2023, the Company, through its wholly-owned subsidiary, KSM Mining ULC (“KSMCo”) executed an agreement to sell a secured note and royalty arrangement (collectively referred to as the “2023 Secured Note”) on the KSM Project with Sprott Private Resource Streaming and Royalty (B) Corp. (“Sprott”). The 2023 Secured Note has a principal amount of US$150 million, bears interest at 6.5% per annum and matures upon commercial production, March 24, 2032 or March 24, 2035. The arrangement includes conditions and multiple features that will alter the Company’s obligation to Sprott. The 2023 Secured Note includes options for Sprott to put the royalty back to the Company if the EAC expires or if project financing for construction is not secured. Unless Sprott exercises its put rights at an earlier date, the 2023 Secured Note is to be exchanged at maturity for a net smelter returns royalty (the “NSR”) on all metals produced from the KSM Project and sold, in the range of 1% to 1.5%, to be paid in perpetuity. The Company has the option to reduce the NSR percentage after commercial production.The key terms of the 2023 Secured Note include: ●The 2023 Secured Note matures (“Maturity Date”) at the earlier of: a)commercial production being achieved at KSM; and b)either March 24, 2032, or, if the environmental assessment certificate (“EAC”) expires and Sprott does not exercise its right to put the Note to the Company, March 24, 2035. ●On the Maturity Date, the NSR is issued and Sprott may satisfy the obligation to pay the NSR purchase price of US$150 million with cash or setting-off the amount against the note principal amount due. ●Prior to its maturity, the 2023 Secured Note bears interest at 6.5% per annum, payable quarterly in arrears.          
Company issued common shares | shares 315,289 55,322 315,289 322,084    
Fair value of loan commitment           225
Fair value at initial recognition     $ 150   $ 282.3 $ 225
Fair value of the secured note decreased $ 5.8 $ 18.7        
Secured principal amount     $ 150      
Interest rate 6.50%          
Conversion of debt to equity The 2023 Secured Note matures (“Maturity Date”) at the earlier of: a)commercial production being achieved at KSM; and b)either March 24, 2032, or, if the environmental assessment certificate (“EAC”) expires and Sprott does not exercise its right to put the Note to the Company, March 24, 2035. ●On the Maturity Date, the NSR is issued and Sprott may satisfy the obligation to pay the NSR purchase price of US$150 million with cash or setting-off the amount against the note principal amount due. ●Prior to its maturity, the 2023 Secured Note bears interest at 6.5% per annum, payable quarterly in arrears. Payment of quarterly interest due from the closing date to the second anniversary is deferred and US$21.5 million must be paid on or before 30 months after the closing date. Deferred interest can be satisfied by way of cash, common shares or increasing the NSR percentage from 1 to 1.2%. The Company can elect to satisfy quarterly interest payments in cash or by having Seabridge issue common shares, with a value equal to a 5% discount on the 5-day volume weighted average trading price (“VWAP”). ●Project Financing Repayment Amount: If project financing to develop, construct and place the KSM Project into commercial production is not in place by March 24, 2027, Sprott can put the Note back to the Company for: a)if the Company is obligated to sell Sprott a 1% NSR on the Maturity Date at the time US$155 million plus accrued and unpaid interest, or b)if the Company is obligated to sell Sprott a 1.2% or 1.5% NSR on the Maturity Date at the time, US$180 million plus accrued and unpaid interest. ●EAC Repayment Amount: If the KSM Project’s EAC expires at anytime while the Note is outstanding, Sprott can put the Note back to the Company at any time over the following nine months for: a)if the Company is obligated to sell Sprott a 1% NSR on the Maturity Date at the time, US$165 million plus accrued and unpaid interest, or b)if the Company is obligated to sell Sprott a 1.2% NSR on the Maturity Date at the time, US$186.5 million plus accrued and unpaid interest.          
