Table of Contents


UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM 20-F
 
 __
              REGISTRATION
      STATEMENT  PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
      EXCHANGE ACT OF 1934ORXX
              ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934 for the fiscal year ended December 31,
      2007OR__
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
                For
      the transition period from __________ to
_______________OR__
              SHELL
      COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934
                Date
      of event requiring this shell company report ______________
                For
      the transition period from __________ to
  _______________
  Commission file number: 0-50657
 
 Seabridge Gold
Inc.
 (Exact
name of Registrant as specified in its charter)
 Not
Applicable
 (Translation
of Registrant's Name into English)
 Canada
 (Jurisdiction
of incorporation or organization)
  106 Front Street East,
4th Floor, Toronto,
Ontario CANADA M5A 1E1
 (Address
of principal executive offices)
 
 Securities
registered or to be registered pursuant to Section 12(b) of the
Act.
 
 Title of each
      class
              Name of each exchange
      on which registeredCommon
      Stock, no par value
              American
      Stock ExchangeCommon
      Stock, no par value
              TSX
      Venture Exchange
  Securities
registered or to be registered pursuant to Section 12(g) of the
Act.
 
 N/A
 (Title of
Class)
 
 Securities
for which there is a reporting obligation pursuant to Section 15(d) of the
Act.   None
 
 Indicate
the number of outstanding shares of each of the issuer's classes of capital or
common stock as of the close of the period covered by the annual
report:   37,298,885
  1
 Table of Contents
 Indicate
by check mark if the registrant is a well-known seasoned issuer as defined in
Rule 405 of the Securities Act
 
 ___
Yes xx No
 
 If this
report is an annual or transition report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.
  ___
Yes  xx No
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
  xx  
Yes  __
No
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check
one):
 
 Large
accelerated filer  ___      Accelerate
filer  xx     
Non-accelerated filer  ___
  Indicate
by check mark which basis of accounting the registrant has used to prepare the
financial statements included in this filing:
 [   
]  US GAAP
 [   
]  International Financial Reporting Standards as issued by the
International Accounting Standards Board
 [ x
]  Other
 If
“Other” has been checked in response to the previous question, indicate by check
mark which financial statement item the registrant has elected to
follow.
  xx  Item
17 ___ Item
18
 
 If this
is an annual report, indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).
  ___
Yes   xx 
No
 
 (APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE
YEARS)
 
 Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.
  ___
Yes   ___
No
  2
 Table of Contents
  Seabridge
Gold Inc.
 Form 20-F
Annual Report
 Table of Contents
 
 PART 1
                PAGEItem
      1.
                Identity of Directors, Senior Management and
      Advisers
                9Item
      2.
                Offer Statistics and Expected Timetable
                10Item
      3.
                Key Information
                10Item
      4
                Information on the Company
                20Item
      4A
                Unresolved Staff Comments
                42Item
      5.
                Operating and Financial Review and
    Prospects
                42Item
      6.
                Directors, Senior Management and
    Employees
                49Item
      7.
                Major Shareholders and Related Party
      Transactions
                59Item
      8.
                Financial Information
                60Item
      9.
                The Offer and Listing
                60Item
      10.
                Additional Information
                62Item
      11.
                Quantitative and Qualitative Disclosures about Market
      Risk
                72Item
      12.
                Description of Securities Other than Equity
      Securities
                73PART IIItem
      13.
                Default, Dividend Arrearages and
      Delinquencies
                73Item
      14.
                Material Modifications to the Rights of Securities Holders
      and Use of Proceeds
                73Item
      15.
                Controls and Procedures
                73Item
      16A.
                Audit Committee Financial Expert
                74Item
      16B.
                Code of Business Ethics
                74Item
      16C.
                Principal Accountant Fees and Services
                75Item
      16D.
                Exemptions from the Listing Standards for Audit
      Committees
                75Item
      16E.
                Purchases of Equity Securities by the Issuer and
      Affiliated Purchasers
                75PART IIIItem
      17.
                Financial Statements
                75Item
      18.
                Financial Statements
                75Item
      19.
                Exhibits
                75
  3
 Table of Contents
 METRIC
EQUIVALENTS
 
 For ease
of reference, the following factors for converting metric measurements into
imperial equivalents are provided:
 
 To
      Convert from Metric
                To
      Imperial
                Multiply
      byHectares
                Acres
                2.471Meters
                Feet
      (ft.)
                3.281Kilometers
      (km)
                Miles
                0.621Tonnes
                Tons
      (2000 pounds)
                1.102Grams/tonne
                Ounces
      (troy/ton)
                0.029
 
 
 GLOSSARY
OF TERMS
 
 S.E.C
      Industry Guide
                National
      Instrument 43-101Reserve:That part of a
      mineral deposit which could be economically and legally extracted or
      produced at the time of the reserve determination. The United States
      Securities and Exchange Commission requires a final or full Feasibility
      Study to support either Proven or Probable Reserves and does not recognize
      other classifications of mineralized deposits.
                Mineral Reserve:The
      economically mineable part of a Measured or Indicated Mineral Resource
      demonstrated by at least a Preliminary Feasibility study.  This
      study must include adequate information on mining, processing,
      metallurgical, economic and other relevant factors that demonstrate, at
      the time of reporting, that economic extraction can be
      justified.Proven Reserves:
      Reserves for which a quantity is computed from dimensions revealed in
      outcrops, trenches, workings or drill holes; grade and/or quality are
      computed from the results of detailed sampling and measurement are spaced
      so closely and the geologic character is so well defined that size, shape,
      depth, and mineral content of reserves are well
    established.
                Proven Mineral Reserve:The economically mineable part of a Measured Mineral Resource
      demonstrated by at least a Preliminary Feasibility study. This study must
      include adequate information on mining, processing, metallurgical,
      economic and other relevant factors that demonstrate, at the time of
      reporting, that economic extraction is justified.Probable Reserves:For
      which quantity and grade and/or quality are computed from information
      similar to that used for proven reserves, but the sites for inspection,
      sampling and measurement are farther apart or are otherwise less
      adequately spaced.  The degree of assurance, although lower than
      that for proven reserves, is high enough to assume continuity between
      points of observation.
                Probable Mineral Reserve:The economically mineable part of an indicated, and in some
      circumstances, a Measured Mineral Resource, demonstrated by at least a
      Preliminary Feasibility Study. This study must include adequate
      information on mining, processing, metallurgical, economic and other
      relevant factors that demonstrate, at the time of reporting, that economic
      extraction can be justified.
 
 Adularia -A colorless,
moderate- to low-temperature variety of orthoclase feldspar typically with
relatively high barium content.
 
 Andesite - A dark-colored,
fine-grained extrusive rock that, when porphyritic, contains phenocrysts
composed primarily of zoned sodic plagioclase and one or more of the mafic
minerals.
 
 Argulite -A variety of
asphaltic sandstone
  4
 Table of Contents
  Arkose - A feldspar-rich
sandstone, typically coarse-grained and pink or reddish, that is composed of
angular to subangular grains that may be either poorly or moderately well
sorted; usually derived from the rapid disintegration of granite or granitic
rocks, and often closely resembles granite.
 
 Basalt -A general term for
dark-colored mafic igneous rocks, commonly extrusive but locally
intrusive.
 
 Breccia - A rock in which
angular fragments are surrounded by a mass of fine-grained
minerals.
 
 Caldera - A large,
basin-shaped volcanic depression, more or less circular, the diameter of which
is many times greater than that of the included vent or vents.
 
 Carbonate -A sediment formed
by the organic or inorganic precipitation from aqueous solution of carbonates of
calcium, magnesium, or iron; e.g., limestone and dolomite.
 
 Cut-off grade - The lowest
grade of mineralized material that qualifies as reserve in a
deposit.  It is also used to estimate mineral reserves by including in
the estimates only those assays above the cut-off grade.
 
 Cut Value - Applies to assays that have
been reduced to a statistically determined maximum to prevent erratic high
values from inflating the average.
 
 Diamond Drilling - A type of rotary drilling in
which diamond bits are used as the rock-cutting tool to produce a recoverable
drill core sample of rock for observation and analysis.
 
 Diorite - An intrusive igneous
rock.
 
 Drift - A horizontal underground
opening that follows along the length of a vein or rock formation.
 
 Environmental Baseline Study -A geotechnical study that monitors and establishes the numerous naturally
occurring base levels present within a specific
area/environment.  These can include; water chemistry, flora and
fauna.
 
 Epithermal - Low temperature hydrothermal
process or product.
 
 Fault -A fracture or break in
rock along which there has been movement.
 
 Feasibility Study - A definitive study of the
viability of a mineral project by a qualified professional which defines: (1)
mining methods, pit configuration, mine scheduling, mine equipment and all
related costing, (2) method of mineral processing and all related plant,
equipment and costing, (3) necessary determination of all infrastructure
required and relevant costs and (4) all requirements of government and markets
for mine operation. A definitive financial analysis of the mineral project
taking into consideration all relevant factors, which will establish the
presence of a Mineral Reserve and the details of its economic
viability.
 
 Geochemistry - The study of the chemical
properties of rocks.
 
 Geophysical Survey - A scientific method of
prospecting that measures the physical properties of rock formations. Common
properties investigated include magnetism, specific gravity, electrical
conductivity and radioactivity.
 
 Grade - The metal content of rock
with precious metals, grade can be expressed as troy ounces or grams per tonne
of rock.
 
 Granite - Any holocrystalline,
quartz-bearing plutonic rock.
 
 Granitic - Pertaining to or composed of
granite.
  5
 Table of Contents
 
 Hydrothermal -The products or the actions
of heated waters in a rock mass such as a mineral deposit precipitating from a
hot solution.
 
 Indicated Resource - In
reference to minerals means quantity and grade and (or) quality are computed
from information similar to that used for resources, but the sites for
inspection, sampling, and measurement are farther apart or are otherwise less
adequately spaced.  The degree of assurance, although lower than that
for resources, is high enough to assume continuity between points of
observation.
 
 Inferred Resource - In
reference to minerals, means estimates are based on an assumed continuity beyond
measured and (or) indicated resources, for which there is geological
evidence.  Inferred resources may or may not be supported by samples
or measurements.
 
 Intrusion; Intrusive -Molten
rock that is intruded (injected) into spaces that are created by a combination
of melting and displacement.
 
 Kriging - In the estimation of ore
reserves by geostatistical methods, the use of a weighted, moving-average
approach both to account for the estimated values of spatially distributed
variables, and also to assess the probable error associated with the
estimates.
 
 Lode - A mineral deposit
consisting of a zone of veins, veinlets, disseminations, or planar breccias; a
mineral deposit in consolidated rock as opposed to a placer
deposit.
 
 Measured Resources - In
reference to minerals, means a quantity is computed from dimensions revealed in
outcrops, trenches, workings, or drill holes; grade and (or) quality are
computed from the results of detailed sampling.  The sites for
inspection, sampling, and measurement are spaced so closely and the geological
character is so well defined that size, shape, depth and mineral content of the
resource are well established.
 
 Monzonite -A granular
plutonic rock containing approx. equal amounts of orthoclase and plagioclase,
and thus intermediate between syenite and diorite. Quartz is minor or
absent.
 
 Net Smelter Return Royalty/
NSR  -A phrase used to describe a royalty payment made by a
producer of metals based on gross metal production from the property, less
deduction of certain limited costs including smelting, refining, transportation
and insurance costs.
 
 Patented -A claim to which a
patent has been secured from the U.S. Government, in compliance with the laws
relating to such claims.
 
 Placer - A deposit of sand or gravel
that contains particles of gold, ilmenite, gemstones, or other heavy minerals of
value. The common types are stream gravels and beach sands.
 
 Porphyry - Any igneous rock in which
relatively large crystals are set in a fine-grained matrix of rock.
 
 Prefeasability Study -A comprehensive study of the
viability of a mineral project that has advanced to a stage where the mining
method, in the case of underground mining, or the pit configuration, in the case
of an open pit, has been established, and where an effective method of mineral
processing had been determined.  This Study must include a financial
analysis based on reasonable assumptions of technical engineering, operating,
and economic factors, which are sufficient for a Qualified Person acting
reasonably, to determine if all or part of the Mineral Resource may be
classified as a Mineral Reserve.
 
 Pyrite - An iron sulphide
mineral (FeS2), the most
common naturally occurring sulphide mineral.
 
 Quartz - Crystalline silica; often
forming veins in fractures and faults within older rocks.
 
 Quartz Monzonite - A coarse
grained, quartz rich igneous rock usually occurring as a smaller rock mass
associated with major granitic bodies.
  6
 Table of Contents
 
 Raise -A vertical or inclined
underground working that has been excavated from the bottom upward.
 
 Reclamation - Restoration of
mined land to original contour, use, or condition.
 
 Resource-Under the
Canadian Institute of Mining (“CIM”) standards, Mineral Resource is a
concentration or occurrence of natural, solid, inorganic or fossilized organic
material in or on the earth’s crust in such form and quantity and of such a
grade or quality that it has reasonable prospects for economic extraction. The
location, quantity, grade, geological characteristics and continuity of a
Mineral Resource are known, estimated or interpreted from specific geological
evidence and knowledge.
 
 A mineral
resource estimate is based on information on the geology of the deposit and the
continuity of mineralization. Assumptions concerning economic and operating
parameters,including cut-off grades and economic mining widths, based on factors
typical for the type of deposit, may be used if these factors have not been
specifically established for the deposit at the time of the mineral resource
estimate. A mineral resource is categorized on the basis of the degree of
confidence in the estimate of quantity and grade or quality of the deposit, as
follows:
 
 Measured
Mineral Resource:Under CIM standards, a Measured Mineral Resource is
that part of a Mineral Resource for which quantity, grade or quality, densities,
shape, physical characteristics are so well established that they can be
estimated with confidence sufficient to allow the appropriate application of
technical and economic parameters, to support production planning and evaluation
of the economic viability of the deposit. The estimate is based on detailed and
reliable exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings
and drill holes that are spaced closely enough to confirm both geological and
grade continuity.
 
 Indicated
Mineral Resource:Under CIM standards, an Indicated Mineral Resource is
that part of a Mineral Resource for which quantity, grade or quality, densities,
shape and physical characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and economic
parameters, to support mine planning and evaluation of the economic viability of
the deposit. The estimate is based on detailed and reliable exploration and
testing information gathered through appropriate techniques from locations such
as outcrops, trenches, pits, workings and drill holes that are spaced closely
enough for geological and grade continuity to be reasonably
assumed.
 
 Inferred
Mineral Resource:Under CIM standards, an Inferred Mineral Resource is
that part of a Mineral Resource for which quantity and grade or quality can be
estimated on the basis of geological evidence and limited sampling and
reasonably assumed, but not verified, geological and grade continuity. The
estimate is based on limited information and sampling gathered through
appropriate techniques from such as outcrops, trenches, pits, workings and drill
holes.
 
 Rhyolite - A group of
extrusive igneous rocks, typically porphyritic and commonly exhibiting flow
texture, with phenocrysts of quartz and alkali feldspar in a glassy to
cryptocrystalline groundmass; also, any rock in that group; the extrusive
equivalent of granite.
 
 Sedimentary - Formed by the deposition of
sediment or pertaining to the process of sedimentation.
 
 Sediments -Solid fragmental
material that originates from weathering of rocks and is transported or
deposited by air, water, or ice, or that accumulates by other natural agents,
such as chemical precipitation from solution or secretion by organisms, and that
forms in layers on the Earth's surface at ordinary temperatures in a loose,
unconsolidated form; e.g., sand, gravel, silt, mud, alluvium.
 
 Sericite - A fine-grained potassium
mica found in various metamorphic rocks.
 
 Silification - The in situ alteration of a
rock, which involves an increase in the proportion of silica
minerals.
 
 Trenching - The process of exploration
by which till is removed from a trench cut from the earth’s
surface.
  7
 Table of Contents
  Tuff -A general term for all
consolidated pyroclastic rocks.
 
 Unpatented Claim - Mining
claim to which a deed from the U.S. Government has not been received. A claim is
subject to annual assessment work, to maintain ownership.
 
 Vein - A thin, sheet-like,
crosscutting body of hydrothermal mineralization, principally
quartz.
 
 Volcanics -Those originally
molten rocks, generally fine grained, that have reached or nearly reached the
Earth’s surface before solidifying.
 
 8
 Table of Contents
  Part I
  Item 1.  Identity of Directors, Senior Management and
Advisers
  A. 
Directors and Senior Management
  Table No.
1
 Company
Directors and Senior Officers
 As
of March 20, 2008
  Name
                Position
                Business
      AddressJames
      Anthony
                Chairman
      and Director
                106
      Front Street East, 4th
      Floor,
                  Toronto,
      Ontario M5A 1E1
                  CanadaRudi
      Fronk
                President,
                  Chief
      Executive Officer and Director
                106
      Front Street East, 4th
      Floor,
                  Toronto,
      Ontario M5A 1E1
                  CanadaFrederick
      Banfield
                Director
                3544
      E. Fort Lowell,
                  Tucson,
      Arizona 85716William
      Calhoun
                Director
                P.O.
      Box 0090
                  Silverton,
      Idaho 83867Louis
      J. Fox
                Director
                3200
      North Ocean Blvd, #2410
                  Fort
      Lauderdale, Florida 33308Eliseo
      Gonzalez-Urien
                Director
                10911
      Corp Ranch Rd.
                  Ashland,
      Oregon 95720Thomas
      Dawson
                Director
                106
      Front Street East, 4th
      Floor,
                  Toronto,
      Ontario M5A 1E1
                  CanadaWilliam
      Threlkeld
                Senior
      Vice President
                106
      Front Street East, 4th
      Floor,
                  Toronto,
      Ontario M5A 1E1
                  CanadaRoderick
      Chisholm
                Chief
      Financial Officer and Corporate Secretary
                106
      Front Street East, 4th
      Floor,
                  Toronto,
      Ontario M5A 1E1
                  Canada
  B. 
Advisers
 
 Not
Applicable
 
 9
 Table of Contents
 
 C. 
Auditors
 
 The
Company’s auditor is KPMG LLP, Chartered Accountants, of Suite 3300 Commerce
Court West, Toronto, Ontario, Canada. KPMG was initially appointed on June 4,
2002 for the fiscal year ending December 31, 2002.
  Item 2.  Offer Statistics and Expected
Timetable
  Not
Applicable
  Item 3. Key Information
  As used
within this Annual Report, the terms “Seabridge”, “the Company”, “Issuer” and
“Registrant” refer collectively to Seabridge Gold Inc, and depending on the
context, its predecessors, subsidiaries and affiliates.
 
 All
currency figures stated herein are in Canadian dollars, unless otherwise
noted.
 
 A. 
Selected Financial Data
 
 The
selected financial data of the Company as at December 31, 2007 and 2006 and for
the Years Ended December 31, 2007, December 31, 2006 and December 31, 2005 was
derived from the financial statements audited by KPMG LLP, Chartered
Accountants, Licensed Public Accountants, as indicated in its audit report which
is included elsewhere in this Annual Report. The selected financial data as at
December 31, 2005, 2004 and 2003 and for the years ended December 31, 2004 and
December 31, 2003 was derived from the audited financial statements of the
Company which are not included in this Report.
 
 The
selected financial data should be read in conjunction with the financial
statements and other financial information included elsewhere in the Annual
Report.
 
 The
Company has not declared any dividends on its common shares since incorporation
and does not anticipate that it will do so in the foreseeable
future.  The present policy of the Company is to retain future
earnings for use in its operations and the expansion of its
business.
 
 Table No.
2 is derived from the financial statements of the Company, which have been
prepared in accordance with Canadian Generally Accepted Accounting Principles
(GAAP), the application of which, in the case of the Company, conforms in all
material respects for the periods presented with US GAAP, except as disclosed in
footnote #11 to the financial statements.
 
 10
 Table of Contents
  Table No.
2
 Selected
Financial Data
 ($’s in
000, except per share data)
 
 Year
                Year
                Year
                Year
                YearEnded
                Ended
                Ended
                Ended
                Ended12/31/07
                12/31/06
                12/31/05
                12/31/04
                12/31/03Interest
      Income
                $823
                $363
                $135
                $83
                $107Net
      Loss
                $5,542
                $3,300
                $1,157
                $1,226
                $1,338Net
      Loss Per Share
                $0.15
                $0.10
                $0.04
                $0.04
                $0.05Dividends
      Per Share
                $0
                $0
                $0
                $0
                $0Weighted
      Average Shares (000)
                35,991
                33,459
                30,682
                28,876
                26,191Working
      Capital
                $25,020
                $6,420
                $10,603
                $4,220
                $1,886Mineral
      Properties
                $62,668
                $53,262
                $24,395
                $20,999
                $16,635Long-Term
      Debt
                $0
                $0
                $0
                $0
                $0Shareholders’
      Equity
                $86,747
                $59,279
                $35,385
                $25,703
                $19,154Total
      Assets
                $89,862
                $61,244
                $37,085
                $27,172
                $22,869US
      GAAP Net Loss
                $15,415
                $14,161
                $5,127
                $6,671
                $5,255US
      GAAP Loss Per Share
                $0.43
                $0.42
                $0.17
                $0.23
                $0.20US
      GAAP Weighted Average Shares (000)
                35,991
                33,459
                30,682
                28,876
                26,191US
      GAAP Shareholders’ Equity
                $53,074
                $34,326
                $19,727
                $13,616
                $12,132US
      GAAP Total Assets
                $56,188
                $36,684
                $21,848
                $15,287
                $15,756US
      GAAP Mineral Properties
                $28,995
                $28,649
                $9,159
                $9,113
                $9,522
 
 In this
Annual Report, unless otherwise specified, all dollar amounts are expressed in
Canadian Dollars (CDN$).  The Government of Canada permits a floating
exchange rate to determine the value of the Canadian Dollar against the U.S.
Dollar (US$).
 
 Table No.
3 sets forth the rate of exchange for the Canadian Dollar at the end of the five
most recent fiscal periods ended December 31st, the
average rates for the periods, and the range of high and low rates for the
periods. Table No. 3 also sets forth the rate of exchange for the Canadian
Dollar at the end of the 12 most recent fiscal quarters, and the range of high
and low rates for these periods.
 
 For
purposes of this table, the rate of exchange means the noon buying rate in New
York City for cable transfers in foreign currencies as certified for customs
purposes by the Federal Reserve Bank of New York.  The table sets
forth the number of Canadian dollars required under that formula to buy one U.S.
Dollar.  The average rate means the average of the exchange rates on
the last day of each month during the period.
 
