Exhibit 99.1

ANNUAL

INFORMATION

FORM

FOR THE YEAR ENDED

DECEMBER 31, 2019

DATED MARCH 27, 2020

TABLE OF CONTENTS

PRELIMINARY NOTES

Date of Information

The information in this Annual Information Form (“AIF”) is presented as of December 31, 2019 unless specified otherwise.

Reporting Currency

All dollar amounts are expressed in Canadian dollars unless otherwise indicated. The Issuer’s quarterly and annual financial statements are presented in Canadian dollars.

Units of Measure

In this AIF a combination of Imperial and metric measures are used with respect to the Issuer’s mineral properties. Conversion rates from Imperial measure to metric and from metric to Imperial are provided below:

Abbreviations of unit measures are used in this AIF in addition to those in brackets in the table above as follows:

See “Glossary of Technical Terms” for a description of some important technical terms used in this AIF.

Cautionary Note to United States Investors Regarding Resource Estimates

National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all resource and reserve estimates contained in or incorporated by reference in this AIF have been prepared in accordance with NI 43-101 and the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) Standards on Mineral Resource and the Mineral Reserves, adopted by the CIM Council (the “CIM Standards”).

United States investors are cautioned that the requirements and terminology of NI 43-101 and the CIM Standards differ significantly from the requirements of the SEC, including Industry Guide 7 under the US Securities Act of 1933. Accordingly, the Issuer’s disclosures regarding mineralization may not be comparable to similar information disclosed by companies subject to the SEC’s Industry Guide 7. Without limiting the foregoing, while the terms “measured resources”, “indicated resources” and “inferred resources” are recognized and required by Canadian securities laws, they are not recognized by the SEC and are not permitted to be used in documents filed with the SEC by companies subject to Industry Guide 7. Under U.S. Standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Mineral resources which are not mineral reserves do not have demonstrated economic viability and investors are cautioned not to assume that all or any part of a mineral resource will ever be converted into reserves.

U.S. investors should also understand that “inferred resources” are based on limited geologic evidence and sampling and have great uncertainty as to their economic and legal feasibility. Although it is reasonably expected that the majority of “inferred resources” could be upgraded to “indicated resources” with continued exploration, U.S. investors are also cautioned not to assume that all or any part of an “inferred resource” exists, is economically mineable or will ever be upgraded to a higher category. Disclosure of “contained ounces” in a mineral resource is permitted disclosure under Canadian regulations. In contrast, under U.S. rules, companies are normally only permitted to report “resources” as in place tonnage and grade without reference to unit measures.

Seabridge Gold Inc.

ANNUAL INFORMATION FORM

Incorporation of the Issuer

Seabridge Gold Inc. (the “Issuer” or “Seabridge”) was incorporated under the Company Act (British Columbia) on September 14, 1979 under the name of Chopper Mines Ltd., which was subsequently changed to Dragoon Resources Ltd. on November 9, 1984, and then changed again to Seabridge Resources Inc. on May 20, 1998. On June 20, 2002, the Issuer changed its name to “Seabridge Gold Inc.” and on October 31, 2002, the Issuer was continued under the Canada Business Corporations Act.

The Issuer’s corporate offices are located at 106 Front Street East, 4^th Floor, Toronto, Ontario, Canada M5A 1E1. The Issuer’s telephone number is (416) 367-9292. The Issuer’s Shares are currently listed for trading on the Toronto Stock Exchange (the “TSX”) under the symbol “SEA” and on the New York Stock Exchange (the “NYSE”) under the symbol “SA”. The Issuer’s registered office is located at 10^th Floor, 595 Howe Street, Vancouver, British Columbia, Canada V6C 2T5.

Incorporate Relationships

The Issuer presently has ten wholly-owned subsidiaries: KSM Mining ULC, Seabridge Gold (KSM) Inc., SnipGold Corp., Hattrick Resources Corp. (“Hattrick”) and Tuksi Mining & Development Company Ltd. (“Tuksi”), companies incorporated under the laws of British Columbia, Canada; Seabridge Gold (NWT) Inc., a company incorporated under the laws of the Northwest Territories of Canada; and Seabridge Gold Corporation, Pacific Intermountain Gold, Corporation, 5555 Gold Inc. and 555 Silver Inc., each Nevada Corporations. The following diagram illustrates the inter-corporate relationship between the Issuer, its active subsidiaries and its projects as of December 31, 2019.

Overview

Since 1999, Seabridge has taken steps to achieve its goal of providing strong returns to shareholders by maximizing leverage to the price of gold. The Issuer’s strategy to achieve this goal is to optimize gold ownership per Common share by increasing gold resources more rapidly than shares outstanding. This ratio of gold ownership per Common share has provided a simple but effective measure for evaluating dollars spent on behalf of shareholders.

In 1999, management decided that Seabridge’s strategic focus would be on acquiring, exploring and advancing gold deposits. Seabridge determined it would not build or operate mines, but that it would look to partner or sell assets that were advancing toward production. In the Issuer’s view, building mines adds considerable technical and financial risks and requires a different set of skills and resources. Seabridge also decided it would focus on exploration projects with known gold deposits but exploration upside to reduce risk in terms of trying to achieve a growing ratio of gold ownership per Common share. The Issuer therefore narrowed the activities it would undertake to the following three phases, which phases it planned to progress through in the order set forth and in response to increases in the price of gold: (i) acquiring known gold deposits, (ii) expanding the deposits, and (iii) advancing its deposits towards a construction decision by defining the economic parameters of the deposits through engineering studies, upgrading mineral resources to reserves, securing permits for undertaking mining operations and building relationships with local communities and aboriginal groups. The Issuer believed this was a relatively lower-risk and less capital-intensive strategy consistent with the goal of optimizing gold ownership per Common share.

In 1999, Seabridge set out to buy gold deposits in North America that were not economic in a low gold price environment. North America was selected as the preferred jurisdiction because of its established mineral tenure and permitting procedures, political stability and infrastructure advantages. At that time, many projects were for sale at distressed prices as producers struggled to stay in business. Seabridge decided it would acquire projects with three main characteristics:

From 1999 to 2002, Seabridge acquired eight deposits with gold resources in North America, paying less than US$1.00 per ounce of resource (using aggregate ounces from all resource categories) and has been paying less than US$0.10 per ounce per year in holding costs. Previous owners had spent an estimated US$300 million exploring and developing these deposits.

By 2002, with the gold price on the rise, the Issuer believed that it was becoming more expensive to acquire existing resources, and the cost-benefit equation tilted in favor of increasing gold ownership through exploration. Seabridge’s strategy entered its second phase, which was to expand the Issuer’s resource base by carefully targeted exploration. It has continued exploring even after it moved to the third phase and these efforts have proved highly successful, with measured and indicated gold resources now totaling 61.5 million ounces with an additional 61.3 million ounces of gold in the inferred resource category (see Mineral Resources Table on page 8) against a backdrop of only 63.92 million shares outstanding.

By 2008, the gold price had risen sufficiently to make Seabridge think that a number of its projects might be economic. Therefore Seabridge began work on the third phase of its strategy: defining the economics of its projects through engineering studies, upgrading resources to reserves, securing permits and building support for the KSM Project in local communities. This effort focused on the KSM Project, which, during the exploration phase, had emerged as the Issuer’s most important asset. The permitting process began and the Issuer undertook substantial infill drilling programs to raise the confidence level in the project’s resources. The Issuer completed its initial Preliminary Feasibility Study for the KSM Project in March 2010, which was updated in June, 2011. The Issuer then undertook further optimization work at the KSM Project and revised its project design based on input received from regulatory authorities and local aboriginal groups during a joint harmonized environmental assessment process managed by the Province of British Columbia and Canada, but which also included participation of Alaskan State and Federalregulators. This work is reflected in the third Preliminary Feasibility Study for the KSM Project completed in June 2012. The Issuer submitted its Environmental Impact Statement/Environmental Assessment Application (the “EA Application and EIS”) in the first quarter of 2013, it was accepted for formal review by British Columbia in August, 2013 and it was approved by both the federal and provincial authorities in 2014. The provincial EA certificate was originally approved for a five year term and was renewed for a further five years on March 21, 2019. The EA Application and EIS is based on the KSM Project design in the 2012 KSM Preliminary Feasibility Study.

In conjunction with advancing the EA Application and EIS, the Issuer worked to build its relationships with the Nisga’a Nation and other First Nations, including pursuing impacts and benefits agreements with potentially impacted aboriginal groups. In June, 2014, the Issuer and the Nisga’a Nation entered into a formal Benefits Agreement. In September, 2013, the Gitxsan Treaty Society, representing the Gitxsan Hereditary Chiefs, delivered a letter to regulators expressing its support of Seabridge Gold’s KSM Project. In June, 2014 the Issuer announced it had reached an environmental agreement with the Gitanyow Hereditary Chiefs Office and the wilps represented by Gitanyow Hereditary Chiefs Office. Although these were important for the Issuer’s success in getting its environmental assessment approvals, work to maintain and improve these relationships, as well as relationships with the other aboriginal groups in the area is ongoing. Regular meetings are held with aboriginal groups to update them on KSM Project matters, including future plans, and the Issuer observes a process of review of each permit application with aboriginal groups both before submission of the application and with the relevant regulator after permit submission. In addition, in 2019, the Issuer entered into an impacts and benefits agreement with the Tahltan Nation. Alaskan State and federal regulators also participated in the EA Application and EIS review process, providing input throughout, and continue to be involved in permitting review associated with the KSM Project.

In September, 2014, the Issuer received early-stage construction permits for its KSM Project from the Province of British Columbia. The permits issued include: (1) authority to construct and use roadways along Coulter Creek and Treaty Creek; (2) rights-of-way for the proposed Mitchell-Treaty tunnels connecting project facilities; (3) permits for constructing and operating numerous camps required to support constructions activities; and (4) permits authorizing early-stage construction activities at the mine site and tailings management facility.

