It is proposed that this filing shall become effective (check
appropriate box below):
If any of the securities being registered on this form are to
be offered on a delayed or continuous basis pursuant to the home jurisdiction's shelf prospectus offering procedures, check the
following box. ❑
The outstanding Common Shares are listed
for trading on the Toronto Stock Exchange (the "
TSX
") under the symbol "SEA" and the New York Stock
Exchange (the "
NYSE
") under the symbol "SA". On April 7, 2017, the last trading day prior to the
filing of this Prospectus, the closing price per Common Share on the TSX was $15.01 and US$11.20 on the NYSE.
The TSX has conditionally approved the
listing of the Common Shares to be distributed under this Prospectus on the TSX. The Company has applied to the NYSE for approval
of the listing of the Common Shares to be distributed under this Prospectus on the NYSE. Listing will be subject to the Company
fulfilling all of the requirements of the TSX and the NYSE.
The terms of the Offering, including the
Offering Price, were determined by negotiation between the Company and Canaccord Genuity Corp. ("
Canaccord
"),
Cantor Fitzgerald Canada Corporation ("
Cantor Fitzgerald
") and Paradigm Capital Inc. (collectively, the "
Underwriters
").
The Offering is made pursuant to an underwriting agreement dated March 30, 2017 between the Company and the Underwriters (the "
Underwriting
Agreement
"). See "Plan of Distribution".
|
Price to Public
|
Underwriters' Fee
(1)(2)
|
Net Proceeds to the Company
(3)
|
Per Common Share
|
$14.30
|
$0.715
|
$13.585
|
Total Offering
|
$14,300,000
|
$715,000
|
$13,585,000
|
Notes:
|
(1)
|
The Company has agreed to pay the Underwriters upon completion of the Offering a fee (the "
Underwriters'
Fee
") equal to $0.715 per Common Share from the sale of the Common Shares. See "Plan of Distribution".
|
|
(2)
|
Before deducting expenses of the Offering, estimated to be $267,000, which, together with the Underwriters'
Fee, will be paid from the proceeds of the Offering.
|
|
(3)
|
If the Over-Allotment Option (as defined herein) is exercised in full, the total Offering, Underwriters'
Fee and net proceeds to the Company (before deducting expenses of the Offering) will be $15,730,000, $786,500 and $14,943,500,
respectively. This short form prospectus also qualifies for distribution the issuance of Common Shares pursuant to the exercise
of the Over-Allotment Option. See "Plan of Distribution".
|
The Company has also granted to the Underwriters
an option (the "
Over-Allotment Option
") exercisable, in whole or in part, at the sole discretion of the Underwriters,
at any time up to 30 days following the closing of the Offering, to purchase an additional 100,000 Common Shares at the Offering
Price (the "
Over-Allotment Shares
") to cover over-allotments, if any. A purchaser who acquires Common Shares forming
part of the Underwriters' over-allocation position acquires those Common Shares under this Prospectus, regardless of whether the
over-allocation position is ultimately filled through the exercise of the Over-Allotment Option or secondary market purchases.
The following table sets out the number
of securities issuable under the Over-Allotment Option:
Underwriters' Position
|
Maximum size or number of securities available
|
Exercise period
|
Exercise price
|
|
|
|
|
Over-Allotment Option
|
100,000 Common Shares
|
Up to 30 days following the closing of the Offering.
|
$14.30 per Common Share
|
The Underwriters, as principals, conditionally
offer the Common Shares, subject to prior sale, if, as and when issued by the Company and accepted by the Underwriters in accordance
with the conditions contained in the Underwriting Agreement referred to under "Plan of Distribution" and subject to the
passing upon of certain legal matters relating to the Offering on behalf of the Company by DuMoulin Black LLP with respect to Canadian
legal matters other than tax-related matters, by Thorsteinssons LLP with respect to Canadian tax-related matters, and by Carter
Ledyard & Milburn LLP with respect to United States legal matters, and on behalf of the Underwriters by Blake, Cassels &
Graydon LLP with respect to certain Canadian legal matters, and by Katten Muchin Rosenman LLP with respect to certain United States
legal matters. Subject to applicable laws, the Underwriters may, in connection with the Offering, effect transactions which stabilize
or maintain the market price of the Common Shares at levels other than those which otherwise might prevail in the open market.
Such transactions, if commenced, may be discontinued at any time. See "Plan of Distribution".
Without affecting the firm obligation of
the Underwriters to purchase the Common Shares in accordance with the Underwriting Agreement, the Underwriters may decrease the
Offering Price of the Common Shares which they sell under this short form prospectus after they have made a reasonable effort to
sell all such Common Shares at the Offering Price. The sale by the Underwriters of Common Shares at a price less than the Offering
Price will have the effect of reducing the compensation realized by the Underwriters by the amount that the aggregate price paid
by the purchasers for the Common Shares is less than the gross proceeds paid by the Underwriters for those Common Shares. See "Plan
of Distribution".
Pursuant and subject to the terms and conditions
of the Underwriting Agreement, the Company has agreed to issue and sell, and the Underwriters have agreed to purchase from the
Company, 1,000,000 Common Shares at a price of $14.30 per Common Share (see "Plan of Distribution").
Subscriptions for Common Shares will be
received by the Underwriters subject to rejection or allotment in whole or in part and the right is reserved to close the subscription
books at any time without notice. Closing of the Offering is expected to occur on or about April 19, 2017 or such earlier or later
date as the Company and the Underwriters may agree, but in any event the Common Shares are to be taken up by the Underwriters,
if at all, on or before a date not later than 42 days after the date of the final receipt for this short form prospectus in respect
of the Common Shares (the "
Closing Date
").
It is expected that the Company will arrange
for the instant deposit of the Common Shares distributed under this Prospectus under the book-based system of registration, to
be registered in the name of CDS Clearing and Depository Services Inc. ("
CDS
") or its nominee and will be deposited
with CDS on the Closing Date. No certificates evidencing the Common Shares will be issued to purchasers of the Common Shares. Purchasers
of Common Shares will receive only a customer confirmation from the Underwriters or other registered dealer who is a CDS participant
and from or through whom a beneficial interest in the Common Shares is purchased.
The Common Shares may be sold only in those
jurisdictions where offers and sales are permitted. This Prospectus is not an offer to sell or a solicitation of an offer to buy
the Common Shares in any jurisdiction where it is unlawful. Investors should rely only on the information contained in or incorporated
by reference in this Prospectus. Seabridge has not authorized anyone to provide investors with different information.
Concurrently with the Offering, Seabridge
has entered into an agreement with a syndicate of underwriters, co-led by Canaccord and Cantor Fitzgerald and including Paradigm
Capital Inc. (collectively, the "
Private Placement Underwriters
"), whereby the Private Placement Underwriters
have agreed to purchase, on a bought-deal basis via private placement, 1,000,000 common shares that qualify as "flow-through
shares" for purposes of the
Income Tax Act
(Canada) (the "
Flow-Through Common Shares
") of the Company
at a price of $20.00 per Flow-Through Common Share for gross proceeds of $20,000,000 (the "
Private Placement
").
The Company has granted the Private Placement Underwriters an over-allotment option to purchase up to an additional 100,000 Flow-Through
Common Shares at a price of $20.00 per Flow-Through Common Share exercisable, in whole or in part, at any time up to one week prior
to the closing date of the Private Placement for additional gross proceeds of up to $2,000,000. The Private Placement Underwriters
will receive a cash fee equal to 5.0% of the aggregate proceeds of the Private Placement. See "Concurrent Private Placement".
This Prospectus does not qualify the distribution
of the Flow-Through Common Shares issuable pursuant to the Private Placement. The Flow-Through Common Shares will not be registered
in the United States, but some of the Flow-Through Common Shares may be reoffered and resold in the United States pursuant to an
exemption from registration. The proceeds from the Private Placement will be used to fund exploration at the Company's KSM Project
and Iskut Project (both as defined herein). Neither the Offering, nor the concurrent Private Placement, is contingent on the completion
of the other. Closing of the Private Placement is expected to occur on or about April 27, 2017 and is subject to customary closing
conditions including, but not limited to, the listing of the Flow-Through Common Shares on the TSX and the NYSE and the receipt
of all necessary approvals, including the approval of the TSX and the NYSE. The Flow-Through Common Shares issuable under the Private
Placement will be subject to a four month hold period and any Flow-Through Common Shares sold in the United States will be characterized
as restricted securities under the U.S. Securities Act of 1933, as amended.
The Company's head office is at 106 Front
Street East, Suite 400, Toronto, Ontario, Canada, M5A 1E1 and its registered office is at 10
th
Floor, 595 Howe Street,
Vancouver, British Columbia, Canada, V6C 2T5.
Unless otherwise specifically stated, all
dollar amounts in this Prospectus are expressed in Canadian dollars.
Investors should not assume that the information
contained in this Prospectus is accurate as of any date other than the date of this Prospectus. Subject to Seabridge's obligations
under applicable Canadian securities laws, the information contained in this Prospectus is accurate only as of the date of this
Prospectus regardless of the time of delivery of the Prospectus or of any sale of the Common Shares.
The Offering is being made by a Canadian
issuer that is permitted under a multi-jurisdictional disclosure system (the "MJDS") adopted by Canada and the United
States to prepare this short form prospectus in accordance with the disclosure requirements of Canadian securities laws. Prospective
investors should be aware that such requirements are different from those of the United States. Financial statements included or
incorporated by reference herein have been prepared in accordance with International Financial Reporting Standards, as issued by
the International Accounting Standards Board ("IFRS"), and thus may not be comparable to financial statements of United
States companies.
Prospective investors should be aware
that the acquisition of the Offered Shares may have tax consequences both in Canada and the United States, including the Canadian
federal income tax consequences applicable to a foreign controlled Canadian corporation that acquires Offered Shares. Such consequences,
for investors who are resident in, or citizens of, the United States, may not be described fully in this short form prospectus.
Investors should read the tax discussion in this short form prospectus and consult their own tax advisors with respect to their
own particular circumstances. See "Certain Canadian Federal Income Tax Considerations" and "Certain United States
Federal Income Tax Considerations".
The enforcement by investors of civil
liabilities under the United States federal securities laws may be affected adversely by the fact that the Company is incorporated
under the laws of Canada, that some or all of its officers, directors and experts named in this short form prospectus are residents
of a country other than the United States, and that all or a substantial portion of the assets of the Company and the assets of
those officers, directors and experts are located outside the United States.
Neither
the United States Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or
disapproved of the Offered Shares nor passed upon the accuracy or adequacy of this short form prospectus. Any representation to
the contrary is a criminal offence.
FORWARD-LOOKING STATEMENTS
This Prospectus, and the documents incorporated
by reference into this Prospectus, contain 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. These forward-looking
statements may include statements concerning future events or future performance with respect to the Company'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 Company'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 development activities, community relations, required regulatory and third
party consents, permitting and related programs in relation to the KSM Project, Iskut Project and Courageous Lake 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 resource and reserve 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.
