Seabridge Gold (TSX:SEA): Valuation Spotlight After Lawsuit Challenges KSM Project Permitting

Seabridge Gold (TSX:SEA) has landed in the spotlight after Tudor Gold launched a lawsuit disputing Seabridge’s new Licence of Occupation for the KSM Project’s Mitchell Treaty Tunnels. The challenge highlights project permitting risks and potential timeline impacts.

See our latest analysis for Seabridge Gold.

Despite the regulatory spotlight, Seabridge Gold’s share price has surged recently, recording a 31.96% one-month return and a notable 98.33% gain year-to-date. Over the longer term, its three-year total shareholder return stands at 125.8%, reflecting growing optimism in the face of legal and operational headwinds.

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With the share price still trading well below analyst targets despite recent gains, investors now face a key question: is Seabridge Gold offering a compelling entry point, or has the market already factored in future growth?

Price-to-Book of 3.4x: Is it justified?

Seabridge Gold is currently trading at a price-to-book ratio of 3.4x, which reflects a premium compared to both its industry and peer group averages based on the last close of CA$34.39. This elevated multiple stands out even as shares surge, raising questions about whether the optimism is warranted.

The price-to-book ratio indicates how much investors are willing to pay relative to the company's net asset value. For resource companies that are still pre-revenue, like Seabridge Gold, this metric reflects market expectations around future project success, permitting progress, and eventual profitability rather than current earnings power.

However, with Seabridge's price-to-book ratio above the Canadian Metals and Mining industry average of 2.7x and the peer average of 3.3x, the premium may be difficult to justify given the lack of revenue, persistent losses, and recent increases in net losses. This signals that investors may be assuming substantial future upside, potentially overlooking operational challenges and unprofitability. There is also insufficient data to calculate a fair ratio for additional context on where the market could ultimately move.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Book of 3.4x (OVERVALUED)

However, legal disputes and continued net losses highlight significant risks that could reduce investor optimism and cause delays in anticipated project milestones.

Find out about the key risks to this Seabridge Gold narrative.

Build Your Own Seabridge Gold Narrative

If you have a different perspective or want to see the numbers firsthand, you can easily dive in and build your own narrative in just minutes with Do it your way.

A great starting point for your Seabridge Gold research is our analysis highlighting 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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