Outstanding shares | shares 9.9   9.9      
Fair value of the secured note decreased $ 0.2          
Monte Carlo simulation [Member]            
Secured note liability (Details) [Line Items]            
Fair value at initial recognition $ 198.8          
Minimum [Member]            
Secured note liability (Details) [Line Items]            
Metals produced Range 1.00%          
Maximum [Member]            
Secured note liability (Details) [Line Items]            
Metals produced Range 1.50%          
v3.23.2
Secured note liability (Details) - Schedule of Inputs and Assumptions - $ / shares
 6 Months Ended
Jun. 30, 2023
Jun. 29, 2023
Dec. 31, 2022
2022 Secured Note [Member]      
Secured note liability (Details) - Schedule of Inputs and Assumptions [Line Items]      
Forecast silver production in thousands of ounces (in Shares) 166,144   166,144
Five year quoted future silver price US$28.27   US$29.38
Risk-free rate 3.80%   3.40%
Credit spread 5.40%   5.30%
Share price volatility 60.00%   60.00%
Silver royalty discount factor 9.10%   8.60%
2023 Secured Note [Member]      
Secured note liability (Details) - Schedule of Inputs and Assumptions [Line Items]      
Risk-free rate   3.90%  
Credit spread   5.40%  
Share price volatility   60.00%  
NSR royalty discount factor   9.10%  
Forecast NSR:      
Gold in thousands of ounces (in Shares)   10,500  
Silver in thousands of ounces (in Shares)   29,876  
Copper in millions of pounds (in Shares)   19,322,467  
Molybdenum in millions of pounds (in Shares)   152,310  
Five year quoted future metal price      
Gold per ounce (in Dollars per share)   $ 2,352.04  
Silver per ounce (in Dollars per share)   27.51  
Copper per pound (in Dollars per share)   3.64  
Molybdenum per pound (in Dollars per share)   $ 22.99  
v3.23.2
Secured note liability (Details) - Schedule of Carrying Amount for the Secured Note - shares
shares in Thousands
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Schedule of Carrying Amount for the Secured Note [Abstract]    
Fair value beginning of the period 263,541 282,263
Change in fair value (gain) loss through profit and loss 1,367 (36,967)
Change in fair value (gain) loss through other comprehensive income (loss) (1,127) (2,912)
Foreign currency translation (gain) loss (6,056) 21,157
Total change in fair value (5,816) (18,722)
Fair value end of the period 257,725 263,541
v3.23.2
Secured note liability (Details) - Schedule of Fair Value of the 2022 Secured Note
$ in Millions
 6 Months Ended
Jun. 30, 2023
CAD ($)
2022 Secured Note [Member] | Silver Price Forward Curve [Member]  
Secured note liability (Details) - Schedule of Fair Value of the 2022 Secured Note [Line Items]  
Key Inputs ● Silver price forward curve
Inter-relationship between significant inputs and fair value measurement ● Future silver prices were 10% higher
Increase (decrease) $ 13.4
2022 Secured Note [Member] | Silver Price Forward Curve One [Member]  
Secured note liability (Details) - Schedule of Fair Value of the 2022 Secured Note [Line Items]  
Inter-relationship between significant inputs and fair value measurement ● Future silver prices were 10% lower
Increase (decrease) $ (13.5)
2022 Secured Note [Member] | Discount rates [Member]  
Secured note liability (Details) - Schedule of Fair Value of the 2022 Secured Note [Line Items]  
Key Inputs ● Discount rates
Inter-relationship between significant inputs and fair value measurement ● Discount rates were 1% higher
Increase (decrease) $ (21.5)
2022 Secured Note [Member] | Discount rates One [Member]  
Secured note liability (Details) - Schedule of Fair Value of the 2022 Secured Note [Line Items]  
Inter-relationship between significant inputs and fair value measurement ● Discount rates were 1% lower
Increase (decrease) $ 25.2
2022 Secured Note [Member] | Forecasted silver production [Member]  
Secured note liability (Details) - Schedule of Fair Value of the 2022 Secured Note [Line Items]  
Key Inputs ● Forecasted silver production
Inter-relationship between significant inputs and fair value measurement ● Silver production indicated silver ounces were 10% higher
Increase (decrease) $ 13.4