Forward-looking statements are necessarily
based on estimates and assumptions made by the Company in light of its experience and perception of historical trends, current
conditions and expected future developments. In making the forward-looking statements in this Prospectus the Company 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; (4) estimated reserves and resources at the Company's projects have merit and there is continuity of
mineralization as reflected in such estimates; and (5) the Company will receive all required regulatory approvals in respect of
the Offering and the Private Placement in a timely manner and that the Private Placement will be completed following completion
of the Offering.
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:
|
·
|
the Company's history of net losses and
negative cash flows from operations and expectation of future losses and negative cash flows from operations;
|
|
·
|
risks related to the Company's ability to continue its exploration activities and future development activities, and to continue
to maintain corporate office support of these activities, which are dependent on the Company's ability to enter into joint ventures,
to sell property interests or to obtain suitable financing;
|
|
·
|
uncertainty of whether the reserves estimated
on the Company's mineral properties will be brought into production;
|
|
·
|
uncertainties relating to the assumptions
underlying the Company's reserve and resource estimates;
|
|
·
|
uncertainty of estimates of capital costs,
operating costs, production and economic returns;
|
|
·
|
risks related to commercially producing
precious metals from the Company's mineral properties;
|
|
·
|
risks related to fluctuations in the market
price of gold, copper and other metals;
|
|
·
|
risks related to fluctuations in foreign
exchange rates;
|
|
·
|
mining, exploration and development risks
that could result in damage to mineral properties, plant and equipment, personal injury, environmental damage and delays in mining,
which may be uninsurable or not insurable in adequate amounts;
|
|
·
|
risks related to obtaining all necessary
permits and governmental approvals for exploration and development activities, including in respect of environmental regulation;
|
|
·
|
uncertainty related to title to the Company's
mineral properties and rights of access over or through lands subject to third party rights, interests and mineral tenures;
|
|
·
|
risks related to unsettled First Nations
rights and title and settled Treaty Nations' rights;
|
|
·
|
risks related to increases in demand for
exploration, development and construction services equipment, and related cost increases;
|
|
·
|
increased competition in the mining industry;
|
|
·
|
the Company's need to attract and retain
qualified management and personnel;
|
|
·
|
risks related to some of the Company's
directors' and officers' involvement with other natural resource companies;
|
|
·
|
the Company's potential classification
as a "passive foreign investment company" under the United States tax code; and
|
|
·
|
uncertainty surrounding an audit by the
Canada Revenue Agency of the Company's refund claim in respect of the British Columbia Mining Exploration Tax Credit.
|
This list is not exhaustive of the factors
that may affect any of the Company's forward-looking statements. Forward-looking statements are statements about the future and
are inherently uncertain, and actual achievements of the Company 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 Prospectus under the heading "Risk Factors", elsewhere in this Prospectus and in
documents incorporated by reference herein. In addition, although the Company 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 Company's ability to control or predict. It is also noted that while Seabridge engages
in exploration and development 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 Company 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.
The forward-looking statements contained
in this Prospectus and the documents incorporated herein by reference herein and therein are qualified by the foregoing cautionary
statements.
CAUTIONARY NOTE TO UNITED STATES INVESTORS
REGARDING TECHNICAL DISCLOSURE
The Company is permitted under a multi-jurisdictional
disclosure system adopted by the securities regulatory authorities in Canada and the United States to prepare this Prospectus,
including the documents incorporated by reference herein, in accordance with the requirements of Canadian securities laws, which
differ from the requirements of U.S. securities laws. 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 estimates contained in or incorporated by reference in this Prospectus have been prepared in accordance
with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Classification System. These standards differ significantly
from the requirements of the SEC, including those set out in SEC Industry Guide 7 under the
U.S. Exchange Act
(as herein
defined), as interpreted by the staff of the SEC, and resource information contained herein and incorporated by reference herein
differ from and may not be comparable to similar information disclosed by U.S. companies.
Without limiting the foregoing, this Prospectus,
including the documents incorporated by reference herein, uses the terms "measured", "indicated" and "inferred"
resources. U.S. investors are cautioned that, while such terms are recognized and required by Canadian securities laws, the SEC
does not recognize them. 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. U.S. investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted
into reserves.
U.S. investors should also understand that
"inferred resources" have a great amount of uncertainty as to their existence and great uncertainty as to their economic
and legal feasibility. Inferred resources are based on limited geological evidence and sampling. It is reasonably expected that
the majority of inferred resources could be upgraded to indicated resources with continued exploration. Therefore, U.S. investors
are also cautioned not to assume that all or any part of the inferred resources exist, or that they can be mined legally or economically.
Disclosure of "contained ounces" in a mineral resource is permitted disclosure under Canadian regulations; however, the
SEC normally only permits issuers to report "resources" as in place tonnage and grade without reference to unit measures.
The definitions of proven and probable reserves used in NI 43-101 also differ from the definitions in SEC Industry Guide 7. As
a result, the reserves reported by the Company in accordance with NI 43-101 may not qualify as "reserves" under SEC standards.
Also, under SEC Industry Guide 7 standards, a "final" or "bankable" feasibility study is required to report
reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves, and the primary
environmental analysis or report must be filed with the appropriate governmental authority.
Accordingly, information concerning descriptions
of mineralization and resources contained in this Prospectus, or in the documents incorporated by reference, differ from and may
not be comparable to information made public by U.S. companies subject to the reporting and disclosure requirements of the SEC.
NOTICE REGARDING PRESENTATION OF FINANCIAL
INFORMATION
The annual financial statements incorporated
by reference in this Prospectus, and the selected consolidated financial data derived therefrom included in this Prospectus, have
been prepared in accordance with IFRS. IFRS differs in some material respects from U.S. Generally Accepted Accounting Principles
("
U.S. GAAP
") and so these financial statements may not be comparable to the financial statements of U.S. companies
that report in accordance with U.S. GAAP. As a result, certain financial information included or incorporated in the Prospectus
may not be comparable to financial information prepared by companies in the U.S.
The Common Shares are listed and posted
for trading on the TSX under the symbol "SEA", and on the NYSE under the symbol "SA". The following tables
set forth the market price range and trading volumes of the Common Shares on each of the TSX and NYSE for the 12-month period prior
to the date of this Prospectus:
NYSE
Period
|
Volume
|
High (US$)
|
Low (US$)
|
March 2016
|
29,448,417
|
12.77
|
8.82
|
April 2016
|
21,104,426
|
15.50
|
10.55
|
May 2016
|
23,701,020
|
14.52
|
11.31
|
June 2016
|
21,200,287
|
15.22
|
11.83
|
July 2016
|
19,422,479
|
15.88
|
11.66
|
August 2016
|
19,092,879
|
13.78
|
10.42
|
September 2016
|
19,022,416
|
12.59
|
10.49
|
October 2016
|
10,852,708
|
11.59
|
9.92
|
November 2016
|
14,744,722
|
12.05
|
8.60
|
December 2016
|
16,711,425
|
10.60
|
7.35
|
January 2017
|
10,258,604
|
10.40
|
8.50
|
February 2017
|
13,348,637
|
12.07
|
9.55
|
March 2017
|
12,629,453
|
12.85
|
9.22
|
April 1 – 7, 2017
|
3,380,263
|
11.60
|
10.90
|
On April 7, 2017, the last trading day
prior to the filing of this Prospectus, the closing price per Common Share on the TSX was $15.01 and on the NYSE was US$12.20.
DESCRIPTION OF SECURITIES BEING DISTRIBUTED
Common Shares
The Company is authorized to issue an unlimited
number of Common Shares without par value and an unlimited number of Preferred shares, issuable in series. As of April 7, 2017,
54,460,531 Common Shares were issued and outstanding and no Preferred shares were issued and outstanding.
The holders of the Common Shares are entitled
to receive notice of and to attend and vote at all meetings of the shareholders of the Company, and each Common Share confers the
right to one vote in person or by proxy at all meetings of the shareholders of the Company. The holders of the Common Shares, subject
to the prior rights, if any, of the holders of any other class of shares of the Company, are entitled to receive such dividends
in any financial year as the board of directors of the Company may by resolution determine. In the event of the liquidation, dissolution
or winding-up of the Company, whether voluntary or involuntary, the holders of the Common Shares are entitled to receive, subject
to the prior rights, if any, of the holders of any other class of shares of the Company, the remaining property and assets of the
Company. The Common Shares carry no pre-emptive or conversion rights.
The directors of the Company are authorized
to create series of Preferred shares in such number and having such rights and restrictions with respect to dividends, rights of
redemption, conversion or repurchase and voting rights as may be determined by the directors and shall have priority over the Common
shares to the property and assets of the Company in the event of liquidation, dissolution or winding-up of the Company.
PLAN OF DISTRIBUTION
Pursuant to the Underwriting Agreement,
the Company has agreed to sell and the Underwriters have agreed to purchase on the Closing Date 1,000,000 Common Shares at the
Offering Price per Common Share, payable in cash (net of the Underwriters' Fee) to the Company against delivery of the Common Shares.
The Company is offering the Common Shares
offered hereby through the Underwriters named below. Subject to the terms and conditions of the Underwriting Agreement, each of
the Underwriters has severally agreed to purchase the number of Common Shares listed next to its name in the following table:
Underwriters
|
|
Number of
Common Shares
|
Canaccord Genuity Corp.
|
|
500,000
|
Cantor Fitzgerald Canada Corporation
|
|
400,000
|
Paradigm Capital Inc.
|
|
100,000
|
Total
|
|
1,000,000
|
The Underwriting Agreement provides that
the Underwriters must buy all of the Common Shares offered hereby if they buy any of them. However, the Underwriters are not required
to take or pay for the Common Shares covered by the Over-Allotment Option described below.
The Common Shares are offered subject to
a number of conditions, including:
|
·
|
receipt and acceptance of the Common Shares by the Underwriters;
|
|
·
|
the Underwriters' right to reject orders in whole or in part;
|
|
·
|
approval of legal matters by their counsel, including the validity of the Common Shares; and
|
|
·
|
other conditions contained in the Underwriting Agreement, such as the receipt by the Underwriters
of officers' certificates and legal opinions.
|
The obligations of the Underwriters under
the Underwriting Agreement are subject to certain conditions and may be terminated at the Underwriters' discretion upon the occurrence
of the events specified in the Underwriting Agreement. In connection with the Offering, certain of the Underwriters or securities
dealers may distribute this Prospectus electronically.
The Offering is being made concurrently
in Ontario, British Columbia, Alberta, Saskatchewan and Manitoba, and in the United States pursuant to the multi-jurisdictional
disclosure system implemented by the SEC and the securities regulatory authorities in Canada. Offers and sales of Common Shares
outside of Canada and the United States will be made in accordance with applicable laws in such jurisdictions.
The Company has granted the Underwriters
the Over-Allotment Option to buy up to 100,000 additional Common Shares. The Underwriters may exercise this option solely for the
purpose of covering over-allotments, if any, made in connection with the Offering. The Underwriters may exercise the Over-Allotment
Option, in whole or in part, at any time up to 30 days following the Closing Date. If the Underwriters exercise this option, they
will each purchase the additional Common Shares issuable pursuant to the Over-Allotment Option approximately in proportion to the
amounts specified in the table above. Under applicable Canadian securities laws, this Prospectus also qualify for distribution
the Over-Allotment Option and the Common Shares issued pursuant to exercise of the Over-Allotment Option. A purchaser who acquires
Common Shares forming part of the Underwriters’ over-allocation position acquires those Common Shares under this Prospectus,
regardless of whether the over-allocation position is ultimately filled through the exercise of the Over-Allotment Option or secondary
market purchases.