 11
 Table of Contents
 Table No.
3
 Canadian
Dollar/US Dollar
 
 Average
                High
                Low
                CloseYear
      Ended 12/31/07
                $1.07
                $1.19
                $0.92
                $0.99Year
      Ended 12/31/06
                $1.13
                $1.17
                $1.10
                $1.17Year
      Ended 12/31/05
                $1.21
                $1.27
                $1.15
                $1.17Year
      Ended 12/31/04
                $1.30
                $1.39
                $1.18
                $1.20Year
      Ended 12/31/03
                $1.39
                $1.58
                $1.29
                $1.29Three
      Months Ended 12/31/07
                $0.98
                $1.02
                $0.92
                $0.99Three
      Months Ended 9/30/07
                $1.04
                $1.08
                $1.00
                $1.00Three
      Months Ended 6/30/07
                $1.08
                $1.16
                $1.06
                $1.06Three
      Months Ended 3/31/07
                $1.17
                $1.19
                $1.15
                $1.15Three
      Months Ended 12/31/06
                $1.14
                $1.17
                $1.12
                $1.17Three
      Months Ended 9/30/06
                $1.12
                $1.14
                $1.11
                $1.12Three
      Months Ended 6/30/06
                $1.11
                $1.17
                $1.10
                $1.12Three
      Months Ended 3/31/06
                $1.15
                $1.17
                $1.13
                $1.17Three
      Months Ended 12/31/05
                $1.17
                $1.19
                $1.15
                $1.17Three
      Months Ended 9/30/05
                $1.19
                $1.24
                $1.16
                $1.16Three
      Months Ended 6/30/05
                $1.24
                $1.27
                $1.21
                $1.23Three
      Months Ended 3/31/05
                $1.23
                $1.23
                $1.20
                $1.21
  B. 
Capitalization and Indebtedness
 
 Not
applicable
 
 C. 
Reasons for the Offer and Use of Proceeds
 
 Not
applicable
 
 D. 
Risk Factors
 
 An
investment in the Common Shares of the Company must be considered speculative
due to the nature of the Company’s business and the present stage of exploration
of its non-producing mineral properties. In particular, the following risk
factors apply:
 
 Risks Associated with
Mineral Exploration
 
 The
Company is Involved in the Resource Industry which is Highly Speculative and has
Certain Inherent Exploration Risks which Could have a Negative Effect on the
Company’s Operations
  12
 Table of Contents
  Resource
exploration is a speculative business, characterized by a number of significant
risks including, among other things, unprofitable efforts resulting not only
from the failure to discover mineral deposits but also from finding mineral
deposits which, though present, are insufficient in quantity and quality to
return a profit from production.  The marketability of minerals
acquired or discovered by the Company may be affected by numerous factors which
are beyond the control of the Company and which cannot be accurately predicted,
such as market fluctuations, the proximity and capacity of milling facilities,
mineral markets and processing equipment, and such other factors as government
regulations, including regulations relating to royalties, allowable production,
importing and exporting of minerals, and environment protection, the combination
of which factors may result in the Company not receiving an adequate return on
investment capital.
 
 The
Company’s Operations Contain Significant Uninsured Risks which Could Negatively
Impact Profitability as the Company Maintains No Insurance Against its
Operations
  The
Company’s exploration of its mineral properties incurs certain risks, including
unexpected or unusual operating conditions including rock bursts, cave-ins,
flooding, fire and earthquakes which could adversely affect operations and may
result in liabilities.
 
 The
Company currently maintains $5 million insurance for its properties and
operations which may not cover larger liabilities or uninsured situations. If
such larger liabilities or uninsured situations arise, they could reduce or
eliminate the Company’s assets and shareholder equity as well as result in
increased costs and a decline in the value of the Company’s
securities.
 
 The
Company Has No Known Reserves and No Economic Reserves May Exist on Its
Properties Which Would have a Negative Effect on the Company’s Operations and
Valuation
  Despite
exploration work on its mineral claims, no known bodies of commercial ore or
economic deposits have been established on any of the Company’s mineral
properties.  In addition, the Company is at the exploration stage on
all of its properties and substantial additional work will be required in order
to determine if any economic deposits occur on the Company’s properties. Even in
the event commercial quantities of minerals are discovered, the exploration
properties might not be brought into a state of commercial production. Finding
mineral deposits is dependent on a number of factors, not the least of which is
the technical skill of exploration personnel involved.  The commercial
viability of a mineral deposit once discovered is also dependent on a number of
factors, some of which are particular attributes of the deposit, such as size,
grade and proximity to infrastructure, as well as metal prices.  Most
of these factors are beyond the control of the entity conducting such mineral
exploration. The Company is an exploration stage company with no history of
pre-tax profit and no income from its operations.  There can be no
assurance that the Company’s operations will be profitable in the
future.
 
 The
Company Has Not Surveyed Any of Its Properties and the Company Could Lose Title
and Ownership of Its Properties which would have a Negative Effect on the
Company’s Operations and Valuation
  13
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  The
Company has only done a preliminary legal survey of the boundaries of any of
these properties, and therefore, in accordance with the laws of the
jurisdictions in which these properties are situated, their existence and area
could be in doubt. The Company has not obtained formal title reports on any of
its properties and title may be in doubt.  If title is disputed, the
Company will have to defend its ownership through the courts.  In the
event of an adverse judgment, the Company would lose its property
rights.
 
 The
Mining Industry is Highly Competitive which could Restrict the Company’s
Growth
  The
Company competes with other corporations that may have greater
resources.  Such corporations could outbid the Company for potential
projects or produce minerals at lower costs which would have a negative effect
on the Company’s operations.
 
 Mineral
Operations are Subject to Market Forces Outside of the Company’s Control which
could Negatively Impact the Company’s Operations
  The
marketability of minerals, especially the price of gold, is affected by numerous
factors beyond the control of the entity involved in their mining and
processing.  These factors include market fluctuations, government
regulations relating to prices, taxes, royalties, allowable production, import,
exports and supply and demand.  One or more of these risk elements
could have an impact on costs of an operation and if significant enough, reduce
the profitability of the operation and threaten its continuation.
 
 The
Company is Subject to Substantial Government Regulatory Requirements which could
cause a Restriction or Suspension of the Company’s Operations
  The
Company’s exploration operations are affected to varying degrees by government
regulations relating to resource operations, the acquisition of land, pollution
control and environmental protection, safety, production and expropriation of
property.  Changes in these regulations or in their application are
beyond the control of the Company and may adversely affect its operations,
business and results of operations.  Failure to comply with the
conditions set out in any permit or failure to comply with the applicable
statutes and regulations may result in orders to cease or curtail operations or
to install additional equipment.  The Company may be required to
compensate those suffering loss or damage by reason of its operating or
exploration activities. Operations may be affected in varying degrees by
government regulations with respect to restrictions on production, price
controls, export controls, foreign exchange controls, income taxes,
expropriation of property, environmental legislation and mine
safety.
 
 Currently,
the Company’s Canadian properties are subject to the jurisdiction of the federal
laws of Canada, the provincial laws of British Columbia and the Northwest
Territories, as well as local laws where they are located.  In
addition, the Company’s U.S. properties are subject to U.S. Federal laws, the
state laws of Nevada and Oregon, as well as local laws where they are located.
The Company’s Mexican property is subject to Mexican federal laws as well as
local laws where it is located.  Mineral exploration and mining may be
affected in varying degrees by government regulations relating to the mining
industry.  Any changes in regulations or shifts in political
conditions are beyond the control of the Company and may adversely affect its
business.
  14
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  On the
Federal and Provincial level, the Company must comply with exploration
permitting requirements which require sound operating and reclamation plans to
be approved by the applicable government body prior to the start of exploration.
Depending upon the type and extent of the exploration activities, the Company
may be required to post reclamation bonds and/or assurances that the affected
areas will be reclaimed. Currently, the Company has estimated $1,849,475 in
reclamation liabilities for its properties.  $1,269,900 has been
deposited for the benefit of the various government agencies until released or
applied to reclamation costs. If the reclamation requires funds in addition to
those already allocated, Seabridge could be forced to pay for the extra work and
it could have a significant negative effect upon the Company’s financial
position and operations.
 
 On the
State and Provincial level, the government has jurisdiction over certain
properties and requires their own permitting and compliance with applicable
regulations. On the local level, regulations deal primarily with zoning, land
use and specific building permits, as well as taxation and the impact of the
Company’s operations on the existing population and local services.
 
 The
Company is Subject to Substantial Environmental Requirements which could cause a
Restriction or Suspension of Company Operations
  In
connection with its operations and properties, the Company is subject to
extensive and changing environmental legislation, regulation and
actions.  The Company cannot predict what environmental legislation,
regulation or policy will be enacted or adopted in the future or how future laws
and regulations will be administered or interpreted.  The recent trend
in environmental legislation and regulation generally is toward stricter
standards and this trend is likely to continue in the future. The recent trend
includes, without limitation, laws and regulations relating to air and water
quality, mine reclamation, waste handling and disposal, the protection of
certain species and the preservation of certain lands.  These
regulations may require obtaining permits or other authorizations for certain
activities.  These laws and regulations may also limit or prohibit
activities on certain lands lying within wetland areas, area providing for
habitat for certain species or other protected areas.  Compliance with
more stringent laws and regulations, as well as potentially more vigorous
enforcement policies or stricter interpretation of existing laws, may
necessitate significant capital outlays, which may materially affect the
Company’s results of operations and business, or may cause material changes or
delays in the Company’s intended activities.
 
 On the
Federal, State and Provincial level, regulations deal with environmental quality
and impacts upon air, water, soils, vegetation and wildlife, as well as
historical and cultural resources. Approval must be received from the applicable
bureau and/or department before exploration can begin, and will also conduct
ongoing monitoring of operations. If operations result in negative effects upon
the environment, government agencies will usually require the Company to provide
remedial actions to correct the negative effects.
  15
 Table of Contents
 Specific
to its U.S. properties, costs involved with complying with various government
environmental regulations vary by anticipated operations. Typically, surface
sampling does not require any permits. Agency review and approval for
exploration drilling and access construction can vary from several hundred
dollars to several thousands of dollars, depending upon the level of activity.
Permitting and environmental compliance costs vary, depending upon the level of
activities proposed and the sensitivity of the areas where mineral activities
are proposed. As a general rule, these costs makeup 10% or less of the total
cost amount of the program. The Company also may be required to post reclamation
bonding and assurance that areas will be reclaimed after exploration. These
bonds and guarantees range from approximately $1,000 on a small-scale
exploratory drill program in Nevada to approximately $150,000 on an advanced
exploration program in Oregon.
 
 At
present, the Company has not estimated or allocated any funds for reclamation at
its Courageous Lake property, nor have any specific environmental concerns been
identified. However, the history of mining and exploration of the property by
others may have caused certain environmental damage which will require cleanup
funded by Seabridge as the current landholder. In addition, unidentified
environmental deficiencies may exist on other of the Company’s properties. The
discovery of and any required reclamation of any additional properties would
likely have a negative effect on the Company’s operations and financial
position.
 
 Financing
Risks
 
 The
Company is Likely to Require Additional Financing which Could Result in
Substantial Dilution to Existing Shareholders and/or the Delay or Cessation of
Operations
  The
Company, while engaged in the business of exploiting mineral properties, has
sufficient funds to undertake its planned current exploration
projects.  If the Company’s exploration programs are successful,
additional financing will be required to develop the mineral properties
identified and to place them into commercial production.  The
exploration of the Company’s mineral properties is, therefore, dependent upon
the Company’s ability to obtain financing through the joint venturing of
projects, debt financing, equity financing or other means. Such sources of
financing may not be available on acceptable terms, if at
all.  Failure to obtain such financing may result in delay or
indefinite postponement of exploration work on the Company’s mineral properties,
as well as the possible loss of such properties. Any transaction involving the
issuance of previously authorized but unissued shares of common or preferred
stock, or securities convertible into common stock, could result in dilution,
possibly substantial, to present and prospective holders of common stock. These
financings may be on terms less favorable to the Company than those obtained
previously.
 
 The
Company Has a History of Net Losses and Expects Losses to Continue for the
Foreseeable Future
  16
 Table of Contents
  The
Company has had a history of losses and there is no assurance that it can reach
profitability in the future.  As of the end of the last fiscal year
dated December 31, 2007, the Company’s historical net losses total $27,350,897.
The Company will require significant additional funding to meet its business
objectives.  Capital will need to be available to help maintain and to
expand exploration on the Company’s principal exploration
property.  The Company may not be able to obtain additional financing
on reasonable terms, or at all.  If equity financing is required, as
expected, then such financings could result in significant dilution to existing
shareholders.  If the Company is unable to obtain sufficient
financing, the Company might have to dramatically slow exploration efforts
and/or lose control of its projects. The Company has historically obtained the
majority of its financing through the issuance of equity, there is no limit to
the number of authorized common shares, and the Company has no current plans to
obtain financing through means other than equity financing.
  The
Company has a Lack of Cash Flow to Sustain Operations and Does Not Expect to
Begin Receiving Operating Revenue in the Foreseeable Future
  None of
the Company’s properties have advanced to the commercial production stage and
the Company has no history of earnings or cash flow from
operations.  The Company has paid no dividends on its shares since
incorporation and does not anticipate doing so in the foreseeable
future.  Historically, the only source of funds available to the
Company has been through the sale of its common shares and convertible debt
instruments. Any future additional equity financing would cause dilution to
current stockholders. If the Company does not have sufficient capital for its
operations, management would be forced to reduce or discontinue its activities
which would likely have a negative effect on the stock price.
 
 The
Company Operates in Foreign Countries and is Subject to Currency Fluctuations
which could have a Negative Effect on the Company’s Operating
Results
  While
engaged in the business of exploiting mineral properties, the Company’s
operations outside of Canada, i.e. in the United States and Mexico, make it
subject to foreign currency fluctuation as the Company’s accounts are conducted
in Canadian dollars while certain expenses are numerated in US dollars and
Mexican pesos. Such fluctuations may adversely affect the Company’s financial
positions and results.  Management may not take any steps to address
foreign currency fluctuations that will eliminate all adverse effects and,
accordingly, the Company may suffer losses due to adverse foreign currency
fluctuations.
 
 Risks Relating to an
Investment in the Securities of the Company
 
 The
Market for the Company’s Stock has Been Subject to Volume and Price Volatility
which Could Negatively Effect a Shareholder’s Ability to Buy or Sell the
Company’s Shares
  The
market for the common shares of the Company may be highly volatile for reasons
both related to the performance of the Company or events pertaining to the
industry (i.e., mineral price fluctuation/high production costs/accidents) as
well as factors unrelated to the Company or its industry.  In
particular, the price for gold has recently been at an all time high and may not
sustain such levels.  In addition, market demand for products
incorporating minerals in their manufacture fluctuates from one business cycle
to the next, resulting in change of demand for the mineral and an attendant
change in the price for the
  17
 Table of Contents
  mineral.  The
Company’s common shares can be expected to be subject to volatility in both
price and volume arising from market expectations, announcements and press
releases regarding the Company’s business, and changes in estimates and
evaluations by securities analysts or other events or factors.  In
recent years the securities markets in the United States and Canada have
experienced a high level of price and volume volatility, and the market price of
securities of many companies, particularly small-capitalization companies such
as the Company, have experienced wide fluctuations that have not necessarily
been related to the operations, performances, underlying asset values, or
prospects of such companies.  For these reasons, the shares of the
Company’s common shares can also be expected to be subject to volatility
resulting from purely market forces over which the Company will have no
control.  Further, despite the existence of markets for trading the
Company’s common shares in Canada and the United States, stockholders of the
Company may be unable to sell significant quantities of common shares in the
public trading markets without a significant reduction in the price of the
stock. Also see Item 10.E of this Report.
 
 The
Company has a Dependence Upon Key Management Employees, the Absence of Which
Would Have a Negative Effect on the Company’s Operations
  The
Company strongly depends on the business and technical expertise of its
management and key personnel, including Rudi Fronk, President.  There
is little possibility that this dependence will decrease in the near
term.  As the Company’s operations expand, additional general
management resources will be required. The Company may not be able to attract
and retain additional qualified personnel and this would have a negative effect
on the Company’s operations. The Company does not carry any formal services
agreements between itself and its officers/directors. The Company does not carry
any “Key Man” Life Insurance.
 
 Certain
Officers and Directors May Have Conflicts of Interest Which Could have a
Negative Effect on the Company’s Operations
  Certain
of the directors and officers of the Company are also directors and/or officers
and/or shareholders of other natural resource companies.  While the
Company was engaged in the business of exploiting mineral properties, such
associations may have given rise to conflicts of interest from time to
time.  The directors of the Company are required by law to act
honestly and in good faith with a view to the best interests of the Company and
to disclose any interest that they may have in any project or opportunity of the
Company.  If a conflict of interest arises at a meeting of the board
of directors, any director in a conflict must disclose his interest and abstain
from voting on such matter.  In determining whether or not the Company
will participate in any project or opportunity, the directors will primarily
consider the degree of risk to which the Company may be exposed and its
financial position at the time.
 
 The
Company Could be Deemed a Passive Foreign Investment Company Which Could have
Negative Consequences for U.S. Investors
  The
Company could be classified as a Passive Foreign Investment Company (“PFIC”)
under the United States tax code. If the Company is declared a PFIC, then owners
of the Company’s Common Stock who are U.S.  taxpayers generally will
be required to treat any so-called “excess distribution” received on its common
shares, or any gain realized
  18
 Table of Contents
  upon a
disposition of common shares, as ordinary income and to pay an interest charge
on a portion of such distribution or gain, unless the taxpayer makes a qualified
electing fund ("QEF") election or a mark-to-market election with respect to the
Company’s shares. A U.S. taxpayer who makes a QEF election generally must report
on a current basis its share of the Company’s net capital gain and ordinary
earnings for any year in which the Company is classified as a PFIC, whether or
not the Company distributes any amounts to its
shareholders.   U.S. investors should consult with their tax
advisors for advice as to the U.S. tax consequences of an investment in the
Common Stock of the Company.
 
 U.S.
Investors May Not Be Able to Enforce Their Civil Liabilities Against The Company
or Its Directors, Controlling Persons and Officers
  It may be
difficult to bring and enforce suits against the Company.  The Company
is a corporation incorporated in Canada under the Canada Business Corporation
Act. A majority of the Company’s directors and officers are residents of
Canada and a substantial portion of the Company’s assets and its subsidiaries
are located outside of the United States.  Consequently, it may be
difficult for United States investors to effect service of process in the United
States upon those directors or officers who are not residents of the United
States, or to realize in the United States upon judgments of United States
courts predicated upon civil liabilities under United States securities
laws.  There is substantial doubt whether an original action could be
brought successfully in Canada against any of such persons or the Company
predicated solely upon such civil liabilities under the U.S. Securities
Act.
  Forward
Looking Statements
  Certain
Statements presented herein contain certain forward-looking statements relating
but not limited to the Company’s expectations, intentions, plans and beliefs.
Forward-looking information can often be identified by forward-looking words
such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “intend”, “estimate”,
“may” and “will” or similar words suggesting future outcomes, or other
expectations, beliefs, plans, objectives, assumptions, intentions or statements
about future events or performance. Forward-looking information may include
reserve and resource estimates, estimates of future production, unit costs,
costs of capital projects and timing of commencement of operations, and is based
on current expectations that involve a number of business risks and
uncertainties. Factors that could cause actual results to differ materially from
any forward-looking statement include, but are not limited to, failure to
establish estimated resources and reserves, the grade and recovery of ore which
is mined varying from estimates, capital and operating costs varying
significantly from estimates, delays in obtaining or failures to obtain required
governmental, environmental or other project approvals, inflation, changes in
exchange rates, fluctuations in commodity prices, delays in the development of
projects related to accidents, equipment break downs, weather or other
difficulties, and other factors. Forward-looking statements are subject to
risks, uncertainties and other factors that could cause actual results to differ
materially from expected results.
  Potential shareholders and
prospective investors should be aware that these statements are subject to known
and unknown risks, uncertainties and other factors that could cause actual
results to differ materially from those suggested by the forward-looking
statements. Shareholders are cautioned not to place undue reliance on
forward-looking information. By its nature, forward-looking information involves
numerous assumptions, inherent risks and uncertainties, both general and
specific, that contribute to the possibility that the predictions, forecasts,
projections and various future events will not occur. The Company undertakes no
obligation to update publicly or otherwise revise any forward-looking
information whether as a result of new information, future events or other such
factors which affect this information, except as required by law.
  19
 Table of Contents
 
 Potential
shareholders and prospective investors should be aware that these statements are
subject to known and unknown risks, uncertainties and other factors that could
cause actual results to differ materially from those suggested by the
forward-looking statements. Shareholders are cautioned not to place undue
reliance on forward-looking information. By its nature, forward-looking
information involves numerous assumptions, inherent risks and uncertainties,
both general and specific, that contribute to the possibility that the
predictions, forecasts, projections and various future events will not occur.
Shareholders should carefully review the cautionary statements and risk factors
contained in this and other documents that the Company files from time to time
with the securities commissions in Canada (see SEDAR filings at www.sedar.com) and
with the U.S. Securities and Exchange Commission.  The Company
undertakes no obligation to update publicly or otherwise revise any
forward-looking information whether as a result of new information, future
events or other such factors which affect this information, except as required
by law.
  Item 4. Information on the Company
  DESCRIPTION OF
BUSINESS
 
 Introduction
 
 The
Company’s executive office is located at:
  102 Front
Street East, 4th Floor,
Toronto, Ontario M5A 1E1 Canada
 Telephone:
(416) 367-9292
 Facsimile:
(416) 367-2711
 E-Mail:
info@seabridgegold.net
 Website:www.seabridgegold.net
 
 The
Contact person in Toronto is Rudi Fronk, President and CEO.
 
 The
Company currently leases its executive offices in Toronto from Allied Property
REIT. The lease covers the entire 4th floor of a building located at 106 Front
Street East, Toronto, Ontario, Canada. The lease was effective commencing May 1,
2007 and will expire on April 30, 2012.  The rent in 2007 was $8,900
per month, and will be adjusted annually based upon a building cost operating
adjustment. Current monthly rent for 2008 is approximately $9,000.
 
 The
Company's fiscal year ends December 31st.
 
 The
Company's common shares trade on the TSX Venture Exchange under the symbol "SEA"
and on the American Stock Exchange under the symbol “SA”.
 
