NEW YORK (
is hoping to profit from an exit strategy as
Seabridge is a development and exploration company that doesn't produce any minerals. It buys reserves, explores and then looks to sell its assets at a high price. The company has sold smaller properties to finance exploration but is still hoping for a major miner to buy the whole package.
Seabridge has a market cap of over $1 billion, but the stock seems to have stalled at $27 a share. I sat down with CEO Rudi Fronk at Dahlman Rose & Co.'s recent emerging-mining conference to monitor Seabridge's strategy as gold prices reached new highs.
: We started this business plan a little more than 10 years ago when gold was trading well below $300 an ounce with the view back then that gold did have a future. What we thought would [be] the best leverage play to a rising gold price [was] buying advance-stage gold assets located in North America. We were able to buy these for pennies on the dollar and then in 2002 when the price of gold began to move we began further exploration on these properties [which has led to] some tremendous growth and resources.
Fronk: We're now sitting as a company with 64 million ounces of gold in the ground, all located in North America with less than 40 million shares outstanding; meaning that each of our shares is now backed with 1.7 ounces of gold in the ground. Nobody in the industry comes close to that