Commissions
Common Shares sold by the Underwriters
to the public will initially be offered at the offering price set forth on the cover of this Prospectus. After the Underwriters
have made a reasonable effort to sell all of the Common Shares offered hereby at the price specified in this Prospectus, the offering
price may be decreased, and further changed from time to time, to an amount not greater than the initial offering price, and compensation
realized by the Underwriters will decrease by the amount that the aggregate price paid by purchasers for the Common Shares is less
than the gross proceeds paid by the Underwriters to the Company. Under the Underwriting Agreement, the Underwriters are obligated
to purchase the Common Shares subject to the conditions stated therein, at the prices and upon the terms stated therein and, as
a result, will thereafter bear any risk associated with changing the offering price to the public or other selling terms.
The following table shows the per Common
Share and total underwriting commission the Company will pay to the Underwriters, assuming both no exercise and full exercise of
the Over-Allotment Option.
|
Over-Allotment
Option not exercised
|
Over-Allotment Option fully
exercised
|
Per Common Share
|
$0.715
|
$0.715
|
Total
|
$715,000
|
$786,500
|
The Company estimates that the total expenses
of the Offering and the Private Placement payable by the Company, not including the underwriting commissions, will be approximately
$267,000 and $133,000 respectively.
No Sales of Similar Securities
The Company has agreed in the Underwriting
Agreement not to issue any common shares of the Company or financial instruments convertible or exercisable into common shares
of the Company (other than under the Private Placement (see "
Concurrent Private Placement
")), for the purposes
of directors', officers' or employee stock options or to satisfy existing rights, warrants, options, agreements, instruments or
other arrangements or arm's length acquisitions of mining companies or mineral projects) or announce any intention to do so until
90 days after the closing date of the Offering without the prior consent of the Underwriters, such consent not to be unreasonably
withheld. The Company also agreed to use its reasonable efforts to restrict its officers and directors from selling any securities
in the Company on or prior to the closing of the Offering without the prior written consent of the Underwriters, such consent not
to be unreasonably withheld or delayed, except officers whose restricted share units vest during such period or in the preceding
five week period, if any, or in connection with the exercise of any stock options by directors or officers of the Company during
such period.
Indemnification and Contribution
The Company has agreed in the Underwriting
Agreement to indemnify the Underwriters against certain liabilities, including liabilities under the U.S. Securities Act of 1933,
as amended, and Canadian securities laws, and, where such indemnification is unavailable, to contribute to payments that the Underwriters
may be required to make in respect of such liabilities.
Price Stabilization, Short Positions
In order to facilitate the
Offering, the Underwriters may engage in transactions that stabilize, maintain or otherwise affect the market price of the
Common Shares in accordance with applicable market stabilization rules. Stabilizing transactions may consist of bids or
purchases made for the purpose of preventing or retarding a decline in the market price of Common Shares during the course of
the Offering. These transactions may also include making short sales of Common Shares, which involve the sale by the
Underwriters of a greater number of Common Shares than they are required to purchase in the Offering. Short sales may be
“covered short sales”, which are short positions in an amount not greater than the Over-Allotment Option, or may
be “naked short sales”, which are short positions in excess of that amount.
The Underwriters may close out any covered
short position either by exercising the Over-Allotment Option, in whole or in part, or by purchasing Common Shares in the open
market. In making this determination, the Underwriters will consider, among other things, the price of Common Shares available
for purchase in the open market compared to the price at which they may purchase Common Shares through the Over-Allotment Option.
The Underwriters must close out any naked short position by purchasing Common Shares in the open market. A naked short position
is more likely to be created if the Underwriters are concerned that there may be downward pressure on the price of the Common Shares
in the open market that could adversely affect investors who purchase Common Shares in the Offering. Any naked short position would
form part of the Underwriters' over-allocation position.
These transactions may be effected on the
NYSE, the TSX or otherwise. Additionally, the representatives, on behalf of the Underwriters, may also reclaim selling concessions
allowed to another Underwriter or dealer. Similar to other purchase transactions, the Underwriters' purchases to cover the syndicate
short sales or to stabilize the market price of the Common Shares may have the effect of raising or maintaining the market price
of the Common Shares or preventing or mitigating a decline in the market price of the Common Shares. As a result, the price of
the Common Shares may be higher than the price that might otherwise exist in the open market. No representation is made as to the
magnitude or effect of any such stabilization or other activities. The Underwriters are not required to engage in these activities
and, if commenced, the Underwriters may discontinue any of these activities at any time.
Pursuant to rules and policy statements
of certain Canadian securities regulators, the Underwriters may not, at any time during the period ending on the date the selling
process for the Common Shares ends and all stabilization arrangements relating to the Common Shares are terminated, bid for or
purchase Common Shares. The foregoing restrictions are subject to certain exceptions including: (a) a bid for or purchase of Common
Shares if the bid or purchase is made through the facilities of the TSX, in accordance with the Universal Market Integrity Rules
of Market Regulation Services Inc., (b) a bid or purchase on behalf of a client, other than certain prescribed clients, provided
that the client's order was not solicited by the Underwriter, or if the client's order was solicited, the solicitation occurred
before the commencement of a prescribed restricted period, and (c) a bid or purchase to cover a short position entered into prior
to the commencement of a prescribed restricted period. The Underwriters may engage in market stabilization or market balancing
activities on the TSX where the bid for or purchase of the Common Shares is for the purpose of maintaining a fair and orderly market
in the Common Shares, subject to price limitations applicable to such bids or purchases. Such transactions, if commenced, may be
discontinued at any time.
Affiliations
Some of the Underwriters and/or their affiliates
have in the past engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary
course of business with the Company for which they have received, and would expect to receive, customary fees and commissions.
Copies of this Prospectus in electronic
format may be made available on the websites maintained by one or more of the Underwriters. The representatives may agree to allocate
a number of Common Shares to Underwriters for sale to their online brokerage account holders. The representatives will allocate
Common Shares to Underwriters that may make internet distributions on the same basis as other allocations. In addition, Common
Shares may be sold by the Underwriters to securities dealers who resell shares to online brokerage account holders.
CERTAIN INCOME TAX CONSIDERATIONS FOR
U.S. HOLDERS
Material United States Federal Income
Tax Consequences
The following is a summary of certain material
U.S. federal income tax considerations applicable to the ownership of Common Shares. Unless otherwise stated, this summary deals
only with shareholders that are U.S. Holders (as defined below) who hold their Common Shares as capital assets (generally, assets
held for investment purposes).
This summary is based on provisions of
the U.S. Internal Revenue Code of 1986, as amended, (the "
Code
"), existing and proposed U.S. Treasury regulations
promulgated thereunder by the Internal Revenue Service (the "
IRS
") administrative and judicial interpretations
thereof, and the U.S.-Canada Tax Treaty (the "
Treaty
"), each as in effect as of the date of this Prospectus. These
sources may change, possibly with retroactive effect, and are open to differing interpretations.
As used in this section, the term "
U.S.
Holder
" means a beneficial owner of a Common Share who is:
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an individual citizen or resident of the United States or an individual treated as a U.S. citizen
or resident for U.S. federal income tax purposes;
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a corporation or other entity taxable as a corporation for U.S. federal income tax purposes created
or organized in or under the laws of the United States, any state of the United States or the District of Columbia;
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an estate, the income of which is subject to U.S. federal income taxation regardless of its source;
or
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any trust if (A)(i) a court within the U.S. is able to exercise primary supervision over the administration
of the trust and (ii) one or more U.S. persons have the authority to control all substantial decisions of the trust, or (B) such
trust validly elects to be treated as a U.S. person.
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The term "
Non-U.S. Holder
"
means a beneficial owner of a Common Share that is an individual, corporation, estate or trust and is not a U.S. Holder. The tax
consequences to a Non-U.S. Holder may differ substantially from the tax consequences to a U.S. Holder.
This summary does not discuss all aspects
of U.S. federal income taxation that may be applicable to persons in light of their particular circumstances or to persons who
are subject to special treatment under U.S. federal income tax law, including: insurance companies; dealers in stocks, securities
or currencies; financial institutions and financial services entities; regulated investment companies; tax-exempt organizations;
persons that directly, indirectly or constructively own 10% or more of the Company's total stock entitled to vote; individual retirement
and other tax-deferred accounts; and persons liable for the alternative minimum tax. This summary also does not consider the possible
application of U.S. federal gift or estate tax or alternative minimum tax, nor any state or local tax consequences.
If a partnership or an entity treated as
a partnership for U.S. federal income tax purposes owns Common Shares, the U.S. federal income tax treatment of a partner in such
a partnership will generally depend upon the status of the partner and the activities of the partnership. A partnership that owns
Common Shares and the partners in such partnership should consult their own tax advisors about the U.S. federal income tax consequences
of holding and disposing of Common Shares.
All investors are urged to consult their
own tax advisors as to the particular tax consequences to them of an investment in the Company's Common Shares, including the effect
and applicability of U.S. federal, state, local and foreign income and other tax laws (including estate and gift tax laws) and
tax treaties.
Passive Foreign Investment
Company Considerations
Complex and, generally, adverse U.S. federal
income tax rules may apply to a U.S. Holder of Common Shares if the Company is a passive foreign investment company (
"PFIC"
)
at any time during which the U.S. Holder holds Common Shares. For U.S. federal income tax purposes, the Company will be considered
a PFIC in any taxable year in which either (i) 75% or more of its gross income is passive income, or (ii) at least 50% of the average
value of all of its assets for the taxable year produce or are held for the production of passive income. For this purpose, passive
income generally includes dividends, interest, royalties, rents, annuities and the excess of gains over losses from the disposition
of assets that produce passive income. For purposes of these tests, if the Company owns directly or indirectly at least 25% (by
value) of the stock of another corporation, the Company is treated as if it held its proportionate share of the assets of such
corporation, and received directly its proportionate share of the income of such corporation.
The Company believes that it was a PFIC
for the taxable year ending December 31, 2016. The Company may be a PFIC for the current and subsequent taxable years. The determination
of whether the Company will be a PFIC for a taxable year depends, in part, on the application of complex U.S. federal income tax
rules, which are subject to various interpretations. In addition, whether the Company was a PFIC for the taxable year ending December 31, 2016
and each subsequent taxable year depends on the assets and income of the Company over the course of each such taxable year and,
as a result, cannot be predicted with certainty as of the date of this Prospectus. Accordingly, there can be no assurance that
the IRS will not challenge any determination made by the Company concerning its PFIC status.