In 2010 the Issuer also turned its attention to its second-largest asset, the Courageous Lake Project. A preliminary economic assessment of this project was completed in early 2008 and indicated that the project’s economics were marginal at the then prevailing gold price. However, with the increase in the gold price by 2010, the Issuer decided to start taking the Courageous Lake Project along a similar advancement path to the KSM Project, including additional drilling and further engineering work, and completed a preliminary feasibility study in September, 2012.

In 2012 the Issuer refocused its exploration activities and began undertaking drilling of new targets at both the KSM Project, in search of higher grade core zones, and the Courageous Lake Project, in search of deposits of higher grade material, that could improve the economics of each project. The exploration programs in the 2012 to 2018 seasons were very successful, with the generation of successive resource estimates for the Kerr deposit and the Iron Cap deposit at the KSM Project and a resource estimate at the Walsh Lake deposit at the Courageous Lake Project. After its successful drill programs in 2013, 2014 and 2015 that dramatically increased inferred resources below the Kerr deposit, the Issuer decided to update its 2012 PFS to use current costs and incorporate commitments from the EA Application and EIS and to include in the report a preliminary economic assessment of the KSM Project presenting an alternative development plan incorporating the expanded Kerr deposit into a conceptual project design. The updated report was completed in 2016 and showed a modest decline in the economics of the PFS development plan but improved economics from the alternative development plan that incorporated the new mineral resources at Kerr. Exploration programs in 2016, 2017 and 2018 have led to a dramatic increase in mineral resources at Iron Cap, which now total 423 million tonnes in the indicated category and 1.9 billion tonnes in the inferred category. Now the Issuer believes that, due to the Iron Cap deposit’s proximity to the MTT and its higher grade, Iron Cap could potentially improve KSM’s economics by mining it before the Kerr deposit. Work began in 2019 on preparing an updated technical report for the KSM Project, examining another alternative development plan incorporating the new mineral resources at Iron Cap, which should be completed in the second quarter of 2020.

After several years of declines in the price of gold, in late 2015 the Issuer decided to look once again for opportunities to acquire gold properties as they were becoming available at more attractive prices. Since the Issuer had become much larger than it was in the 1999-2002 period when it was first acquiring properties, it has focused on identifying properties with potential for major deposits. In April, 2016, the Issuer reached an agreement to acquire SnipGold Corp., the owner of the highly prospective Iskut Project, and completed the acquisition in June 2016. In February, 2017, the Issuer announced that it had entered into a letter of intent to acquire the Snowstorm Project in Northern Nevada and completed the acquisition in June, 2017. In June, 2019, the Issuer reach an agreement for the acquisition of the Goldstorm Project, located about 3 km to the east of its Snowstorm Project. The Issuer continues to look for opportunities to acquire gold properties.

In 2017, 2018 and 2019 the Issuer completed programs at its Iskut and Snowstorm Projects. At Iskut, its recent work suggests the presence of a large porphyry system, which will be the target of its drilling program planned for 2020. At Snowstorm, detailed target generation work has underway with drilling of the first target in 2019 and follow-up drilling on the next two targets in 2020. Drilling in 2019 confirmed the presence of structures and stratigraphy similar to the Turquoise Ridge and Twin Creeks mines, which are located a few kilometers to the south.

To date, work on the KSM Project and the Courageous Lake Project has been funded in part by the sale of, or the optioning of, non-core assets, consistent with the Issuer’s strategy of limiting share dilution. The Issuer has sold the Noche Buena Project and its early-stage Nevada properties and entered into option agreements in respect of each of the Grassy Mountain, Red Mountain, Quartz Mountain and Castle Black Rock projects under which the respective optionees could acquire a 100% interest in such properties. The Grassy Mountain project was sold in February, 2013 upon exercise of the option to acquire a 100% interest in the Grassy Mountain property granted by the Issuer in 2011. In February, 2017, the option to acquire a 100% interest in the Castle Black Rock Project was exercised and the Project was sold. In May, 2017, the holder of the option on the Red Mountain Project acquired the Project from the Issuer. In addition to the proceeds received on the sale of these Projects, the Issuer has the potential to receive additional payments in respect of the Grassy Mountain, Quartz Mountain and Red Mountain Projects in the form of a net profits royalty (Grassy Mountain), an option payment and either $15 million or a net smelter returns royalty (Quartz Mountain) and a metal stream (Red Mountain).

Seabridge intends to seek a sale or joint venture of its two core assets, the KSM Project and the Courageous Lake Project, or a sale of the Issuer, while the current phase of finding and delineating higher grade zones to improve the economics of these projects and additional de-risking of these projects is being advanced. One of the goals of the search for high grade core zones at the KSM Project was to change its economic profile. Before finding the higher grade mineralized zones below the Kerr deposit, KSM was a gold project with a robust copper credit that would appeal primarily to gold miners as prospective partners. Now, KSM has a much stronger copper profile which opens up the potential for a joint venture with a large base metal producer. Realizing value for the Issuer’s shareholders will depend on the potential financial return for a prospective purchaser or partner, successfully addressing regulatory and aboriginal concerns as well as market conditions at the time, especially gold and copper prices. The timing of sales or partnership agreements, if any, cannot be determined at this juncture.

The continuing success of the Issuer is dependent on (1) the Issuer being able to raise capital as needed (2) strength in the price of gold and copper (3) exploration success on projects it is exploring on its own account and/or (4) advancing its projects through optimization work, regulatory reviews and permitting.

Three Year History

During the 2017 and 2018 financial years, the Issuer principally focused its exploration and advancement efforts on its core project, KSM, in British Columbia. Limited work was undertaken at Courageous Lake over those years. In addition, since 2016 the Issuer has been doing exploration and reclamation work at the Iskut Project, and since 2017, it has been reviewing data to develop drill targets at its Snowstorm Project. In 2019, advancement efforts continued at KSM at a similar pace to previous years, however exploration efforts were more evenly split amongst the KSM, the Iskut and the Snowstorm Projects.

The 2016 exploration program at KSM successfully extended the Kerr deposit in a manner that is expected to allow the expansion of block cave designs in a new mine plan and drilling at the Iron Cap deposit not only successfully found the down plunge extension of Iron Cap Lower Zone but also intersected a new shallower mineralized zone in a 61m interval that averaged 1.2 g/t gold, 0.95% copper and 4.4 g/t silver. A new resource estimate for the Kerr deposit was announced in February, 2017.

In 2017, the Issuer’s exploration program at KSM followed up on the exciting results from drilling at the Iron Cap deposit in 2016. There were two targets; the down plunge projection of the Lower Iron Cap Zone and the shallower high grade zone discovered in 2016 in hole IC-16-62. The Issuer completed 10,383m of drilling in 11 holes at Iron Cap, all of which encountered wide zones of significant grade. In some holes the Issuer encountered some of the best grades to date over long intervals at the Project. A new resource estimate was announced for Iron Cap in February, 2018, that incorporated all previous drilling results at Iron Cap and increased gold and copper resources at Iron Cap by more than 300%.

At the Iskut Project, in 2017 drilling focused on the Quartz Rise target where 4,459 m of drilling was completed in 10 core holes. Drilling found evidence of a gold-bearing intermediate sulfidation epithermal system beneath the Quartz Rise lithocap, as anticipated. Gold was intercepted over short intervals. Sampling of a cliff face north of Quartz Rise returned very high grades ranging from 1.49 to 125.3 g/t gold. A source for these gold concentrations was not found in the 2017 drilling. Exploration activities continued at Iskut in 2018 with the results suggesting the potential for a porphyry system, which was the target of its exploration work in 2019.

Progress was also made in 2017 on permitting at KSM, remediation at the old Johnny Mountain mine site (on the Iskut Project), and relations with indigenous groups in the area of the KSM Project. Amongst other permitting advances, the federal government approved an amendment to Schedule 2 of the Metal Mining Effluent Regulations under the Fisheries Act (Canada) authorizing aspects of the proposed tailings management facility for the KSM Project. At the Johnny Mountain mine the Issuer also completed structural work on the tailings pond, removed a tank farm, closed old mine portals and progressed clean-up of the mill, amongst other things.

In accordance with its initiative to acquire new larger properties with potential for major deposits, the Issuer completed the acquisition of a 100% interest in the Snowstorm Project in June, 2017. The Snowstorm Project consists of 31 square miles of land holdings strategically located at the projected intersection of three of the most important gold trends in Northern Nevada: the Carlin Trend, the Getchell Trend and the Northern Nevada Rift Zone. Snowstorm is contiguous and on strike with several large, successful gold producers including the Getchell/Turquoise Ridge Joint Venture operated by Barrick Gold, Newmont Mining’s Twin Creeks and Hecla Mining’s Midas operations. The Snowstorm acquisition also includes an extensive package of data generated by previous operators. Although potential targets are hidden under Tertiary cover, the existing data supports the project’s outstanding exploration potential. Geological and geochemical evaluations of Snowstorm have documented hydrothermal alteration zones consistent with large Northern Nevada deposit types. Geophysical surveys have confirmed the structural settings which host large Northern Nevada deposit types. Limited drilling has demonstrated that some of the target areas are at a depth amenable to surface exploration and resource delineation.

The Issuer continued to realize proceeds from the sale of its non-core assets in 2017. The Castle Blackrock property was sold in February, 2017 and the holder of the option on the Red Mountain Project completed the exercise of its option and acquired this property in May, 2017. The Issuer also sold its residual interest in the KSP Project, which is adjacent to its Iskut Project, as the holder of an option to acquire an 80% interest in the KSP property was close to completing its earn-in.