2022 Secured Note [Member] | Forecasted Silver Production One [Member]  
Secured note liability (Details) - Schedule of Fair Value of the 2022 Secured Note [Line Items]  
Inter-relationship between significant inputs and fair value measurement ● Silver production indicated silver ounces were 10% lower
Increase (decrease) $ (13.5)
2023 Secured Note [Member] | Discount rates [Member]  
Secured note liability (Details) - Schedule of Fair Value of the 2022 Secured Note [Line Items]  
Key Inputs ● Discount rates
Inter-relationship between significant inputs and fair value measurement ● Discount rates were 1% higher
Increase (decrease) $ (22.5)
2023 Secured Note [Member] | Discount rates One [Member]  
Secured note liability (Details) - Schedule of Fair Value of the 2022 Secured Note [Line Items]  
Inter-relationship between significant inputs and fair value measurement ● Discount rates were 1% lower
Increase (decrease) $ 26.2
2023 Secured Note [Member] | Metals price forward curve [Member]  
Secured note liability (Details) - Schedule of Fair Value of the 2022 Secured Note [Line Items]  
Key Inputs ● Metals price forward curve
Inter-relationship between significant inputs and fair value measurement ● Future metal prices were 10% higher
Increase (decrease) $ 13.2
2023 Secured Note [Member] | Metals price forward curve one [Member]  
Secured note liability (Details) - Schedule of Fair Value of the 2022 Secured Note [Line Items]  
Inter-relationship between significant inputs and fair value measurement ● Future metal prices were 10% lower
Increase (decrease) $ (13.2)
2023 Secured Note [Member] | Forecasted metal production [Member]  
Secured note liability (Details) - Schedule of Fair Value of the 2022 Secured Note [Line Items]  
Key Inputs ● Forecasted metal production
Inter-relationship between significant inputs and fair value measurement ● Metal production indicated volumes were 10% higher
Increase (decrease) $ 13.2
2023 Secured Note [Member] | Forecasted metal production One [Member]  
Secured note liability (Details) - Schedule of Fair Value of the 2022 Secured Note [Line Items]  
Inter-relationship between significant inputs and fair value measurement ● Metal production indicated volumes were 10% lower
Increase (decrease) $ (13.2)
v3.23.2
Shareholders' Equity (Details) - CAD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 6 Months Ended 9 Months Ended 12 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Mar. 31, 2022
Mar. 31, 2021
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2022
Dec. 31, 2021
Shareholders' Equity (Details) [Line Items]                      
Agreement, description       the Company entered into an agreement with two securities dealers, for an At-The-Market offering program, entitling the Company, at its discretion, and from time to time, to sell up to US$75 million in value of common shares of the Company. This program was in effect until the Company’s US$775 million Shelf Registration Statement, that expired in December 2022, was replaced with a new US$750 million the same month. During the first quarter of 2023, a US$100 million prospectus supplement was filed and the program was renewed. In the first quarter of 2023, the Company entered into a new agreement with two securities dealers, for an At-The-Market offering program, entitling the Company, at its discretion, and from time to time, to sell up to US$100 million in value of common shares of the Company. This program can be in effect until the Company’s US$750 million Shelf Registration Statement expires in 2025. During the six months ended June 30, 2023, the Company issued 1,281,667 shares, at an average selling price of $18.27 per share, for net proceeds of $22.9 million under the Company’s At-The-Market offering. Subsequent to the quarter end, the Company issued 238,489 shares, at an average selling price of $17.00 per share, for net proceeds of $4.0 million under the Company’s At-The-Market offering. In 2022, the Company issued 998,629 shares, at an average selling price of $22.82 per share, for net proceeds of $22.3 million under the Company’s At-The-Market offering.              