If the Company is treated as a PFIC for
any taxable year, dividends paid on Common Shares could not be eligible for qualification for the reduced preferential U.S. tax
rate on "qualified dividend income", discussed below, and, unless U.S. Holders make a "mark-to-market" or "qualified
electing fund election" (a "
QEF election
") with respect to their Common Shares, as described below, the following
rules would apply:
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U.S. Holders would be required to allocate income recognized upon receiving certain dividends or gain recognized upon the disposition
of Common Shares ratably over their holding period for such Common Shares,
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the amount allocated to each year during which the Company is considered a PFIC, other than the year of the dividend payment
or disposition, would be subject to tax at the highest individual or corporate tax rate, as the case may be, in effect for that
year and an interest charge would be imposed with respect to the resulting tax liability allocated to each such year,
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the amount allocated to the current taxable year and any taxable year before the Company became a PFIC would be taxable as
ordinary income in the current year, and
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U.S. Holders would generally be required to file an annual return on IRS Form 8621 regarding distributions received with respect
to Common Shares and any gain realized on the disposition of Common Shares.
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The PFIC provisions discussed above apply
to U.S. persons who directly or indirectly hold stock in a PFIC. Generally, a U.S. person is considered an indirect shareholder
of a PFIC if it is:
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a direct or indirect owner of a pass-through entity, including a trust or estate, that is a direct
or indirect shareholder of a PFIC,
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a shareholder of a PFIC that is a shareholder of another PFIC, or
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a 50%-or-more shareholder of a foreign corporation that is not a PFIC and that directly or indirectly
owns stock of a PFIC.
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An indirect shareholder may be taxed
on a distribution paid to the direct owner of the PFIC and on a disposition of the stock indirectly owned.
U.S. Holders who make either a timely QEF
election or a timely mark-to-market election with respect to their Common Shares would not be subject to the rules described above.
Instead, U.S. Holders who make a timely QEF election would be required to include in their income for each taxable year their pro
rata share of the Company's ordinary earnings as ordinary income and their pro rata share of the Company's net capital gain as
long term capital gain, whether or not such amounts are actually distributed. For a U.S. Holder who had made a timely QEF election,
the U.S. federal income tax consequences of such U.S. Holder's sale or other taxable disposition of its Common Shares are generally
as described below in "Disposition of Common Shares" in the case where the Company is not a PFIC.
U.S. Holders will not be eligible to make
a QEF election unless the Company complies with certain applicable information reporting requirements. For the past several years,
the Company has made available the information needed for U.S. Holders to make and satisfy the reporting requirements of a QEF
election. The Company expects to continue providing this information in the future.
Alternatively, a U.S. Holder may make a
mark-to-market election if the Common Shares are "regularly traded" on a "qualified exchange". In general,
the Common Shares will be treated as "regularly traded" for a given calendar year if more than a
de minimis
quantity
of the Common Shares is traded on a qualified exchange on at least 15 days during each calendar quarter of such calendar year.
The Common Shares are listed on the TSX under the symbol "SEA" and the NYSE under the symbol "SA", which should
qualify the Common Shares as publicly traded, provided they are traded in sufficient volume. However, because a mark-to-market
election cannot be made for a subsidiary PFIC, if a U.S. Holder makes a mark-to-market election it may continue to be subject to
the PFIC rules with respect to its indirect interest in any PFIC the Company owns.
U.S. Holders who timely elect to "mark-to-market"
their Common Shares will generally include in income, in each year in which the Company is considered a PFIC, any excess of the
fair market value of the Common Shares at the close of each tax year over such U.S. Holder's adjusted basis in the Common Shares.
If the fair market value of the Common Shares has fallen below such U.S. Holder's adjusted basis at the close of the tax year,
the U.S. Holder may generally deduct the excess of the adjusted basis of the Common Shares over their fair market value at that
time. However, such deductions generally would be limited to the net mark-to-market gains, if any, that such U.S. Holder included
in income with respect to such Common Shares in prior years. Income recognized and deductions allowed under the mark-to-market
provisions, as well as any gain or loss on the disposition of Common Shares with respect to which the mark-to-market election is
made, is treated as ordinary income or loss (except that loss on a disposition of Common Shares is treated as capital loss to the
extent the loss exceeds the net mark-to-market gains, if any, that such U.S. Holder included in income with respect to such Common
Shares in prior years). Further, the source of such gain or loss will be U.S.-source for the purposes of the foreign tax credit
limitation. Gain or loss from the disposition of Common Shares as to which a mark-to-market election was made in a year in which
the Company no longer is a PFIC will generally be capital gain or loss.
If the Company ceases to be a PFIC in a
future year, a U.S. Holder may avoid the continued application of the tax treatment described above by electing to be treated as
if it sold its Common Shares on the last day of the last taxable year in which the Company was a PFIC. Any gain would be recognized
and subject to tax under the rules described above. Loss would not be recognized. A U.S. Holder's basis in its Common Shares would
be increased by the amount of gain, if any, recognized on such a deemed sale. A U.S. Holder would be required to treat its holding
period for his Common Shares as commencing on the day following the last day of the last taxable year in which the Company was
a PFIC. In addition, one or more Company subsidiaries might also constitute PFICs when considered on a stand-alone basis. In such
event, similar and generally adverse U.S. federal income rules may apply to a U.S. Holder of the Common Shares
as regard to
their share of the income and gain of and from any such subsidiary,
unless the U.S. Holder is able to make, and does make,
a timely QEF election with respect to any such subsidiary. While the Company has made available the information needed for U.S.
Holders to make and satisfy the reporting requirements of a QEF election for the Company, it has not separately done so for any
Company subsidiary that might have constituted a PFIC. While the Company would consider making such information available as regard
to any Company subsidiary that might also constitute a PFIC, the Company expressly reserves the right not to do so in its sole
discretion.
PFIC status can have significant adverse
tax effects on U.S. shareholders of foreign corporations. The taxation of a U.S. shareholder who owns stock in a PFIC is extremely
complex. Management urges U.S. Holders to consult with their own tax advisors with regard to the impact of the PFIC rules, as well
as the availability of any elections that may mitigate the adverse tax consequences of owning stock in a PFIC.
Distributions Paid on the
Common Shares
Unless the Company is treated as a PFIC,
as discussed above, a U.S. Holder generally will be required to include in its gross income as ordinary dividend income the amount
of any distributions paid on the Common Shares, including the amount of any Canadian taxes withheld, to the extent that those distributions
are paid out of the Company's current or accumulated earnings and profits, as determined for U.S. federal income tax purposes.
Subject to the discussion above under "Passive Foreign Investment Company Considerations," distributions in excess of
the Company's earnings and profits will be applied against and will reduce the U.S. Holder's tax basis in its Common Shares and,
to the extent they exceed that tax basis, will be treated as gain from a sale or exchange of those Common Shares. Because the Company
does not calculate its earnings and profits in accordance with U.S. federal income tax principles, U.S. Holders should expect that
all distributions made with respect to the Company's Common Shares will be treated as dividends. The Company's dividends will not
qualify for the dividends-received deduction applicable in some cases to U.S. corporations.
Dividends that the Company pays in Canadian
dollars, including the amount of any Canadian taxes withheld therefrom, will be included in the income of a U.S. Holder in a U.S.
dollar amount calculated by reference to the exchange rate in effect on the day such dividends are received, regardless of whether
the payment is in fact converted into U.S. dollars. A U.S. Holder who receives payment in Canadian dollars and converts them into
U.S. dollars at an exchange rate other than the rate in effect on such day will have a foreign currency exchange gain or loss that
would be treated as ordinary income or loss. U.S. Holders should consult their own tax advisors concerning the U.S. tax consequences
of acquiring, holding and disposing of Canadian dollars.
Subject to certain limitations, "qualified
dividend income" received by a non-corporate U.S. Holder will be subject to tax at a reduced maximum tax rate of 20%. The
reduced rate does not apply if the Company is a PFIC. If the Company is not a PFIC, the reduced rate applies only if the Company
qualifies for the Treaty and certain holding period requirements are satisfied. The reduced rate also does not apply to dividends
received in respect of certain hedged positions or in certain other situations. The legislation enacting the reduced tax rate on
qualified dividend income contains special rules for computing the foreign tax credit limitation of a taxpayer who receives dividends
subject to the reduced tax rate. Dividends paid on the Common Shares are not expected to qualify for the reduced tax rate because
the Company believes it was a PFIC for the taxable year ending December 31, 2016 and the Company may be a PFIC for the
current taxable year.
Foreign Tax Credit
Any dividend income resulting from distributions
the Company pays to a U.S. Holder with respect to its Common Shares generally will be treated as foreign source income for U.S.
foreign tax credit limitation purposes. Subject to certain conditions and limitations, Canadian tax withheld on dividends may be
deducted from taxable income or credited against a U.S. Holder's U.S. federal income tax liability. The limitation on foreign taxes
eligible for credit is calculated separately with respect to specific classes of income. For this purpose, any dividend that the
Company distributes generally will constitute "passive category income," or, in the case of certain U.S. Holders, "general
category income." Further, there are special rules for computing the foreign tax credit limitation of a taxpayer who receives
dividends subject to a reduced tax rate (see discussion above). A U.S. Holder may be denied a foreign tax credit with respect to
Canadian income tax withheld from dividends received on the Common Shares to the extent such U.S. Holder has not held the Common
Shares for at least 16 days of the 31-day period beginning on the date that is 15 days before the ex-dividend date or to the extent
such U.S. Holder is under an obligation to make related payments with respect to substantially similar or related property. Any
days during which a U.S. Holder has substantially diminished its risk of loss on the Common Shares are not counted toward meeting
the 16-day holding period required by the statute. The rules relating to the determination of foreign source income and the foreign
tax credit are complex, and the availability of a foreign tax credit depends on numerous factors, including whether such taxes
are attributed to an excess distribution from a PFIC, and if so, whether any portion is attributed to a year other than the current
tax year, as discussed above. Each investor who is a U.S. Holder should consult with its own tax advisor to determine whether its
income with respect to the Common Shares would be foreign source income and whether and to what extent that investor would be entitled
to a foreign tax credit.
Disposition of Common Shares
As stated above, the Company believes that
it is a PFIC. If it is a PFIC, certain tax consequences of the disposition of Common Shares are described under "Passive Foreign
Investment Company Considerations." If the Company is not a PFIC, upon the sale or other taxable disposition of Common Shares
a U.S. Holder generally will recognize capital gain or loss equal to the difference between the amount realized on the disposition
and the U.S. Holder's adjusted tax basis in the sold or disposed of Common Shares. Capital gain or loss upon the sale or other
taxable disposition of the Common Shares would be treated as long-term capital gain or loss if, at the time of the sale or disposition,
the sold or disposed of Common Shares were held for more than one year. Long-term capital gain realized by a non-corporate U.S.
Holder is generally eligible for a preferential U.S. federal income tax rate (currently a maximum of 20%). The deductibility of
capital losses by a U.S. Holder is subject to limitations. In general, any gain or loss recognized by a U.S. Holder on the sale
or other disposition of Common Shares will be U.S. source income or loss for U.S. foreign tax credit purposes.
In the case of a cash basis U.S. Holder
who receives Canadian dollars in connection with the sale or other disposition of the Common Shares, the amount realized will be
based on the U.S. dollar value of the Canadian dollars received with respect to the Common Shares as determined on the settlement
date of such sale or other disposition. A cash basis U.S. Holder who receives payment in Canadian dollars and converts Canadian
dollars into U.S. dollars at a conversion rate other than the rate in effect on the settlement date may have a foreign currency
exchange gain or loss, which would generally be treated as ordinary income or loss.