In 2018 at the KSM Project, the Issuer completed 20,341 m of drilling at the Iron Cap deposit that included testing the down plunge and up dip projections of the high-grade core zone of the Iron Cap deposit and drilling encountered large widths down plunge at gold and copper grades exceeding the KSM average. The Issuer announced a resource update for Iron Cap on March 12, 2018 which incorporated all drilling at Iron Cap to date. The drilling also included confirmation work that substantiated the KSM reserve model, waste characterization drilling and geotechnical drilling.

A winter 2018 drill program at the Courageous Lake Project was conducted to test targets for additional satellite deposits and successfully identified two gold zones, Marsh Pond and Olsen, with characteristics similar to the Walsh Lake discovery that warrant follow-up work.

Exploration at the Iskut Project in 2018 focused on testing the Quartz Rise Lithocap for high-grade epithermal precious metal occurrences associated with the uppermost portion of a porphyry mineral system. Results confirmed that much of the Quartz Rise lithocap had been eroded, leaving little opportunity for a sizeable high-grade epithermal occurrence in this area. However, the discovery of a hydrothermal breccia (diatreme) in holes QR-18-14 and 17 confirmed that a porphyry source for the lithocap is nearby. Extensive review of the available data indicates the source for the diatreme is south and southwest of Quartz Rise, where glacial erosion has exposed rocks deeper in the mineralizing system. This erosional window provides the opportunity to explore into the heart of the porphyry system with much shorter drill holes than originally anticipated from a lower elevation.

Work on the Snowstorm Project in 2018 included the analysis of historic core, geochemical sampling and a magnetotelluric survey (CSAMT) to target Getchell-style mineralization and define drill targets.

In March, 2019, the Issuer’s environmental assessment certificate (the “EAC”) for its KSM Project was extended to July 29, 2024 by the British Columbia Environmental Assessment Agency. The EAC was issued for an initial five-year term on July 24, 2014. The extended EAC imposes no new terms and conditions on the KSM Project, reflecting the strong environmental protections of the proposed development plan for the KSM Project.

In June, 2019, the Issuer announced that it had reached agreement with the Tahltan Nation on the terms of a Co-operation and Benefits Agreement in respect of the development and operation of the KSM Project. The more than 3 year process for reaching agreement culminated in a vote by the Tahltan Nation that approved the agreement by a majority of 77.8%. The agreement represents another important milestone for the KSM Project and sets forth a thorough and co-operative framework for the parties to work together on the KSM Project.

The Issuer’s search for large new porphyry targets within the KSM Project in 2020 identified four prospects which can be tested from the surface but are likely to be evaluated as bulk underground opportunities. In addition, 6,121 m of drilling was completed in 26 holes within the proposed Sulphurets pit limits at the margins of the deposit. Of the 26 holes drilled, 24 intersected over 1.0 g/t gold material in areas of epithermal occurrences not captured in the existing deposit resource model and the intersections are being evaluated for inclusion in the resource model.

At the Iskut Project, 2019 exploration work included geophysical surveys, geochemical sampling and detailed mapping, which identified a large intrusive system at relatively shallow depth and confirmed the presence of gold and copper. An aggressive drill testing program is planned at this target in 2020. Work continued on the remediation of the former Johnny Mountain mIne in 2019 with the continuation of in-situ hydrocarbon remediation at the former tank farm location; relocation of unapproved landfill waste to the approved landfill location; continued clean-up of the interior of the former mill building; as well as ongoing water quality sampling. A significant waste rock disposal program at the site will be implemented in 2020.

The Issuer’s first drill program at the Snowstorm Project was undertaken in 2019 to test for an extension of the Getchell Trend and the distinctive structural and stratigraphic features found at the Twin Creeks and Turquoise Ridge mines. The program encountered technical difficulties but did identify the favourable stratigraphic host for a Getchell-style deposit as well as structures similar to those which fed the deposits to the south.

The Issuer acquired the Goldstorm Project in August, 2019. The Goldstorm Project is in northern Nevada, only about 3 km from its Snowstorm Project. It consists of 134 mining claims and 1,160 acres of leased land in the Northern Nevada Rift, a geologic feature hosting many high-grade gold-silver mines. Goldstorm has had limited previous exploration, but surface trenching on a northwest trending vein yielded 3.0 meters of 9.0 g/t gold and 44.0 g/t silver.

At the date of this AIF, the Issuer’s plans exploration work at each of its Iskut and Snowstorm Projects in 2020. At the Iskut Project, the work will focus on drilling the porphyry target below the Quartz Rise lithocap and the third year of its five-year planned reclamation and closure plan for the Johnny Mountain Mine. At Snowstorm, the Issuer plans to complete drilling of two target concepts in 2020. At the KSM Project, proposed work involves advancing development of the Project to maintain a schedule that would allow a partner to reach a construction decision and have construction substantially started before expiry of the EAC on July 29, 2024.

General

The Issuer owns 6 properties, 4 of which have gold resources, and its material properties are its KSM Project and its Courageous Lake Project. The Issuer holds a 100% interest in each of its properties other than a small portion of the Iskut Project, in which it owns a 95% interest. The Quartz Mountain project is subject to an option agreement under which the optionee may acquire a 100% interest in such project. At the date of this AIF, the estimated gold resources at the Issuer’s properties are set forth in the following table and are broken down by project and resource category.

The measured and indicated mineral resources at the KSM Project and Courageous Lake Project are inclusive of mineral reserves. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

Cautionary Note Regarding Forward-Looking Statements

This AIF contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of Canadian securities laws concerning future events or future performance with respect to the Issuer’s projects, business approach and plans, including production, capital, operating and cash flow estimates; business transactions such as the potential sale or joint venture of the Issuer’s KSM Project and Courageous Lake Project (each as defined herein) and the acquisition of interests in mineral properties; requirements for additional capital; the estimation of mineral resources and reserves; and the timing of completion and success of exploration and advancement activities, community relations, required regulatory and third party consents, permitting and related programs in relation to the KSM Project, Courageous Lake Project, Iskut Project or Snowstorm Project. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “intends”, “strategy”, “goals”, “objectives” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements and forward-looking information (collectively referred to in the following information simply as “forward-looking statements”). In addition, statements concerning mineral reserve and mineral resource estimates constitute forward-looking statements to the extent that they involve estimates of the mineralization expected to be encountered if a mineral property is developed and the economics of developing a property and producing minerals.

Forward-looking statements are necessarily based on estimates and assumptions made by the Issuer in light of its experience and perception of historical trends, current conditions and expected future developments. In making the forward-looking statements in this AIF the Issuer has applied several material assumptions including, but not limited to, the assumption that: (1) market fundamentals will result in sustained demand and prices for gold and copper, and to a much lesser degree, silver and molybdenum; (2) the potential for production at its mineral projects will continue operationally, legally and economically; (3) any additional financing needed will be available on reasonable terms; and (4) estimated reserves and resources at the Issuer’s projects have merit and there is continuity of mineralization as reflected in such estimates.

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:

This list is not exhaustive of the factors that may affect any of the Issuer’s forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Issuer or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in this AIF under the heading “Risk Factors” and elsewhere in this AIF. In addition, although the Issuer has attempted to identify important factors that could cause actual achievements, events or conditions to differ materially from those identified in the forward-looking statements, there may be other factors that cause achievements, events or conditions not to be as anticipated, estimated or intended. Many of the foregoing factors are beyond the Issuer’s ability to control or predict. It is also noted that while Seabridge engages in exploration and advancement of its properties, it will not undertake production activities by itself.

These forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and the Issuer does not assume any obligation to update forward-looking statements, except as required by applicable securities laws, if circumstances or management’s beliefs, expectations or opinions should change. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

KSM Project

Overview

The KSM Project is located within the Iskut-Stikine region of British Columbia, approximately 21 kilometers south-southeast of the former Eskay Creek Mine and approximately 65 kilometers north-northwest of Stewart, British Columbia. (See Figure 1.) The provincial government has recognized the significance of historical mining activity in this area, which includes the past producing Eskay Creek, Snip, Granduc, and Premier mines. Recently the Red Chris Mine and the Brucejack Mine commenced mining operations.

Access to the property is by helicopter from Bell II Crossing on the Stewart Cassiar Highway or Stewart, British Columbia. Mobilization of equipment and personnel is staged from kilometer 54 on the private Eskay Creek Mine Road (about 25 km from the Project) and from Bell II Crossing on the Stewart Cassiar Highway (about 40 km from the Project).

At the time the Issuer acquired the KSM Project in 2001, the project consisted of two distinct zones (Kerr and Sulphurets) which had been modeled separately by Placer Dome (CLA) Limited (“Placer Dome”). Subsequent drilling and engineering work by the Issuer has defined two new very large zones, the Mitchell Zone and the Iron Cap Zone, as well as dramatically expanding the mineralized zone beneath the Kerr zone.

From 2008 to 2012 Seabridge focused on further exploration and advancement of the four known deposits at the KSM Project and generated successive resource estimates and three preliminary feasibility studies, the last of which being the 2012 KSM PFS Report (as defined herein) with an effective date of June 22, 2012. In 2012 Seabridge continued advancement efforts, including work required for the submission of its EA Application and EIS, but changed its exploration focus at KSM to a search for higher temperature core zones that typically concentrate high-grade metals within very large porphyry systems such as KSM. Exploration since 2011 has resulted in the discovery of two core zones, Deep Kerr (a down dip continuation of Kerr deposit mineralization) and Iron Cap Lower Zone (a down dip continuation of Iron Cap deposit mineralization), an extension of the Mitchell zone and other promising core targets. (See “Core Zone Exploration”)

After completing drilling in 2019 the resource drill hole database for the KSM Project now includes 742 drill holes totaling approximately 291,880 meters. More than 95% of the holes at Mitchell and 95% of the holes at Iron Cap were drilled by Seabridge between 2006 and 2019.