 The
authorized share capital of the Company consists of an unlimited number of
common shares and an unlimited number of preferred shares. As of December 31,
2007, the end of the most recent fiscal year, there were 37,297,885 common
shares issued and outstanding and no preferred shares issued and
outstanding.
  20
 Table of Contents
 
 Corporate
Background
 
 The
Company was originally incorporated under the Company Act of British Columbia
under the name of Chopper Mines Ltd. on September 14, 1979. After conducting a 1
for 5 reverse split, the Company changed its name to Dragoon Resources Ltd. on
November 9, 1984. On May 20, 1998, the Company conducted a 1 for 10 reverse
split and changed its name to Seabridge Resources Ltd. On June 20, 2002, the
Company changed its name to Seabridge Gold Inc. in order to better reflect the
Company’s focus on gold and gold projects. On October 31, 2002 the Company also
continued from British Columbia into Canadian Federal jurisdiction under the
Canada Business Corporations Act.
 
 The
Company presently has four active subsidiaries: Seabridge Gold Corporation, a
Nevada corporation; Pacific Intermountain Gold Inc., a Nevada corporation; 5073
N.W.T.  Limited, a company incorporated under the laws of the
Northwest Territories of Canada; and Minera Seabridge Gold SA de CV, a company
incorporated in Mexico.  The following diagram illustrates the current
inter-corporate relationship between the Company and its material
subsidiaries:
 
 
  (1)
                  The
      Company's 100% interest in the Quartz Mountain project is subject to the
      terms of an option agreement with Quincy Energy Corp. (which subsequently
      became Golden Predator Mines Inc.) under which Quincy can earn up to a
      62.5% interest in portions of the
property.
  21
 Table of Contents
 
 Currently,
the Company conducts operations in Canada, Mexico and the United States. As of
December 31, 2007, the Company’s non-current assets were located as
follows:
 
 United
      States:
                  
                  $
                  8,855,729Canada:
                  
                  $
                  48,991,219Mexico:
                  
                  $
                  6,316,381
 
 History
and Development of the Business
 
 On May
20, 1998, the Company completed a 1 for 10 reverse split and changed its name to
Seabridge Resources Inc.
 
 In
October 1999, the Company initiated a corporate strategy based on its belief
that the then depressed gold market offered significant upside
potential.  In October 1999, a new Board and senior management team
possessing the required technical and financial skills to implement the new
strategy were put in place.  The new corporate direction was to
acquire gold mining assets, including developed resources and shutdown or
suspended projects, which had been made available by depressed gold prices and a
lack of capital and which were uneconomic at the current gold
price.  The Company observed that projects that previously commanded
significant market capitalization when gold prices were higher were becoming
available at fractions of their previous valuations.  The success of
this new strategy was dependent on a return to higher gold
prices.  From October 1999 through to the present the Company acquired
nine North American based gold projects which collectively contain substantial
gold resources.
 
 With the
recent improvement in gold prices, the Company has commenced engineering studies
and exploration activities on several of its projects.  In addition,
the Company has entered into joint venture agreements on some of its projects
where partners will be conducting exploration activities.
 
 In
February 2000, the Company acquired an option to purchase 100% of the Grassy
Mountain gold project located in eastern Oregon from Atlas Precious Metals Inc.
("Atlas").  In
March 2003, the Company exercised its option and acquired a 100% interest in the
Grassy Mountain Property.
 
 In June
2000, the Company entered into a Letter of Intent with Placer Dome (CLA) Limited
to acquire a 100% interest in the KSM project located in the Iskut-Stikine River
region, approximately 20 km southeast of the Eskay Creek Mine in British
Columbia. In June 2001, the Company completed the acquisition of Placer Dome’s
100% interest in the project.  In September 2002, the Company
announced that it had entered into an agreement with Noranda Inc. (which
subsequently became Falconbridge Limited and then Xstrata plc) whereupon
Falconbridge could earn a 50% interest in the project by spending $6,000,000 on
exploration at the project within 6 years.  Falconbridge could earn an
additional 15% interest by funding all costs to complete a feasibility
study.  During 2003 and 2004, Falconbridge conducted field programs at
KSM consisting of mapping, rock and soil sampling, and IP surveys. During 2005
Falconbridge drilled 16 widely-spaced core drill holes totaling 4,092 meters
designed to test six targets situated
  22
 Table of Contents
  outside
the resources previously defined for the Kerr and Sulphurets
zones.  In 2006 Falconbridge was acquired by Xstrata plc. In April
2006, the Company announced that it had reached agreement with Falconbridge
whereby the Company would purchase Falconbridge’s option to earn up to a 65%
interest at KSM by issuing Falconbridge 200,000 common shares and 2.0 million
conditional common share purchase warrants with an exercise price of C$13.50 per
share. One warrant would become exercisable for each new ounce of gold resources
discovered at KSM, up to a maximum of two million. The transaction closed in
August 2006. In 2006 the Company drilled 24 holes at the Mitchell zone and
defined an initial mineral resource thereby triggering the vesting of all 2.0
million Xstrata warrants. In 2007, Xstrata exercised all 2.0 million warrants,
thereby providing the Company with $27.0 million in proceeds. During 2007, the
Company continued exploration activities at the Mitchell zone. In January 2008,
the Company announced independent resource estimates for the Kerr and Sulphurets
zones at KSM. In February 2008, the Company announced independent resource
estimates for the Mitchell zone at KSM.
 
 In
December 2001, the Company entered into an agreement to acquire a 100% interest
in the Quartz Mountain Gold Project located in Lake County,
Oregon.  The Quartz Mountain acquisition was completed in January
2002.  In October 2003, the Company granted Quincy Gold Corp. an
option to earn a 50% interest in the Quartz Mountain gold project, excluding the
existing gold resources.  Under certain conditions Quincy can increase
its interest to 62.5%. During 2004, Quincy completed approximately 4,000 meters
of core drilling at the property designed to test for higher-grade feeder zones.
Additional drilling is planned by Quincy in 2008.
 
 Effective
December 31, 2001, the Company entered into an agreement to acquire a 100%
interest in the Red Mountain Gold Project located near Stewart, British
Columbia.  Closing of the Red Mountain transaction was completed in
April 2002.
 
 In May
2002, the Company reached agreement to purchase a 100% interest in the
Courageous Lake Project located in the Northwest Territories,
Canada.  The Company paid former owners Newmont Canada Limited and
Total Resources (Canada) US$2,500,000 and granted them a 2.0% NSR for 100% of
the project.  Seabridge also agreed to pay Newmont and Total up to an
additional US$3,000,000 depending upon the price of gold.  The
purchase was closed in July 2002.  In April 2003 and February 2004,
the Company paid the former owners of the Courageous Lake Project the
US$3,000,000 ($1,500,000 on each date) as the price of gold exceeded the two
threshold levels that triggered the obligations to make these payments. In 2004,
an additional property was optioned in the area ("Red 25").  Under the
terms of the agreement, the Company paid $50,000 on closing and is required to
make option payments of $50,000 on each of the first two anniversary dates and
subsequently $100,000 per year.  In addition, the property may be
purchased at any time for $1,250,000 with any option payments being credited
against the purchase price. During 2005, an independent Preliminary Assessment
was completed on the known FAT (felsic ash tuff) resources at that time
including capital and operating costs estimates for a large-scale open pit
operation. In March 2008, the Company announced the results of an updated
Preliminary Assessment incorporating a new resource estimate and updating
capital and operating cost estimates from the 2005 study.
  23
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 In June
2002, the Company and an independent third party incorporated a Nevada company
named Pacific Intermountain Gold Corporation to acquire and explore early-stage
exploration projects which have previously identified gold systems capable of
hosting large-scale deposits.  In 2004, the Company increased its
ownership in Pacific Intermountain Gold to 100%, subject to a 10% net profits
interest retained by the previous equity owner. To date, Pacific Intermountain
Gold has entered into a number of option agreements with third parties whereby
the third parties can earn interests in specific projects by funding exploration
and making payments to Pacific Intermountain Gold.
 
 In April
2006, the Company acquired a 100% interest in the Noche Buena gold project
located in Sonora, Mexico from Hecla Mining Company for US$4,350,000 in
cash.
 
 Business
Overview
 
 All of
the Company’s operations are located in Canada, the United States and Mexico.
The Company operates in the mineral exploration sector.
 
 All
of the Company’s properties are currently at the exploration stage. There is no
assurance that an economic and commercially viable deposit exists on any of the
Company’s properties, and substantial additional work will be required in order
to determine if any economic and legally feasible deposits occur on the
Company’s properties.
 
 Operations
are not seasonal as the Company can conduct exploration at certain of its
properties year-round. To date, the Company’s income has been limited to
interest on its cash balances and therefore it is not currently dependent upon
market prices for its operations, nor is it dependent upon any patents, licenses
or manufacturing processes.
 
 The
mineral exploration operations of the Company are subject to regulation by
several government agencies at the Federal, Provincial and local levels. These
regulations are well documented and a fundamental aspect of operations for any
resource company in Canada and the United States. Management believes the
Company is in compliance with all current requirements and does not anticipate
any significant changes to these regulations which will have a material effect
on the Company’s operations. The Company has obtained or has applied for all
material permits required for its anticipated exploration
activities.
 
 Mineral
Properties
 
 The
Company currently operates in the mineral exploration sector. All of the
Company’s properties are located in Canada, Mexico and the United States and are
at the exploration stage.
  24
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 25
 Table of Contents
 
 Seabridge
considers its material properties to be the KSM Project and the Courageous Lake
Project. These material properties are described in detail below.
 
 Courageous Lake
Project
 
 The
Courageous Lake project is a gold project covering approximately 67,000 acres
located in the Northwest Territories, Canada.  Seabridge has a 100%
interest in the project, subject to a 2% NSR on certain portions of the
property.The Property is without known mineral
reserves and is at the exploration stage; the Company’s current efforts are
exploratory in nature.
 
 Location
and Access
 
 The
project is located approximately 240 kilometers northeast of Yellowknife in the
Northwest Territories. Year round access is available by air, either by fixed
wing aircraft to the airstrip at the former Salmita mine 6 kilometers to the
south or via float-equipped aircraft to several adjacent
lakes.  During mid-winter, access is available via a winter road.
There are about 10 kilometers of gravel roads located on the
property.
  26
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 Courageous Lake Property
  27
 Table of Contents
  How
Acquired
  In May
2002, Seabridge entered into a purchase agreement with Newmont Canada Limited
and Total Resources Canada Limited on the Courageous Lake project comprised of
17 mining leases covering 18,178 acres.  Under the purchase agreement,
Seabridge paid Newmont/Total US$2.5 million in cash and granted them a 2.0% NSR
and agreed that it would be liable to make two (2) further payments of US$1.5
million, each subject to the price of gold passing certain thresholds, for a
100% interest in the property.  A further US$1.5 million was paid to
Newmont/Total in April 2003 as a result of the spot price of gold closing above
US$360 per ounce for 10 consecutive days, which occurred in February
2003.  A further US$1.5 was payable to Newmont/Total 60 days after the
spot price of gold closes at or above US$400 per ounce.  This final
payment was made in February 2004.  The purchase by Seabridge closed
on July 31, 2002.  Upon acquiring the Courageous Lake project,
Seabridge assigned its right thereto to its wholly owned subsidiary, 5073 N.W.T.
Ltd.  The obligations of 5073 N.W.T. Ltd. under the agreement,
including the payment of the royalty, is secured by a debenture under which the
vendors have been granted a security interest in the Courageous Lake
property.  Subsequent to this acquisition, Seabridge staked contiguous
open ground totaling an additional 48,905 acres in 42 mining claims of which a
portion is subject to the terms of the purchase agreement, including the 2%
royalty.  In 2004, an additional property was optioned in the area
(“Red 25”).  Under the terms of the agreement, the Company paid
$50,000 on closing and is required to make option payments of $50,000 on each of
the first two anniversary dates (paid) and subsequently $100,000 per
year.  In addition, the property may be purchased at any time for
$1,250,000 with any option payments being credited against the purchase
price.
 
 Regional
and Property Geology
 
 The
Courageous-Matthews Lakes belt is characterized by a series of north to
northwest trending Archean metavolcanic and metasedimentary rocks that are
within the Yellowknife Supergroup and are locally referred to as the Courageous
Lake Greenstone Belt (“CLGB”). The CLGB is approximately 60 kilometers long,
with a maximum east-west width of 5.5 kilometers. Two distinct volcanic cycles
have been recognized within the CLGB. The second cycle of volcanism is
conformably overlain by a thick sequence of metasedimentary rocks that are
locally known as the Yellowknife Group Sediments (“YGS”). The dominant post YGS
lithology consists of large granodiorite to diorite plutons that bound the
Courageous Lake deposit along its east and west flanks.
 
 North of
Matthews Lake, the Courageous Lake property consists of a sequence of northerly
trending, steeply dipping metasedimentary and metavolcanic rocks, with tops to
the east. All of the currently recognized gold occurrences on the property are
located within or near the top of the second cycle of volcanism of the CLGB.
Generally, the units that make up the second volcanic cycle are about 2
kilometers thick and have been subdivided into 8 distinct mappable
units.
  28
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 Both the
main Tundra and carbonate zones within the Courageous Lake property strike
north-south and have a near vertical dip component. The zones are characterized
by moderate to intense shearing, sericite-carbonate alteration, and quartz
veining. These mineralized zones are very persistent along strike and down dip.
The continuity of gold mineralization has been demonstrated to be at least 800
meters along strike based upon previous drilling results. Within the area that
has been tested by drilling, the continuity of gold mineralization is at least
100 meters in a down dip direction. The limits of gold mineralization have not
been fully tested and the deposit remains open along strike and down
dip.
 
 Previous
Exploration History
 
 Gold was
first discovered in the Courageous Lake area in the early 1940’s. Beginning in
1976, Noranda Exploration Ltd. initiated exploration in the Courageous Lake
Volcanic Belt. Exploration activities included geological reconnaissance,
airborne, EM and magnetic surveys, ground follow-up and claim staking. In 1982,
Noranda initiated a limited drill program to evaluate rock units north of
Matthews Lake. Detailed geophysics, geological mapping, and extensive diamond
drilling followed this initial program leading to the discovery of two gold
deposits, the Tundra Deposit (Main Zone), known as the FAT Deposit, and the
Carbonate Zone.
 
 From 1982
to 1987, Noranda continued core drilling the property from the surface and also
constructed a winter road to the property. They also began an environmental
impact study. In late 1987, Noranda made the decision to sink a vertical shaft
to provide access for conducting an underground definition drilling program and
to be able to test gold grade continuity and tenor by drifting and raising on
ore grade shoots. This also allowed Noranda to extract a bulk sample for
metallurgical testing. In conjunction with the development of the shaft, surface
core drilling, magnetic, VLF, and HLM surveys were also completed.
 
 In late
1987, Noranda completed an in-house preliminary resource estimate. Based upon
this work, a two-year underground exploration program was initiated. The program
was designed to establish an underground mining reserve, access material for
bulk metallurgical sampling and provide engineering information for mine design
and planning. The shaft was timbered and completed to a depth of 472.6 meters in
April 1989. Drifting on the target zone occurred between May to November 1989
and totaled 1,948.2 meters. Both lateral drifts and sub-vertical raises were
completed and provided access to bulk sample locations and diamond drilling
stations along the strike of the target zones. Approximately 200 vertical meters
and 750 to 8000 of strike length of the mineralized zone were tested by
underground drill holes. Additional horizontally fanned holes were drilled on
25-meter centers to aid in the interpretation of the target zone. Underground
drilling was completed in November 1989 and totaled 27,459.25 meters in 125
diamond drill holes.
 
 Little
additional work was performed on the property until Placer Dome optioned the
property in 1998. Placer’s exploration included a core drilling/sampling program
in order to verify Noranda’s previous work and to provide infill sample data.
Detailed mapping and structural analysis was done by Placer concurrent with the
drilling to help design a
  29
 Table of Contents
  drill
plan as well as conducting a ground magnetic survey to define the zone of
mineralization. Placer utilized two diamond drill rigs to provide detailed
information on the continuity of the Tundra Main Zone and to confirm the
Carbonate Zone. The total diamond drilling completed by Placer was 15,988 meters
in 76 drill holes. Placer dropped its option on the property in
1999.
 
 Environmental/Regulatory
Information
 
 As part
of its due diligence review on the property, Seabridge engaged EBA Engineering
Consultants Ltd. of Yellowknife, Northwest Territories, to prepare an
Environmental Review of the Courageous Lake property. EBA determined the
governmental environmental review process in the NWT would likely take 24 to 36
months from the time a Project Description Report had been filed with the
authorities before the review process began. An additional 12 to 16 months would
likely be required to complete the regulatory review process, all at a cost of
$2-8 million, plus another $0.5-1 million for costs during the regulatory
phase.
 
 Additionally,
EBA visited and evaluated the site for any current or potential environmental
damage related to historical exploration work conducted at Courageous Lake by
previous operators. EBA found no significant environmental concerns, but did
note several areas of potential concerns, including the existing land
disturbances, acid rock drainage from waste rock and drill casings.
 
 The
Company began to collect environmental data at their Courageous Lake, NWT
property in 2003.  The data collection was designed and implemented by
EBA Engineering Consultants Ltd and focused on multi-year studies required to
obtain operating permits.  To date the data includes archaeology,
fisheries, water quality, hydrology and wildlife.  The environmental
programs in 2005, 2006 and 2007 included hydrology and a comprehensive review of
environmental data collection programs to support the application to the
McKenzie Valley Land and Water Board for development licenses and
permits.
 
 Current
and Planned Work
 
 In late
2002, Seabridge engaged a group of independent consulting firms to undertake an
engineering study for Courageous Lake. During 2003, preliminary reports were
completed on key mining and metallurgical issues relating to the project. In
January 2004, Seabridge authorized the independent consultants to upgrade
capital and operating cost estimates in its Courageous Lake study to
pre-feasibility levels to better define the economics of the project. As a
result of a 2004 drilling program, the Company commissioned a new independent
resource estimate for the FAT deposit which was completed in December 2004 and
was incorporated into the engineering study.  The engineering study
was completed in September 2005 and the results are presented
below.
  During a
2003 summer exploration program, Seabridge successfully identified 12 gold
targets at Courageous Lake with characteristics similar to the existing FAT zone
at the project. The Company also identified significant drill core from previous
owners of these
  30
 Table of Contents
  targets
which had not been assayed. The drill core, an estimated 110,000 meters, was
retained on the property but never evaluated for bulk mineable potential. From
September through December of 2003, Seabridge conducted a program to evaluate
and prioritize these 12 targets by sampling and assaying available core. The
results from this program confirmed that nine of the 12 targets have the
potential to host bulk mineable deposits similar to FAT. Of these nine targets,
four have been consolidated into what is now called the Salmita Zone and five
have been consolidated into what is now called the Tundra Zone. A 10,000-meter
core drill program was conducted by Seabridge during 2004 that focused on
testing the Salmita and Tundra Zones as well as the potential strike extension
of the FAT zone and the FAT hanging wall zone.
 
 In 2004,
drill testing of selected priority targets was undertaken by the
Company.  The program was conceived in 2 stages, initial testing for
strataform gold concentrations similar to the FAT Deposit and sectional drilling
for potential resource additions.  The initial program intended to
test 3 target areas, Olsen Lake, Walsh Lake and the South FAT
Extension.  Ground conditions precluded a test of the Walsh Lake
target, but the other targets were tested.  Results from the initial
stage of the program led Seabridge to initiate sectional drilling on the South
FAT Extension. The South FAT Extension was a projection of the previous resource
model where little work had been completed.  Surface and initial
drilling results indicated that 300 meters of strike could be added to the FAT
Deposit with the completion of sectional drilling.  The second stage
of the 2004 program completed the sectional drilling on 50-meter section lines
across these 300 meters of strike.
 
 In
September 2005, an engineering study (classified as a Preliminary Assessment
under National Instrument 43-101 in Canada) for the Courageous Lake project was
completed by a team of independent consultants. The Preliminary Assessment is
dated September 7, 2005 and is entitled “Seabridge Gold Inc., Courageous Lake
Project, Preliminary Technical Assessment”. The independent consultants
concluded that given the resource size, location and grade, a year round,
open-pit bulk mineable operation with on-site processing is the most suitable
development scenario.  A base case scenario was developed for the
project incorporating a 25,000 tonne per day operation (9.0 million tonne per
year throughput) resulting in a projected 8.5 year operation with average annual
production of 545,000 ounces of gold.
 
 During
2005 and 2006, the Company completed an additional 15,689 meters of core
drilling at Courageous Lake, designed to test areas to the west of the main
mineralized zones and to the north.
 
 In 2007,
the Company commissioned a group of independent consultants to update the
Preliminary Assessment by incorporating the new 2007 resource estimate for the
project and updating all capital and operating cost estimates. An updated
Preliminary Assessment was completed in March 2008, and the results are
mentioned in the next section.
  The
Company estimates its annual holding costs of the Courageous Lake Project to be
$236,000 with $136,000 of these costs paid to the Department of Indian Affairs
and Northern Development, Northwest Territories and the remaining $100,000 as an
option payment on the Red 25 claim payable to Bathurst Inlet Developments (1984)
Ltd.
  31
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 Mineral
Resources
  Over the
period of previous exploration at Courageous Lake, several resource estimates
have been prepared.  The most detailed historic estimates were
conducted by Noranda in 1990 at the conclusion of its underground exploration
program, by Placer Dome in 1999 at the conclusion of its exploration program and
by Resource Modeling Inc. (an independent consulting firm based in Tucson,
Arizona) in July 2002 as part of the Company’s due diligence when it acquired
the project from Newmont and Total, and in December 2004 incorporating
additional exploration results subsequent to the 2002 estimate.
  In
January 2007, RMI completed a new resource model for Courageous Lake,
incorporating the results from the Company’s 2005 and 2006 exploration programs.
The study provided resource estimates at various cut-off grades.
 
 In March
2008, an updated Preliminary Assessment for the Courageous Lake project was
completed by a group of independent consultants including Wardrop Engineering
Inc. (“Wardrop”), Snowden Mining Consultants Inc. (“Snowden”), EBA Engineering
Consultants Ltd. (“EBA”), TJS Mining-Met Services Inc. (“TJS”), W.N. Brazier
& Associates Inc. (“Brazier”), and Resource Modeling Inc. (“RMI”)
(collectively the “Project Consultants”).
  In the
March 2008 Preliminary Assessment, Snowden determined that based on a mining
cost of $1.15 per tonne, a processing and G&A cost of $14.19 per tonne, an
88.9% recovery rate, and a gold price of US$690, that a 0.76 gram per tonne
cut-off grade was appropriate for the deposit.
 