An accrual basis U.S. Holder
may elect the same treatment required of cash basis taxpayers with respect to foreign currency gain or loss realized on a sale
or disposition of the Common Shares that are traded on an established securities market, provided that the election is applied
consistently from year to year. This election may not be changed without the consent of the IRS. In the event that an accrual basis
U.S. Holder does not elect to be treated as a cash basis taxpayer for this purpose (pursuant to the Treasury regulations applicable
to foreign currency transactions), the U.S. Holder may have a foreign currency gain or loss for U.S. federal income tax purposes
because of differences between the U.S. dollar value of the currency received prevailing on the trade date and the settlement date.
Any such foreign currency gain or loss would be treated as ordinary income or loss and would be in addition to the gain or loss,
if any, recognized by such U.S. Holder on the sale or other disposition of the Common Shares. Any foreign currency gain or loss
a U.S. Holder realizes will generally be U.S. source ordinary income or loss.
Net Investment Income Tax
In addition to the income taxes
described above, U.S. Holders that are individuals, estates or trusts with income that exceeds certain thresholds will be subject
to a 3.8% Medicare contribution tax on net investment income, which includes dividends and capital gains.
Information Reporting and
Backup Withholding
Payments in respect of Common Shares may
be subject to information reporting to the IRS and to U.S. backup withholding tax at a rate of 28%. Backup withholding will not
apply, however, if the holder (i) is a corporation or comes within certain exempt categories, and demonstrates the fact when so
required, generally on IRS Form W-9 or (ii) furnishes a correct taxpayer identification number on IRS Form W-9 and makes any other
required certification.
Backup withholding is not an additional
tax. Amounts withheld under the backup withholding rules may be credited against a U.S. Holder's U.S. tax liability, and a U.S.
Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for
refund with the IRS.
U.S. individuals who hold certain specified
foreign financial assets, including stock in a foreign corporation, with values in excess of certain thresholds are required to
file with their U.S. federal income tax return IRS Form 8938, on which information about the assets, including their value, is
provided. Taxpayers who fail to file the form when required are subject to penalties. An exemption from reporting applies to foreign
assets held through a financial institution. U.S. Holders are encouraged to consult with their own tax advisors regarding the possible
application of this disclosure requirement to their investment in the Common Shares.
Canadian Federal Income Tax Considerations
In the opinion of Thorsteinssons LLP, Canadian
tax counsel to the Company, the following is a general summary of the principal Canadian federal income tax considerations as of
the date of this Prospectus generally applicable under the
Income Tax Act
(Canada) (the "
Tax Act
") to a
holder who acquires Common Shares as beneficial owner pursuant to the Offering and who, at all relevant times, for the purposes
of the Tax Act, holds such Common Shares as capital property, deals at arm's length with the Company and the Underwriters, is not
affiliated with the Company or the Underwriters and, for purposes of the Tax Act, is not, and is not deemed to be, a resident of
Canada and has not, and will not use or hold or be deemed to use or hold the Common Shares in or in the course of carrying on business
in Canada or as part of an adventure in the nature of trade (a "
Non-Resident Holder
"). Special rules, which are
not discussed below, may apply to a non-resident of Canada that is an insurer which carries on business in Canada and elsewhere
or an authorized foreign bank (as defined in the Tax Act). The Common Shares will generally be considered capital property to a
Non-Resident Holder unless either (i) the Non-Resident Holder holds or uses or is deemed to hold or use the Common Shares in the
course of carrying on a business of buying and selling securities or (ii) the Non-Resident Holder has acquired or has been deemed
to acquire the Common Shares in a transaction or transactions considered to be an adventure in the nature of trade.
The term "
Qualifying US Person
",
for the purposes of this summary, means a person who, for the purposes of the Canada-United States Income Tax Convention (1980)
(the "
Convention
"), is at all relevant times a resident of the United States, and is a "qualifying person"
within the meaning of the Convention. A Non-Resident Holder who is a Qualifying US Person, and who does not use or hold, and is
not deemed to use or hold, the Common Shares in connection with carrying on a business in Canada through a permanent establishment
in Canada is referred to as a "
US Holder
" for the purposes of this summary. Where, under the taxation law of the
United States, an amount of income, profit or gain is considered to be derived by a Qualifying US Person through a fiscally transparent
entity (including a limited liability company) which may hold Common Shares, such a Qualifying US Person may be entitled to benefits
under the Convention with respect to such an amount in certain circumstances.
US Holders and other affected Qualifying US Persons
are urged to consult with their own tax advisors to determine their entitlement to benefits under the Convention based on their
particular circumstances.
This summary is based on the current provisions
of the Tax Act, the regulations thereunder (the "
Regulations
"), the current provisions of the Convention, and
counsel's understanding of the current administrative policies and assessing practices of the Canada Revenue Agency (the "
CRA
")
publicly available prior to the date hereof. This summary also takes into account all specific proposals to amend the Tax Act and
Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (collectively, the
"
Proposed Tax Amendments
"). No assurances can be given that the Proposed Tax Amendments will be enacted or will
be enacted as proposed. Other than the Proposed Tax Amendments, this summary does not take into account or anticipate any changes
in law or the administration policies or assessing practice of CRA, whether by judicial, legislative, governmental or administrative
decision or action, nor does it take into account provincial, territorial or foreign income tax legislation or considerations,
which may differ significantly from those discussed herein.
This summary is of a general nature
only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular holder and no representations
with respect to the income tax consequences to any particular holder are made. This summary is not exhaustive of all Canadian federal
income tax considerations. Accordingly, prospective investors in Common Shares should consult their own tax advisors with respect
to their own particular circumstances.
Currency Conversion
For purposes of the Tax Act, all amounts
relating to the acquisition, holding or disposition of the Common Shares, including interest, dividends, adjusted cost base and
proceeds of disposition must be converted into Canadian dollars based on the relevant exchange rate quoted by the Bank of Canada
on the effective date (as determined in accordance with the Tax Act) of the related acquisition, disposition or recognition of
income.
Disposition of Common Shares
A Non-Resident Holder will not be subject
to tax under the Tax Act in respect of any capital gain realized by such Non-Resident Holder on a disposition of the Common Shares,
unless the Common Shares constitute "taxable Canadian property" (as defined in the Tax Act) of the Non-Resident Holder
at the time of disposition and the Non-Resident Holder is not entitled to relief under an applicable income tax treaty or convention
between Canada and the country of residence of the Non-Resident Holder. As long as the shares are listed on a designated stock
exchange (which currently includes the TSX and the NYSE), the Common Shares generally will not constitute taxable Canadian property
of a Non-Resident Holder, unless at any time during the 60-month period immediately preceding the disposition (a) the Non-Resident
Holder, persons with whom the Non-Resident Holder did not deal at arm's length, partnerships in which the Non-Resident Holder or
a person with whom the Non-Resident Holder did not deal at arm's length holds a membership interest directly or indirectly through
one or more partnerships, or the Non-Resident Holder together with all such persons, owned or was considered to own 25% or more
of the issued shares of any class or series of shares of the capital stock of the company, and (b) more than 50% of the fair market
value of the Common Shares was derived directly or indirectly from, or from any combination of, real or immovable property situated
in Canada, "Canadian resource properties" (as defined in the Tax Act), "timber resource properties" (as defined
in the Tax Act), or options in respect of, interests in or civil law rights in, such properties whether or not it exists.
If the Common Shares are taxable Canadian
property to a Non-Resident Holder, any capital gain realized on the disposition or deemed disposition of such shares will be subject
to Canadian federal income tax subject to any relief from such taxation provided by the terms of an applicable income tax treaty
or convention between Canada and the country of residence of such Non-Resident Holder.
A Non-Resident Holder whose shares are
taxable Canadian property should consult their own advisors.
Dividends on Common Shares
Under the Tax Act, dividends on shares
paid or credited or deemed to be paid or credited to a Non-Resident Holder will be subject to Canadian withholding tax at the rate
of 25% of the gross amount of the dividends. This withholding tax may be reduced pursuant to the terms of an applicable income
tax treaty or convention between Canada and the country of residence of a Non-Resident Holder. Under the Convention, a US Holder
will generally be subject to Canadian withholding tax at a rate of 15% of the amount of such dividends. This rate is reduced to
5% in the case of a US Holder that is the beneficial owner of the dividends and that is a company that owns at least 10% of the
voting stock of the Company. In addition, under the Convention, dividends may be exempt from Canadian withholding tax if paid to
certain US Holders that are qualifying religious, scientific, literary, educational or charitable tax-exempt organizations and
qualifying trusts, companies, organizations or other arrangements operated exclusively to administer or provide pension, retirement
or employee benefits that are generally exempt from income tax in the United States and that have complied with specific administrative
procedures.
CERTAIN INCOME TAX CONSIDERATIONS FOR
CANADIAN HOLDERS
In the opinion of Thorsteinssons LLP, Canadian
tax counsel to the Company, the following is a summary of the principal Canadian federal income tax considerations as of the date
of this Prospectus generally applicable under the Tax Act to the acquisition of Common Shares by holders who acquire Common Shares
pursuant to the Offering. This summary is applicable to a holder who, for purposes of the Tax Act, holds their Common Shares as
capital property, deals at arm's length and is not affiliated with the Company or the Underwriters, and who is, for the purposes
of the Tax Act, resident or deemed to be resident in Canada (a "
Canadian Holder
"). The Common Shares will generally
be considered capital property to a Canadian Holder unless either (i) the Canadian Holder holds or uses or is deemed to hold or
use such Common Shares in the course of carrying on a business of buying and selling securities or (ii) the Canadian Holder
has acquired or has been deemed to acquire the Common Shares in a transaction or transactions considered to be an adventure in
the nature of trade. Certain Canadian Holders who might not otherwise be considered to hold their Common Shares as capital property
may, in certain circumstances, be entitled to make an irrevocable election permitted by subsection 39(4) of the Tax Act to have
the Common Shares and every other "Canadian security" (as defined in the Tax Act), owned by such holder in the taxation
year of the election and in all subsequent taxation years deemed to be capital property. Canadian Holders that are considering
making such an election should consult with their own tax advisors.
This summary is not applicable to any holder
which is a "financial institution" for the purposes of the mark-to-market rules in the Tax Act, or a "specified
financial institution" (as defined in the Tax Act), to any holder an interest in which would be a "tax shelter investment"
(as defined in the Tax Act), to any holder who has made a functional currency election pursuant to the Tax Act, to any holder that
is a corporation resident in Canada (for purposes of the Tax Act), or a corporation that does not deal at arm's length for purposes
of the Tax Act with a corporation resident in Canada, that is, or becomes a part of a series of transactions that includes the
acquisition of the Common Shares, controlled by a non-resident corporation for the purposes of the foreign affiliate dumping rules
in Section 212.3 of the Tax Act, any holder that is exempt from tax under the Tax Act and any holder that has or will enter into
a "derivative forward agreement" or "synthetic disposition agreement" with respect to the Common Shares.
