Seabridge Gold


On June 21, 2016, Seabridge Gold acquired 100% of the issued and outstanding shares of SnipGold, giving Seabridge a 100% ownership interest in the Iskut and KSP Projects subject to an agreement by which Colorado Resources Ltd. was able to earn up to an 80% interest in the KSP Project (59 claims covering 30,500 hectares). Subsequently, Seabridge completed a sale of its interests in the KSP Project to Colorado Resources in exchange for $1,000,000 in cash, 2,000,000 Colorado common shares and a 2% NSR on the property (half of which can be repurchased by Colorado at any time for $2,000,000).

On April 18, 2016, Seabridge and SnipGold entered into an agreement (the “Agreement”) under which Seabridge agreed to acquire all of the issued and outstanding common shares of SnipGold by way of a statutory Plan of Arrangement under the Business Corporations Act (British Columbia). To be effective, the Arrangement required approval by a majority of at least 66⅔% of the votes cast by SnipGold shareholders at a special meeting which took place on June 15, 2016. At the meeting, the Arrangement received the approval of 98.41% of the votes cast. Previously, the board of directors of SnipGold had unanimously approved the Arrangement and recommended that SnipGold shareholders vote in favour of the Arrangement. The SnipGold board of directors acted in accordance with the recommendation of its independent special committee which received advice from Primary Capital Inc., its independent financial advisor. All directors and officers of SnipGold entered into voting and support agreements with Seabridge in support of the Arrangement. Two independent shareholder advisory agencies recommended acceptance of the Arrangement.

Holders of SnipGold Shares received 1/63rd of a common share of Seabridge in exchange for 1 SnipGold Share held (the “Exchange Ratio”), representing an implied offer price of CDN$0.291 per SnipGold share when the Arrangement Agreement was announced on April 19, 2016. The implied price represented a premium of 124% based on the previous day’s closing prices for both companies on the TSX/TSX.V and a premium of 115% based on the trailing 30-day volume weighted average trading price of SnipGold and Seabridge shares on the TSX/TSX.V, calculated from the date of the Arrangement Agreement. Based on the foregoing, the Arrangement represented total consideration to SnipGold shareholders of CDN$9.9 million.

In connection with the Arrangement, approximately 695,277 Seabridge shares were issued to SnipGold shareholders (including shares issued on exercise of convertible securities), which resulted in SnipGold shareholders owning approximately 1.3% of the combined company (based on the Exchange Ratio and the number of issued and outstanding SnipGold Shares and Seabridge shares as of the date of the Arrangement Agreement).

The SnipGold acquisition was undertaken by Seabridge to enhance its exploration potential in an area where its technical team has built up significant expertise. This acquisition also met the Company’s transaction test of immediately increasing gold resource ownership per share (see Resources). Seabridge’s KSM Project has geological similarities to the Iskut Project and the two properties are near enough to each other to offer synergies in terms of personnel and infrastructure.