 Courageous
Lake Gold Resources at 0.76 grams per tonne cut-off:
 
 Measured
                  IndicatedTonnes
                    (000’s)
                  Grade
                    (g/T)
                  Ounces
                    (000’s)
                  Tonnes
                    (000’s)
                  Grade
                    (g/T)
                  Ounces
                    (000’s)6,531
                  2.85
                  598
                  56,577
                  2.05
                  3,729
 
 Cautionary
Note to U.S. Investors concerning estimates of Measured and Indicated
Resources
  This
section uses the terms “measured resources”, “indicated resources” and “inferred
resources”. We advise U.S. investors that while those terms are recognized and
required by Canadian regulations, the U.S. Securities and Exchange Commission
does not recognize them. U.S.
investors are cautioned not to assume that any part or all of mineral deposits
in these categories will ever be converted into reserves.
 
 32
 Table of Contents
 
 Courageous
Lake Gold Inferred Resources at 0.76 grams per tonne cut-off
 
 InferredTonnes
                    (000’s)
                  Grade
                    (g/T)
                  Ounces
                    (000’s)101,394
                  1.89
                  6,161
 
 Cautionary
Note to U.S. investors concerning estimates of Inferred Resources
  This
section uses the term “inferred resources”. We advise U.S. investors that while
this term is recognized and required by Canadian regulations, the U.S.
Securities and Exchange Commission does not recognize it. “Inferred resources”
have a great amount of uncertainty as to their existence, and great uncertainty
as to their economic and legal feasibility. It cannot be assumed that all or any
part of an Inferred Mineral Resource will ever be upgraded to a higher category.
Under Canadian rules estimates of Inferred Mineral Resources may not form the
basis of feasibility or other economic studies. U.S. investors are cautioned not to
assume that part or all of an inferred resource exists, or is economically or
legally mineable.
 
 None of
the resource can be classified as a Mineral Reserve. Additional exploration work
will be required in order to upgrade the resources into reserve categories, and
a full feasibility study will be required in order to determine if any of the
mineral resources are economic and can be profitably mined.
  The
resource model constructed for the Courageous Lake deposit incorporates data
from 488 holes drilled by Seabridge, Noranda and Placer Dome totaling 131,338
meters.  Block model gold grades in the Courageous Lake resource model
were estimated using an inverse distance weighting interpolation
procedure.
 
 KSM
Project
 
 The KSM
Project consists of three separate gold zones (Kerr, Sulphurets and Mitchell)
located in the Iskut-Stikine River region of British Columbia. Seabridge
currently has a 100% interest in the project. The Property is without known mineral
reserves and is at the exploration stage; the Company’s current efforts are
exploratory in nature.
 
 Location
and Access
 
 The KSM
property is located in the Iskut-Stikine River region, approximately 65 km
northwest of Stewart, British Columbia. Access to the property is by helicopter
from Stewart. Mobilization of equipment and personnel can be staged quite
effectively from the Tide Lake airstrip, Bronson Strip or from Bob Quinn and
Bell II Crossing on the Stewart Cassiar Highway.
  33
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  34
 Table of Contents
  How
Acquired
 
 Seabridge
entered into a Letter of Intent with Placer Dome in June 2000 to acquire a 100%
interest in KSM. On March 27, 2001, the Company and Placer Dome executed a
definitive acquisition agreement and the acquisition closed in June 2001. At
closing, the Company issued Placer Dome (i) 500,000 common shares of Seabridge;
(ii) 500,000 common share purchase warrants, exercisable by Placer Dome at
C$2.00 per share for two years; and (iii) a 1% net smelter royalty interest on
the Project, capped at C$4.5 million. Seabridge will be obligated to purchase
the 1% net smelter royalty from Placer Dome for $4.5 million in the event that a
positive feasibility study demonstrates a 10% internal rate of return after tax
and financing costs.
 
 In
September 2002, the Company optioned KSM to Noranda Inc. (which subsequently
became Falconbridge Limited and then Xstrata plc.) which could have earned a 50%
interest by spending $6 million on exploration within 6
years.  Noranda was entitled to earn a further 15% by funding all
costs to complete a feasibility study on the project.
  In April
2006, the Company announced that it had reached agreement with Falconbridge
whereby the Company would re-acquire Falconbridge’s option to earn a 65%
interest at KSM for 200,000 common shares of the Company and 2.0 million
conditional common share purchase warrants of the Company with an exercise price
of C$13.50 per share. One warrant becomes exercisable for each new ounce of gold
resource discovered at KSM, up to the maximum of two million. The transaction
closed in August 2006. With the announcement of an initial mineral resource at
the Mitchell mineral resource, the full 2.0 million warrants became exercisable
in February 2007. During 2007, all two million warrants were exercised by
Xstrata and the Company received $27 million in proceeds.
 
 The KSM
project consists of two contiguous claim blocks known as the Kerr Property and
the Sulphurets Property. Total minimum annual holding costs associated with the
project are approximately $100,000.
 
 Property
Description
 
 The
property consists of 30 contiguous mineral claims and 19 contiguous placer
claims covering an area of approximately 6,726 hectares while the placer claims
cover about 4,554 hectares. It should be noted that most of the placer claims
lie “over the top” of the mineral claims. Seabridge also has acquired 45
contiguous mineral claims (Seabee Property) that are located about 19 kilometers
northeast of the KSM property.
 
 The KSM
mineral claims were converted from 58 legacy claims to B.C.’s new Mineral Titles
Online (MTO) system in 2005. Eleven legacy placer claims were converted in 2005
to nine cell placer claims. Ten cell placer claims have been added to the
property and are contiguous with the converted legacy placer claims. In the MTO
system, claims are located digitally using a fixed grid on lines of latitude and
longitude with cells measuring 15 seconds north-south and 22.5 seconds east-west
(approx. 460 by 380 meters at KSM). The legacy claims were located by previous
owners by placing tagged posts along the boundaries; however the survey method
employed in locating the legacy claims is not known. With the MTO system no
markings are required on the ground and the potential for gaps and/or
overlapping claims inherent in the old system is eliminated.
  35
 Table of Contents
 
 The
claims are 100% owned by Seabridge. Placer Dome Inc. (now Barrick Gold) retains
a 1% net smelter royalty (NSR) that is capped at $4.5 million. Two of the
pre-converted claims (Xray 2 and 6) are subject to a contractual royalty
obligation in accordance with terms in the underlying Dawson Agreement. The
lands covered by these claims are now contained within the converted Xray 1
claim (Tenure No. 516245). There is an additional underlying agreement whereby
advance annual royalties payable to Dawson are being paid by Placer Dome
Inc.
 
 Annual
holding costs for all of the claims (mineral and placer) are approximately
$172,988. In 2007, assessment work was filed to advance the year of expiry to
2018. Neither the KSM placer claims nor the Seabee Property claims have had any
work filed to date, but both are in good standing to 2008 and 2009.
 
 Regional
and Property Geology
 
 The KSM
property lies within the Stikine Terrane and is underlain largely volcanic,
volcaniclastic and sedimentary rocks at the western edge of the Bowser Basin.
Within this geologic framework, copper, gold and molybdenum mineralization and
associated alteration are focused in a local core where intense folding,
faulting, thrust faulting and intrusions are prevalent. A number of deformed
porphyry and vein type deposits occur in the Mitchell-Sulphurets area. These
deposits are characterized by a strong copper-gold and minor molybdenum
association, and spatially occur along the flanks of a horseshoe-shaped
trend.
 
 The
project consists of three separate gold/copper zones (Kerr, Sulphurets and
Mitchell) and are discussed separately below:
 
 Kerr
Zone
  The Kerr
zone extends approximately 3,000 m in a northerly trend from the crest of a
ridge above the southwestern branch of the Sulphurets Glacier down to the lower
slopes of a cirque-like basin just above Sulphurets Lake. The zone is a
pyrite-rich copper-gold system that occurs in strongly altered and deformed
monzonitic intrusions in sedimentary and volcaniclastic rocks. The most
important mineralization type is quartz stockwork. The strongest copper-gold
mineralization is associated with a core of chlorite-bearing alteration and
quartz stockwork.
 
 Sulphurets
Zone
  Disseminated
copper-gold mineralization in the Sulphurets Gold Zone is centered about a
hydrothermal breccia (Breccia Gold Zone) and dyke complex (Raewyn Copper-Gold
Zone) representing the higher levels of a copper-gold porphyry system. The
combined gold and copper lithogeochemical anomaly associated with the Sulphurets
Gold Zone Target has a strike length of 2.5 kilometers by up to one kilometer in
width.
  36
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 Mitchell
Zone
  The
Mitchell zone is situated at the base of the Mitchell Glacier within an
erosional window through the major thrust fault complex that crosses the
property. The intermediate volcanic rocks exposed in the erosional window are
dominated by intense phyllic alteration that diminishes to the west. This
conspicuous phyllic alteration is characterized by abundant fine-grained
pervasive sericite, 5 to 20% pyrite and quartz stockwork veins that locally
exceed 80% of the rock mass. Gold and copper are associated with fine grained
sulfide minerals which are disseminated in the rock and in stockwork veins. Gold
and copper grades in the drill results are remarkably consistent down hole,
along and across strike. This homogeneity of grades and the lack of sharp grade
contrasts across the Mitchell zone probably resulted from regional deformation
of the mineral system after its deposition.
 
 Exploration
History
 
 Placer
gold was discovered in Sulphurets Creek in the 1880s. In 1935, copper
mineralization was discovered on Mitchell-Sulphurets Ridge in a location now
known as the Main Copper Zone. In 1959, gold-silver mineralization was
discovered in the Brucejack Lake area. These showings were subsequently explored
with surface and underground exploration in the 1980s and 1990s as three
comparatively small high-grade gold-silver zones by Newhawk Gold Mines Ltd. and
Lacana Mining Corp.
 
 In 1960,
claims on the Sulphurets property were staked by Granduc Mines Ltd. and some
independent prospectors. Exploration including diamond drilling was completed
over an eight-year period on Sulphurets Gold, Main Copper and Quartz Stockwork
Zones by Granduc and the Newmont Mines Joint Venture. From 1971 to 1975 Granduc
continued exploration on the Sulphurets Property. From 1980 to 1985, Esso
Minerals optioned the Sulphurets Property from Granduc in order to explore for
porphyry molybdenum, bulk mineable copper-molybdenum-gold and gold-bearing vein
type deposits. In 1985, Esso surrendered its interest in the Sulphurets Property
to Granduc.
 
 The Alpha
Joint Venture (“Alpha”) staked the Kerr Property in 1982. Anomalous gold values
in soils were identified in 1983 by Alpha and based on these results Brinco
Limited optioned the Kerr Property in 1984 and funded the next phase of
geological mapping, prospecting and geochemical sampling. This work outlined a
gold anomaly over one kilometer long. In 1985, Newhawk Gold Mines Ltd. and
Lacana Mining Corp. formed a joint venture, and optioned the adjoining
Sulphurets Property from Granduc and explored several zones, including
conducting diamond drilling.
 
 In 1989,
fieldwork completed by Placer Dome included additional diamond drilling to
extend the Kerr zone to a strike length of more than 1,600 meters. In 1990,
Placer Dome completed a major diamond drill program on the Kerr Property to
further define the zone. Placer further completed a major diamond drill program
on the Sulphurets Gold Zones and adjoining Kerr zone during the summer of 1992,
with the total exploration expenditures incurred by Placer on the KSM property
through to year-end 1992 was C$6.6 million.
  37
 Table of Contents
  During
2003 and 2004, under its option to earn up to a 65% interest in the project from
the Company, Falconbridge conducted geophysics, surface mapping, surface
sampling and target delineation at the project.  Falconbridge
completed a $1.3 million drill program on six new targets during the summer of
2005.
 
 In 2006,
the Company completed a 9,100 meter core drill program at KSM designed to expand
the project’s known gold resource by testing for the strike and depth extensions
of the Sulphurets zone and by systematically drilling the promising new Mitchell
gold zone identified in previous work. In February 2007, the Company announced a
43-101 compliant resource estimate for the Mitchell zone prepared by
RMI.
 
 In 2007,
the Company completed a 15,300 meter core drill program at KSM designed to
expand the Mitchell zone’s known gold resource by testing for the strike and
depth extensions. In January 2008, RMI completed a 43-101 compliant resource
estimate for the Kerr and Sulphurets zones. In February 2008, RMI completed an
updated 43-101 compliant resource estimate for the Mitchell zone.
 
 Mineral
Resources
 
 A
significant amount of work has been performed on the Kerr and Sulphurets zones
by previous owners including Placer Dome. RMI remodeled these zones, as well as
the Mitchell zone, using independently constructed gold and copper grade
envelopes as the primary constraint for estimating block grades and then
tabulated Mineral Resources by using a gold equivalent cutoff grade (which
converts copper values to gold values at set prices and estimated metal
recoveries).
 
 RMI
estimated gold and copper grades using inverse distance weighting methods within
gold and copper grade envelopes that were constructed for each zone. The grade
models were validated visually and by comparisons with nearest neighbor models.
The estimated block grades were classified into indicated and inferred mineral
resource categories based on mineralized continuity that was determined both
visually and statistically (i.e. variogram ranges) together with the proximity
to drill hole data.
 
 RMI
estimated gold and copper mineral resources using a gold equivalent cut-off
grade of 0.50 grams per tonne. The key parameters used in determining this
cut-off included gold and copper prices of US$650/ounce (70% recovery) and
US$2.00/pound (85% recovery). Mining costs of US$1.25/tonne and processing,
smelting/refining and general and administrative costs of US$8.20/tonne were
also used.
 
 38
 Table of Contents
 
 KSM
Indicated Mineral Resources at 0.50 grams per tonne gold equivalent
cut-off:
  Zone
                    Indicated
      Mineral ResourcesTonnes
                      (000)
                    Gold
                      (g/t)
                    Copper
                      (%)
                    Gold
                      Ounces
                      (000)
                    Copper
                      Pounds
                      (millions)Mitchell
                    734,163
                    0.69
                    0.18
                    16,287
                    2,913Kerr
                    206,272
                    0.25
                    0.45
                    1,651
                    2,037Sulphurets
                    74,655
                    0.75
                    0.24
                    1,798
                    388Total
                    1,015,090
                    0.61
                    0.24
                    19,736
                    5,338
   Cautionary
Note to U.S. Investors concerning estimates of Indicated Resources
  This
section uses the term “indicated resources”. We advise U.S. investors that while
those terms are recognized and required by Canadian regulations, the U.S.
Securities and Exchange Commission does not recognize them. U.S. investors are cautioned not to
assume that any part or all of mineral deposits in these categories will ever be
converted into reserves.
 
 KSM
Inferred Mineral Resources at 0.50 grams per tonne gold equivalent
cut-off:
 
 Zone
                    Inferred
      Mineral ResourcesTonnes
                      (000)
                    Gold
                      (g/t)
                    Copper
                      (%)
                    Gold
                      Ounces
                      (000)
                    Copper
                      Pounds
                      (millions)Mitchell
                    667,421
                    0.62
                    0.15
                    13,304
                    2,206Kerr
                    51,387
                    0.21
                    0.45
                    352
                    506Sulphurets
                    33,636
                    0.62
                    0.20
                    675
                    147Total
                    752,444
                    0.59
                    0.18
                    14,331
                    2,859
  Cautionary
Note to U.S. investors concerning estimates of Inferred Resources
  This
section uses the term “inferred resources”. We advise U.S. investors that while
this term is recognized and required by Canadian regulations, the U.S.
Securities and Exchange Commission does not recognize it. “Inferred resources”
have a great amount of uncertainty as to their existence, and great uncertainty
as to their economic and legal feasibility. It cannot be assumed that all or any
part of an Inferred Mineral Resource will ever be upgraded to a higher category.
Under Canadian rules estimates of Inferred Mineral Resources may not form the
basis of feasibility or other economic studies. U.S. investors are cautioned not to
assume that part or all of an inferred resource exists, or is economically or
legally mineable.
 
 None of
the resource can be classified as a Mineral Reserve. Additional exploration work
will be required in order to upgrade the resources into reserve categories, and
a full feasibility study will be required in order to determine if any of the
mineral resources are economic and can be profitably mined.
  39
 Table of Contents
 
 The
database for the Kerr zone incorporates 144 core drill holes totaling 26,409
meters. The database for the Sulphurets zone incorporates 60 core drill holes
totaling 13,033 meters. The database for the Mitchell zone incorporates 69 core
holes totaling 24,824 meters.
 
 Environmental/Regulatory
Information
 
 The KSM
Property falls within the Cassiar-Iskut-Stikine Land and Resource Management
Plans (LRMP).  At this stage, there are no direct Protected or Special
Management Areas overlapping the KSM Property.  However, as
negotiations on recommendations proceed, there may be potential Land Use
conflicts arising from future allocations by the Regional Protected Areas Team
in the vicinity of the KSM project.  In particular, a
Conservation-oriented Protection Area and large River Corridor Special
Management Area are currently being recommended along the lower two-thirds of
the Unuk River.  The establishment of this type of Protected Area,
although it does not overlap the KSM Property, could impact the approval process
of potential development plans and valley access to the project.
 
 The KSM
Project falls within the traditional lands of the Tahltan First
Nation.  The Tahltan have been active community and development
partners in other mining projects such as the Golden Bear mine, and Homestake’s
nearby Eskay Creek Mine.
 
 Placer
Dome investigated water drainage at the Kerr and Sulphurets zones and found that
the waste rock to be generated by any project would be acid
generating.  High levels of acidity were observed locally, but further
downstream the high volume of glacial meltwater that flowed into the drainage
system neutralized the PH levels in the water.
 
 Reclamation
and decommissioning activities associated with previous exploration activities
have been initiated and almost completed on the KSM Property.  The
main activities include response to periodic inspections by the British Columbia
Ministry of Energy and Mines.  Key activities have concentrated on
decommissioning the Kerr Camp, the old Western Canadian Camp, general clean-up
of old equipment and materials, and reclamation of drill access roads and drill
sites.  The majority of the tasks have been concluded including the
plugging and cementing of water-making drill hole collars.  There are
a number of outstanding activities that are still required to be administered in
accordance with recommendations from the Ministry including additional
reclamation on drill access roads and equipment and material
clean-up.  At the time of the Company’s acquisition of the KSM
Property, the Ministry estimated $225,000 of additional reclamation work may be
required and the Company deposited this amount under a safekeeping agreement
with the Ministry for these obligations.  In early 2004, Falconbridge
assumed these reclamation obligations and the $225,000 deposit was returned to
the Company. Following Seabridge’s acquisition of Falconbridge’s option at KSM,
in 2007 the Company deposited $200,000 towards additional reclamation
liabilities under a safekeeping agreement with the Ministry.
  40
 Table of Contents
 
 Current
and Planned Work
 
 In
December 2007, the Company announced that it had assembled a team of independent
consultants to prepare a National Instrument 43-101 Preliminary Assessment for
its KSM project. The Preliminary Assessment will establish a project development
scenario for KSM including preliminary capital and operating cost
estimates.
 
 The
Preliminary Assessment is being coordinated by TJS Mining-Met Services and
includes a number of independent contractors including: Resource Modeling Inc.
(resource estimate), Rescan Environmental Services (environmental baseline and
permitting), Klohn Crippen Berger (geotechnical work on tailing, diversions,
tunnels and site services), Piteaus Associates Engineering Ltd. (rock mechanics
and mining pit slopes), Moose Mountain Technical Services (mine planning,
costing and production scheduling), WN Brazier Associates (electrical and
power generation plans and economics), TJS Mining-Met Services Inc. (metallurgy
and process).
 
 In
addition to on-site sampling, selected ore samples and waste samples will be
tested in 2008 to determine the environmental parameters and further
characterize the metallurgical response of the Mitchell ore zones. The
Preliminary Assessment is scheduled for completion in late 2008. As part of
their mandate, TJS Mining-Met Services and Rescan Environmental Associates will
also facilitate the preparation of a Project Description document, scheduled for
completion by April 2008. This document is required by the government to
initiate permitting activities for the project.
 
 The Company also is planning to conduct
additional exploration activities at KSM during 2008.The Company is planning a 15,000 meter
core drill program designed to improve the value of the asset by exploring for
higher grade gold zones, upgrading more of the remaining inferred mineral
resources to the indicated category and further expanding the Mitchell
zone.
 
 Other
Projects
 
 The
Company also holds a 100% interest in several other projects, all of which are
situated in North America. The Company does not consider any of these other
projects material to the overall operations. These projects include Noche Buena
(Sonora, Mexico), Quartz Mountain (Oregon), Grassy Mountain (Oregon), Hog Ranch
(Nevada) and Red Mountain (British Columbia, Canada). The Company’s ownership at
Quartz Mountain is subject to a 65% earn-in by Quincy Gold.
 
 The
Company also owns a 100% interest in Pacific Intermountain Gold Corporation
(“PIGCO”), a private company focused on the acquisition and exploration of
early-stage gold and silver properties in Nevada. The Company’s ownership
interest in PIGCO is subject to a 10% net profits interest held by a previous
minority shareholder in PIGCO.
  41
 Table of Contents
 
 The
Company is not planning any additional work on any of these other projects at
this time.
 
 All
of the Company’s Properties are without known mineral reserves and are at the
exploration stage.
 
 Item 4A.  Unresolved Staff Comments
  Not
applicable
  Item 5.  Operating and Financial Review and
Prospects
  Overview
 
 The
following is a discussion of the results of operations and financial condition
of Seabridge Gold Inc. and its subsidiary companies for the years ended December
31, 2007, December 31, 2006 and December 31, 2005. This report should be read in
conjunction with the audited consolidated financial statements for the years
ended December 31, 2007, 2006 and 2005 in Item 17 of this report.
 The
Company's financial statements are stated in Canadian Dollars (C$) and are
prepared in accordance with Canadian Generally Accepted Accounting Principles
(GAAP), the application of which, in the case of the Company, conforms in all
material respects for the periods presented with United States GAAP except as
noted in Footnote #11 to its audited annual consolidated financial statements
for the year ended December 31, 2007.  The value of the U.S. Dollar in
relationship to the Canadian Dollar was $0.99 as of December 31,
2007.
  The
Company is a development stage company engaged in the acquisition and
exploration of gold properties located in North America.  The Company
is designed to provide its shareholders with exceptional leverage to a rising
gold price.  The Company’s business plan is to increase its gold
ounces in the ground but not to go into production on its own.  The
Company will either sell projects or participate in joint ventures towards
production with major mining companies.  During the period 1999
through 2002, when the price of gold was lower than it is today, Seabridge
acquired 100% interests in eight advanced-stage gold projects situated in North
America. Subsequently, the Company also acquired a 100% interest in the Noche
Buena project in Mexico.  As the price of gold has moved higher over
the past several years, Seabridge has commenced exploration activities and
engineering studies at several of its projects.  Seabridge’s principal
projects include the Courageous Lake property located in the Northwest
Territories and the KSM (Kerr-Sulphurets-Mitchell) property located in British
Columbia.  Seabridge’s common shares trade in Canada on the TSX
Venture Exchange under the symbol “SEA” and in the United States on the American
Stock Exchange under the symbol “SA”. 
 Selected
Annual Information
  Summary
      operating results($)
                    
                    2007
                    
                    2006
                    
                    2005Interest
      income
                    
                    823,000
                    
                    363,000
                    
                    135,000Operating
      costs
                    
                    6,984,000
                    
                    5,658,000
                    
                    2,113,000Loss
                    
                    5,542,000
                    
                    3,300,000
                    
                    1,157,000Loss
      per share
                    
                    0.15
                    
                    0.10
                    
                    0.04
 
 Summary balance
      sheets ($)
                    
                    2007
                    
                    2006
                    
                    2005Current
      assets
                    
                    25,698,000
                    
                    6,855,000
                    
                    10,896,000Mineral
      interests
                    
                    62,668,000
                    
                    53,262,000
                    
                    24,395,000Total
      assets
                    
                    89,862,000
                    
                    61,244,000
                    
                    37,085,000Total
      long-term liabilities
                    
                    2,436,000
                    
                    1,530,000
                    
                    1,407,000
 42
 Table of Contents
 The
Company has since inception financed its activities through the distribution of
equity capital.  The Company anticipates having to raise additional
funds by equity issuance in the next several years, as all of the Company’s
properties are at the exploration stage. The timing of such offerings is
dependent upon the success of the Company’s exploration programs, the ability to
attract joint-venture partners, as well as the general economic
climate.
 