In July, 2014, the Issuer’s provincial EA Application for the KSM Project under the British Columbia Environmental Assessment Act was approved. The Canadian Environmental Assessment Agency (CEAA) issued its Comprehensive Study Report in July 2014, as required by the Canadian Environmental Assessment Act, which concluded that the KSM Project would not have significant impacts to the environment. The EA Application and EIS review process involved Alaskan regulators throughout and the CEAA Study Report also concluded that the KSM Project would not have significant impacts to the environment situated downstream of the Alaska border. In December 2014 the Federal Minister of the Environment issued a positive project decision which endorsed the conclusions of the Comprehensive Study Report. The provincial EA approval was for a term of five years and was extended for a further five year term in March, 2019, but lapses after ten years unless the province determines the Issuer has substantially started construction of the Project. The federal approval is for an indefinite term. The Issuer believes that the EA Application and EIS materials and subsequent approvals demonstrate that the KSM project, as designed, is an environmentally responsible and a generally socially accepted Project.

Figure 1 - KSM Project Location Map

The Project received a license under the International Rivers Improvement Act (Canada) on October 21, 2016, authorizing the construction, operation and maintenance of the Water Storage Facility (WSF) and ancillary water works for the KSM Project within the Unuk River watershed in northwestern British Columbia.

In June, 2017, the Issuer also announced it had been given a regulatory amendment to Schedule 2 of the Metal Mining Effluent Regulations under the Fisheries Act (Canada) which authorizes the use of North Treaty Creek for the discharge from the KSM tailings management facility, subject to strict bonding and fishery habitat compensation.

After completion of the 2015 exploration season the Issuer announced a resource estimate for the Kerr/Deep Kerr zone that exceeded 1 billion tonnes and at higher grade than much of the material in the mine plan used for the 2012 KSM PFS Report. This new deposit presented great potential for improving Project economics if it was incorporated into the Issuer’s development plan at the Project. In addition, in the course of the EA Application and EIS review process, the Issuer made commitments to enhance the environmental mitigation and protection offered by the Project, which the Issuer knew would increase the cost of building KSM Project infrastructure. Since the 2012 KSM PFS Report did not incorporate the Deep Kerr deposit or these increased infrastructure costs and given the change in the market prices used in the 2012 KSM PFS Report, the Issuer decided in early 2016 to update the 2012 KSM PFS Report. In November, 2016, the Issuer completed a new pre-feasibility study report which reflected more current market conditions and included the costs associated with the Issuer’s EA Application and EIS commitments, but otherwise used essentially the same construction plan and mine plan as in the 2012 KSM PFS Report. The report also presented an alternative development plan for the Project, at a preliminary economic assessment level, that incorporated material from the Deep Kerr deposit. Overall, this new report showed that the projected economics of the original development plan had declined since 2012, but that the projected economics of the development plan that incorporated the Kerr deposit in its entirety showed meaningful improvement.

Additional drilling was completed at the Iron Cap deposit in 2017 and 2018 with great success. In March, 2019, an updated resource estimate was completed for the Iron Cap deposit which increased inferred resources at the deposit by more than four times the number of tonnes in the inferred resource estimate used in the 2016 update to the 2012 KSM PFS Report.

Land Status

The KSM property is comprised of four discrete claim blocks (see Figure 2) and a group of placer claims. Claim blocks of the KSM Property include mineral leases and both cell and legacy claims. The claim blocks are referred to as:

The four claim blocks include 79 mineral claims (cell and legacy) and 2 mining leases with a combined area of 40,784.97 ha. The mineral resources are positioned within the KSM Claims and include the original claims purchased from Placer Dome and the BJ claims.

The Seabee and Tina claim blocks are located about 19 km northeast of the Kerr-Sulphurets-Mitchell-Iron Cap mineralized zones. These claim blocks are currently being considered for proposed infrastructure siting. The Treaty Creek Switching Station claims, adjacent to the NTL and to the east of the Seabee claims, are considered for power infrastructure siting.

Placer claims only cover areas on part of the westernmost KSM Claims covering an area of 1,554 hectares. The Issuer placer claims lie along Sulphurets Creek and Mitchell Creek in areas where certain of the Project’s proposed infrastructure will be located.

Figure 2 - KSM Project Claim Map

These claims are 100% owned by the Issuer through its wholly-owned subsidiary, KSM Mining ULC. Newmont Corporation retains a 1% net smelter returns (“NSR”) royalty that is capped at $4.5 million. Two of the pre-converted claims at the Sulphurets property (Xray 2 and 6) are also subject to an effective 1% NSR royalty capped at US$650,000. One group of BJ legacy claims is subject to a 2.5% NSR royalty, which can be reduced to a 1.25% NSR royalty upon payment of $1,500,000, but only a portion of the Iron Cap deposit lies within the BJ legacy claims. In addition, the Issuer has granted two options to a subsidiary of Royal Gold, Inc. under which such subsidiary can acquire a 1.25% NSR Royalty and a 0.75% NSR Royalty in gold and silver produced from the KSM Property for $100 million and $60 million, respectively, subject to certain conditions. Under the Benefits Agreement with the Nisga’a Nation and the Co-operation and Benefits Agreement with the Tahltan Nation, the Issuer has agreed to pay each Nation annual payments. The combined annual payments to these Nations are payable in two forms; payments that are a percentage of the tax payable (the “Mineral Tax”) under the Mineral Tax Act (British Columbia) (the “Mineral Tax Act”), which is a tax on net operating profit, and payments that are based on net smelter returns. The combined payments payable to both Nations are as follows:

For the purposes of the description above, a “Capital Recovery Year” is a year in which the Issuer is able to apply sufficient amounts in the KSM Capital Account (as determined under the Mineral Tax Act) to fully offset operating profit, and a “Post-Capital Recovery Year” is a year in which the Issuer is unable to apply sufficient amounts in the KSM Capital Account (as determined under the Mineral Tax Act) to fully offset operating profit.

In addition, a sale of the original claims that were purchased in 2001 is subject to a right of first refusal held by Glencore Canada Corporation.

The property is located on Crown land; therefore, all surface and access rights are granted under, and subject to, the Land Act (British Columbia) and the Mineral Tenure Act (British Columbia). Approximately 13 km of the proposed 23 km Mitchell-Treaty tunnels (the “MTT”) pass under Crown Land subject to mineral claims held by third parties. The Issuer has been granted a licence of occupation, a form of land tenure that grants it rights to occupy the area through which the proposed MTT will pass, subject to the rights of the third party mineral claims holders. In the Issuer’s opinion, these rights are addressed by the Issuer’s obligations, under the management plan associated with the licence of occupation, to segregate and deliver to such claims holders all earth and rock material removed from the third party claims during construction of the MTT.

The four gold-copper deposits, and the proposed waste rock storage areas, lie within the Unuk River drainage in the area covered by the Cassiar-Iskut-Stikine Land and Resource Management Plan approved by the British Columbia Government in 2000. A part of the proposed ore transport tunnel lies within the boundaries of the Nass South Sustainable Resource Management Plan that was completed in 2012. The proposed sites for the tailing management and plant facilities lie outside of the boundaries of any provincial land-use planning process.

Relationships with Aboriginal Groups in KSM Region

The KSM Project site is located in a region historically used by several aboriginal groups. Part of the Project, including the proposed plant and TMF but excluding the mineral deposits and their immediately-related infrastructure, lies within the boundaries of the Nass Area, as defined in the Nisga’a Final Agreement. In this area, consultation, led by the federal and provincial governments, is required with the Nisga’a Lisims Government under the terms of the Final Agreement. Similarly, the Tahltan Nation has asserted rights and title over the area of the proposed plant and tailings management facility but excluding the mineral deposits. Tsetsaut Skii km Lax Ha (“TSKLH”), an aboriginal group asserting independent nation status which the Issuer understands is viewed by the Crown as being a wilp of the Gitxsan Nation (as opposed to an independent nation on its own), assert aboriginal rights and title over the entire KSM Project footprint. This territorial assertion by the TSKLH is inconsistent with the boundaries asserted by them in the proceedings relating to the Supreme Court of Canada decision in Delgamuukw v. British Columbia. This previously asserted territory had a northern boundary to the south of the KSM Project infrastructure on the eastern side of the KSM Project and therefore does not overlap the KSM Project footprint at all. Additionally, the Gitanyow Huwilp (the collective houses of the Gitanyow Nation) may have some interests within the broader region potentially affected by the KSM Project, in particular downstream of the plant site and TMF. Accordingly, the Issuer has been directed to engage with the Tahltan Nation, as well as with both the Tsetsaut Ski km Lax Ha as a wilp of the Gitxsan Nation and the Gitanyow Nation on the basis of potential effects of the plant site and TMF and related downstream effects.

On June 16, 2014, the Issuer entered into a comprehensive Benefits Agreement with the Nisga’a Nation in respect of the KSM Project. The Benefits Agreement establishes a long-term co-operative relationship between Seabridge and the Nisga’a Nation under which the Nisga’a Nation will support development of the Project, participate in economic benefits from the Project and provide ongoing advice. Highlights of the Benefits Agreement include:

The Agreement with the Nisga’a Nation will remain in effect throughout the life of the KSM Project and will apply to future partners in the Project. This Agreement was signed on behalf of the Nisga’a Nation by the Nisga’a Lisims Government Executive.

In June, 2014, the Issuer entered into an agreement with the Gitanyow Huwilp in respect of the KSM Project. Under the agreement, Seabridge agrees to provide funding for certain programs relating to wildlife, fish and water quality monitoring to address some of the concerns raised by the Gitanyow Huwilp, as well as for a committee to establish a means of maintaining communications about KSM Project related issues. This Agreement was signed by seven of the eight wilps of the Gitanyow Nation and by the Gitanyow Hereditary Chiefs Office.