Premium amount $ 1.5       $ 1.5            
Vested options (in Shares)         5,000            
RSU shares (in Shares)         20,000         37,500 20,600
Fair value grants         $ 0.3           $ 2.6
Amortized         1.5         $ 0.1 $ 0.4
Fair value grants amortized 0.2       $ 0.2            
Common shares exchanged (in Shares)           119,800          
Restricted share units granted (in Shares)                     40,000
Restricted stock units vested (in Shares)         5,000         20,000  
Basic and diluted net income $ 9.0 $ 19.1     $ 1.8 $ 12.8          
Average share price (in Dollars per share) $ 18.22 $ 20.37     $ 17.48 $ 20.95          
RSU [Member]                      
Shareholders' Equity (Details) [Line Items]                      
Options exercised (in Shares)                   540,834  
Exercised for proceeds                   $ 3.9  
RSUs vested (in Shares)                   148,800  
Weighted average share price (in Dollars per share)                   $ 18.74  
Common shares (in Shares)           128,800       5,000  
RSU shares (in Shares)                   232,266 75,200
Fair value grants         $ 0.9         $ 5.1 $ 2.6
Restricted share units granted (in Shares)               10,000   310,266 123,800
RSUs were granted (in Shares)                   40,500  
Amortized     $ 2.2   3.4         $ 5.1  
Fair value grants amortized $ 0.9       0.9            
Restricted share units granted (in Shares)                 40,000    
Board Members [Member]                      
Shareholders' Equity (Details) [Line Items]                      
Restricted stock units vested (in Shares)           5,000          
Board Members [Member] | RSU [Member]                      
Shareholders' Equity (Details) [Line Items]                      
RSU shares (in Shares)             10,000       28,000
Fair value grants         0.2     $ 0.2      
Fair value grants amortized               $ 0.1      
Equity Financing [Member]                      
Shareholders' Equity (Details) [Line Items]                      
Common shares issued (in Shares)                   675,400  
Price per share (in Dollars per share)                   $ 22.24  
Gross proceeds                   $ 15.0  
Premium amount                   $ 4.2  
Expenditures         $ 5.3            
v3.23.2
Shareholders' Equity (Details) - Schedule of Stock Option and RSU Transactions - CAD ($)
$ / shares in Units, $ in Thousands
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Stock Option and RSU Transactions [Line Items]    
Total Stock-based Compensation, Outstanding at beginning $ 4,655 $ 8,697
Total Stock-based Compensation, Outstanding at ending 6,271 4,655
Total Stock-based Compensation, Granted 187
Total Stock-based Compensation, Exercised option or vested RSU (111) (7,146)
Total Stock-based Compensation, Expired   (34)
Total Stock-based Compensation, Amortized value of stock-based compensation $ 1,727 $ 2,951
Options [Member]    
Stock Option and RSU Transactions [Line Items]    
Number of Options, Outstanding at beginning (in Shares) 477,500 1,023,334
Weighted Average Exercise Price, Outstanding at beginning (in Dollars per share) $ 15.85 $ 14.61
Amortized Value of options, Outstanding at beginning $ 4,117 $ 8,125
Number of Options, Outstanding at ending (in Shares) 477,500 477,500
Weighted Average Exercise Price, Outstanding at ending (in Dollars per share) $ 15.85 $ 15.85
Amortized Value of options, Outstanding at ending $ 4,117 $ 4,117
Number of Options, Exercisable (in Shares) 477,500 477,500
Number of Options, Granted (in Shares)
Weighted Average Exercise Price, Granted (in Dollars per share)
Amortized Value of options, Granted
Number of Options, Exercised option or vested RSU (in Shares)   (540,834)
Weighted Average Exercise Price, Exercised option or vested RSU (in Dollars per share)   $ 13.54
Amortized Value of options, Exercised option or vested RSU   $ (3,974)
Number of Options, Expired (in Shares)   (5,000)
Weighted Average Exercise Price, Expired (in Dollars per share)   $ 13.14
Amortized Value of options, Expired   $ (34)
Number of Options, Amortized value of stock-based compensation (in Shares)
Weighted Average Exercise Price, Amortized value of stock-based compensation (in Dollars per share)
Amortized Value of options, Amortized value of stock-based compensation  
RSUs [Member]    
Stock Option and RSU Transactions [Line Items]    
Number of Options, Outstanding at beginning (in Shares) 345,266 173,800
Amortized Value of options, Outstanding at beginning $ 538 $ 572