 Part A.  Results of
Operations
 
 Year
Ended December 31, 2007 Compared to Year Ended December 31, 2006
 
 The net
loss for the year ended December 31, 2007 was $5,542,000 or $0.15 per share
compared to a net loss of $3,300,000 or $0.10 per share for 2006.  For
both years, reported losses were reduced due to the recognition of income tax
recoveries ($620,000 in 2007 and $1,906,000 in 2006) relating to the renouncing
of Canadian Exploration Expenses to the investors of flow-through financings.
The Company’s interest income from cash investments was up considerably at
$823,000 compared with $363,000 in 2006 with higher cash balances resulting
primarily from the exercise of share purchase warrants for proceeds of $27
million. Corporate and general expenses were higher in the 2007 period due to
activity levels, bonus payments and stock option compensation expenses of
$2,830,000 (2006 - $1,979,000), resulting mainly from the vesting of stock
options granted in 2006 due to the increase in the Company’s share
price.  At December 31, 2006, the Company wrote down the value of its
investment in Atlas Precious Metals Inc. amounting to $749,000 as that company
was not able to secure financing due to perceived political risks in the
jurisdiction where its main asset was located.
  Year
Ended December 31, 2006 Compared to Year Ended December 31, 2005
  The net
loss for the year ended December 31, 2006 was $3,300,000 or $0.10 per share
compared to a net loss of $1,157,000 or $0.04 per share for 2005.  For
both years, reported losses were less due to the recognition of income tax
recoveries ($1,906,000 in 2006 and $821,000 in 2005) relating to the renouncing
of Canadian Exploration Expenses to the investors of flow-through financings.
The Company’s interest income from cash investments was up considerably at
$363,000 compared with $135,000 in 2005 with higher cash balances to invest from
financings and higher interest rates compared to 2005. Corporate and general
expenses were higher in the 2006 period due to stock option compensation
expenses of $1,979,000 (2005 - $361,000), resulting mainly from one third of the
options granted early in 2006 vesting due to the significant increase in the
Company’s share price, increased management compensation, higher investor
relations expenses, mineral property search activities and stock exchange and
other regulatory fees, and a loss on foreign exchange of $161,000 as funds were
accumulated to acquire the Noche Buena property.  At December 31,
2006, the Company wrote down the value of its investment in Atlas Precious
Metals Inc. amounting to $749,000 as that company had not been able to secure
financing due to perceived political risks in the jurisdiction where its main
asset is located.
  Quarterly
Information
  Selected
financial information for each of the last eight quarters ended December 31,
2007 is as follows (unaudited):
  4th Quarter
      Ended
                      December 31,
    2007
                    
                    3rd Quarter
      Ended
                      September
      30, 2007
                    
                    2nd Quarter
      EndedJune 30, 2007
                    
                    1st Quarter
      Ended
                      March 31,
      2007Revenue
                    
                    $
                    Nil
                    
                    
                    $
                    Nil
                    
                    
                    $
                    Nil
                    
                    
                    $
                    NilLoss
      for period
                    
                    $
                    (1,336,000
                    )
                    
                    $
                    (1,473,000
                    )
                    
                    $
                    (1,947,000
                    )
                    
                    $
                    (786,000
                    )Loss
      per share
                    
                    $
                    (0.04
                    )
                    
                    $
                    (0.04
                    )
                    
                    $
                    (0.05
                    )
                    
                    $
                    (0.02
                    )
  4th Quarter
      Ended
                      December 31,
    2006
                    
                    3rd Quarter
      Ended
                      September 30,
      2006
                    
                    2nd Quarter
      Ended
                      June 30, 2006
                    
                    1stQuarter
      Ended
                      March 31,
  2006Revenue
                    
                    $
                    Nil
                    
                    
                    $
                    Nil
                    
                    
                    $
                    Nil
                    
                    
                    $
                    NilIncome
      (loss) for period
                    
                    $
                    (1,598,000
                    )
                    
                    $
                    (1,878,000
                    )
                    
                    $
                    (1,134,000
                    )
                    
                    $
                    1,310,000Income
      (loss) per share
                    
                    $
                    (0.05
                    )
                    
                    $
                    (0.06
                    )
                    
                    $
                    (0.03
                    )
                    
                    $
                    0.04
 43
 Table of Contents
 The loss
in the second and third quarters of 2007 and the third quarter of 2006 were
higher than other quarters due to the stock option compensation expense for the
vesting of two-tiered stock options.  The loss in the fourth quarter
of 2006 was higher due to the write-down of an investment amounting to
$749,000.
 
 The
income for the first quarter in 2006 was due to the recognition of income tax
recoveries relating to the renouncing of Canadian Exploration Expenses to the
investors of the flow-through financings completed in 2005.
 
 Mineral
Interest Activities
  During
the year ended December 31, 2007, the Company incurred net expenditures of
$9,406,000 on mineral interests compared to $28,867,000 in the year ended
December 31, 2006. In 2007, expenditures were mainly for exploration drilling
programs at the KSM, Noche Buena and the Golden Arrow in Nevada (part of the
Pacific Intermountain property group) projects.  In addition in 2007,
a new 13.1 million ounce inferred gold mineral resource estimate was completed
for the Mitchell zone of the KSM project and engineering and metallurgical
studies were undertaken at the KSM and Courageous Lake projects. At Courageous
Lake, the 2006 and 2007 work and new mineral resource will be used to complete a
revised Preliminary Economic Assessment (“PEA”) and engineering studies in
2008.
 
 In the
2006 year, almost $15 million of the costs were for the deemed value of the
shares and warrants issued to acquire the KSM project and an additional $4.9
million was paid in cash for the acquisition of the Noche Buena project in
Mexico.  Exploration expenditures incurred in the 2006 period included $4,553,000
at the Courageous Lake project where drilling programs have helped expand the
gold mineral resource, and $3,656,000 for drilling on the Kerr-Sulphurets
project.
 
 For 2008,
at KSM, another drilling program is planned to expand the zone and upgrade
mineral resources. It is planned to complete a Preliminary Economic Assessment
on this project by year end.   In Nevada, 2008 exploration
activities will include drilling on the Four-Mile Basin project.
 Part B.  Liquidity and
Capital Resources
 
 The
ability of the Company to successfully acquire additional advanced-stage gold
projects or to advance the projects already acquired is conditional on its
ability to secure financing when required. The Company proposes to meet any
additional cash requirements through equity financings. In light of the
continually changing financial markets, there is no assurance that new funding
will be available at the times required or desired by the Company or will not be
dilutive to existing shareholders.
  During
2008, the Company plans to continue to advance its two major gold projects, KSM
and Courageous Lake in order to either sell them or joint venture them
towards production with major mining companies.  In addition, it will
seek to sell off its other properties, initially, Noche Buena and
Red Mountain.
 
 Year
Ended December 31, 2007
 
 During
2008, the Company plans to continue to advance its two major gold projects, KSM
and Courageous Lake in order to either sell them or joint venture them
towards production with major mining companies.  In addition, it will
seek to sell off its other properties, initially, Noche Buena and
Red Mountain.
  The
Company’s working capital position, at December 31, 2007, was $25,055,000 up
from $6,420,000 at the end of 2006.  In 2007, the two million share
purchase warrants issued as part of the KSM project acquisition in 2006 were
exercised for proceeds of $27 million.  In addition, during 2007
$4,327,000, (2006 - $585,000) was received from the exercise of stock
options.  In 2006, two private placement financings were completed
which netted $12,008,000.  The increase in share capital in 2007 was
used for expenditures on exploration and operating costs.
 
 Cash and
short-term deposits at December 31, 2007 totaled $24,942,000, up from $5,786,000
at December 31, 2006.  Operations activities used $3,446,000 in 2007
compared to $2,330,000 in the prior year due to increased compensation costs,
investor activities and corporate costs. Cash expenditures on Mineral Interests
were $8,351,000 compared to the $14,571,000 cash expenditures in
2006.
 
 44
 Table of Contents
  The
Company’s cash position at December 31, 2007 is sufficient to undertake planned
exploration and corporate activities for 2008 and 2009.
 Contractual
      Obligations
                      ($,000)
                    
                    
                    Payments
      due by periodTotal
                    2008
                    2009-11
                    2012-13
                    After
      2013Mineral
      interests
                    
                    8,283
                    1,069
                    3,530
                    2,456
                    1,228Reclamation
      liabilities
                    
                    1,849
                    24
                    -
                    162
                    1,663Business
      premises operating lease
                    
                    438
                    101
                    303
                    34
                    -10,570
                    1,194
                    3,833
                    2,652
                    2,891
 US GAAP Reconciliation with
Canadian GAAP
 
 Under
U.S. GAAP, all expenditures relating to mineral interests prior to the
completion of a definitive feasibility study, which establishes proven and
probable reserves, must be expensed as incurred. Under Canadian GAAP, these
amounts can be deferred. As such, under US GAAP, these amounts and related
future tax liabilities are not recorded on the balance sheets.
 
 Reference
is made to Seabridge’s audited annual consolidated financial statements for the
year ended December 31, 2007, particularly Note #11, Reconciliation to United
States Generally Accepted Accounting Principles, for the quantification of the
differences.
 
 Variation in Operating
Results
 
 The
Company derives interest income on its bank deposits, which depend on the
Company's ability to raise funds, the amount of the deposits and interest
rates.
 
 Management
periodically, through the exploration process, reviews results both internally
and externally through resource related professionals.  Decisions to
abandon, reduce or expand exploration efforts is based upon many factors
including general and specific assessments of mineral deposits, the likelihood
of increasing or decreasing those deposits, land costs, estimates of future
mineral prices, potential extraction methods and costs, the likelihood of
positive or negative changes to the environment, permitting, taxation, labor and
capital costs.  There cannot be a pre-determined hold period for any
property as geological or economic circumstances render each property
unique.
 Under
United States GAAP when flow-through shares are issued, the proceeds are
allocated between the issue of shares and the sale of tax
benefits.  The allocation is made based on the difference between the
quoted price of the existing shares and the amount that the investor pays for
the shares.  The shareholders’ equity is reduced and a liability is
recognized for this difference which amounted to $393,250 for the flow-through
shares issued in 2006.  The liability is reversed when the tax
benefits are renounced and a deferred tax liability recognized at that
time.  Income tax expense is the difference between the amount of the
deferred tax liability and the liability recognized on issuance.
 45
 Table of Contents
 The
Company's financial statements are stated in Canadian Dollars (CDN$) and are
prepared in accordance with Canadian Generally Accepted Accounting Principles
(GAAP), the application of which, in the case of the Company, conforms in all
material respects for the periods presented with United States GAAP except as
noted in Note 11 to the 2007 audited financial statements.  The value
of the Canadian Dollar in relationship to the US Dollar was $1.01 as of December
31, 2007.
  Outlook
  During
2008, the Company plans to continue to advance its two major gold projects, KSM
and Courageous Lake in order to either sell them or joint venture them towards
production with major mining companies.  In addition, it will seek to
sell off its other properties, initially, Noche Buena and Red Mountain while at
the same time ensuring that funding is available for its project holding costs
and other corporate requirements.
 
 Disclosure
Controls and Procedures
  Disclosure
controls and procedures are designed to provide reasonable assurance that all
relevant information is gathered and reported to senior management, including
the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), on a
timely basis so that appropriate decisions can be made regarding public
disclosure. As at December 31, 2007, the Company's management, with the
participation of the CEO and CFO, has evaluated the effectiveness of the
Company's disclosure controls and procedures as
defined in Multilateral Instrument 52-109 of the Canadian Securities
Administrators and has concluded that such controls and procedures are
effective.
 
 Internal
Controls Over Financial Reporting
  The
Company’s CEO and the CFO are responsible for establishing and maintaining the
Company’s internal controls over financial reporting in accordance with
Multilateral Instrument 52-109 of the Canadian Securities
Administrators.  These controls have been established as at December
31, 2007.  There have been no changes in these controls during fiscal
year 2007 which have materially affected, or are reasonably likely to materially
affect, the Company’s internal controls over financial reporting.
 Shares
Issued and Outstanding
  At March
19, 2008, the issued and outstanding common shares of the Company totaled
37,298,185.  In addition, there were 1,192,300 stock options granted
and outstanding (of which 140,000 were unexercisable).  On a fully
diluted basis there would be 38,490,485 common shares issued and
outstanding.
 
 In
addition to the 1,192,300 options outstanding, there were 150,000 options
granted which are subject to an increase in the share option plan and the
approval of shareholders at the next meeting of shareholders.
 46
 Table of Contents
 Related
Party Transactions
  During
the year ended December 31, 2007, a private company controlled by a director of
the Company was paid $33,300 (2006 - $33,900) for technical services provided by
his company related to mineral properties; a private company controlled by a
second director was paid $360,000 (2006 - $144,000) for corporate consulting
services rendered; a third director was paid $17,300 (2006 - $18,000) for
geological consulting and outstanding accounts payable to directors at year end
were $94,000.  These transactions were in the normal course of
operations and were measured at the exchange amount, which is the amount of
consideration established and agreed to by the related parties.
 
 Recently
Issued Accounting Pronouncements
  On
January 1, 2007, the Company adopted the following Canadian Institute of
Chartered Accountants (CICA) accounting standards which were effective for
fiscal years beginning on or after October 1, 2006:  Section 1530
Comprehensive Income; Section 3855 Financial Instruments – Recognition and
Measurement; Section 3861 “Financial Instruments – Presentation and Disclosure”;
and, Section 3865 – Hedges”.  These sections require certain financial
instruments and hedge positions to be recorded at fair value.  The
standards also introduce the concept of comprehensive income and accumulated
comprehensive income.  Adoption of these standards is generally on a
retrospective basis without restatement.
  Under the
new standards, financial instruments designated as “held-for-trading” and
“available-for-sale” will be carried at their fair value while financial
instruments such as “loans and receivables”, “financial liabilities” and those
classified as “held-to-maturity” will be carried at their amortized cost. 
All derivatives will be carried on the consolidated balance sheets at their fair
value, including derivatives designated as hedges.  Unrealized gains and
losses on effective cash flow hedges will be carried in “Accumulated
Comprehensive Income”, a component of “Shareholders’ Equity” on the consolidated
balance sheets, while any gains or losses on ineffective hedges will be
recognized in earnings.
 
 New
Pronouncements Not Yet Adopted
  The
Canadian Institute of Chartered Accountants (“CICA”) issued the following
accounting standards effective for the Company’s fiscal year beginning on
January 1, 2008:
 
 Capital
Disclosures
  In
December 2006, the CICA issued Handbook Section 1535, Capital Disclosures, which
establishes standards for disclosing information about an entity’s capital and
how it is managed.  The entity’s disclosure should include information
about its objectives, policies and processes for managing capital and disclose
whether or not it has complied and the consequences of non-compliance with any
capital requirements to which it is subject.  The Company is currently
evaluating the impact of the adoption of this section on the consolidated
financial statements.
  Financial
Instruments – Disclosures and Financial Instruments - Presentation
  In
December 2006, the CICA issued Handbook Section 3862 Financial Instruments –
Disclosures and Section 3863 Financial Instruments –
Presentation.  Section 3862 modifies the disclosure requirements of
Section 3861 Financial Instruments - Disclosures and Presentation including
required disclosure of the assessment of the significance of financial
instruments for an entity’s financial position and performance; and of the
extent of risks arising from financial instruments to which the Company is
exposed and how the Company manages those risks. Section 3863 carries forward
the presentation related requirements of Section 3861.  The Company is
currently evaluating the impact of the adoption of Section 3862, while it does
not expect the adoption of 3863 to have a significant effect on the consolidated
financial statements.
 
 Inventories
  In March
2007, the CICA issued Handbook Section 3031 Inventories, which replaces Section
3030 Inventories.   Under the new section, inventories are
required to be measured at the “lower of cost and net realizable value, which is
different from the existing guidance of the “lower of cost and market
value”.  The new section contains guidance on the determination of
cost and also requires the reversal of any write-downs previously recognized, if
applicable.  Certain minimum disclosures are required, including the
accounting policies used, carrying amounts, amounts recognized as an expense,
write-downs, and the amount of any reversal of any write-downs recognized as a
reduction in expenses.  The Company evaluated the impact of the
adoption of this new section on the consolidated financial statements and
concluded the impact will not be material.
 47
 Table of Contents
 Part C.  Research and
Development
 
 The
Company conducts no Research and Development activities, nor is it dependent
upon any patents or intellectual property licenses.
 
 Part D.  Trend
Information
 
 The
Company knows of no trends, uncertainties, demands, commitments or events that
are reasonably likely to have a material effect on the Company’s operations or
financial condition.
 
 PART E:  Off Balance
Sheet Disclosure
 
 Not
Applicable
 
 PART F:  Contractual
Obligations
 
 On-going
contractual obligations of the Company are limited to property holding costs and
reclamation liabilities.  Although property holding costs are at the
discretion of the Company, if payments are not made the Company will lose their
rights to the project.  Table No. 4 provides details of the Company’s
future contractual obligations which are required to be satisfied in order to
keep its projects in good standing.
  Table No.
4
 Contractual
Obligations ($000’s)
  Payments
      due by periodTotal
                    2008
                    2009-11
                    2012-13
                    After
                      2013Mineral
      interests
                    
                    8,283
                    1,069
                    3,530
                    2,456
                    1,228Reclamation
      liabilities
                    
                    1,849
                    24
                    -
                    162
                    1,663Business
      premises operating lease
                    
                    438
                    101
                    303
                    34
                    -10,570
                    1,194
                    3,833
                    2,652
                    2,891
 
 Amounts
shown for mineral interests include option payments and mineral lease payments
that are required to maintain the Company’s interest in the mineral
projects.
  PART G:  SAFE
HARBOR
  See
“Forward Looking Statements”
in Item 3D.
  48
 Table of Contents
 
 Item 6.  Directors, Senior Management and
Employees
  A. 
Directors and Senior Management
 
 Table No.
5 lists as of March 20, 2008 the names of the Directors of the
Company.  The Directors have served in their respective capacities
since their election and/or appointment and will serve until the next Annual
General Meeting or until a successor is duly elected, unless the office is
vacated in accordance with the Articles/By-Laws of the Company.  All
Directors are citizens of Canada, except, William Calhoun, Eliseo Gonzalez-Urien
and Louis Fox, all of whom are citizens of the United States. Frederick Banfield
and Rudi Fronk are citizens of both Canada and the United States.
 
 Table No.
5
 Directors
 
 Name
                  Age
                  Date First
  Elected/AppointedJames
      Anthony
                  60
                  October
      1999Rudi
      Fronk
                  49
                  October
      1999Frederick
      Banfield (1,3)
                  65
                  October
      1999William
      Calhoun (1,2,3)
                  75
                  February
      2000Thomas
      Dawson (1,3)
                  71
                  January
      2006Louis
      Fox (2,3)
                  65
                  January
      2000Eliseo
      Gonzalez-Urien (2,3)
                  67
                  January
      2006
 
 (1)
                  Member
      of Audit Committee.
 (2)
                  Member
      of Compensation Committee
 (3)
                  Member
      of Corporate Governance and Nominating
Committee
 
 Table No.
6 lists, as of March 20, 2008 the names of the Executive Officers of the
Company.  The Executive Officers serve at the pleasure of the Board of
Directors.  Mr. Threlkeld is a citizen of the United
States.  Messrs. Anthony and Chisholm are citizens of Canada. Mr.
Fronk is a citizen of both Canada and the United States.
 
 Table No.
6
 Executive
Officers
 
 Name
                  Position
                  Age
                  Date
      of
                    AppointmentJames
      Anthony
                  Chairman
                  60
                  October
      1999Rudi
      Fronk
                  President
      and CEO
                  49
                  October
      1999William
      Threlkeld
                  Senior
      Vice President
                  53
                  November
      2001Roderick
      Chisholm
                  Secretary
      and CFO
                  58
                  August
      2004
 
 49
 Table of Contents
 
 James
Anthony is a financier and corporate strategist specializing in growth
companies. He served as a senior policy advisor to a number of cabinet ministers
and a premier before establishing a corporate strategy consultancy. He advised a
number of major corporations on their positioning within their political and
financial environments and lectured at the Niagara Institute. Mr. Anthony has
been President of J.S. Anthony & Company, a private investment company,
since 1975 and was the past chairman of the board of Greenstone Resources Ltd.
Mr. Anthony has been a Director of Seabridge since 1999 and as Chairman since
2001. Mr. Anthony spends approximately 50% of his time on Seabridge
business.
 
 Rudi
Fronk has over 20 years experience in the gold industry, including serving as a
director and senior officer of several publicly traded gold companies. He was
appointed President, CEO and a Director of Seabridge in 1999 and has since that
time continuously served in those roles. Mr. Fronk is the past President and
Director of Greenstone Resources Ltd. from 1994 to 1999. Prior to 1994, he held
positions with Columbia Resources (1992-1993), DRX Inc. (1989-1992), Behre
Dolbear & Company (1986-1989), Riverside Associates (1984-1986),
Phibro-Salomon (1982-1983), and Amax (1980). Mr. Fronk is a graduate of Columbia
University from which he holds a Bachelor of Science in Mining Engineering and a
Master of Science in Mineral Economics. Mr. Fronk spends 100% of his time on
Seabridge business.
 