In September, 2013, the Gitxsan Hereditary Chiefs Office provided a letter to British Columbia and federal regulators expressing support for the KSM Project. The Issuer has engaged directly with the TSKLH with respect to the KSM Project and it is making efforts to establish a good relationship with the TSKLH. However, the ongoing disagreement between the government and the TSKLH regarding their status as a Nation and their territorial boundary has created a difficult environment in which to build a good relationship.

In July, 2019, the Issuer entered into a Co-operation and Benefits Agreement (the “CBA”) with the Tahltan Central Government, the Iskut band and the Tahltan Band in respect of the KSM Project. The CBA establishes a comprehensive framework for the parties to work together on the KSM Project, including detailed provisions on environmental management of the land, robust participation by the Tahltan Nation in the economic opportunities offered by the KSM Project and financial payments related to the performance of the Project. It includes commitments to fund education of Tahltan members, commitments to work to achieve employment targets, processes for awarding contracts on a preferred basis to Tahltan businesses and a procedure for resolving disputes, including disputes on permitting issues. The CBA with the Tahltan Nation will apply to future partners in the Project.

The Issuer believes that, after considering:

the Supreme Court of Canada decision of June 26, 2014 in Tsilhqot’in Nation v. British Columbia, which declares aboriginal title for the first time in a certain area in Canada and outlines the rights associated with aboriginal title, is unlikely to significantly impact the KSM Project.

Updated and Revised 2016 Preliminary Feasibility Study at the KSM Project

In June 2012, an updated Preliminary Feasibility Study for the KSM Project (the “2012 KSM PFS Report”) was completed. The development plan in the 2012 KSM PFS Report was the one approved in the EA Application and EIS review processes, with certain enhancements to the Project infrastructure to improve environmental protection and various mitigation measures. Since the date of the 2012 KSM PFS Report Seabridge has continued exploration activities at KSM which led to the discovery of the large higher-grade zones below the Kerr and Iron Cap deposits. In early 2016, the Issuer decided to update the 2012 KSM PFS Report to present the same development plan as in the 2012 KSM PFS Report at a pre-feasibility level using more current market values in the financial analysis but, in addition, to incorporate into that development plan the infrastructure enhancements committed to in the EA Application and EIS processes and to incorporate other design improvements identified by the Issuer. Accordingly, the prefeasibility study level development plan (the “2016 PFS Plan”) does not include material from recent higher-grade discoveries at Kerr and Iron Cap. Given the positive impact the new higher grade material was expected to have on Project economics, the Issuer also decided to complete a study that would present an analysis of the integration of the additional material into the proposed KSM Project design as an alternative development plan (the “2016 PEA Plan”) at a preliminary economic assessment level and include the results in the new prefeasibility report. The new report, which presents both the 2016 PFS Plan and the 2016 PEA Plan, was completed in November, 2016, is entitled “2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study Update and Preliminary Economic Assessment” (the “2016 KSM PFS/PEA Report”), has an effective date of October 6, 2016, and is available among Seabridge’s documents at www.sedar.com.

The overall 2016 KSM PFS/PEA Report was coordinated by Tetra Tech Canada Inc. (formerly Tetra Tech, Inc.) (“Tetra Tech”) and incorporates the work of a number of industry-leading consulting firms. The principal consultants who contributed to the 2016 PFS Plan, and their Qualified Persons are listed below along with their areas of responsibility:

The 2016 PEA Plan was prepared by Amec Foster Wheeler Americas Limited, now known as Wood Canada Limited (“Wood”) and the principal consultants who contributed to the 2016 PEA Plan, and their Qualified Persons are listed below along with their areas of responsibility:

The following (to “2016, 2017, 2018 and 2019 Exploration”) summarizes information from the 2016 KSM PFS/PEA Report.

Location and Climate

The KSM Project is situated about 950 km northwest of Vancouver, 65 km by air north-northwest of Stewart, BC and 21 km south-southeast of the former Eskay Creek Mine. The property is located at latitude 56.50° North and longitude 130.30° West (see Figure 1).

The proposed pit areas lie within the headwaters of Sulphurets Creek, which is a tributary of the Unuk River and flows into the Pacific through Alaska. The proposed process plant and TMF will be located within the tributaries of Teigen and Treaty creeks. Teigen and Treaty creeks are tributaries of the Bell-Irving River, which is itself a major tributary of the Nass River. The Nass river flows to the Pacific Ocean entirely within Canada.

The climate is generally typical of a temperate or northern coastal rainforest, with sub-arctic conditions at high elevations. Precipitation at the mine site has an estimated average of 1,652 mm and at the process plant and TMF area has an estimated average of 1,371 mm. The length of the snow-free season varies from about May through November at lower elevations, and from July through September at higher elevations.

Local Resources, Infrastructure and Physiography

The KSM property lies in the rugged Coastal Mountains of northwest British Columbia, with elevations ranging from 520 meters in Sulphurets Creek valley to over 2,300 meters at the highest peaks. Valley glaciers fill the upper portions of the larger valleys from just below tree line and upwards.

Deep-water loading facilities for shipping bulk mineral concentrates exist in Stewart, and are currently utilized by the Red Chris Mine. Historically they have been used by several other mines in northern, BC. The nearest railway is the CNR Yellowhead route, which is located approximately 220 km southeast of the Property. This line runs east-west, and can deliver concentrate to deep-water ports near Prince Rupert and Vancouver, BC.

There are no settlements or privately owned land in the area of the Project; there is limited commercial recreational activity in the form of helicopter skiing and guided fishing adventures. The closest power transmission lines run along Highway 37, 40 km east of the Project.

Stewart, a town of approximately 500 inhabitants, is the closest population center to the KSM Project. It is connected to the provincial highway system via paved, all weather Highway 37A. The larger population centers of Prince Rupert, Terrace, and Smithers, with a total population of about 32,000, are located approximately 270 km to the southeast.

Exploration History

There is evidence that prospectors were active in the area prior to 1935. The modern exploration history of the area began in the 1960’s, with brief programs conducted by Newmont Mining Corp., Granduc Mines Ltd., Phelps Dodge Corp., and the Meridian Syndicate. All of these programs were focused towards gold exploration. The Sulphurets Zone was first drilled by Esso Minerals in 1969; Kerr was first drilled by Brinco Ltd. in 1985 and Mitchell Creek by Newhawk Gold Mines Ltd. in 1991.

There is no recorded mineral production, nor evidence of it, from the property. Immediately west of the property, small-scale placer gold mining has occurred in Sulphurets and Mitchell Creeks. On the Brucejack property immediately to the east and currently owned by Pretium Resources Inc., limited underground development and test mining was undertaken in the 1990’s on narrow, gold-silver bearing quartz veins at the West Zone.

During 2003-2005, under its option to earn up to a 65% interest in the project from Seabridge, Falconbridge conducted geophysics, surface mapping, surface sampling and completed approximately 4,100 m of drilling at the project.

Since 2006, Seabridge has been conducting exploration and advancement activities at the project.

Geology

The region lies within “Stikinia”, a terrane of Triassic and Jurassic volcanic arcs that were accreted onto the Paleozoic basement. Stikinia is the largest of several fault bounded, allochthonous terranes within the Intermontane belt, which lies between the post-accretionary, Tertiary intrusives of the Coast belt and continental margin sedimentary prisms of the Foreland (Rocky Mountain) belt. In the Kerr-Sulphurets area, Stikinia is dominated by variably deformed, oceanic island arc complexes of the Triassic Stuhini and Jurassic Hazelton groups. Backarc basins formed eastward of the KSM Property in the Late Jurassic and Cretaceous were filled with thick accumulations of fine black clastic sediments of the Bowser Group. Folding and thrusting due to sinistral transpression tectonics in the mid-Cretaceous followed by extensional conditions generated the area’s current structural features. The most important structure is the north-northeast striking, moderately west-northwest dipping Sulphurets Thrust Fault (STF), which transects the Property and is spatially and genetically related to mineralization at KSM. Remnants of Quaternary basaltic eruptions occur throughout the region.

Early Jurassic sub-volcanic intrusive complexes are common in the Stikinia terrane, and several host well-known precious and base metal rich hydrothermal systems. These include copper-gold porphyry deposits such as Galore Creek, Red Chris, Kemess, Mt. Milligan, and Kerr-Sulphurets. In addition, there are a number of related polymetallic deposits including skarns at Premier, epithermal veins and subaqueous vein and replacement sulfide deposits at Eskay Creek, Snip, Brucejack, and Granduc.

The Kerr deposit is a strongly-deformed copper-gold porphyry, where copper and gold grades have been upgraded due to remobilization of metals during later and/or possibly syn-intrusive deformation. Alteration is the result of a relatively shallow, long lived hydrothermal system generated by intrusion of monzonite. Subsequent deformation along the STF was diverted into the Kerr area along pre-existing structures. The mineralized area forms a fairly continuous, north-south trending west dipping irregular body measuring about 1,700 m long and up to 200 m thick. Deep drilling since 2012 has identified two sub-parallel, north-south trending, steep west-dipping mineralized zones that appear to coalesce near the topographic surface. After significant deep drilling was completed at the Kerr deposit, an updated geological interpretation and subsequent updated Mineral Resource model were completed. That new model forms the basis for the 2016 Mineral Resources and Mineral Reserves.