This summary is based on the current provisions
of the Tax Act, the Regulations, the Proposed Tax Amendments and counsel's understanding of the current administrative policies
and assessing practices of the CRA made publicly available prior to the date hereof. No assurances can be given that the Proposed
Tax Amendments will be enacted or will be enacted as proposed. Other than the Proposed Tax Amendments, this summary does not take
into account or anticipate any changes in law or the administration policies or assessing practice of CRA, whether by judicial,
legislative, governmental or administrative decision or action, nor does it take into account provincial, territorial or foreign
income tax legislation or considerations, which may differ significantly from those discussed herein.
This summary is of a general nature
only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular holder and no representations
with respect to the income tax consequences to any particular holder are made. This summary is not exhaustive of all possible Canadian
federal income tax considerations. Accordingly, prospective investors in Common Shares should consult their own tax advisors with
respect to their own particular circumstances.
Acquisition of Common Shares
The adjusted cost base to a Canadian Holder
of the Common Shares acquired pursuant to the Offering will be determined by averaging the cost of the Common Shares so acquired
with the adjusted cost base to the Canadian Holder of any other Common Shares that are held by the Canadian Holder at the time
of acquisition.
Dividends on Common Shares
A Canadian Holder that is an individual
(other than certain trusts) will be required to include in computing the holder's income for a taxation year any taxable dividends
received or deemed to be received on the Common Shares. Such taxable dividends will be subject to the gross-up and dividend tax
credit rules in the Tax Act, including the enhanced dividend tax credit rules applicable to any dividend designated as an "eligible
dividend" by the Company. There may be limitations on the ability of the Company to designate dividends as eligible dividends.
A Canadian Holder that is a corporation
will include dividends received or deemed to be received on the Common Shares in computing its income for tax purposes and generally
will be entitled to deduct the amount of such dividends in computing its taxable income. In certain circumstances, section 55(2)
of the Tax Act will treat a taxable dividend received by a Canadian Holder that is a corporation as proceeds of a disposition or
capital gain. Canadian Holders that are corporations should consult their own tax advisors having regard to their own circumstances.
Certain corporations, including private corporations or subject corporations (as such terms are defined in the Tax Act), may be
liable to pay a refundable tax under Part IV of the Tax Act at the rate of 38⅓% of the dividends received or deemed to be
received on the Common Shares to the extent that such dividends are deductible in computing taxable income.
Disposition of Common Shares
In general, a Canadian Holder of a Common
Share will realize a capital gain (or a capital loss) on a disposition, or a deemed disposition of such Common Share (other than
to the Company), equal to the amount by which the proceeds of disposition of the Common Share, net of any reasonable costs of disposition,
exceed (or are less than) the adjusted cost base of the Common Share to the holder.
A Canadian Holder will be required to include
in income one-half of the amount of any capital gain (a "
taxable capital gain
") realized in the year of a disposition
of the Common Shares and will generally be required to deduct one-half of the amount of any capital loss (an "
allowable
capital loss
") against taxable capital gains realized in the year of a disposition, in accordance with the provisions
of the Tax Act. Allowable capital losses for a taxation year in excess of taxable capital gains for that year generally may be
carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation
year against net taxable capital gains realized in such years, to the extent and in the circumstances provided in the Tax Act.
In general, in the case of a Canadian Holder
that is a corporation, the amount of any capital loss otherwise determined arising from a disposition or deemed disposition of
Common Shares may be reduced by the amount of dividends previously received thereon, or deemed received thereon, to the extent
and under circumstances prescribed in the Tax Act. Analogous rules apply where a corporation is, directly or through a trust or
partnership, a member of a partnership or a beneficiary of a trust which owns Common Shares. Canadian Holders to whom these rules
may apply should consult their own tax advisors
Additional Refundable Tax
A Canadian Holder that is, throughout the
relevant taxation year, a "Canadian-controlled private corporation" as defined in the Tax Act may be liable to pay, in
addition to the tax otherwise payable under the Tax Act, a refundable tax of 10⅔% of its "aggregate investment income",
as defined in the Tax Act, for the year which is defined to include taxable capital gains and an amount in respect of dividends.
Capital gains and dividends realized by
an individual may give rise to a liability for minimum tax.
ELIGIBILITY FOR INVESTMENT
In the opinion of Thorsteinssons LLP,
tax counsel to the Company with respect to Canadian legal matters, provided the Common Shares are listed on a designated stock
exchange (which currently includes the TSX and the NYSE) or that the Company continues to qualify as a "public corporation"
for the purposes of the Tax Act, the Common Shares will be qualified investments under the Tax Act for a trust governed by a registered
retirement savings plan (a "
RRSP
"), a registered retirement income fund (a "
RRIF
"), a deferred
profit sharing plan, a registered education savings plan (a “
RESP
”), a registered disability savings plan (a
“
RDSP”)
, and a tax-free savings account (a "
TFSA
").
Notwithstanding that the
Common Shares may be qualified investments for a TFSA, RRSP or RRIF (a "
Registered Plan
"), if the Common
Shares are a "prohibited investment" within the meaning of the Tax Act for a Registered Plan, the holder or
annuitant of the Registered Plan, as the case may be, will be subject to penalty taxes as set out in the Tax Act. The Common
Shares will generally not be a prohibited investment for a Registered Plan if the holder or annuitant, as the case may be,
(a) deals at arm's length with the Company for the purposes of the Tax Act, and (b) does not have a "significant
interest" (as defined in the Tax Act) in the Company. In addition, the Common Shares will not be a prohibited investment
if the Common Shares are "excluded property" (as defined in the Tax Act) for a Registered Plan. Pursuant to tax
proposals contained in the 2017 Federal Budget released on March 22, 2017, the rules in respect of “prohibited
investments” are also proposed to apply to (i) RESPs and the subscriber thereof and (ii) RDSPs and the holders tthereof.
Purchasers of the Common Shares should
consult their own tax advisers with respect to whether Common Shares would be prohibited investments having regard to their particular
circumstances.
RISK FACTORS
Investing in the Common Shares is speculative
and involves a high degree of risk due to the nature of the Company's business and the present stage of exploration of its mineral
properties. The following risk factors, as well as risks currently unknown to the Company, could materially adversely affect Seabridge's
future business, operations and financial condition and could cause them to differ materially from the estimates described in forward-looking
information relating to the Company, or its business, property or financial results, each of which could cause purchasers of the
Common Shares to lose part or all of their investment. In addition to the other information contained in this Prospectus and the
documents incorporated by reference herein and therein, prospective investors should carefully consider the factors set out under
the "Risk Factors" section in the Annual Information Form and the factors set out below in evaluating the Company and
its business before making an investment in the Common Shares.
Risks Relating to the Common Shares
and the Offering
The trading price for the Company's
securities is volatile.
The market prices for the securities of
mining companies, including the Company, have historically been highly volatile. The market has from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of any particular company. In addition, because of
the nature of Seabridge's business, certain factors such as the Company's announcements and the public's reaction, operating performance
and the performance of competitors and other similar companies, fluctuations in the market prices of the Company's resources, government
regulations, changes in earnings estimates or recommendations by research analysts who track Seabridge's securities or securities
of other companies in the resource sector, general market conditions, announcements relating to litigation, the arrival or departure
of key personnel and the factors listed under the heading "Cautionary Note Regarding Forward-Looking Statements" can
have an adverse impact on the market price of the Common Shares. For example, since January 1, 2016, the closing price of the Common
Shares on the TSX has ranged from a low of $7.99 to a high of $20.71 and on the NYSE has ranged from a low of US$5.16 to a high
of US$15.88.
Any negative change in the public's perception
of the Company's prospects could cause the price of the Company's securities, including the price of the Common Shares, to decrease
dramatically. Furthermore, any negative change in the public's perception of the prospects of mining companies in general could
depress the price of Seabridge's securities, including the price of the Common Shares, regardless of the Company's results. Following
declines in the market price of a company's securities, securities class-action litigation is often instituted. Litigation of this
type, if instituted, could result in substantial costs and a diversion of Seabridge's management's attention and resources.
Sales of a significant number of Common
Shares in the public markets, or the perception of such sales, could depress the market price of the Common Shares.
Sales of a substantial number of Common
Shares or other equity-related securities in the public markets by the Company or its significant shareholders could depress the
market price of the Common Shares and impair Seabridge's ability to raise capital through the sale of additional equity securities.
Seabridge cannot predict the effect that future sales of the Common Shares or other equity-related securities would have on the
market price of the Common Shares. The price of the Common Shares could be affected by possible sales of the Common Shares by hedging
or arbitrage trading activity which the Company expects to occur involving the Common Shares.
The Company has discretion concerning
the use of cash resources, including the net proceeds of the Offering, as well as the timing of expenditures.
The Company has discretion concerning the
application of cash resources and the timing of expenditures and shareholders may not agree with the manner in which the Company
elects to allocate and spend cash resources. The results and the effectiveness of the application of cash resources are uncertain.
The failure by the Company to apply cash resources effectively could have a material adverse effect on the business of the Company.
Management of the Company will have discretion with respect to the use of the net proceeds from the Offering and investors will
be relying on the judgment of management regarding the application of these proceeds. Management of the Company could spend most
of the net proceeds from the Offering in ways that the Company's security holders may not desire or that do not yield a favourable
return. Prospective investors will not have the opportunity, as part of their investment in the Common Shares, to influence the
manner in which the net proceeds of the Offering are used. At the date of this Prospectus, the Company intends to use the net proceeds
from the Offering as indicated in the discussion under "Use of Proceeds". However, the Company's needs may change as
the business of the Company evolves and the Company may have to allocate the net proceeds differently than as indicated in the
discussion under "Use of Proceeds". As a result, the proceeds that the Company receives in the Offering may be used in
a manner significantly different from the Company's current expectations.
The Company believes that it may
be classified as a "passive foreign investment company" for the current taxable year, which would likely result in materially
adverse U.S. federal income tax consequences for U.S. investors.
The Company believes that it was classified
as a passive foreign investment company ("PFIC") for the taxable year ending December 31, 2016 and expects that it may
be classified as a PFIC for the current taxable year and in future taxable years. If the Company is classified as a PFIC for any
taxable year during which a U.S. Holder (as defined under "Certain Income Tax Considerations for U.S. Holders—Material
United States Federal Income Tax Considerations") holds the Common Shares, it would likely result in adverse U.S. federal
income tax consequences for such U.S. Holder. The adverse consequences of the PFIC regime may be mitigated if a U.S. Holder is
able to make a "qualified electing fund" election or a "mark-to-market" election. The Company has made available
and expects to continue to make available the information necessary for a U.S. Holder to make and maintain a QEF election. U.S.
Holders should carefully read "Certain Income Tax Considerations for U.S. Holders – Material United States Federal Income
Tax Considerations – Passive Foreign Investment Company Considerations" for more information and consult their own tax
advisors regarding the likelihood and consequences of the Company being classified as a PFIC for U.S. federal income tax purposes.
The Company has a history of net
losses and negative cash flows from operations and expects losses and negative cash flows from operations to continue for the foreseeable
future.