Number of Options, Outstanding at ending (in Shares) 360,266 345,266
Amortized Value of options, Outstanding at ending $ 2,154 $ 538
Number of Options, Granted (in Shares) 20,000 320,266
Amortized Value of options, Granted $ 187
Number of Options, Exercised option or vested RSU (in Shares) (5,000) (148,800)
Amortized Value of options, Exercised option or vested RSU $ (111) $ (3,172)
Number of Options, Expired (in Shares)  
Amortized Value of options, Expired  
Number of Options, Amortized value of stock-based compensation (in Shares)
Amortized Value of options, Amortized value of stock-based compensation $ 1,727 $ 2,951
v3.23.2
Shareholders' Equity (Details) - Schedule of Outstanding Share
 6 Months Ended
Jun. 30, 2023
$ / shares
shares
Outstanding Share [Line Items]  
Options Outstanding, Number outstanding 477,500
Options Exercisable, Number Exercisable 477,500
Exercise Price 16.94 [Member]  
Outstanding Share [Line Items]  
Options Outstanding, Exercise price | $ / shares $ 16.94
Options Outstanding, Number outstanding 50,000
Options Outstanding, Remaining contractual life 4 months
Options Exercisable, Number Exercisable 50,000
Exercise Price 15.46 [Member]  
Outstanding Share [Line Items]  
Options Outstanding, Exercise price | $ / shares $ 15.46
Options Outstanding, Number outstanding 377,500
Options Outstanding, Remaining contractual life 6 months
Options Exercisable, Number Exercisable 377,500
Exercise Price 17.72 [Member]  
Outstanding Share [Line Items]  
Options Outstanding, Exercise price | $ / shares $ 17.72
Options Outstanding, Number outstanding 50,000
Options Outstanding, Remaining contractual life 1 year
Options Exercisable, Number Exercisable 50,000
v3.23.2
Shareholders' Equity (Details) - Schedule of Basic and Diluted Earnings Per Common Share - shares
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Basic and Diluted Earnings Per Common Share [Line Items]        
Basic weighted average shares outstanding 82,434,434,000 80,144,953,000 81,998,804,000 79,701,761,000
Stock options 62,142,000 233,552,000 [1] 250,408,000 [1]
RSUs 150,149,000 13,887,000 14,755,000
Diluted weighted average shares outstanding 82,646,724,000 80,392,391,000 81,998,804,000 79,966,924,000
Stock options [Member]        
Basic and Diluted Earnings Per Common Share [Line Items]        
Stock options [1],[2] 44,492,000
RSUs [Member]        
Basic and Diluted Earnings Per Common Share [Line Items]        
RSUs [2] 141,220,000
[1] Dilutive stock options were determined using the Company’s average share price for the period. For the three and six months ended June 30, 2023, the average share price used was $18.22 and $17.48, respectively (three and six months ended June 30, 2022 - $20.37 and $20.95, respectively).
[2] These adjustments were excluded as they are anti-dilutive.
v3.23.2
Cash Flow Items (Details) - Schedule of Adjustment for Other Non-Cash Items within Operating Activities - CAD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Schedule of Adjustment for Other Non-Cash Items within Operating Activities [Abstract]        
Impairment of investment in associate   $ 873   $ 873
Equity loss of associate $ 60 46 $ 120 90
Environmental rehabilitation expense   26   (41)
Unrealized gain on convertible notes receivable 22 (6) 37 9
Accrued interest income on convertible notes receivable     (20) (19)
Depreciation 33 74 65 95
Finance costs, net 63 18 124 34
Effects of exchange rate fluctuation on cash and cash equivalents 209 (1,430) 230 (1,374)
Total $ 387 $ (399) $ 556 $ (333)
v3.23.2
Fair Value of Financial Assets and Liabilities (Details) - CAD ($)
$ in Millions
 1 Months Ended 6 Months Ended
Dec. 31, 2022
Jun. 30, 2023
Shareholders' Equity [Line Items]    
Maturity term   1 year
Short-term deposits  
Liquidity Risk [Member]    
Shareholders' Equity [Line Items]    
Cash and cash equivalents $ 46.2 202.6
Short-term deposits 81.7  
Current financial liabilities $ 47.3 $ 66.4
Foreign Currency Risk [Member]    
Shareholders' Equity [Line Items]    
Bear interest percentage   6.50%
Investment Risk [Member]    
Shareholders' Equity [Line Items]    
Investments   $ 3.6
v3.23.2
Fair Value of Financial Assets and Liabilities (Details) - Schedule of Fair Values of Financial Assets and Liabilities - CAD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Assets    
Cash and cash equivalents $ 202,642 $ 46,150
Short-term deposits   81,690
Amounts receivable 6,215 6,260
Investment in marketable securities 3,577 3,696
Convertible notes receivable 594 631