The Sulphurets deposit comprises two distinct zones referred to as the Raewyn Copper-Gold Zone and the Breccia Gold Zone. The Raewyn Copper-Gold Zone hosts mostly porphyry style disseminated chalcopyrite and associated gold mineralization in moderately quartz stockworked, chlorite-biotite-sericite-magnetite altered volcanics. The Raewyn Copper-Gold Zone strikes north-easterly and dips about 45° to the northwest. The Breccia Gold Zone hosts mostly gold-bearing pyritic material mineralization with minor chalcopyrite and sulfosalts in a potassium-feldspar-siliceous hydrothermal breccia that apparently crosscuts the Raewyn Copper-Gold Zone. The Breccia Gold Zone strikes northerly and dips westerly.

The Mitchell Zone is underlain by foliated, schistose, intrusive, volcanic, and clastic rocks that are exposed in an erosional window below the shallow north dipping Mitchell Thrust Fault (MTF). These rocks tend to be intensely altered and characterized by abundant sericite and pyrite with numerous quartz stockwork veins and sheeted quartz veins (phyllic alteration) that are often deformed and flattened. Towards the west end of the zone, the extent and intensity of phyllic alteration diminishes and chlorite-magnetite alteration becomes more dominant along with lower contained metal grades. In the core of the zone, pyrite content ranges between 1 to 20%, averages 5%, and typically occurs as fine disseminations. Gold and copper tends to be relatively low-grade but is dispersed over a very large area and related to hydrothermal activity associated with Early Jurassic hypabyssal porphyritic intrusions. In general, within the currently drilled limits of the Mitchell Zone, gold and copper grades are remarkably consistent between drill holes, which is common with a large, stable, and long-lived hydrothermal systems.

The Iron Cap Zone, which is located about 2,300 m northeast of the Mitchell Zone, is well exposed and consists of intensely altered intrusive, sedimentary, and volcanic rocks. The Iron Cap deposit is a separate, distinct mineralized zone within the KSM district. It is thought to be related to the other mineralized zones but differs in that much of the host rock is hydrothermally altered intrusive (porphyritic monzonite to diorite) rather than altered volcanic and sedimentary rocks. There is a high degree of silicification that overprints earlier potassic and chloritic alteration. Intense phyllic alteration and high density of stockwork veining, which are pervasive at the nearby Mitchell Zone, are less pervasive at Iron Cap. The surface expression of the Iron Cap Zone measures about 1,500 m (northeast-southwest) by 600 m (northwest-southeast). Significant drilling has been completed at the Iron Cap deposit since the 2012 KSM PFS Report, which resulted in an updated geological interpretation and subsequent updated Mineral Resource model that forms the basis for the 2016 Mineral Resources and Mineral Reserves.

Security of Samples

The Issuer follows an ongoing and rigorous sample preparation, security, quality control/quality assurance protocol for its exploration programs, including blank and reference standards in every batch of assays. Cross-check analyses are conducted at a second external laboratory on no less than 10% of the samples. The details of these procedures are outlined in the 2016 KSM PFS/PEA Report.

Mineral Resources

RMI constructed 3D block models for the Kerr, Sulphurets, Mitchell, and Iron Cap Zones using various 3D wireframes. Inverse distance estimation methods were used for all Mineral Resource models. In the case of the Sulphurets and Mitchell deposits, a multi-pass interpolation strategy was used, using a combination of grade shells or specific geological lithological/alteration assemblages to constrain the estimate. 3D search ellipses oriented with the trend of mineralization were used to find drill hole composites. Similar strategies were used for the more recent models constructed for the Kerr and Iron Cap deposits. Deeper exploration in those two areas has demonstrated that higher-grade mineralization is associated with various structures. Instead of using conventional search ellipses to collect drill hole composites for block grade estimation, a trend plane search was used for the Kerr and Iron Cap models. That search method appears to do a better job of honoring the currently recognized structural controls in those deposits.

The measured and indicated mineral resources estimated by RMI are set forth in the Table below and are inclusive of mineral reserves.

Note: This table does not include the results of the exploration programs at the KSM Project in 2016, 2017, 2018 and 2019. These resource estimates have been prepared in accordance with NI 43-101. See “Cautionary Note to United States Investors”. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. Inferred resources are based on limited geologic evidence and sampling.  It is reasonably expected that the majority of inferred resources could be upgraded to indicated resources with continued exploration.

The estimated block grades were classified into Measured (Mitchell only), Indicated, and Inferred categories using mineralized continuity, proximity to drilling, and the number of holes used to estimate the blocks. Mineral Resources for the Project were determined by using a combination of conceptual open pit and underground mining methods. Lerchs-Grossmann (LG) conceptual pits were generated for the Kerr, Sulphurets, and Mitchell deposits using metal prices of US$1,300.00/oz of gold, US$3.00/lb of copper, US$20.00/oz of silver, and US$9.70/lb of molybdenum. Mining, processing, general and administrative (G&A), and metal recoveries were used to generate conceptual Mineral Resource pits that demonstrate reasonable prospects for eventual economic extraction. Conceptual block cave shapes were generated by Golder using GEOVIA’s PCBC™ Footprint Finder software.

Metallurgical Test Review

Several wide-ranging metallurgical test programs were carried out between 2007 and 2016 to assess the metallurgical responses of the mineral samples from the KSM deposits, especially the samples from the Mitchell deposit.

The metallurgical tests to date include:

The test results indicate that the mineral samples from the four separate mineralized deposits are amenable to the flotation-cyanidation combined process. The process consists of:

The samples from the Mitchell deposit produced better metallurgical results with the chosen flotation and cyanide leach extraction circuits when compared to the metallurgical results from the samples taken from the Sulphurets, Iron Cap, and Kerr (upper zone) deposits. The locked cycle tests showed that, on average, approximately 85% of copper and 60% of gold in the Mitchell samples, which contain 0.21% Cu and 0.72 g/t Au, were recovered into a concentrate containing 24.8% Cu. The cyanidation further recovered approximately 18% of the gold from the gold bearing products consisting of the cleaner flotation tailing and the gold bearing pyrite flotation concentrate.

For the Sulphurets, Iron Cap, and upper Kerr samples, the average head grades of the tested samples fluctuated from 0.25 to 0.62% for copper and 0.23 to 0.60 g/t for gold. The average recoveries reporting to flotation concentrates ranged from 78% to 85% for copper and 41 to 60% for gold. The average copper grades of the concentrates varied from 24 to 28%. The cyanidation further recovered approximately 15 to 29% of the gold from the gold-bearing products.

Mineral Processing

The proposed flotation process is projected to produce a copper-gold concentrate containing approximately 25% copper. Copper and gold flotation recoveries will vary with changes in head grade and mineralogy. For the life of mine (LOM) mill feed containing 0.55 g/t gold and 0.21% copper, the average copper and gold recoveries to the concentrate are projected to be 81.6% and 55.3%, respectively. As projected from the testwork, the cyanidation circuit (carbon-in-leach [CIL]) will increase the overall gold recovery to a range of 60% to 79%, depending on gold and copper head grades. Silver recovery from the flotation and leaching circuits is expected to be 62.7% on average. A separate flotation circuit will recover molybdenite from the copper-gold-molybdenum bulk concentrate when higher-grade molybdenite mineralization is processed.

The Process Plant will consist of three separate facilities: ore primary crushing and handling facilities at the mine site, a 23 km ore transportation tunnel system between the mine site and the processing facility, and a main process facility at the Treaty ore processing complex (OPC), adjacent to the TMF.

Gyratory crushers in the comminution plants located at the mine site will reduce the mill feed from 80% passing 1,200 mm to 80% passing 150 mm. The crushed ore will be conveyed to a 30,000 t surge bin (two pockets, each 15,000 t) located underground at a train car loading area, prior to being transported by train cars to the Treaty OPC.

A 23 km MTT system has been designed to connect the Mine Site and the PTMA. The crushed ore will be transported through the tunnels by electric train. This tunnel will also be used for electrical power transmission sourced from the Northwest Transmission Line and for the transport of personnel and supplies for mine operating and water management activities. The proposed tunnel route is through Crown land and approximately 13 kilometers of its length passes through ground subject to mineral claims held by third parties.

The Process Plant at the Treaty OPC will consist of secondary and tertiary crushing, primary grinding, flotation, concentrate regrinding, concentrate dewatering, cyanide leaching, gold recovery, tailing delivery, and concentrate loadout systems. The crushed ore transported from the mine site will be sent to a 60,000 t coarse ore stockpile adjacent to the tunnel portal. The ore will then be reclaimed and crushed by cone crushers, followed by an HPGR comminution circuit. There is a 30,000 t fine ore stockpile located ahead of the tertiary crushing circuit. The crushing systems will be operated in closed circuits with screens.

The ore from the HPGR comminution circuits will be ground to a product size of 80% passing 150 μm by four conventional ball mills in closed circuit with hydrocyclones. The ground ore will then have copper/gold/molybdenum minerals concentrated by conventional flotation to produce a copper-gold-molybdenum concentrate and gold bearing pyrite products for gold leaching. Depending on molybdenum content in the copper-gold-molybdenum concentrate, the concentrate may be further treated to produce a copper-gold concentrate and a molybdenum concentrate. The molybdenum concentrate will be leached to reduce levels of copper and other impurities. The concentrates will be dewatered and shipped to copper and molybdenum smelters.

The gold-bearing pyrite products which consist of the bulk cleaner flotation tailing from the copper-gold-molybdenum cleaner flotation circuit and the gold-bearing pyrite concentrate will be leached with cyanide using CIL treatment for additional gold and silver recovery. Prior to storage in the lined pond within the TMF, the leach residues from the cyanide leaching circuits will be washed, and subjected to cyanide recovery and destruction. The water from the residue storage pond will be recycled back to the cyanide leach circuit. Any excessive water will be further treated prior to being sent to the flotation tailing storage pond.