 Frederick
Banfield is the Founder of Mintec since 1970. Mintec is a consulting and
software company that provides consulting services to the mineral industry. Mr.
Banfield has also served as an independent reserves auditor and mine planning
advisor gold mining organizations with respect to projects in the United States,
Canada, Africa, Australia and Latin America. Mr. Banfield holds an engineering
degree from the Colorado School of Mines. Mr. Banfield spends less than 10% of
his time on Seabridge business.
 
 William
Calhoun is President of W.M. Calhoun Inc., an independent consultant that
provides consulting services to the minerals industry in the areas of mining
operations, mine planning, mine design, ore reserves and environmental issues.
From 1972 through 1981, Mr. Calhoun served as President and CEO of Day Mines,
Inc., an American Stock Exchange Company with mining operations in the western
United States that was acquired by Hecla Mining. Mr. Calhoun's extensive public
service record includes membership on President Ronald Reagan's Strategic
Minerals Task Force, President Gerald Ford's Inflation Task Force; Director of
the Silver Institute; Trustee of the Northwest Mining Association; Chairman of
the Mining Advisors Committee to the Governors of Washington and Idaho;
President of the Idaho Mining Association; Chairman of Advisory Committee of
Idaho College of Mines; and numerous other civil and professional organizations.
Mr. Calhoun has a Bachelor of Science degree in Mining/Geology from the
University of Texas at El Paso. Mr. Calhoun spends less than 10% of his time on
Seabridge business.
 
 Thomas
Dawson has been a Chartered Accountant since 1961. He is a retired senior audit
and accounting partner with 40 years of experience at Deloitte & Touche LLP,
Chartered Accountants. He received his B.Comm. from Loyola College (now
Concordia University), Canada, in 1959. Mr. Dawson is also a director of WFI
Industries Ltd., Energy Split Corp., Energy Split II Corp., R Split II Corp. and
Anvil Mining Limited.  Mr. Dawson spends less than 10% of his time on
Seabridge business.
 50
 Table of Contents
 Louis Fox
has more than 25 years experience in precious metals trading, merchanting and
merchant banking activities. From 1984 to 1999, Mr. Fox was a Senior Vice
President of Gerald Metals, Inc., commodity trading, refining and merchant
banking firm, in Stamford, Connecticut. At Gerald Metals, Mr. Fox was the head
of the company's worldwide precious metals group. Prior to Gerald Metals, from
1974 to 1981, Mr. Fox was a Vice President of J. Aron & Co., a precious
metals trading firm. Following the acquisition of J. Aron & Co. by Goldman
Sachs in 1981, Mr. Fox was a Vice President of Goldman Sachs through 1984. Mr.
Fox holds a B.A. from the University of Pittsburgh and a J.D. from the Boston
University Law School. Mr. Fox spends less than 10% of his time on Seabridge
business.
 
 Eliseo
Gonzalez-Urien has over 30 years of experience in the mining industry. From 1989
through 2001 Mr. Gonzalez-Urien held various executive positions with Placer
Dome Inc. including Senior Vice President of the parent company and President of
Placer Dome Exploration Inc. During this period he was charged with ultimate
responsibility for Placer Dome ́s worldwide exploration activities. Prior to
Placer Dome, Mr. Gonzalez-Urien held senior positions with BHP-Utah Inc. and
Noranda. He holds a degree in Geology from the University of Santiago, Chile,
followed by post graduate studies in Geology at the University of California,
Berkley. Mr. Gonzalez-Urien spends less than 10% of his time on Seabridge
business.
 
 William
Threlkeld has served as Senior Vice President of Seabridge since November 2001,
and from 2000 to 2001 acted as a technical consultant to the Company. From 1997
to 2000, he was Vice President, Exploration for Greenstone Resources Ltd. and
was responsible for resource delineation on three Central American gold deposits
and development of an organization and strategy to identify new mineral
investments. From 1991 to 1997, Mr. Threlkeld was Exploration Manager and
Vice President of Placer Dome and was responsible for all of Placer Dome’s
exploration activity and investment in Latin America. Mr. Threlkeld obtained his
MSc in Economic Geology from the University of Western Ontario. Mr. Threlkeld
spends 100% of his time on Seabridge business.
 
 Roderick
Chisholm was appointed Secretary of Seabridge in June 2003 and Chief Financial
Officer of Seabridge in August 2004.  Since 1981, Mr. Chisholm has
been a financial officer and corporate secretary of a number of Canadian junior
exploration companies.  Prior thereto he was an audit manager with
Deloitte & Touche LLP, Chartered Accountants.  Mr. Chisholm is a
Chartered Accountant and spends approximately 80% of his time on Seabridge
business.
 
 Other
than as set forth below, no Director and/or Executive Officer has been the
subject of any order, judgment, or decree of any governmental agency or
administrator or of any court or competent jurisdiction, revoking or suspending
for cause any license, permit or other authority of such person or of any
corporation of which he is a Director and/or
  51
 Table of Contents
  Executive
Officer, to engage in the securities business or in the sale of a particular
security or temporarily or permanently restraining or enjoining any such person
or any corporation of which he is an officer or director from engaging in or
continuing any conduct, practice, or employment in connection with the purchase
or sale of securities, or convicting such person of any felony or misdemeanor
involving a security or any aspect of the securities business or of theft or of
any felony.  Mr. Chisholm served as Secretary-Treasurer of Canuc
Resources Corp. (CDN-OTC: CANC) in 2000 when a cease trade order was issued
halting all trading of the common shares of Canuc due to failure to file
financial statements.  The cease trade order was rescinded in April
2007.
 
 There are
no arrangements or understandings between any two or more Directors or Executive
Officers, pursuant to which he was selected as a Director or Executive Officer.
There are no family relationships between any Directors or Executive
Officers.
 
 B. 
COMPENSATION
 
 Commencing
in July 2003, the Company commenced to compensate directors in cash in addition
to stock option grants previously granted for their services in their capacity
as directors and for committee participation. In 2007, unrelated directors
received US$20,000 per annum, the Chairman of the Audit Committee received an
additional US$7,500 per annum and the chairman of the Compensation Committee
received US$2,500 per annum, all paid quarterly in arrears.
 
 During
2003, the Company adopted a formalized stock option plan, approved by its
shareholders, for the granting of incentive stock options. To assist the Company
in compensating, attracting, retaining and motivating personnel, the Company
grants stock options to Directors, Executive Officers and employees; refer to
ITEM #10, "Stock Options".
  52
 Table of Contents
 
 Table No.
7 sets forth the compensation paid to the Company’s executive officers and
members of its administrative body during the last three fiscal
years.
 
 Table No.
7
 Summary
Compensation Table
 All
Figures in Canadian Dollars unless otherwise noted
 
 
 Name
                  Year
                  Salary
                  Options Granted (1)
                  Other Compensation (5)Rudi
      Fronk,
                    President,
      CEO and Director
                  2007
                    2006
                    2005
                  $300,000
                    $300,000
                    $250,000
                  Nil
                    250,000
                    Nil
                  $450,000
                    Nil
                    $7,750James
      Anthony,
                    Chairman
                  2007
                    2006
                    2005
                  Nil
                    Nil
                    Nil
                  Nil
                    125,000
                    Nil
                  $360,000
                    $144,000
                    $120,000Frederick
      Banfield,
                    Director
                  2007
                    2006
                    2005
                  Nil
                    Nil
                    Nil
                  Nil
                    100,000
                    Nil
                  US$20,000
                    US$20,000
                    US$20,000William
      Calhoun,
                    Director
                  2007
                    2006
                    2005
                  Nil
                    Nil
                    Nil
                  Nil
                    100,000
                    Nil
                  US$21,500
                    US$21,250
                    US$20,000Thomas
      Dawson (2)
                  2007
                    2006
                  Nil
                    Nil
                  Nil
                    50,000
                  US$27,500
                    US$27,500Henry
      Fenig (3),
                    Director
                  2007
                    2006
                    2005
                  Nil
                    Nil
                    Nil
                  Nil
                    100,000
                    Nil
                  US$11,250
                    US$21,250
                    US$20,000Louis
      Fox,
                    Director
                  2007
                    2006
                    2005
                  Nil
                    Nil
                    Nil
                  Nil
                    100,000
                    Nil
                  US$20,000
                    US$20,000
                    US$20,000Eliseo
      Gonzalez-Urien (2)
                  2007
                    2006
                  Nil
                    Nil
                  Nil
                    50,000
                  US$37,250
                    US$36,000Roderick
      Chisholm
                    Secretary
      and CFO
                  2007
                    2006
                    2005
                  Nil
                    Nil
                    Nil
                  60,000
      (4)
                    Nil
                    Nil
                  $201,501
                    $240,000
                    $145,000William
      Threlkeld,
                    Senior
      VP
                  2007
                    2006
                    2005
                  US$150,000
                    US$120,000
                    US$120,000
                  60,000
      (4)
                    Nil
                    50,000
                  US$75,000
                    US$120,000
                    US$25,000
 
 (1) The
stock options were granted under the stock option plans which are described
under “Item 10: Stock Options”.  The options stated above were granted
at the market price for a period of five years with exercise prices as
follows:  2007 - $29.60, 2006 - $10.56 and 2005 - $4.00.
 (2)
Messrs. Dawson and Gonzalez-Urien were appointed directors in January
2006.
 (3) Mr.
Fenig stepped down as a director at the June 2007 shareholders
meeting.
 (4)
Messrs. Chisholm’s and Threlkeld’s 2007 stock option grants are subject to
shareholder approval which will be sought at the 2008 shareholders’
meeting.
 (5) The
Other Compensation amounts include consulting fees, bonuses and directors
fees.
  No funds
were set aside or accrued by the Company during Fiscal 2007 to provide pension,
retirement or similar benefits for Directors or Executive Officers.
  53
 Table of Contents
 
 C.  Board
Practices
 
 Mandate
of the Board
 
 The
Company's Board of directors is responsible for the supervision of the
management of the Company's business and affairs.  Under its governing
statute (the Canada Business Corporations Act), the Board is required to carry
out its duties with a view to the best interests of the Company. The Board
specifically recognizes its responsibility for the following areas:
 
 (a)
                  representing
      the interests of the shareholders in all significant decisions affecting
      the Company and ensuring that shareholders are kept informed of
      developments affecting their
Company;
  (b)
                  reviewing
      and approving corporate objectives, goals and strategies with a view to
      enhancing shareholder value;
  (c)
                  reviewing
      and approving the Company’s operating plans and monitoring
      performance;
  (d)
                  reviewing
      significant operational and financial issues as they arise and providing
      direction to management on these
matters;
  (e)
                  acting
      diligently to ensure that the Company fulfils its legal and regulatory
      requirements;
 (f)
                    evaluating
      the effectiveness of senior management and establishing their
      compensation; and
 (g)
                  evaluating
      whether or not directors receive the information they require to perform
      their duties as directors.
  The
frequency of the meetings of the Board of directors as well as the nature of
agenda items change depending upon the state of the Company's affairs and in
light of opportunities or risks which the Company faces.
  Composition
of the Board
 
 The TSE
Report recommends that a Board of directors be constituted with a majority of
individuals who qualify as "unrelated directors".  The TSE Report
defines an "unrelated director" as a director who is independent of management
and free from any interest and any business or other relationship, which could,
or could reasonably be perceived to, materially interfere with that director's
ability to act with a view to the best interest of the Company, other than an
interest arising from shareholding.  The Company does not have a
"significant" shareholder, defined in the TSE Report as a shareholder with the
ability to exercise a majority of votes for the election of
directors.
  54
 Table of Contents
 
 The
directors have examined the relevant definitions in the TSE Report and have
individually considered their respective interests in and relationship with the
Company.  As a consequence, the Board has concluded that five of the
Board's present seven members are "unrelated" within the meaning of the TSE
Report: Frederick A. Banfield; William Calhoun; Thomas C. Dawson; Eliseo
Gonzalez-Urien; and Louis J. Fox. The Corporate Governance Committee is
responsible for reviewing and recommending a suitable approach for the Company
to assess director performance.
 
 The Board
considers seven directors to be an appropriate size for the Board at the current
time.  The Board believes that the inclusion of the President and
Chief Executive Officer, Rudi P. Fronk, on the Company's Board of directors is
useful to the effective governance of the Company.  Each director
brings to the Board a specific area of expertise which is instrumental in
creating a Board which is able to implement the Company’s strategy
effectively.
 
 At
present, in addition to those matters which must by law be approved by the
Board, management seeks Board approval for any transaction which is out of the
ordinary course of business or could be considered to be material to the
business of the Company.
 
 Committees
  The Board
has assigned specific governance responsibilities to three
committees.  A description of the mandate of each committee
follows:
 
 Audit
Committee
  The
following constitutes the Charter of the Audit Committee.
  The Audit
Committee of Seabridge is a committee of the Board composed entirely of three
outside and unrelated directors. Its overall goal is to ensure that the Company
adopts and follows a policy of full, plain, true and timely disclosure of
material financial information to its stakeholders. It reviews all material
matters affecting the risks and financial well being of the Company and is a key
part of the Corporate Governance system.  The Committee is mandated to
satisfy the requirements of the Canada Business Corporations Act.
 
 The Audit
Committee meets at a minimum, quarterly and on such other occasions as required.
The auditors are invited to attend the meetings called to discuss the annual
audit plan and the final review of the year-end financial statements. At least
annually, the Committee meets with the auditors to review management’s
performance relating to financial reporting matters.
 
 Specifically,
the Committee:
  (a)
                    reviews
      the annual statements of the Company and makes recommendations to the
      Board with respect to these
statements,
  (b)
                    reviews
      the quarterly financial statements and makes recommendations to the Board
      regarding these financial
statements,
  55
 Table of Contents
  (c)
                    reviews
      and approves financial information in all prospectuses, offering
      circulars, and similar documents,
  (d)
                    oversees
      the adequacy and accuracy of the Company’s financial disclosure policies
      and obligations,
  (e)
                    reviews
      significant accounting policies and
estimates,
  (f)
                    monitors
      the Company’s internal controls, financial systems and procedures, and
      management information systems,
  (g)
                    oversees
      management’s reporting on internal
control,
  (h)
                    meets
      with the Company’s auditors to review management’s financial stewardship
      and to review their recommendations to management,
  and
  (i)
                    recommends
      the appointment of auditors and reviews the terms of the audit engagement
      and the appropriateness of the proposed
fee,
  (j)
                    reviews
      through discussions or by way of a formal document the plan followed for
      the annual audit with the auditors and
  management,
  (k)
                    evaluates
      the performance of the auditors,
  (l)
                    confirms
      the independence of auditors,
 (m)
                      establishes
      procedures for the receipt, retention and treatment of complaints received
      regarding accounting, internal accounting controls or auditing matters,
      and
 (n)
                    establishes
      procedures for the confidential, anonymous submission by employees of
      concerns regarding questionable accounting or auditing
      matters.
 Corporate Governance and
Nominating Committee
  The
Corporate Governance and Nominating Committee is presently composed of all five
“un-related” and outside directors.  This Committee has prepared and
obtained approval by the Board of written policies on Fair Disclosure, Insider
Trading and Conflict of Interest.  Reporting to the full Board of
Directors, this Committee is mandated to:
 
 1.
                  Prepare
      and recommend to the Board on an annual basis, proposed goals for the
      Company and its CEO and a mandate for the
CEO;
  2.
                  Ensure
      that the Board is adequately informed of developments and issues within
      the Company such that it is able to fulfill its duties and
      responsibilities;
  3.
                  Ensure
      that the Board reviews and approves all major corporate decisions which
      could reasonably be expected to affect shareholder
  value;
  4.
                  Assess
      the effectiveness of the Board as a whole, of each of the directors and of
      each committee of directors and consider the impact that the number of
      directors has on effectiveness of the
Board.
  56
 Table of Contents
  5.
                  Conduct
      an annual discussion among non-management directors on the role and
      effectiveness of independent
directors;
  6.
                  Ensure
      that each Board Committee has a clear, written mandate and is performing
      diligently the tasks necessary to limit Board
  liability;
  7.
                  Oversee
      the administration of the Company’s Fair Disclosure Policy and Insider
      Trading Policy;
  8.
                  Oversee
      an annual review of each director’s business interests in accordance with
      the Company’s Conflict of Interest Policy to ascertain which conflicts
      might exist with respect to the interests of Seabridge and how such
      conflicts, if any, are to be managed so as to ensure the independence of
      directors and to protect the interests of Seabridge and its
      shareholders;
  9.
                  Review
      disclosure of corporate governance matters to ensure that shareholders are
      adequately informed of the Board’s procedures for governance on their
      behalf.
 
 Compensation
Committee
  The
Compensation Committee is presently composed of three directors, all of which
are outside and unrelated directors.  Reporting to the full Board of
Directors, this Committee is mandated to:
 
 1.
                  On
      an annual basis, review the total compensation of the President and Vice
      President(s) against their performance, mandates and goals and make
      recommendations on their compensation to the
  Board;
  2.
                  Review,
      approve and recommend to the Board for confirmation all grants of options
      to all directors and employees; ensure the proper administration of the
      Company’s options program in conformity with the Company’s Option
      Plan;
  3.
                  Review
      on an annual basis the Company’s overall hiring and compensation practices
      with reference to industry norms.
  None of
the members of the Committee have any indebtedness to the Company or any of its
subsidiaries nor have they any material interest, or have any associates or
affiliates which have any material interest, direct or indirect, in any actual
or proposed transaction in the last financial year which has materially affected
or would materially affect the Company or any of its subsidiaries.
 
 The
compensation of the Company's executive officers is determined by the Board of
Directors upon recommendations made by the Committee.  The Committee
met twice during the last financial year.  The Company's executive
compensation program consists of an annual base salary and a longer-term
component consisting of stock options, however, the Committee may also recommend
a bonus for management or its directors in the future.
  57
 Table of Contents
 
 D. 
Employees
  The
Company currently has 6 employees and 4 executive officers.
 
 E. 
Share Ownership
 
 The
Company’s shares are publicly held.  The Company is not controlled by
another corporation as described below.
 
 Table No.
8 lists, as of March 20, 2008, Directors and Executive Officers who beneficially
own the Company's voting securities and the amount of the Company’s voting
securities owned by the Directors and Executive Officers as a
group.
 
 Table No.
8
 Shareholdings
of Directors and Executive Officers
 
 Title
                    of
                    Class
                  Name of Beneficial Owner
                  Amount
      and Nature
                    of
      Beneficial
                    Ownership
                  Percent
                    of
                    ClassCommon
                  James
      Anthony (1)
                  1,353,125
                  3.62%Common
                  Rudi
      Fronk (2)
                  1,300,000
                  3.46%Common
                  Frederick
      Banfield (3)
                  245,000
                  0.66%Common
                  William
      Calhoun (4)
                  196,667
                  0.53%Common
                  Thomas
      Dawson (5)
                  71,000
                  0.19%Common
                  Louis
      Fox (6)
                  325,000
                  0.87%Common
                  Eliseo
      Gonzalez-Urien
                  47,000
                  0.13%Common
                  William
      Threlkeld (7)
                  375,000
                  1.00%Common
                  Roderick
      Chisholm (8)
                  242,600
                  0.65%Total
      Directors/Officers (9)
                  4,155,392
                  10.84%
 
 (1)
                  Of
      these shares 125,000 represent currently exercisable share purchase
      options; and 543,334 shares are held
indirectly.
 (2)
                  Of
      these shares 250,000 represent currently exercisable share purchase
      options
 (3)
                  Of
      these shares 100,000 represent currently exercisable share purchase
      options
 (4)
                  Of
      these shares 100,000 represent currently exercisable share purchase
      options
 (5)
                  Of
      these shares 50,000 represent currently exercisable share purchase
      options
 (6)
                  Of
      these shares 100,000 represent currently exercisable share purchase
      options
 (7)
                  Of
      these shares 50,000 represent exercisable share purchase options and
      60,000 represent share purchase options subject to shareholder approval,
      40,000 of which are subject to certain vesting
  requirements
 (8)
                  Of
      these shares 130,000 represent exercisable share purchase options and
      60,000 represent share purchase options subject to shareholder approval,
      40,000 of which are subject to certain vesting
  requirements
 (9)
                  See
      notes (1) through (8)
  58
 Table of Contents
 Percent
of Class number is based on 37,298,885 shares outstanding as of March 20, 2008
and Stock options held by each beneficial holder.
 
 Based
upon information provided by the Company’s transfer agent, as of March 20, 2008,
approximately 10.6 % of the Company’s common shares were held of record by US
residents.
  Item 7.Major Shareholders and Related Party
Transactions
  A. 
Major Shareholders
 
 As of
March 20, 2008, Pan Atlantic Bank and Trust Ltd. owned 6,489,852 shares of the
Company representing 17.4% of the outstanding shares of the Company and FCMI
Financial Corporation, Pan Atlantic’s sole shareholder owned 180,000 shares
representing 0.4% of the outstanding shares of the Company.  In
addition, as of March 20, 2008, principals of, and funds managed by the
Friedberg Mercantile Group Ltd. owned 270,632 shares of the Company representing
1% of the Company. Pan Atlantic Bank and Trust Ltd. is ultimately beneficially
owned and controlled by Albert D. Friedberg and members of his immediate family.
Albert D. Friedberg is the President and a director of Friedberg Mercantile
Group Ltd. The Company is not aware of any other person/company who beneficially
owns 5% or more of the Company’s voting securities.
 
 No
shareholders of the Company have different voting rights from any other
shareholder.
 
 There are
no arrangements known to the Company, the operation of which as of a subsequent
date, could result in a change of control of the Company.
 
 B. 
Interest of Management in Certain Transaction
 
 During
the fiscal year ended December 31, 2007, Mintec, Inc., a private company
controlled by Fred Banfield, a Director of Seabridge, was paid $33,300 (2006 -
$33,900, 2005 - $39,000) for technical services provided by his company related
to the mineral properties. These technical services were for consulting and
computer software for geologic modeling, reserve estimation, mine planning and
database management. The Company negotiated the agreement at arms length, after
the Company reviewed all available software in the marketplace and determined
that the agreement negotiated with Mintec was the most cost effective
available.
 
 Pan
Atlantic Bank and Trust Ltd. has been an investor in two convertible debt
offerings and two private placements of common shares by Seabridge. Pan Atlantic
Bank and Trust Ltd.’s sole shareholder is FCMI Financial
Corporation.
 
 None of
the Company’s interests in its mineral properties were acquired from
affiliates.
 
