Seabridge Gold hosts one of the world’s largest gold resources, offering shareholders exceptional leverage to a rising gold price. Chairman and CEO Rudi Fronk explains his company’s value-enhancing strategy of obtaining resources at low cost and spinning them into gold.
The Gold Report: Would you tell us about Seabridge Gold Inc.’s (SEA:TSX; SA:NYSE.MKT) strategy?
Rudi Fronk: Our strategy is essentially to turn cash into gold. When we founded the company 17 years ago, it was to give our shareholders maximum exposure to the gold price. That meant taking a different approach to the business. If you look at what the gold mining industry is doing, they are turning what we believe to be a superior form of money—gold into an inferior one—the dollar.
At Seabridge, we like to think of ourselves as modern alchemists turning cash into gold. Over the last 17 years, we have used cash from our shareholders to fund acquisitions and exploration of gold projects in Canada with the aim of increasing gold ownership per share as measured by our ounces of gold resources and reserves in the ground relative to our shares outstanding. We think there is a place for this strategy among those shareholders who value gold ownership over cash flow.
TGR: What level of resources does Seabridge have?
RF: We have more than 59 million ounces (59 Moz) of gold resources in the Measured and Indicated categories and nearly 35 Moz of gold resources classified as Inferred. Some 45 million of those ounces are reserves, with much more to come. Meanwhile, we only have 53 million shares outstanding. Gold ownership per share has grown every year since our inception. I think you will find that every other public gold company has reduced its gold ownership on a per share basis over the …read more