The flotation tailing and the washed leach residues would be sent to the TMF for storage in separate tailing areas. Two water reclaim systems for the flotation tailing pond and the CIL residue pond have been designed to separately reclaim the water from the TMF.

Tailing Management

The TMF would be constructed in three cells: the North and South cells for flotation tailing, and a lined cell for CIL tailing. The cells are confined between four dams (North, Splitter, Saddle, and Southeast dams) located within the Teigen-Treaty Creek cross-valley. In total, the TMF is designed to have a capacity of 2.3 Bt.

De-pyritized flotation tailing is to be stored in the North and South cells. The pyrite bearing CIL tailing is to be stored in a lined central cell.

The North and CIL cells would be constructed and operated first; they would store tailing produced in the first 25 years. The North Cell would then be reclaimed while the CIL and South cells are in operation.

The North, Splitter, and Saddle earth-fill starter dams will be constructed over a two-year period, in advance of the start of milling, to form the North and Central cells and will provide start-up tailing storage for two years. Cyclone sand dams will be progressively raised above the starter dams over the operating LOM. The North Starter Dam will be constructed with a low-permeability glacial till core and raised with compacted cyclone sand shells, using the centerline geometry method. The Splitter and Saddle starter dams will form the CIL pond. These dams will also subsequently be raised with cyclone sand shells, but the CIL pond and the Splitter and Saddle dams will incorporate high-density polyethylene (HDPE) and linear low-density polyethylene (LLDPE) liners in the core and basin floor in order to surround the CIL tailing within a completely lined impoundment.

Cyclone sand dam raises would be constructed from April through October each year, starting with the North Cell. To reach the capacity of 2.3 billion tonnes, an ultimate dam crest elevation of 1,068 m will be required for the North Cell dams and 1,068 m for the South Cell. This will require a dam height of up to 240 m for the Southeast dam, which is the highest dam of the TMF.

Process water collected in the North and South tailing cells will be reclaimed by floating pump barges and recycled separately to the Process Plant, either for use in the process, for treatment, or to be discharged. Water from the Central Cell will only be directed to the Process Plant for recycling purposes and will not be discharged directly to the receiving environment. Diversions will be constructed to route non-contact runoff from the surrounding valley slopes around the TMF. The diversion channels are sized to allow passage of 200-year peak flows, and are large enough to allow space for passage of snow removal machinery. Buried pipe sections paralleling the channels will be installed in areas of active snow avalanche paths to enhance diversion operability during avalanche periods.

Each of the cells are expected to have surplus water. Surplus water is proposed to be managed during operations using a combination of storage, discharge to Treaty Creek during freshet if water quality meets standards, or treatment at the Treaty process plant water treatment facility (if required) and discharge.

Mine Site Water Management

The overall site water management strategy, including the discharge from the Water Storage Facility (WSF) via the High-density Sludge (HDS) water treatment plant (WTP) was the strategy that was reviewed and approved during the EA Application and EIS review process.

Three diversion tunnel routes totalling approximately 22.4 km will be required to route glacial melt water and non-contact valley runoff from the Mitchell and McTagg valleys around the mine area. The open pit phase of the Mitchell Diversion Tunnel (MDT) and the twinned McTagg Diversion Tunnels (MTDTs) are sized to convey flows from an average 200-year storm. When the Mitchell block cave operation commences, an additional MDT paralleling the open pit phase tunnel will be driven to protect the underground workings, which are more sensitive to inflows than the open pits.

The second tunnel of each set of twinned tunnels provides redundancy against blockage as each individual tunnel can carry typical freshet flows. The provision of twin tunnels also allows switching base flows between adjacent tunnels if access for maintenance is required.

The MDT will route water from Mitchell Creek/Mitchell Glacier to the Sulphurets Valley, away from the open pit, primary crushing facility, open pit area, and Mitchell rock storage facility. The MDT would collect melt water from beneath the base and toe of the Mitchell Glacier via separate surface and sub-glacial inlet structures, which improves redundancy. Both surface and subglacial inlets are designed to protect the inlet of the diversion from being blocked by snow avalanches. The MDT is proposed to generate hydroelectric power as Sulphurets Valley is lower than Mitchell Valley. In Year 23, the MDT will be augmented with a second (twin) tunnel to provide protection against the 1,000-year storm flow to the underground workings.

The McTagg valley tunnels collect flows from east and west McTagg valleys and feed into the main diversion tunnel route, around the west side of the McTagg RSF, and discharge into Sulphurets Valley. These tunnels would have three staged inlets as the McTagg RSF raises in elevation. Hydropower is proposed to be generated by the McTagg tunnels only in Stages 2 and 3.

To facilitate construction in the Mitchell Valley and the staging of water management as the Mitchell and McTagg RSFs rise and fill the valley areas, an approximately 5.4 km long Mitchell Valley Drainage Tunnel will be constructed under Mitchell Valley to carry the existing flows from Mitchell Creek, which are naturally affected by contact with surface mineralization. When the mine is in operation the tunnel will convey contact water from the Mitchell workings and the mineralized area upstream of the deposit, around the RSFs into the WSF.

An in-rock spillway would be constructed at the southwest corner of the McTagg RSF to convey surface diversion flows down to diversion pipelines and channels on the west and east sides of the WSF pond.

Contact water from the mine areas (open pits, RSFs, roads, infrastructure) would be directed to the WSF, located in the lower Mitchell Creek area. The WSF would be formed with a 165 m-high rock fill asphalt core dam built to full height by Year -1. The WSF dam is founded on competent sedimentary rock foundations. Seepage will be controlled by the asphalt core in the dam and the dam foundation will be grouted. A seepage collection pond will return seepage water to the WSF.

During operations, secondary diversion ditches and pipelines would be implemented within the mine area to reduce contact water volumes. Open pit contact water and discharge from pit dewatering wells would be routed from the pit rims, via ditches or direct drainage, and via pipelines or tunnels to the WSF.

Mine area contact water is to be treated with a high density sludge lime water treatment plant (“WTP”).

Additional hydropower is to be generated in an energy recovery facility from the flow of treatment water from the WSF to the WTP.

Permitting

As of June 2016, the Project has successfully gone through the provincial and federal environmental assessment processes, and the appropriate certificates/approvals have been obtained. Additionally, permits for early stage constructions activities for the first two and half years of site activity were obtained. These permits covered the following mine components:

Seabridge is currently in the process of obtaining numerous provincial and federal permits to allow for the construction of parts of the Project, as well as expanding exploration activities, including but not limited to the following:

Mine Planning (2016 PFS Plan)

The proposed mine uses conventional large-scale open pit and block cave underground mining methods. Pit phases at the Mitchell, Kerr, and Sulphurets deposits have been engineered based on the results of an updated economic pit limit analysis. Starter pits have been selected in higher-grade areas. Underground mining has been proposed for the Iron Cap deposit and below the Mitchell open pit to reduce the volume of waste generated from the potential open pits.

Mining Limits

Lerchs-Grossman (“LG”) pit shell optimizations were used to define open pit mine plans in the 2012 KSM PFS Report and the same limits were confirmed using LG for the 2016 KSM PFS/PEA Report. Ultimate open pits have been modified slightly to implement design changes from the EA Application and EIS process and updated geotechnical study.

The underground block caving mine designs for both the Mitchell and Iron Cap deposits are based on modeling using GEOVIA’s PCBC™ and Footprint Finder software. The ramp-up and maximum yearly mine production rates were established based on the rate at which the drawpoints are constructed, and the initial and maximum production rates at which individual drawpoints can be mucked. The values chosen for these inputs were based on industry averages adjusted to suit the anticipated conditions.

Mineral Reserve Estimate

Waste to ore open pit cut-offs and underground shut-offs, including process recovery, were determined using metal prices of US$1,200.00/oz of gold, US$2.70/lb of copper, US$17.50/oz of silver, and US$9.70/lb of molybdenum for NSR calculations.

Open pit Mineral Reserves have been calculated using the updated pit designs and the 2016 Mineral Resource models. These calculations include mining loss and dilution that varies by pit ranging from 2.2 to 5.3% for loss, and 0.8 to 3.9% for dilution. A dynamic cut-off grade strategy has been applied with a minimum NSR of CDN$9.00/t.

The mining NSR shut-off is Cdn$15.00/t for the Mitchell underground mine and CDN$16.00/t for the Iron Cap underground mine. The Mitchell Mineral Reserves include 59 Mt of non-mineralized dilution at zero grade (13%) and 7 Mt of mineralized dilution (2%). The Iron Cap Mineral Reserves include 20 Mt of dilution at zero grade (9%) and 25 Mt of mineralized dilution (11%).

Proven and Probable Mineral Reserves for the KSM Project as of July 31, 2016 are estimated as:

Note: The Mineral Reserves tabulated above are included in the tabulated Mineral Resources. All Mineral Reserves stated above account for mining loss dilution.

Mineral Reserves are derived from a total undiluted Measured plus Indicated Mineral Resource of 49.8 million ounces of gold and 13.6 billion pounds of copper contained in 2.9 billion tonnes at an average grade of 0.54 grams of gold per tonne and 0.21% copper per tonne. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. Most of the Deep Kerr and Lower Iron Cap Mineral Resources are classified as Inferred Mineral Resources and are excluded from the reserves.

Mine Production Plan (2016 PFS Plan)

During the initial 33 years of mine life, the majority of ore is derived from open pits, with the tail end of this period supplemented by the initial development of underground block cave mines. After Year 1 ramp up, ore delivery to the mill during Year 2 to Year 35 is designed to be maintained at an average of 130,000 t/d. After depletion of the open pits, the mill processing rate will be reduced to about 96,000 t/d for 10 additional years, before ramping down to just over 61,000 t/d. The change in throughput matches the production levels from the block cave with appropriate ramp ups and ramp downs applied. The remaining few years use stockpile reclaim to supplement the declining production from the block caves at the end of the mine life.