 59
 Table of Contents
  C. 
Interests of Experts and Counsel
  Not
applicable
  Item 8. Financial Information
  The
financial statements as required under ITEM #8 are attached hereto and found
immediately following the text of this Annual Report.  The audit
report of KPMG LLP, Chartered Accountants, Licensed Public Accountants, is
included herein immediately preceding the financial statements and
schedules.
 
 There
have been no undisclosed significant changes of financial condition since the
most recent financial statements dated December 31, 2007.
  Item 9.  The Offer and Listing
  A.  Offer
and Listing Details
 
 The
Company's common shares began trading on the Vancouver Stock Exchange (now the
TSX Venture Exchange) in Vancouver, British Columbia, Canada in September
1979.  The current stock symbol is “SEA”, and the CUSIP number is
#811916105.
 
 The
Company’s common shares began trading on the American Stock Exchange in the
United States in April 2004.  The current stock symbol is
“SA”.
 
 Table No.
9 lists the volume of trading and high, low and closing sales prices on the TSX
Venture Exchange for the Company's common shares over the disclosed periods for
the last 12 fiscal quarters and the last five fiscal years.The Company’s
common shares commenced trading on the American Stock Exchange on April 20, 2004
and the corresponding trading information is shown in Table No. 9.
  60
 Table of Contents
 
 Table No.
9
 Common
Share Trading Activity
 
 TSX
      Venture Exchange (“SEA”)
                  American
      Stock Exchange (“SA”)(Canadian
      Dollars)
                  (United
      States Dollars)Volume
                  High
                  Low
                  Close
                  Volume
                  High
                  Low
                  CloseAnnual
      Information2007
                  9,372,726
                  $39.00
                  $12.98
                  $29.29
                  95,565,460
                  $39.50
                  $11.02
                  $29.442006
                  8,767,525
                  $17.25
                  $9.15
                  $16.55
                  48,816,200
                  $15.30
                  $8.13
                  $14.122005
                  6,202,194
                  $12.00
                  $2.40
                  $11.01
                  26,737,194
                  $10.49
                  $1.91
                  $9.402004
                  5,228,619
                  $6.00
                  $2.90
                  $4.30
                  4,596,350
                  $4.20
                  $2.12
                  $3.632003
                  10,919,486
                  $5.50
                  $1.86
                  $5.30
                  N/A
                  N/A
                  N/A
                  N/AQuarterly
      Information3
      Months Ended 31-Dec-07
                  1,775,750
                  $39.00
                  $23.09
                  $29.29
                  24,899,116
                  $39.50
                  $23.85
                  $29.443
      Months Ended 30-Sep-07
                  2,008,758
                  $35.23
                  $22.01
                  $30.06
                  40,196,000
                  $33.49
                  $20.60
                  $30.183
      Months Ended 30-Jun-07
                  4,049,104
                  $22.10
                  $15.50
                  $21.67
                  18,621,148
                  $20.94
                  $14.31
                  $20.513
      Months Ended 31-Mar-07
                  1,539,114
                  $20.05
                  $12.98
                  $16.75
                  11,849,196
                  $17.31
                  $11.02
                  $14.603
      Months Ended 31-Dec-06
                  1,391,284
                  $17.25
                  $11.85
                  $16.55
                  11,068,200
                  $15.00
                  $10.50
                  $14.123
      Months Ended 30-Sep-06
                  2,314,143
                  $16.91
                  $11.50
                  $13.95
                  14,299,800
                  $15.30
                  $10.21
                  $12.533
      Months Ended 30-Jun-06
                  2,932,525
                  $13.10
                  $9.15
                  $13.05
                  12,451,100
                  $11.95
                  $8.13
                  $11.603
      Months Ended 31-Mar-06
                  2,129,673
                  $11.75
                  $7.94
                  $10.28
                  10,997,100
                  $10.13
                  $6.69
                  $8.90Monthly
      InformationFebruary
      2008
                  291,400
                  $29.48
                  $21.52
                  $26.64
                  5,176,508
                  $29.27
                  $12.24
                  $27.18January
      2008
                  655,900
                  $33.09
                  $18.60
                  $25.03
                  16,456,979
                  $33.55
                  $17.75
                  $24.95December
      2007
                  233,883
                  $30.45
                  $25.00
                  $29.29
                  6,545,821
                  $30.49
                  $24.89
                  $29.44November
      2007
                  729,143
                  $35.16
                  $23.09
                  $25.37
                  8,709,295
                  $37.65
                  $23.85
                  $25.33October
      2007
                  812,724
                  $37.98
                  $28.31
                  $33.84
                  9,644,000
                  $39.50
                  $28.57
                  $36.10September
      2007
                  589,807
                  $32.89
                  $24.54
                  $30.06
                  11,059,500
                  $31.84
                  $23.00
                  $30.18August
      2007
                  722,267
                  $35.23
                  $22.01
                  $24.70
                  14,571,900
                  $33.49
                  $20.60
                  $23.42July
      2007
                  696,684
                  $32.24
                  $22.75
                  $31.15
                  14,564,600
                  $30.25
                  $21.00
                  $29.21
 
 American Depository
Receipts.  Not applicable.
  Other Securities to be
Registered. Not applicable
 
 B.  Plan
and Distribution
  Not
Applicable
 
 C.  Markets
  The
Company’s common shares currently trade on the TSX Venture Exchange under the
symbol “SEA” and on the American Stock Exchange under the symbol
“SA”.
  D.  Selling
Shareholders
 
 Not
Applicable
 
 E. 
Dilution
  Not
Applicable
  61
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 F. 
Expenses of the Issue
  Not
Applicable
  Item 10.  Additional Information
  A.  Share
Capital
 
 Stock
Option Plan
  During
2003, the Company adopted a formalized stock option plan, approved by its
shareholders, for the granting of incentive stock options. To assist the Company
in compensating, attracting, retaining and motivating personnel, the Company
grants stock options to Directors, Executive Officers and
employees.  The plan provides for options to be granted at market
prices for periods up to five years. For directors and senior manage­ment,
option grants are subject to a two-tiered vesting policy designed to better
align option compensation with the interests of shareholders.  Grants
to other employees and consultants do not have the two-tiered
provision.
 
 The
two-tier option grants require a certain share price above the grant date price
for 10 successive days for the first third to vest, a higher share price for the
second third to vest and a further higher share price for the final third to
vest. Once the share price has met the first test, the Company’s share price
performance must have exceeded the S&P/TSX Global Gold Index by more than
20% over the preceding six months or these options would be
cancelled.
 
 B.  Memorandum and Articles of
Association
 
 Information
regarding the Company’s Certificate of Incorporation, By-Laws and other charter
documents is incorporated by reference to Item 10B to the Company’s registration
statement on Form 20-F dated February 18, 2004.
 
 C.  Material
Contracts
 
 The
Company considers the following as material contracts, which have been entered
into by the Company which are currently in effect:
 
 1.
                  Agreement
      for the purchase and sale of the Red Mountain Project and Willoughby Joint
      Venture between Seabridge and North American Metals
  Corp.
 2.
                  Agreement
      between the Company and Platoro West Incorporated covering the
      Castle/Black Rock project;
 3.
                  Agreement
      between the Company and Platoro West Incorporated covering the Hog Ranch
      project;
 4.
                  Agreement
      between the Company and Placer Dome covering the Kerr/Sulphurets
      project;
 5.
                  Agreement
      between the Company and Atlas covering the Grassy Mountain
      project;
  62
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  6.
                  Agreement
      between the Company and Quartz Mountain Resources covering the Quartz
      Mountain project.
 7.
                  Agreement
      between the Company and Noranda Inc. covering the Kerr/Sulphurets
      project.
 8.
                  Agreement
      between the Company, Newmont Canada and Total Resources covering the
      Courageous Lake project.
 9.
                  Agreement
      between the Company and Minera Hecla S.A. de C.V. covering the Noche Buena
      project.
 
 Details
and a discussion of each material contract are given in the detailed property
section contained in Item 4 of this Annual Report.  Copies of these
contracts were filed as exhibits to the Company’s registration statement on Form
20-F dated February 18, 2004 except #9 which was filed in March
2007.
 
 D. 
Exchange Controls and Other Limitations Affecting Security Holders
 
 The
Company is not aware of any Canadian federal or provincial laws, decrees, or
regulations that restrict the export or import of capital, including foreign
exchange controls, or that affect the remittance of dividends, interest or other
payments to non-Canadian holders of the common shares.  There are no
limitations on the right of non-Canadian owners to hold or vote the common
shares imposed by Canadian federal or provincial law or by the charter or other
constituent documents of the Company.
 
 The Investment Canada Act(the
"IC Act") governs
acquisitions of Canadian business by a non-Canadian person or entity. The IC Actrequires a
non-Canadian (as defined in the IC Act) making an investment
to acquire control of a Canadian business, the gross assets of which exceed
certain defined threshold levels, to file an application for review with the
Investment Review Division of Industry Canada.  The IC Actprovides, among other
things, for a review of an investment in the event of acquisition of "control"
in certain Canadian businesses in the following circumstances:
 
 1. If the
investor is a non-Canadian and is a national of a country belonging to the North
American Free Trade Agreement ("NAFTA") and/or the World Trade Organization
("WTO") ("NAFTA or WTO National"), any direct acquisition having an asset value
exceeding $179,000,000 is reviewable. This amount is subject to an annual
adjustment on the basis of a prescribed formula in the IC Actto reflect inflation
and real growth within Canada.  This threshold level does not apply in
certain sections of Canadian industry, such as uranium, financial services
(except insurance), transportation services and cultural services (i.e. the
publication, distribution or sale of books, magazines, periodicals (other than
printing or typesetting businesses), music in print or machine readable form,
radio, television, cable and satellite services; the publication, distribution,
sale or exhibition of film or video recordings on audio or video music
recordings), to which lower thresholds as prescribed in the IC Actare
applicable.
  63
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  2. If the
investor is a non-Canadian and is not a NAFTA or WTO National, any direct
acquisition having an asset value exceeding $5,000,000 and any indirect
acquisition having an asset value exceeding $50,000,000 is
reviewable.
 
 3. If the
investor is a non-Canadian and is NAFTA or WTO National, an indirect acquisition
of control is reviewable if the value of the assets of the business located in
Canada represents more than 50% of the asset value of the transaction or the
business is involved in uranium, financial services, transportation services or
cultural services (as set forth above).
 
 Finally,
certain transactions prescribed in the IC Actare exempted from
review altogether.
 
 In the
context of the Company, in essence, three methods of acquiring control of a
Canadian business are regulated by the IC Act: (i) the acquisition
of all or substantially all of the assets used in carrying on business in
Canada; (ii) the acquisition, directly or indirectly, of voting shares of a
Canadian corporation carrying on business in Canada; or (iii) the acquisition of
voting shares of an entity which controls, directly or indirectly, another
entity carrying on business in Canada.
 
 An
acquisition of a majority of the voting shares of a Canadian entity, including a
corporation, is deemed to be an acquisition of control under the IC Act.  However,
under the IC Act, there
is a rebuttable presumption that control is acquired if one-third of the voting
shares of a Canadian corporation or an equivalent undivided interest in the
voting shares of such corporation are held by a non-Canadian person or
entity.  An acquisition of less than one-third of the voting shares of
a Canadian corporation is deemed not to be an acquisition of
control.  An acquisition of less than a majority, but one-third or
more, of the voting shares of a Canadian corporation is presumed to be an
acquisition of control unless it can be established that, on the acquisition,
the Canadian corporation is not, in fact, controlled by the acquirer through the
ownership of voting shares. For partnerships, trusts, joint ventures or other
unincorporated Canadian entities, an acquisition of less than a majority of the
voting interests is deemed not to be an acquisition of control.
 
 In
addition, if a Canadian corporation is controlled by a non-Canadian, the
acquisition of control of any other Canadian corporation by such corporation may
be subject to the prior approval of the Investment Review Division, unless it
can be established that the Canadian corporation is not in fact controlled by
the acquirer through the ownership of voting shares.
 
 Where an
investment is reviewable under the IC Act, the investment may
not be implemented unless it is likely to be of net benefit to
Canada.  If an applicant is unable to satisfy the Minister responsible
for Industry Canada that the investment is likely to be of net benefit to
Canada, the applicant may not proceed with the
investment.  Alternatively, an acquirer may be required to divest
control of the Canadian business that is the subject of the
investment.
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 In
addition to the foregoing, the IC Actprovides for formal
notification under the IC Actof all other acquisitions of control by Canadian businesses by
non-Canadian investors.  The notification process consists of filing a
notification within 30 days following the implementation of an investment, which
notification is for information, as opposed to review, purposes.
 
 E. 
Taxation
 
 The
following summary of the material Canadian federal income tax consequences
generally applicable in respect of the common stock reflects the Company’s
opinion.  The tax consequences to any particular holder of common
stock will vary according to the status of that holder as an individual, trust,
corporation or member of a partnership, the jurisdiction in which that holder is
subject to taxation, the place where that holder is resident and, generally,
according to that holder’s particular circumstances.  This summary is
applicable only to holders who are resident in the United States, have never
been resident in Canada, deal at arm’s length with the Company, hold their
common stock as capital property and who will not use or hold the common stock
in carrying on business in Canada.  Special rules, which are not
discussed in this summary, may apply to a United States holder that is an issuer
that carries on business in Canada and elsewhere.
 
 This
summary is based upon the provisions of the Income Tax Act of Canada and the
regulations there under (collectively, the "Tax Act" or “ITA”) and the
Canada-United States Tax Convention (the “Tax Convention”) as at the date of the
Annual Report and the current administrative practices of Canada Revenue
Agency.  It has been assumed that there will be no other relevant
amendments of any governing law, although no assurance can be given in this
respect. This summary does not take into account provincial income tax
consequences.
 
 Management
urges each holder to consult his/her own tax advisor with respect to the income
tax consequences applicable to him/her in his/her own particular
circumstances.
 
 CANADIAN INCOME TAX
CONSEQUENCES
 
 The
summary below is restricted to the case of a holder (a “Holder”) of one or more
common shares (“Common Shares”) who for the purposes of the Tax Act is a
non-resident of Canada, holds his Common Shares as capital property and deals at
arm’s length with the Company.
  Dividends
  A Holder
will be subject to Canadian withholding tax (“Part XIII Tax”) equal to 25%, or
such lower rates as may be available under an applicable tax treaty, of the
gross amount of any dividend paid or deemed to be paid on his Common Shares.
Under the Tax Convention, the rate of Part XIII Tax applicable to a dividend on
Common Shares paid to a Holder who is a resident of the United States is, if the
Holder is a company that beneficially owns at least 10% of the voting stock of
the Company, 5% and, in any other case, 15% of the gross amount of the dividend.
The Company will be required to withhold the applicable amount of Part XIII Tax
from each dividend so paid and remit the withheld amount directly to the
Receiver General for Canada for the account of the Holder.
  65
 Table of Contents
  Disposition
of Common Shares
  A Holder
who disposes of Common Shares, including by deemed disposition on death, will
not be subject to Canadian tax on any capital gain thereby realized unless the
Common Share constituted “taxable Canadian property” as defined by the Tax Act.
Generally, a common share of a public corporation will not constitute taxable
Canadian property of a Holder unless he held the common share as capital
property used by him carrying on a business in Canada, or he or persons with
whom he did not deal at arm’s length alone or together held or held options to
acquire, at any time within the 60 months preceding the disposition, 25% or more
of the issued shares of any class of the capital stock of the
Company.
 
 A Holder
who is a resident of the United States and realizes a capital gain on
disposition of Common Shares that was taxable Canadian property will
nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax
thereon unless (a) more than 50% of the value of the Common Shares is derived
from, or from an interest in, Canadian real estate, including Canadian mineral
resources properties, (b) the Common Shares formed part of the business property
of a permanent establishment that the Holder has or had in Canada within the 12
months preceding disposition, or (c) the Holder (i) was a resident of Canada at
any time within the ten years immediately preceding the disposition, and for a
total of 120 months during any period of 20 consecutive years, preceding the
disposition, and (ii) owned the Common Shares when he ceased to be resident in
Canada.
 
 A Holder
who is subject to Canadian tax in respect of a capital gain realized on
disposition of Common Shares must include one half of the capital gain (“taxable
capital gain”) in computing his taxable income earned in Canada. The Holder may,
subject to certain limitations, deduct one half of any capital loss (“allowable
capital loss”) arising on disposition of taxable Canadian property from taxable
capital gains realized in the year of disposition in respect to taxable Canadian
property and, to the extent not so deductible, from such taxable capital gains
of any of the three preceding years or any subsequent year.
 
 UNITED STATES FEDERAL INCOME
TAX CONSEQUENCES
 
 The
following is a discussion of material United States Federal income tax
consequences, under the law, generally applicable to a U.S. Holder (as defined
below) of common shares of the Company. This discussion does not cover any
state, local or foreign tax consequences.
 
 The
following discussion is based upon the sections of the Internal Revenue Code of
1986, as amended (“the Code”), Treasury Regulations, published Internal Revenue
Service (“IRS”) rulings, published administrative positions of the IRS and court
decisions that are currently applicable, any or all of which could be materially
and adversely changed, possible on a retroactive basis, at any
time.  In addition, the discussion does not consider the potential
effects, both adverse and beneficial, or recently proposed legislation which, if
enacted, could
  66
 Table of Contents
  be
applied, possibly on a retroactive basis, at any time. The discussion is for
general information only and it is not intended to be, nor should it be
construed to be, legal or tax advice to any holder or prospective holder of
common shares of the Company and no opinion or representation with respect to
the U.S. federal income tax consequences to any such holder or prospective
holder is made. Management urges holders and prospective holders of common
shares of the Company to consult their own tax advisors about the federal,
state, local, and foreign tax consequences of purchasing, owning and disposing
of common shares of the Company.
 
 U.S.
Holders
 
 As used
herein, a (“U.S. Holder”) includes a holder of common shares of the Company who
is a citizen or resident of the United States, a corporation created or
organized in or under the laws of the United States or of any political
subdivision thereof, an estate whose income is taxable in the United States
irrespective of source or a trust subject to the primary supervision of a court
within the United States and control of a United States fiduciary as described
in Section 7701(a)(30) of the Code. This summary does not address the tax
consequences to, and U.S. Holder does not include, persons subject to special
provisions of Federal income tax law, such as tax-exempt organizations,
qualified retirement plans, financial institutions, insurance companies, real
estate investment trusts, regulated investment companies, broker-dealers,
non-resident alien individuals, persons or entities that have a “functional
currency” other than the U.S. dollar, shareholders who hold common shares as
part of a straddle, hedging or conversion transaction, and shareholders who
acquired their common shares through the exercise of employee stock options or
otherwise as compensation for services. This summary is limited to U.S. Holders
who own common shares as capital assets. This summary does not address the
consequences to a person or entity holding an interest in a shareholder or the
consequences to a person of the ownership, exercise or disposition of any
options, warrants or other rights to acquire common shares.
 
 Distribution
of Common Shares of the Company
 
 U.S.
Holders receiving dividend distributions (including constructive dividends) with
respect to common shares of the Company are required to include in gross income
for United States Federal income tax purposes the gross amount of such
distributions equal to the U.S. dollar value of such distributions on the date
of receipt (based on the exchange rate on such date), to the extent that the
Company has current or accumulated earnings and profits, without reduction for
any Canadian income tax withheld from such distributions.  Such
Canadian tax withheld may be credited, subject to certain limitations, against
the U.S. Holder’s United States Federal Income tax liability or, alternatively,
individuals may deduct in computing the U.S. Holder’s United States Federal
taxable income by those individuals who itemize deductions.  (See more
detailed discussion at “Foreign Tax Credit” below).  To the extent
that distributions exceed current or accumulated earnings and profits of the
Company, they will be treated first as a return of capital up to the U.S.
Holder’s adjusted basis in the common shares and thereafter as gain from the
sale or exchange of the common shares. Dividend income will be taxed at marginal
tax rates applicable to ordinary income while preferential tax rates for
long-term capital gains are applicable to a U.S. Holder which is an individual,
estate or trust.  There are currently no preferential tax rates for
long-term capital gains for a U.S. Holder which is a corporation.
  67
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 In the
case of foreign currency received as a dividend that is not converted by the
recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a
tax basis in the foreign currency equal to its U.S. dollar value on the date of
receipt. Generally any gain or loss recognized upon a subsequent sale of other
disposition of the foreign currency, including the exchange for U.S. dollars,
will be ordinary income or loss.
 
 Dividends
paid on the common shares of the Company will not generally be eligible for the
dividends received deduction provided to corporations receiving dividends from
certain United States corporations.  A U.S. Holder which is a
corporation may, under certain circumstances, be entitled to a 70% deduction of
the United States source portion of dividends received from the Company (unless
the Company qualifies as a “foreign personal holding company” or a “passive
foreign investment company”, as defined below) if such U.S. Holder owns shares
representing at least 10% of the voting power and value of the
Company.  The availability of this deduction is subject to several
complex limitations which are beyond the scope of this discussion.
 
 Under
current Treasury Regulations, dividends paid on the Company’s common shares, if
any, generally will not be subject to information reporting and generally will
not be subject to U.S. backup withholding tax. However, dividends and the
proceeds from a sale of the Company’s common shares paid in the U.S. through a
U.S. or U.S. related paying agent (including a broker) will be subject to U.S.
information reporting requirements and may also be subject to the 31% U.S.
backup withholding tax, unless the paying agent is furnished with a duly
completed and signed Form W-9. Any amounts withheld under the U.S. backup
withholding tax rules will be allowed as a refund or a credit against the U.S.
Holder’s U.S. federal income tax liability, provided the required information is
furnished to the IRS.
 
 Foreign
Tax Credit
 
 For
individuals whose entire income from sources outside the United States consists
of qualified passive income, the total amount of creditable foreign taxes paid
or accrued during the taxable year does not exceed $300 ($600 in the case of a
joint return) and an election is made under section 904(j), the limitation on
credit does not apply.
 
 A U.S.
Holder who pays (or has withheld from distributions) Canadian income tax with
respect to the ownership of common shares of the Company may be entitled, at the
option of the U.S. Holder, to either a deduction or a tax credit for such
foreign tax paid or withheld.  Generally, it will be more advantageous
to claim a credit because a credit reduces United States Federal income taxes on
a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s
income subject to tax.  This election is made on a year-by-year basis
and applies to all foreign income taxes (or taxes in lieu of income tax) paid by
(or withheld from) the U.S. Holder during the year.  There are
significant and complex limitations which apply to the credit, among which is
the general limitation that the credit cannot exceed the proportionate share of
the U.S. Holder’s United States income tax liability that the U.S.
  68
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  Holder’s
foreign source income bears to his/her or its worldwide taxable income in the
determination of the application of this limitation. The various items of income
and deduction must be classified into foreign and domestic sources. Complex
rules govern this classification process.  In addition, this
limitation is calculated separately with respect to specific classes of income
such as “passive income”, “high withholding tax interest”, “financial services
income”, “shipping income”, and certain other classifications of income.
Dividends distributed by the Company will generally constitute “passive income”
or, in the case of certain U.S. Holders, “financial services income” for these
purposes.  The availability of the foreign tax credit and the
application of the limitations on the credit are fact specific and management
urges holders and prospective holders of common shares of the Company to consult
their own tax advisors regarding their individual circumstances.
 
