Impressive Stock Performance Amidst Market Volatility: Seabridge Gold Inc. (TSX: SEA) is an initial stage gold exploration company, which is associated in several drilling activities for the exploration of gold through projects located in Canada.

FY19 Operational Highlights:

• Confirmed a private placement of 1.2 million common shares at a price consideration of CAD 11.75 per share for gross proceeds of CAD 14.10 million. The fund will be allocated to meet the tax liabilities curtailing from re-assessments of its Canadian Exploration Expenses by the Canada Revenue Agency (CRA).
• Recently, the company made acquisition of 3 Aces gold project in the Yukon, Canada from Golden Predator Mining Corp at a price consideration of CAD 2.25 million. The above project consists of 1,734 claims covering 357 sq. km, located in a readily accessible part of southeastern Yukon.
• The company has mining reserves of 38.8M oz gold plus 10.2B lbs copper within the KSM project followed by 6.5M oz gold reserves in the Courageous Lake.

FY19 Financial Highlights: SEA declared its full-year FY19 results, wherein the company reported a loss of CAD 11.61 million, as compared to a loss of CAD 19.94 million in FY18. The improvement in the bottom-line was driven by inclusion of impairment of investment in associate during the previous financial period. Corporate and administrative expenses stood higher at CAD 13.34 million, as compared to CAD 12.37 million in FY18 due to an increase in stock-based compensation. The company reported net cash used in operating activities of CAD 10.90 million, higher from CAD 9.40 million in FY18. Net cash used in investing activities stood at CAD 14.77 million, as compared to CAD 42.65 million in FY18.Cash and cash equivalents stood at CAD 8.79 million, improved from CAD 2.93 million in the previous financial year. SEA’s total assets stood at CAD 449.37 million, reflecting an improvement over CAD 423.46 million in FY18.

FY19 Income Statement Highlights (Source: Company Reports)

Stock Recommendation: The stock of SEA is trading at CAD 15.15, along with a market capitalization of CAD 959.41 million. The stock has generated a mixed return of ~+11% and ~-8% in the last one month, respectively. The stock made a strong comeback and generated a ~13.40% return in the last five trading sessions, outperforming the index by ~4.84%. Amidst the market volatility due to the panic selling on account of COVID 19, the stock’s performance was impressive. At current market price, the stock is quoting above its 20 Day Simple moving average (SMA) of CAD 12.68. The recent acquisitions and new discoveries are likely to add significant higher-grade reserves for the company. Apart, from Canada, the company operates its drilling activities across Peru, Argentina, Ecuador, Indonesia and Chile and has a significant chance of new gold discoveries. Considering the aforesaid facts, recent price movement and recent acquisition, we recommend a ‘Speculative Buy’ on the stock at the closing market price of CAD 15.15 as on April 9, 2020.

SEA One-Year Daily Price Chart (Source: Thomson Reuters)

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