Ore is mined from Mitchell open pit from Years 1 to 24. Mitchell transitions to block cave mining as the Mitchell pit is mined out. Ore is mined from Sulphurets open pit from Years 1 to 17. Kerr open pit supplements block cave mining from Year 25 to Year 34, and during these years, ore will be transported by an overland conveyor and rope conveyor system starting at the Kerr pit. Mitchell block cave is estimated to have a production ramp-up period of six years, steady state production at 20 Mt/a for 17 years, and then ramp-down production for another 7 years. Iron Cap is estimated to have a production ramp-up period of four years, steady state production at 15 Mt/a for 10 years, and then ramp-down production for another 9 years. The underground pre-production period would be six years, with first underground ore production from Mitchell and Iron Cap in Years 23 and 32, respectively.

All ore will be transported by train from the mine area through the MTT to the Treaty processing plant. The ore transport system will also include:

Infrastructure (2016 PFS Plan)

In Figure 3 below, the location of the proposed infrastructure is shown.

Site access will be established from three fronts:

Copper concentrates produced at the Treaty plant will be transported by contract trucking firms via Highway 37 and 37A to one of the port vendors in Stewart, BC. A concentrate storage building (approximately 100 m by 66 m) will be required. Copper concentrates will be loaded via ship loader and shipped via ocean transport to overseas smelters.

Multiple staging areas will be used in the Project, with the majority of equipment and materials anticipated to be delivered to the Port of Stewart, supplemented by overland freight delivered to Terrace or Stewart.

Figure 3 – KSM Project Layout

Trains will travel through the MTT on a conventional ballasted track structure, be electrically driven by an overhead catenary system, and be controlled by an automated train control system managed from a remote control room without an on-board operator. The trains will transport personnel, freight and fuel and the train staging areas will be accessible by road.

The tunnels will be driven in accordance with the BC Mines Act and Regulations using mechanized drill and blast techniques and will follow the conditions contained within the License of Occupation. The MTT are on the critical path of the construction schedule and have therefore been broken into two segments to allow for concurrent development workplaces resulting in a shorter total tunnel construction period. This will be accomplished with headings at the Treaty Valley, an adit as the saddle of a transecting valley, located 6.1 km from the Treaty portals, and by headings in the Mitchell Valley thus creating six active headings. During construction, rail will be installed in both the North and South tunnels for the future operations rail haulage system; however, only the North Tunnel will be used for hauling tunnel muck during construction.

Electric service for the Project will be from BC Hydro’s Northern Transmission Line (NTL) that was completed in 2014 and parallels Highway 37. The NTL provides an economic and reliable source of power at a cost of US$0.05/kWh.

The new 344 km long, 287 kV, NTL runs from the Skeena Substation on the BC Hydro 500 kV grid near Terrace, BC, to Cranberry Junction, from which point it roughly parallels BC Highway 37 to its terminus at Bob Quinn. A 30 km long, 287 kV transmission extension from the NTL will be constructed, originating at the Treaty Creek Switching Station (BC Hydro designation TCT) and terminating at the Treaty processing plant. This spur line will parallel the Treaty Creek access road in a common corridor. Land tenure for the right-of-way has been obtained. The Treaty Creek Switching Station on the NTL will be approximately 20 km south of Bell II. The Project will take electrical service from the new NTL as a Transmission Service Customer under Schedule 1823 as published in the BC Hydro tariffs.

Seabridge commissioned BC Hydro to carry out a Facilities Study for the Project, following the previously completed BC Hydro System Impact Study. The Facilities Study is the final evaluation required by the utility to define connection costs and terms of electric service. A draft version of the Facilities Study has been issued. Upon the final issue of the study, the parties will be in a position to sign a Facilities Agreement that, in conjunction with the Electricity Supply Agreement (ESA), forms the standard contract for the supply of electric power for a large bulk Transmission Service Customer such as Seabridge. The Project, on the basis of the current application, has priority for service from the new NTL. Currently there is a reservation of 150 MVA for the Project, but an application has been made to increase this to 200 MVA.

Several energy recovery and mini-hydro plants have been included in the Project development plan. These plants generate electric power by making use of facilities already included in the Project and will result in significant net project energy savings.

It was assumed for the 2016 KSM PFS/PEA Report that the Project will be constructed using the engineering, procurement, and construction management (EPCM) approach with a management team located at both the Mine Site and the Treaty OPC. The Owner will supply all the temporary construction camps and service contractors to manage daily activities on site.

Mine Site construction begins with the development of the site access roads to the water treatment plant area, WSF, tunnel entrances, Coulter Creek access road, and building locations. Early works material and equipment will be mobilized via the Winter Access Road and the pioneering road along the Coulter Creek access road alignment. Major equipment, general construction materials, and heavy earth moving equipment will be mobilized via the Coulter Creek access road. Construction material and equipment for the plant and tailings management area will be transported using the Treaty Creek access road. Helicopter support is planned to be used prior to Treaty Creek access road pioneering road completion. The construction schedule for both sites is coordinated around the development of the MTT.

Capital Cost Estimate (2016 PFS Plan)

An initial capital cost of US$5.005 billion is estimated for the project. Costs in the 2016 KSM PFS/PEA Report are expressed in US Dollars, unless otherwise stated. Costs have been converted using a fixed currency exchange rate of US$0.80 to CDN$1.00. The expected accuracy range of the capital cost estimate is +25%, -10%. This estimate includes only initial capital, defined as all capital expenditures required to produce concentrate and doré. A summary of the major capital costs is shown in the following table.

This 2016 PFS estimate is prepared with a base date of Q2 2016. The estimate does not include any escalation past this date. Budget quotations were obtained for major equipment. The vendors provided equipment prices, delivery lead times, freight costs to a designated marshalling yard, and spares allowances. The quotations used in this estimate were obtained in Q1/Q2 2016, and are budgetary and non-binding. Pricing for all major equipment is based on budgetary quotations provided by vendors obtained in Q1/Q2 2016. For non-major equipment, pricing is based on in-house data or recent quotes from similar projects.

All equipment and material costs are based on FCA (Free Carrier) Ex-works (Incoterms 2010). Other costs such as spares, taxes, duties, freight, and packaging are covered separately in the indirect costs section of the capital cost estimate.

Sustaining capital costs were also estimated leveraging the same basis of information applied to the initial capital estimate with respect to vendor quotations, labour, and material costs. The sustaining capital costs total US$5.503 billion and consist of:

Operating Cost Estimate (2016 PFS Plan)

The average operating cost for the Project is estimated at US$12.03/t milled at the nominal process rate of 130,000 t/d or US$12.33/t for the LOM average as shown in the table below. The cost estimates in this table are based upon budget prices in Q1/Q2 2016 or based on the data from the database of the consulting firms involved in the cost estimates. When required, costs in this report have been converted using a three-year average currency exchange rate of CDN$1.00 to US$0.80. The expected accuracy range of the operating cost estimate is +25%/-10%.

The estimates do not include energy recovery credit (approximately US$0.12/t milled LOM) from mini hydropower stations and the cost (approximately US$0.15/t milled LOM) related to Provincial Sales Tax (PST).

** - Mining operating costs are LOM average unit costs calculated by total LOM operating costs divided by LOM process tonnages; mining operating costs exclude mine pre-production costs. The annual cost is the LOM average cost.

Power will be supplied by BC Hydro at an average cost of US$0.050/kWh at the plant 25 kV bus bars, based on the BC Hydro credits for energy conservation by use of HPGR and similar, and the cost of “peaking” power to avoid a BC Hydro contract demand of over 150 MVA. Process power consumption estimates are based on the Bond work index equation for specific grinding energy consumption and estimated equipment load power draws for the rest of the process equipment. The power cost for the mining section is included in the mining operating costs. Power costs for site services, water treatment plants, TMF seepage water pumping, and the Mine Site water pumping are included in their area costs separately.

The estimated electrical power costs are based on the 2016 BC Hydro Tariff 1823 – Transmission Service Stepped Rate and Schedule 1901 – Deferred Account Rate Rider. The electrical power costs also account for local system losses and include 7% PST, which is not treated as an Input Tax Credit (ITC). The rates take advantage of the implementation of BC Hydro-approved energy conservation measures in the plant design phase, including the HPGR circuit, which will greatly reduce the costlier Tier 2 power in the BC Hydro stepped-rate Schedule 1823. The 5% Goods and Services Tax (GST) is not included in the power rates as it is an ITC.

The operating costs are defined as the direct operating costs including mining, processing, tailing storage, water treatment, and G&A. The hydropower credit from recovered hydro-energy during mining operations is not accounted for directly against operating cost estimate, but is included in the economic financial analysis. Sustaining capital costs including all capital expenditures after the process plant has first been put into production are excluded from the operating cost estimate.

Economic Evaluation (2016 PFS Plan)

The economic evaluation was prepared on both a pre-tax financial and a post-tax financial model.

Metal revenues projected in the KSM Project cash flow models were based on the average metal production values as follows:

A cash flow analysis was prepared using four metals price scenarios. In the base case scenario, the three-year trailing average (as of July 31, 2016) prices for gold, copper, silver and molybdenum were used, consistent with industry standard and in compliance with the guidance of the United States Securities and Exchange Commission and NI 43-101. In addition to the base case, three metal price/exchange rate scenarios were also developed: the first uses the metal prices and exchange rate used in mine optimization and design (2016 Design Case); the second uses the spot metal prices and closing exchange rate on July 1, 2016 (Recent Spot Price Case); the third uses higher metal prices to indicate upside potential (Alternate Case). The input parameters and results of all four scenarios on a pre- and post-tax basis can be found in the following table.