Long-term receivables 13,203 13,203
Total assets 226,231 151,630
Liabilities    
Accounts payable and accrued liabilities 62,040 42,956
Secured notes 456,325 263,541
Total liabilities 518,365 306,497
Carrying Amounts [Member]    
Assets    
Cash and cash equivalents 202,642 46,150
Short-term deposits   81,690
Amounts receivable 6,215 6,260
Investment in marketable securities 3,577 3,696
Convertible notes receivable 594 631
Long-term receivables 13,203 13,203
Total assets 226,231 151,630
Liabilities    
Accounts payable and accrued liabilities 62,040 42,956
Secured notes 456,325 263,541
Total liabilities 518,365 306,497
Level 1 [Member]    
Assets    
Cash and cash equivalents 202,642 46,150
Short-term deposits   81,690
Amounts receivable 6,215 6,260
Investment in marketable securities 3,577 3,696
Convertible notes receivable
Long-term receivables 13,203 13,203
Total assets 225,637 150,999
Liabilities    
Accounts payable and accrued liabilities 62,040 42,956
Secured notes
Total liabilities 62,040 42,956
Level 2 [Member]    
Assets    
Cash and cash equivalents
Short-term deposits  
Amounts receivable
Investment in marketable securities
Convertible notes receivable
Long-term receivables
Total assets
Liabilities    
Accounts payable and accrued liabilities
Secured notes
Total liabilities
Level 3 [Member]    
Assets    
Cash and cash equivalents
Short-term deposits  
Amounts receivable
Investment in marketable securities
Convertible notes receivable 594 631
Long-term receivables
Total assets 594 631
Liabilities    
Accounts payable and accrued liabilities
Secured notes 456,325 263,541
Total liabilities $ 456,325 $ 263,541
v3.23.2
Fair Value of Financial Assets and Liabilities (Details) - Schedule of Consolidated Statements of Financial Position
$ in Thousands
 6 Months Ended
Jun. 30, 2023
CAD ($)
Consolidated Statements of Financial [Line Items]  
2022 Secured Note including interest $ 257,725
2023 Secured Note including interest 198,600
Flow-through share expenditures 9,737
Lease obligation 1,944
Total 468,006
Less than 1 year [Member]  
Consolidated Statements of Financial [Line Items]  
2022 Secured Note including interest 19,364
2023 Secured Note including interest
Flow-through share expenditures 9,737
Lease obligation 952
Total 30,053
1-3 years [Member]  
Consolidated Statements of Financial [Line Items]  
2022 Secured Note including interest 38,728
2023 Secured Note including interest 28,466
Flow-through share expenditures
Lease obligation 728
Total 67,922
3-5 years [Member]  
Consolidated Statements of Financial [Line Items]  
2022 Secured Note including interest 38,728
2023 Secured Note including interest 25,818
Flow-through share expenditures
Lease obligation 103
Total 64,649
Greater than 5 years [Member]  
Consolidated Statements of Financial [Line Items]  
2022 Secured Note including interest 160,905
2023 Secured Note including interest 144,316
Flow-through share expenditures
Lease obligation 161
Total $ 305,382
v3.23.2
Corporate and Administrative expenses (Details) - Schedule of Corporate and Administrative Expenses - CAD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Corporate and Administrative Expenses [Line Items]        
Corporate and administrative expenses $ 3,977 $ 2,868 $ 7,868 $ 7,469
Employee compensation [Member]        
Corporate and Administrative Expenses [Line Items]        
Corporate and administrative expenses 1,465 1,302 3,085 2,540
Stock-based compensation [Member]        
Corporate and Administrative Expenses [Line Items]        
Corporate and administrative expenses 859 222 1,727 2,515
Professional fees [Member]        
Corporate and Administrative Expenses [Line Items]        
Corporate and administrative expenses 662 596 936 855
Other general and administrative [Member]        
Corporate and Administrative Expenses [Line Items]        
Corporate and administrative expenses $ 991 $ 748 $ 2,120 $ 1,559
v3.23.2
Income Taxes (Details)
$ in Millions, $ in Millions
 6 Months Ended 12 Months Ended
Jun. 30, 2023
CAD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Income Taxes [Line Items]      
Additional expenditures $ 2.3    
Company deposited (in Dollars)   $ 9.3 $ 9.3
Minimum [Member]      
Income Taxes [Line Items]      
Potential tax indemnification to investors 10.8    
Maximum [Member]      
Income Taxes [Line Items]      
Potential tax indemnification to investors $ 2.9    
v3.23.2
Commitments and Contingencies (Details)
$ in Millions, $ in Millions
 6 Months Ended
Jun. 30, 2023
CAD ($)
Jun. 30, 2023
USD ($)
