Seabridge Gold recovers $4.4-million from B.C. tax case

Executive Summary

• Seabridge Gold Inc. has recovered $4.4 million from the Canada Revenue Agency (CRA) following a successful appeal in the Supreme Court of B.C. (SCBC) regarding the denial of B.C. Mineral Exploration Tax Credits (B.C. METC) for the 2010 and 2011 tax years.
• The SCBC ruled in March 2025 that over 92% of the claimed exploration expenditures qualified as mining exploration expenses, entitling the company to the tax credits and the return of funds held by the CRA during the appeal, plus accrued interest.
• The company is now pursuing the recovery of an additional $9.4 million in tax, penalties, and interest related to a separate CRA denial of flow-through mining expenditures for the 2014–2016 exploration programs, arguing that the SCBC's reasoning applies to these expenses as well.

Key Details

• Recovered Amount: $4.4 million, comprising the original funds held by the CRA and accrued interest.
• Tax Years Resolved: 2010 and 2011.
• Legal Outcome: The Supreme Court of B.C. reversed the CRA's decision to deny B.C. METC, ruling that the expenses were incurred to determine the "existence, location, extent or quality of a mineral resource."
• Expense Qualification: The judge determined that over 92% of the $15.8 million in exploration expenditures claimed by Seabridge qualified as mining exploration expenses.
• Pending Dispute: The company is challenging a second CRA decision regarding 2014–2016 exploration expenditures claimed as flow-through mining expenditures.
• Potential Recovery: The company believes it is entitled to the return of $9.4 million currently held by the CRA, which includes tax, penalties, and interest paid on reassessments for the company and its investors.
• Current Status: Seabridge is working with tax counsel to have the 2014–2016 reassessments reversed.

Notable Quotes

• "Canadian mining is subject to an immense and ever-increasing set of regulations covering everything from taxes and mineral rights to permitting and ESG. Navigating this complex environment is critical and we take pride in our ability to do so. We are pleased to have had our interpretation of the Income Tax Act confirmed and to have the B.C. METC challenge behind us. We now look forward to resolving CRA's larger denial of flow-through mining expenditures that we renounced to investors. We believe the CRA should take more supportive positions regarding our industry going forward." — Rudi Fronk, Chair and CEO