The Company has a history of net losses
and negative cash flows from operations and the Company expects to incur net losses and negative cash flows from operations for
the foreseeable future. As of December 31, 2016, the Company's deficit totaled approximately $96 million. None of the Company's
properties has advanced to the commercial production stage and the Company has no history of earnings or positive cash flow from
operations.
The Company expects to continue to incur
net losses unless and until such time as one or more of its projects enters into commercial production and generates sufficient
revenues to fund continuing operations or until such time as the Company is able to offset its expenses against the sale of one
or more of its projects, if applicable. The development of the Company's projects to achieve production will require the commitment
of substantial financial resources. The amount and timing of expenditures will depend on a number of factors, including the progress
of ongoing exploration and development, the results of consultant analysis and recommendations, the rate at which operating losses
are incurred and the execution of any sale or joint venture agreements with strategic partners, some of which are beyond the Company's
control. There is no assurance that the Company will be profitable in the future.
The Company applies from time-to-time
for refunds under British Columbia Mining Exploration Tax Credit ("BCMETC") and its claims are subject to audit and may
not be successful in full.
The Company seeks refunds of qualifying
exploration expenditures under BCMETC. These claims are subject to audit by the Canada Revenue Agency (the "
CRA
"),
the outcome of which is uncertain. There is a risk that if a claim is reduced on audit the Company may be required to return money
refunded to it by the CRA.
AUDITORS, TRANSFER AGENT AND REGISTRAR
The Company's auditors are KPMG LLP, Chartered
Professional Accountants, of Suite 4600, 333 Bay Street, Toronto, Ontario, Canada. KPMG LLP has reported that it is independent
within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and
any applicable legislation or regulation and are independent accountants under all relevant U.S. professional and regulatory standards.
The registrar and transfer agent for the
Common Shares is Computershare Investor Services Inc. at its principal office at 100 University Ave., 9th Floor, Toronto, Ontario,
Canada M5J 2Y1 and co-transfer points at 510 Burrard Street, Vancouver, British Columbia, Canada V6C 3B9 and Computershare Trust
Company, N.A., at 350 Indiana Street, Suite 800, Golden, Colorado, USA 80401.
INTEREST OF EXPERTS
Names of Experts
The following are the names of each person
or company who has prepared or certified a statement, report or opinion relating to the Company's mineral properties described
or included in this Prospectus, including in a document incorporated by reference in this Prospectus, and whose profession or business
gives authority to the report, valuation, statement or opinion made by the person or company.
With respect to the KSM Report, the following
experts are named and their responsibilities are as follows:
|
·
|
Tetra Tech, under the direction of Hassan
Ghaffari (surface and underground infrastructure, TMF costs, WSF costs, construction schedule, capital estimate and financial analysis),
John Huang (metallurgical testing review, permanent water treatment, mineral process design and operating cost estimation for process,
G&A and site services, and overall report preparation), Kevin Jones (winter access road)
|
|
·
|
Moose Mountain Technical Services under
the direction of Jim Gray (open pit Mineral Reserves, open pit mining operations, mine capital and mine operating costs, MTT and
rail ore conveyance design)
|
|
·
|
W.N. Brazier Associates Inc. under the
direction of W.N. Brazier (power supply, energy recovery plants, underground electrical systems and associated costs)
|
|
·
|
ERM (Environmental Resources Management)
under the direction of Rolf Schmitt (environment and permitting)
|
|
·
|
Klohn Crippen Berger Ltd. under the direction
of Graham Parkinson (design of surface water diversion, diversion tunnels and seepage collection ponds, tailing dam, water treatment
dam and rock storage facility (RSF) and tunnel geotechnical)
|
|
·
|
Resource Modeling Inc. under the direction
of Michael Lechner (Mineral Resources)
|
|
·
|
Golder Associates Inc. under the direction
of Ross Hammett (underground Mineral Reserves, block caving assessments, mine design and associated costs)
|
|
·
|
BGC Engineering Inc. under the direction
of Derek Kinakin (rock mechanics and mining pit slopes)
|
|
·
|
McElhanney Consulting Services Ltd. under
the direction of Robert Parolin (permanent access roads and associated costs)
|
|
·
|
Amec Foster Wheeler under the direction
of Simon Allard P.Eng., Mark Ramirez RM SME and Tony Lipiec P.Eng (Underground and open pit design , RSF design, process design
and capital and operating costs)
|
With respect to the Courageous Lake Report,
the following experts are named and their responsibilities are identified:
|
·
|
Tetra Tech, under the direction of Dr. John Huang (overall report preparation, metallurgical testing
review, mineral processing, infrastructures (excluding power supply and airstrip), operating costs (excluding mining operating
costs), capital cost estimate and project development plan) and Dr. Sabry Abdel Hafez (financial evaluation)
|
|
·
|
Moose Mountain Technical Services under the direction of Jim Gray (mining, mine capital and mine
operating costs)
|
|
·
|
W.N. Brazier Associates Inc. under the direction of W.N. Brazier (power generation)
|
|
·
|
ERM Consultants Canada Ltd. under the direction of Rolf Schmitt (environmental matters)
|
|
·
|
Golder Associates Ltd. under the direction of Albert Victor Chance
(open pit slope stability)
|
|
·
|
Tetra Tech EBA Inc. under the direction of Nigel Goldup (tailings, surface water management and
waste rock storage facilities, and surficial geology) and Kevin Jones (airstrip upgrade)
|
|
·
|
SRK Consulting (Canada) Inc., under the direction of Stephen Day (metal leaching and acid rock
drainage)
|
|
·
|
Resource Modeling Inc. under the direction of Michael Lechner (mineral resources)
|
William Threlkeld, the Senior Vice President,
Exploration of the Company and a Registered Professional Geologist, is named as having prepared or supervised the preparation of
technical information in respect of exploration programs of the Company at both the KSM Project and Courageous Lake Project. Resource
Modeling Inc. under the direction of Michael Lechner is named as having prepared resource estimates for the Deep Kerr deposit at
the KSM Project and the Walsh lake deposit at the Courageous Lake Project.
Each of the persons referenced above is
a qualified person as such term is defined in NI 43-101.
Interests of Experts
To Seabridge's knowledge, none of the companies,
firms or persons identified above received or will receive a direct or indirect interest in the property of the Company or of any
associate or affiliate of the Company. As at the date hereof, the aforementioned persons, and the directors, officers, employees
and partners, as applicable, of each of the aforementioned companies and firms beneficially own, directly or indirectly, in the
aggregate in relation to each such company or firm, less than one percent of the securities of the Company.
Other than as set out below, none of the
aforementioned persons, nor any director, officer, employee or partner, as applicable, of the aforementioned companies or firms
is currently expected to be elected, appointed or employed as a director, officer or employee of the Company or of an associate
or affiliate of the Company.
Mr. Threlkeld, the Senior Vice President,
Exploration of the Company, owns 317,147 Common Shares of the Company, options to purchase 195,000 Common Shares at various prices
and restricted share units entitling him to 5,750 Common Shares upon vesting.
LEGAL MATTERS
Certain legal matters related to the Common
Shares offered pursuant to this Prospectus will be passed upon on behalf of the Company by DuMoulin Black LLP with respect to Canadian
legal matters other than tax-related matters, by Thorsteinssons LLP with respect to Canadian tax-related matters, and by Carter
Ledyard & Milburn LLP with respect to United States legal matters, and on behalf of the Underwriters by Blake, Cassels &
Graydon LLP with respect to Canadian legal matters, and by Katten Muchin Rosenman LLP with respect to United States legal matters.
At the date of this Prospectus supplement, the partners and associates of DuMoulin Black LLP beneficially own less than 1% of the
Company's outstanding securities. At the date of this Prospectus, the partners and associates of Thorsteinssons LLP beneficially
own less than 1% of the Company's outstanding securities. At the date of this Prospectus, the partners and associates of Blake,
Cassels & Graydon LLP beneficially own less than 1% of the Company's outstanding securities.
ENFORCEABILITY OF CIVIL LIABILITIES
Seabridge is a company organized and existing
under the
Canada Business Corporations Act
and its principal place of business is in Canada. Many of the Company's directors
and officers, and some of the experts named in this Prospectus, are residents of Canada or otherwise reside outside the United
States, and all or a substantial portion of their assets, and a substantial portion of the Company's assets, are located outside
the United States. Seabridge has appointed an agent for service of process in the United States, but it may be difficult for holders
of Common Shares who reside in the United States to effect service within the United States upon those directors, officers and
experts who are not residents of the United States. It may also be difficult for holders of Common Shares who reside in the United
States to realize in the United States upon judgments of courts of the United States predicated upon the Company's civil liability
and the civil liability of the Company's directors, officers and experts under the United States federal securities laws or the
securities or "blue sky" laws of any state within the United States. The Company's Canadian counsel, DuMoulin Black LLP,
advised the Company that a judgment of a United States court predicated solely upon civil liability under United States federal
securities laws would probably be enforceable in Canada if the United States court in which the judgment was obtained has a basis
for jurisdiction in the matter that would be recognized by a Canadian court for the same purposes. However, DuMoulin Black LLP
also advised the Company that there is substantial doubt whether an action could be brought in Canada in the first instance on
the basis of liability predicated solely upon United States federal securities laws.
Seabridge has filed with the SEC, concurrently
with the filing of the registration statement of which this Prospectus forms a part, an appointment of agent for service of process
on Form F-X. Under the Form F-X, Seabridge has appointed Corporation Service Company, New York, New York as its agent for service
of process in the United States in connection with any investigation or administrative proceeding conducted by the SEC or any civil
suit or action brought against or involving the Company in a United States federal court or state court arising out of or related
to or concerning the offering of the securities under this Prospectus.
ENFORCEMENT OF JUDGMENTS AGAINST FOREIGN
PERSONS OR COMPANIES
Certain of
the Company's directors reside outside of Canada, being Rudi P. Fronk, A. Frederick Banfield, Richard Kraus, Eliseo Gonzalez-Urien and Jay Layman. Each of such directors has appointed Seabridge, 400 - 106 Front Street
East,
Toronto
, Ontario, M5A 1E1 as their agent for service of process.
Each of (a) William Threlkeld, (b) Michael
Lechner, (c) Resource Modeeling Inc., (d) Mark Ramirez and (e) Amec Foster Wheeler E&C Services, Inc., is resident outside
Canada or, in the case of a company, is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction.
Purchasers are advised that it may not
be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued
or otherwise organized under the laws of a foreign jurisdiction, or resides outside of Canada, even if the party has appointed
an agent for service of process.
PART II
INFORMATION NOT REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS
Indemnification of Directors and Officers.