Commitments and Contingencies (Details) [Line Items]    
Construction cost $ 32.8  
Company paid 24.9  
Facilities agreement 59.7  
Reinforcement security $ 59.7  
Project power consumptions 8 years  
Annual payment (in Dollars)   $ 21.5
Minimum [Member]    
Commitments and Contingencies (Details) [Line Items]    
Secured note bears interest rate 1.00% 1.00%
Maximum [Member]    
Commitments and Contingencies (Details) [Line Items]    
Secured note bears interest rate 1.20% 1.20%
2022 Secured Notes [Mmber]    
Commitments and Contingencies (Details) [Line Items]    
Secured note bears interest rate 6.50% 6.50%
Annual payment (in Dollars)   $ 14.6
2023 Secured Note [Member]    
Commitments and Contingencies (Details) [Line Items]    
Secured note bears interest rate 6.50% 6.50%
Annual payment (in Dollars)   $ 9.8
BC Hydro [Member]    
Commitments and Contingencies (Details) [Line Items]    
Company paid $ 57.1  
v3.23.2
Commitments and Contingencies (Details) - Schedule of Commitments and Contingencies
$ in Thousands
Jun. 30, 2023
USD ($)
Commitments and Contingencies (Details) [Line Items]  
Commitments payments $ 311,172
2023 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 102,447
2024-25 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 76,131
2026-27 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 66,304
2028-29 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 66,290
2022 Secured Note – interest [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 125,866
2022 Secured Note – interest [Member] | 2023 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 9,682
2022 Secured Note – interest [Member] | 2024-25 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 38,728
2022 Secured Note – interest [Member] | 2026-27 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 38,728
2022 Secured Note – interest [Member] | 2028-29 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 38,728
2023 Secured Note – interest [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 80,102
2023 Secured Note – interest [Member] | 2023 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments
2023 Secured Note – interest [Member] | 2024-25 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 28,466
2023 Secured Note – interest [Member] | 2026-27 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 25,818
2023 Secured Note – interest [Member] | 2028-29 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 25,818
Capital expenditure obligations [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 88,175
Capital expenditure obligations [Member] | 2023 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 82,033
Capital expenditure obligations [Member] | 2024-25 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 6,142
Capital expenditure obligations [Member] | 2026-27 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments
Capital expenditure obligations [Member] | 2028-29 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments
Flow-through share expenditures [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 9,737
Flow-through share expenditures [Member] | 2023 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 9,737
Flow-through share expenditures [Member] | 2024-25 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments
Flow-through share expenditures [Member] | 2026-27 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments
Flow-through share expenditures [Member] | 2028-29 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments
Mineral interests [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 5,441
Mineral interests [Member] | 2023 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 485
Mineral interests [Member] | 2024-25 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 1,652
Mineral interests [Member] | 2026-27 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 1,652
Mineral interests [Member] | 2028-29 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 1,652
Lease obligation [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 1,851
Lease obligation [Member] | 2023 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 510
Lease obligation [Member] | 2024-25 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 1,143
Lease obligation [Member] | 2026-27 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments 106
Lease obligation [Member] | 2028-29 [Member]  
Commitments and Contingencies (Details) [Line Items]  
Commitments payments $ 92
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