Section 124 of the
Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the “CBCA”) provides that a corporation may indemnify a director
or officer of the corporation, a former director or officer of the corporation or another individual who acts or acted at the corporation’s
request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges
and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect
of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of that association
with the corporation or other entity. A corporation may not indemnify an individual unless the individual (a) acted honestly and
in good faith with a view to the best interests of the corporation, or, as the case may be, to the best interests of the other
entity for which the individual acted as a director or officer or in a similar capacity at the corporation’s request and
(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had
reasonable grounds for believing that the individual’s conduct was lawful. The indemnification may be made in connection
with an action by or on behalf of the corporation or other entity to procure a judgment in its favor, to which the individual is
made a party because of the individual’s association with the corporation or other entity as described above, only with court
approval and provided the individual fulfills the conditions set out in clauses (a) and (b) above. The aforementioned individuals
are entitled to indemnification from the corporation in respect of all costs, charges and expenses reasonably incurred by the individual
in connection with the defense of any civil, criminal, administrative, investigative or other proceeding to which the individual
is subject because of the individual’s association with the corporation or other entity as described above if the individual
was not judged by the court or other competent authority to have committed any fault or omitted to do anything that the individual
described above ought to have done and provided the individual fulfills the conditions set out in clauses (a) and (b) above. A
corporation may advance moneys to a director, officer or other individual for the costs, charges and expenses of a proceeding described
above; however, the individual shall repay the moneys if the individual does not fulfill the conditions set out in clauses (a)
and (b) above.
Section 6.03 of the
Amended By-law Number 1 (including all amendments as of December 5, 2007, the “By-laws”) of Seabridge Gold Inc. (the
“Registrant”), provides that subject to Section 124 of the CBCA, the Registrant shall indemnify a director or officer
of the Registrant, a former director or officer of the Registrant or a person who acts or acted at the Registrant's request as
a director or officer of a body corporate of which the Registrant is or was a shareholder or creditor, and his heirs and legal
representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably
incurred by him in respect of any civil, criminal, administrative, investigative or proceeding in which the individual is involved
because of that association with the Registrant or other entity, if (a) he acted honestly and in good faith with a view to the
best interests of the Registrant or, as the case may be, to the best interests of the other entity for which the individual acted
as director or officer or in a similar capacity at the Registrant’s request; and (b) in the case of a criminal or administrative
action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual’s
conduct was lawful. Section 6.03 of the By-laws further provides that the Registrant shall also indemnify such persons in such
other circumstances as the CBCA permits or requires and that nothing contained in the By-laws shall limit the discretion of the
Registrant to indemnify, or limit the right of any person entitled to indemnity to claim indemnity, apart from the provisions of
Section 6.03.
The Registrant maintains a policy of directors’
and officers’ liability insurance which insures its directors and officers for certain losses as a result of claims against
them in their capacity as directors and officers and also reimburses the Registrant for payments made pursuant to the indemnity
provisions under the by-laws and the CBCA.
Underwriting agreements
in respect of offerings of securities under this registration statement may contain provisions by which the underwriters agree
to indemnify the Registrant, each of the directors and officers of the Registrant and each person who controls the Registrant within
the meaning of the U.S. Securities Act of 1933 (the “Securities Act”) with respect to information furnished by the
underwriters for use in the registration statement.
Insofar as indemnification
for liabilities arising from the Securities Act may be permitted to directors, officers or persons controlling the Registrant pursuant
to the foregoing provisions, the Registrant has been informed that in the opinion of the U.S. Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
EXHIBITS TO FORM F-10
The exhibits to this Registration Statement
on Form F-10 are listed in the Exhibit Index, which appears elsewhere herein.
EXHIBIT INDEX
Exhibit No.
|
Description
|
|
|
3.1
|
Underwriting Agreement
|
4.1*
|
Annual Information Form of the Registrant dated March 29, 2017
for the year ended December 31, 2016 (incorporated by reference to Exhibit 99.1 from the Registrant’s Report on Form 40-F,
furnished to the Commission on March 29, 2017).
|
4.2*
|
Audited consolidated financial statements
of the Registrant as at December 31, 2016 and 2015 and for each of the years in the two year period ended December 31, 2016 together
with the notes thereto and the independent auditors' report thereon (incorporated by reference to Exhibit 99.3 from the Registrant’s
Report on Form 40-F, furnished to the Commission on March 29, 2017).
|
4.3*
|
Management's discussion and analysis of financial condition and results of operations of the Registrant for the year ended December 31, 2016 (incorporated by reference to Exhibit 99.2 from the Registrant’s Report on Form 40-F, furnished to the Commission on March 29, 2017).
|
|
|
5.1*
|
Consent of KPMG LLP, Independent Registered Public Accounting Firm
|
|
|
5.2*
|
Consents of Tetra Tech Canada Inc. and John Huang, Sabry Abdel
Hafez, Hassan Ghaffari, Kevin Jones, Nigel Goldup
|
5.3*
|
Consent of Moose Mountain Technical Services and J. H. Gray
|
|
|
5.4*
|
Consent of W.N. Brazier Associates Inc. and Neil Brazier
|
|
|
5.5*
|
Consent of ERM Consultants Canada Ltd. and Rolf Schmitt
|
|
|
5.6*
|
Consent of Klohn Crippen Berger Ltd. and J. Graham Parkinson
|
|
|
5.7*
|
Consent of Resource Modeling Inc. and Michael Lechner
|
|
|
5.8*
|
Consent of McElhanney Consulting Services Ltd. and R.W. Parolin
|
|
|
5.9*
|
Consent of BGC Engineering Inc. and Derek Kinakin
|
|
|
5.10*
|
Consents of Golder Associates Ltd. and Ross D. Hammett, Albert Victor Chance
|
|
|
5.11*
|
Consent of Amec Foster
|
|
|
5.12**
|
Consent of Simon Allard
|
Exhibit No.
|
Description
|
|
|
5.13**
|
Consent of Mark Ramirez
|
|
|
5.14*
*
|
Consent of Ignacy (Tony) Lipiec
|
|
|
5.15*
|
Consent of SRK Consulting (Canada) Inc. and Stephen Day
|
|
|
5.16*
|
Consent of William Threlkeld
|
5.17
|
Consent of Thorsteinssons LLP
|
|
|
6.1*
|
Powers of Attorney (included in the signature page)
|
____________________
*: Previously filed
**: Amended consent
PART III
UNDERTAKING AND CONSENT TO SERVICE OF
PROCESS
Item 1.
Undertaking.
The Registrant undertakes
to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish
promptly, when requested to do so by the Commission staff, information relating to the securities registered pursuant to this Form
F-10 or to transactions in such securities.
Item 2.
Consent to Service of Process.
A written Appointment of Agent
for Service of Process and Undertaking on Form F-X for the Registrant and its agent for service of process was filed concurrently
with the initial filing of this Registration Statement.
Any change to the name or address
of the Registrant's agent for service shall be communicated promptly to the Commission by amendment to Form F-X referencing the
file number of this Registration Statement.
SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form F-10 and has duly caused this Amendment No. 2 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of Toronto, Province of Ontario, Country of Canada,
on this 10th day of April, 2017.
|
SEABRIDGE
GOLD INC.
By:
/s/ Rudi P. Fronk
Name:
Rudi P. Fronk
Title: President and Chief Executive
Officer
|
Pursuant
to the requirements of the Securities Act, this Amendment No. 2 to the Registration Statement has been signed below by or on behalf
of the following persons in the capacities and on the dates indicated.
Signature
|
Title
|
Date
|
|
|
|
/s/ Rudi P. Fronk
|
Chief Executive Officer and Chairman
(Principal Executive Officer)
|
April 10, 2017
|
Rudi P. Fronk
|
|
|
|
|
|
/s/ Christopher Reynolds
|
Chief Financial Officer
(Principal Financial Officer and Principal Accounting
Officer)
|
April 10, 2017
|
Christopher Reynolds
|
|
|
|
|
|
*
|
Director
|
April 10, 2017
|
A. Frederick Banfield
|
|
|
|
|
|
*
|
Director
|
April 10, 2017
|
Eliseo Gonzalez-Urien
|
|
|
|
|
|
*
|
Director
|
April 10, 2017
|
Richard C. Kraus
|
|
|
|
|
|
*
|
Director
|
April 10, 2017
|
Jay S. Layman
|
|
|
|
|
|
*
|
Director
|
April 10, 2017
|
John W. Sabine
|
|
|
|
|
|
*
|
Director
|
April 10, 2017
|
Gary Sugar
|
|
|
_____________
*:
Christopher Reynolds
(Attorney-in-fact)
|
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section
6(a) of the Securities Act of 1933, as amended, the Authorized Representative has duly caused this Amendment No. 2 to the Registration
Statement to be signed on its behalf by the undersigned, solely in its capacity as the duly authorized representative of the Registrant
in the United States, in the City of Denver, in the State of Colorado, on this 10th day of April, 2017.
|
Seabridge
Gold Inc.
(Authorized Representative)
By:
/s/ Rudi P. Fronk
Name: Rudi P. Fronk
Title:
President and Chief Executive Officer
|
EXHIBIT INDEX
Exhibit No.
|
Description
|
|
|
3.1
|
Underwriting Agreement
|
4.1*
|
Annual Information Form of the Registrant dated March 29, 2017
for the year ended December 31, 2016 (incorporated by reference to Exhibit 99.1 from the Registrant’s Report on Form 40-F,
furnished to the Commission on March 29, 2017).
|
4.2*
|
Audited consolidated financial statements
of the Registrant as at December 31, 2016 and 2015 and for each of the years in the two year period ended December 31, 2016 together
with the notes thereto and the independent auditors' report thereon (incorporated by reference to Exhibit 99.3 from the Registrant’s
Report on Form 40-F, furnished to the Commission on March 29, 2017).
|
4.3*
|
Management's discussion and analysis of financial condition and results of operations of the Registrant for the year ended December 31, 2016 (incorporated by reference to Exhibit 99.2 from the Registrant’s Report on Form 40-F, furnished to the Commission on March 29, 2017).
|
|
|
5.1*
|
Consent of KPMG LLP, Independent Registered Public Accounting Firm
|
|
|
5.2*
|
Consents of Tetra Tech Canada Inc. and John Huang, Sabry Abdel
Hafez, Hassan Ghaffari, Kevin Jones, Nigel Goldup
|
5.3*
|
Consent of Moose Mountain Technical Services and J. H. Gray
|
|
|
5.4*
|
Consent of W.N. Brazier Associates Inc. and Neil Brazier
|
|
|
5.5*
|
Consent of ERM Consultants Canada Ltd. and Rolf Schmitt
|
|
|
5.6*
|
Consent of Klohn Crippen Berger Ltd. and J. Graham Parkinson
|
|
|
5.7*
|
Consent of Resource Modeling Inc. and Michael Lechner
|
|
|
5.8*
|
Consent of McElhanney Consulting Services Ltd. and R.W. Parolin
|
|
|
5.9*
|
Consent of BGC Engineering Inc. and Derek Kinakin
|
|
|
5.10*
|
Consents of Golder Associates Ltd. and Ross D. Hammett, Albert Victor Chance
|
|
|
5.11*
|
Consent of Amec Foster
|
|
|
5.12**
|
Consent of Simon Allard
|
Exhibit No.
|
Description
|
|
|
5.13**
|
Consent of Mark Ramirez
|
|
|
5.14**
|
Consent of Ignacy (Tony) Lipiec
|
|
|
5.15*
|
Consent of SRK Consulting (Canada) Inc. and Stephen Day
|
|
|
5.16*
|
Consent of William Threlkeld
|
5.17
|
Consent of Thorsteinssons LLP
|
|
|
6.1*
|
Powers of Attorney (included in the signature page)
|
____________________
*: Previously filed
**: Amended consent
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