 Disposition
of Common Shares of the Company
 
 A U.S.
Holder will recognize gain or loss upon the sale of common shares of the Company
equal to the difference, if any, between (I) the amount of cash plus the fair
market value of any property received, and (ii) the shareholder’s tax basis in
the common shares of the Company.  Preferential tax rates apply to
long-term capital gains of U.S. Holders, which are individuals, estates or
trusts. This gain or loss will be capital gain or loss if the common shares are
capital assets in the hands of the U.S. Holder, which will be a short-term or
long-term capital gain or loss depending upon the holding period of the U.S.
Holder.  Gains and losses are netted and combined according to special
rules in arriving at the overall capital gain or loss for a particular tax
year.  Deductions for net capital losses are subject to significant
limitations.  For U.S. Holders, which are not corporations, any unused
portion of such net capital loss may be carried over to be used in later tax
years until such net capital loss is thereby exhausted, but individuals may not
carry back capital losses. For U.S. Holders, which are corporations (other than
corporations subject to Subchapter S of the Code), an unused net capital loss
may be carried back three years from the loss year and carried forward five
years from the loss year to be offset against capital gains until such net
capital loss is thereby exhausted.
 
 Other
Considerations
 
 In the
following circumstances, the above sections of the discussion may not describe
the United States Federal income tax consequences resulting from the holding and
disposition of common shares of the Company.
 
 Foreign
Personal Holding Company
 
 If at any
time during a taxable year more than 50% of the total combined voting power or
the total value of the Company’s outstanding shares is owned, actually or
constructively, by five or fewer individuals who are citizens or residents of
the United States and 60% (50% after the first tax year) or more of the
Company’s gross income for such year was derived from certain passive sources
(e.g. from interest income received from its subsidiaries), the Company would be
treated as a “foreign personal holding company.”  In that event, U.S.
Holders that hold common shares of the Company would be required to include in
gross income for such year their allocable portions of such passive income to
the extent the Company does not actually distribute such income.
  69
 Table of Contents
 
 The
Company does not believe that it currently has the status of a “foreign personal
holding company”. However, there can be no assurance that the Company will not
be considered a foreign personal holding company for the current or any future
taxable year.
 
 Foreign
Investment Company
 
 If 50% or
more of the combined voting power or total value of the Company’s outstanding
shares are held, actually or constructively, by citizens or residents of the
United States, United States domestic partnerships or corporations, or estates
or trusts other than foreign estates or trusts (as defined by the Code Section
7701(a)(31), and the Company is found to be engaged primarily in the business of
investing, reinvesting, or trading in securities, commodities, or any interest
therein, it is possible that the Company might be treated as a “foreign
investment company” as defined in Section 1246 of the Code, causing all or part
of any gain realized by a U.S. Holder selling or exchanging common shares of the
Company to be treated as ordinary income rather than capital gains.
 
 Passive
Foreign Investment Company
 
 As a
foreign corporation with U.S. Holders, the Company could potentially be treated
as a passive foreign investment company (“PFIC”), as defined in Section 1297 of
the Code, depending upon the percentage of the Company’s income which is
passive, or the percentage of the Company’s assets which is held for the purpose
of producing passive income.
  Certain
United States income tax legislation contains rules governing PFICs, which can
have significant tax effects on U.S. shareholders of foreign
corporations.  These rules do not apply to non-U.S.
shareholders.  Section 1297 (a) of the Code defines a PFIC as a
corporation that is not formed in the United States and, for any taxable year,
either (I) 75% or more of its gross income is “passive income”, which includes
interest, dividends and certain rents and royalties or (ii) the average
percentage, by fair market value (or, if the company is a controlled foreign
corporation or makes an election, by adjusted tax basis), of its assets that
produce or are held for the production of “passive income” is 50% or
more.  The taxation of a US shareholder who owns stock in a PFIC is
extremely complex and is therefore beyond the scope of this
discussion.  Management urges US persons to consult with their own tax
advisors with regards to the impact of these rules.
  Controlled
Foreign Corporation
 
 A
Controlled Foreign Corporation (CFC) is a foreign corporation more than 50% of
whose stock by vote or value is, on any day in the corporation’s tax year, owned
(directly or indirectly) by U.S. Shareholders. If more than 50% of the voting
power of all classes of stock entitled to vote is owned, actually or
constructively, by citizens or residents of the United States, United States
domestic partnerships and corporations or estates or trusts other than foreign
estates or trusts, each of whom own actually or constructively 10% or more
of
  70
 Table of Contents
  the total
combined voting power of all classes of stock of the Company could be treated as
a “controlled foreign corporation” under Subpart F of the Code.  This
classification would affect many complex results, one of which is the inclusion
of certain income of a CFC, which is subject to current U.S. tax. The United
States generally taxes United States Shareholders of a CFC currently on their
pro rata shares of the Subpart F income of the CFC. Such United States
Shareholders are generally treated as having received a current distribution out
of the CFC’s Subpart F income and are also subject to current U.S. tax on their
pro rata shares of the CFC’s earnings invested in U.S. property. The foreign tax
credit described above may reduce the U.S. tax on these amounts. In addition,
under Section 1248 of the Code, gain from the sale or exchange of shares by a
U.S. Holder of common shares of the Corporation which is or was a United States
Shareholder at any time during the five-year period ending with the sale or
exchange is treated as ordinary income to the extent of earnings and profits of
the Company (accumulated in corporate tax years beginning after 1962, but only
while the shares were held and while the Company was “controlled”) attributable
to the shares sold or exchanged. If a foreign corporation is both a PFIC and a
CFC, the foreign corporation generally will not be treated as a PFIC with
respect to the United States Shareholders of the CFC. This rule generally will
be effective for taxable years of United States Shareholders beginning after
1997 and for taxable years of foreign corporations ending with or within such
taxable years of United States Shareholders. The PFIC provisions continue to
apply in the case of PFIC that is also a CFC with respect to the U.S. Holders
that are less than 10% shareholders. Because of the complexity of Subpart F, a
more detailed review of these rules is outside of the scope of this
discussion.
 
 The
amount of any backup withholding will not constitute additional tax and will be
allowed as a credit against the U.S. Holder’s federal income tax
liability.
 
 Filing of
Information Returns.  Under a number of circumstances, United
States Investor acquiring shares of the Company may be required to file an
information return with the Internal Revenue Service Center where they are
required to file their tax returns with a duplicate copy to the Internal Revenue
Service Center, Philadelphia, PA 19255. In particular, any United States
Investor who becomes the owner, directly or indirectly, of 10% or more of the
shares of the Company will be required to file such a return. Other filing
requirements may apply, and management urges United States Investors to consult
their own tax advisors concerning these requirements.
 
 F.  Dividends
and Paying Agents
  Not
applicable
  G.  Statements
by Experts
  Not
applicable
  H.  Documents
on Display
  The
documents included as exhibits in Item 19 of this Report have been filed with
the Securities and Exchange Commission (“SEC”) with the Company’s reports on
Forms 6-K and 20-F, and may be reviewed at the SEC’s public reference room at
100 F Street, N.E.,
  71
 Table of Contents
  Washington
D.C. 20549.  Copies may be obtained, upon payment of a duplication
fee, by writing the SEC or reviewed on the SEC’s website (http://www.sec.gov)
or at the American Stock Exchange, 86 Trinity Place, New York, New York
10006.
  I.
Subsidiary Information
  Not
Applicable
  Item 11.  Quantitative and Qualitative Disclosures
about Market Risk
  The
Company’s mineral properties are all currently at the exploration stage and the
Company’s operations are limited to exploring those properties. Therefore,
Seabridge’s market risks are somewhat minimized. The Company does, however, have
future property payments due in United States currency. As a Canadian Company,
Seabridge’s cash balances are kept in Canadian funds. Therefore, Seabridge is
exposed to some exchange rate risk. The Company considers the amount of risk to
be manageable and does not currently, nor is likely in the foreseeable future,
conduct hedging to reduce its exchange rate risk.
 
 The
Company has the following total anticipated required property, royalty and tax
payments due in US dollars for the next 3 fiscal years by individual
property:
 
 Payments
      Due
                    (US$)Property
                  
                  2008
                  
                  
                  2009
                  
                  
                  2010Grassy
      Mountain
                  
                  $
                  73,600
                  
                  
                  $
                  73,600
                  
                  
                  $
                  73,600Quartz
      Mountain (1)
                  
                  $
                  10,000
                  
                  
                  $
                  10,000
                  
                  
                  $
                  10,000Castle/Black
      Rock
                  
                  $
                  41,700
                  
                  
                  $
                  41,700
                  
                  
                  $
                  41,700Hog
      Ranch
                  
                  $
                  57,700
                  
                  
                  $
                  57,700
                  
                  
                  $
                  57,700Other
      Nevada Properties
                  
                  $
                  441,300
                  
                  
                  $
                  442,300
                  
                  
                  $
                  442,300
 
 (1)  The
Quartz Mountain Property is currently under option to Golden Predator Mines Inc.
(formerly named Quincy Energy Corp.) who is required to pay all required holding
costs during the option period.
 
 The
Company maintains a significant amount of cash and cash equivalents as well as
in short term deposits. The Company relies upon this cash to meet its future
needs. As the funds are in interest bearing accounts, the Company has some
interest rate risk. However, as the Company is primarily concerned with the
preservation of the capital for anticipated general and property expenditures
and is not dependent upon the interest from these accounts to meet its ongoing
requirements, management considers the interest rate risk to be minimal and to
have little to no effect on the Company’s operations.
  72
 Table of Contents
 
 Competitive
Environment
  The
Company competes with other resource companies for exploration properties, joint
venture agreements and for the acquisition of attractive gold
companies.  There is a risk that this competition could increase the
difficulty of concluding a negotiation on terms that Seabridge considers
acceptable.
  Item 12.  Description of Securities Other than Equity
Securities
  Not
Applicable
  Part II
  Item 13.  Defaults, Dividend Arrearages and
Delinquencies
  None
 
 Item 14.  Material Modifications of Rights of Security
Holders and Use of Proceeds
  None
 
 Item 15.Disclosure Controls and Procedures
 
 At the
end of the period covered by this report, an evaluation was carried out under
the supervision of and with the participation of the Company’s management,
including the Chief Executive Officer (“CEO”) and Chief Financial Officer
(“CFO”), of the effectiveness of the design and operations of the Company’s
disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d
– 15(e) under the Exchange Act).  Based on that evaluation the CEO and the
CFO have concluded that as of the end of the period covered by this report, the
Company’s disclosure controls and procedures were adequately designed and
effective in ensuring that: (i) information required to be disclosed by the
Company in reports that it files or submits to the Securities and Exchange
Commission under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in applicable rules and forms and
(ii) material information required to be disclosed in our reports filed under
the Exchange Act is accumulated and communicated to our management, including
our CEO and CFO, as appropriate, to allow for accurate and timely decisions
regarding required disclosure.
 
 MANAGEMENT’S
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
 
 The
Company's management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act. Our internal control over financial reporting
is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation and fair presentation of financial
statements for external purposes in accordance with generally accepted
accounting principles.
  73
 Table of Contents
 
 Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
 
 Management
conducted an evaluation of the design and operation of the Company’s internal
control over financial reporting as of December 31, 2007, based on the criteria
set forth in Internal Control
– Integrated Frameworkissued by the Committee of Sponsoring
Organizations of the Treadway Commission. This evaluation included review of the
documentation of controls, evaluation of the design effectiveness of controls,
testing of the operating effectiveness of controls and a conclusion on this
evaluation. Based on this evaluation, management has concluded that the
Company’s internal control over financial reporting was effective as of December
31, 2007 and no material weaknesses were discovered.
 
 As this
report is required for U.S. reporting purposes, the Company is a “foreign
private issuer” as defined in Rule 3b-4 of the Exchange Act, and the Company is
an acceleratedfiler, the Company is
required to provide an auditor’s attestation report on internal control over
financial reporting.  The Company’s auditor has attested to
management’s evaluation of internal controls over financial reporting for the
year ended December 31, 2007.  The auditor’s attestation is included
within this annual report on Form 20-F.
 
 Item 16A.  Audit Committee Financial Expert
 
 The
Company’s Board of Directors has determined that Mr. Thomas Dawson, Chairman of
the Audit Committee and an independent director (as independent is defined by
the American Stock Exchange) of the Company, is an "audit committee financial
expert."
 
 Item 16B.  Code of Business Ethics
 
 The Code
of Business Ethics, formally adopted by the Company in March 2005, was included
with the Company’s Form 20-F dated March 15, 2005. The Code was updated in
November 2007 and the revised document is attached to this Form 20-F. The Code
is available on the Company’s website at www.seabridgegold.net
and from the Company’s office.
 
 During
the most recently completed fiscal year, the Company has not granted any waiver
including an explicit waiver, from a provision of the Code of Business Ethics to
any executive officer or director.
 
 74
 Table of Contents
 
 Item 16C. Principal Accountant Fees and
Services
 
 The
aggregate fees billed for each of the last two fiscal years for professional
services rendered by KPMG, the Company's Auditors, are as
follows:
 
 2007
                  
                  
                  2006Audit
      fees
                  
                  $
                  136,000
                  
                  
                  $
                  70,000Audit
      related fees
                  
                  
                  30,000
                  
                  
                  
                  30,000Tax
      Fees
                  
                  
                  3,500
                  
                  
                  
                  0All
      Other Fees
                  
                  
                  0
                  
                  
                  
                  0$
                  169,500
                  
                  
                  $
                  100,000
 
 Item 16D. Exemptions from the Listing Standards for Audit
Committees
 
 Not
Applicable
 
 Item 16E. Purchases of Equity Securities by the Issuer and
Affiliated Purchasers
 
 None
  Part III
  Item 17.  Financial Statements
  The
Company's financial statements are stated in Canadian Dollars (CDN$) and are
prepared in accordance with Canadian Generally Accepted Accounting Principles
(GAAP), the application of which, in the case of the Company, conforms in all
material respects for the periods presented with United States GAAP, except as
disclosed in Note 11 to the 2007 audited consolidated financial
statements.
 
 The
financial statements as required under ITEM #17 are attached hereto and found
immediately following the text of this Annual Report.  See Item #19
for a list of the reports.
  Item 18.  Financial Statements
  The
Company has elected to provide financial statements pursuant to ITEM
#17.
  Item 19.  Exhibits
  A.           The
financial statements thereto as required under ITEM #17 are attached hereto and
found immediately following the text of this Annual Report.
  75
 Table of Contents
 
 Audited
Financial Statements
  Report of
Independent Registered Public Accounting Firm to the Board of Directors dated
March 19, 2008.
 
 Consolidated
Balance Sheets at December 31, 2007 and 2006
 
 Consolidated
Statements of Operations and Deficit for the Years Ended December 31, 2007, 2006
and 2005.
 
 Consolidated
Statements of Comprehensive Loss for the Years Ended December 31, 2007, 2006 and
2005.
 
 Consolidated
Statements of Other Accumulated Income for the Years Ended December 31, 2007,
2006 and 2005.
 
 Consolidated
Statements of Cash Flows for the Years Ended December 31, 2007, 2006, and
2005.
  Notes to
Consolidated Financial Statements at December 31, 2007 and 2006 and for the
Years Ended December 31, 2007, 2006 and 2005.
  Internal
Control Over Financial Reporting
 
 Report of
Independent Registered Public Accounting Firm to the Board of Directors dated
March 19, 2008
 
 B.           Other
Exhibits
 
 1.
                  Certificate
      of Incorporation, Certificates of Name Change, Articles of Incorporation,
      Articles of Amalgamation and By-Laws (filed as Exhibit 1 to the Company’s
      Registration Statement on Form 20-F, dated February 18, 2004, (File No.
      000-50657) (the “Initial Form 20-F”) and incorporated herein by reference
      thereto).
 
 2.
                  Instruments
      defining the rights of holders of the securities being registered (see
      Exhibit Number 1).
 
 3.
                  Voting
      Trust Agreements – N/A
 4.
                    Material
      Contracts
 
 1.
                  Agreement
      for the purchase and sale of the Red Mountain Project and Willoughby Joint
      Venture between Seabridge and North American Metals Corp. (incorporated by
      reference to Exhibit 4-1 in Initial Form
20-F).
  76
 Table of Contents
  2.
                  Agreement
      between the Company and Platoro West Incorporated covering the
      Castle/Black Rock project (incorporated by reference to Exhibit 4-2 in
      Initial Form 20-F).
 3.
                  Agreement
      between the Company and Platoro West Incorporated covering the Hog Ranch
      project (incorporated by reference to Exhibit 4-3 in Initial Form
      20-F).
 4.
                  Agreement
      between the Company and Placer Dome covering the Kerr/Sulphurets project
      (incorporated by reference to Exhibit 4-4 in Initial Form
      20-F).
 5.
                  Agreement
      between the Company and Atlas covering the Grassy Mountain project
      (incorporated by reference to Exhibit 4-5 in Initial Form
      20-F).
 6.
                  Agreement
      between the Company and Quartz Mountain Resources covering the Quartz
      Mountain project (incorporated by reference in Exhibit 4-9 in Initial Form
      20-F).
 7.
                  Agreement
      between the Company and Noranda Inc. covering the Kerr/Sulphurets project
      (incorporated by reference to Exhibit 4-7 in Initial Form
      20-F).
 8.
                  Agreement
      between the Company, Newmont Canada and Total Resources covering the
      Courageous Lake project (incorporated by reference to Exhibit 4-8 in
      Initial Form 20-F).
 9.
                  Agreement
      between the Company and Minera Hecla S.A. de C.V. covering the Noche Buena
      project (incorporated by reference to Exhibit 9 to the Company’s Form 20-F
      for the year ended December 31,
2006).
 
 5.            
List of Foreign Patents – N/A
 6.           
 Calculation of earnings per share – N/A
 7.            
Explanation of calculation of ratios – N/A
 8.            
List of Subsidiaries
 a)
                  Seabridge
      Gold Corporation, a Nevada corporation incorporated December 28, 2001,
      100% owned.
 b)
                  Pacific
      Intermountain Gold Corporation, a Nevada corporation incorporated on April
      26, 2002, 100% owned
 c)
                  5073
      N.W.T. Limited, a company incorporated under the laws of the Northwest
      Territories on July 9, 2002, 100%
owned.
 d)
                  Minera Seabridge Gold SA de CV, a
      company incorporated in Mexico, 100%
  owned.
 
 9.            
Statement pursuant to the instructions to Item 8.A.4, regarding the financial
statements filed in registration statements for initial public offerings of
securities – N/A
 
 10.           Rule
104 Notice – N/A
 
 11.           Code
of Business Ethics – Revised on November 7, 2007
 
 77
 Table of Contents
 12.           Certifications
 
 12.1(*)
                  Rule13a-14(a)/Rule15d-14(a) Certification of Chief
      Executive Officer
 
 12.2(*)
                  Rule 13a-14(a)/Rule 15d-14(a) Certification of Chief
      Financial Officer
 
 13.           Rule
13a-14(b) Certifications
 
 13.1(*)
                  Certification of Chief Executive Officer pursuant to
      Section 906 of the Sarbanes-Oxley Act of
  2002
 
 13.2(*)
                  Certification of Chief Financial Officer pursuant to
      Section 906 of the Sarbanes-Oxley Act of
  2002
 
 14.  Opinion
– N/A
 
 (*)           Filed
herewith
  78
 Table of Contents
  KPMG
      LLP
                        Chartered
      Accountants
                        Suite
      3300 Commerce Court West
                        PO
      Box 31 Stn Commerce Court
                        Toronto
      ON M5L 1B2
                        Canada
                      Telephone
                        Fax
                        Internet
                      (416)
      777-8500
                        (416)
      777-8818
                        www.kpmg.ca
 
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To the
Board of Directors of Seabridge Gold Inc.
 
 
 We have
audited Seabridge Gold Inc. ("the Company")'s internal control over financial
reporting as of December 31, 2007, based on the criteria established in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). The Company's management is responsible for
maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting
included in the accompanying Management's Report on Internal Control over
Financial Reporting with this Form 20-F. Our responsibility is to express an
opinion the Company's internal control over financial reporting based on our
audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audit also included performing such
other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
 
 A
company's internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial
statements.
 
 
 KPMG LLP,
a Canadian limited liability partnership is the Canadian
 member
firm of KPMG International, a Swiss cooperative.
 
 F-1
 Table of Contents
  Page
2
 
 
 Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
 
 In our
opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2007, based on the criteria
established in Internal Control—Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
 
 We also
have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the consolidated balance sheets of the Company
as of December 31, 2007 and December 31, 2006, and the related consolidated
statements of operations and deficit, comprehensive loss, accumulated other
comprehensive income and cash flows for each of the years in the three-year
period ended December 31, 2007, and our report dated March 19, 2008, expressed
an unqualified opinion on those consolidated financial statements.
 
 
 /s/ KPMG
LLP
 
 Chartered
Accountants, Licensed Public Accountants
 
 Toronto,
Canada
 March 19,
2008
  F-2
 Table of Contents
  Consolidated
      Balance Sheets
                      December
      31, 2007 and 2006
                      (in
      Canadian dollars)
 
 2007            
              
    2006ASSETSCURRENT
      ASSETSCash and cash equivalents (Note
      3)
                    
                    $
                    13,480,147
                    
                    
                    $
                    5,578,691Cash held for exploration
      expenditures (Note 6)
                    
                    
                    -
                    
                    
                    
                    206,815Short-term deposits (Note
      3)
                    
                    
                    11,
      557,493
                    
                    
                    
                    -Amounts receivable and prepaid
      expenses
                    
                    
                    420,069
                    
                    
                    
                    904,437Marketable
    securities
                    
                    
                    240,695
                    
                    
                    
                    165,00125,698,404
                    
                    
                    
                    6,854,944MINERAL
      INTERESTS (Note 4)
                    
                    
                    62,667,850
                    
                    
                    
                    53,262,180RECLAMATION
      DEPOSITS (Note 5)
                    
                    
                    1,305,171
                    
                    
                    
                    1,069,900PROPERTY
      AND EQUIPMENT
                    
                    
                    190,308
                    
                    
                    
                    56,772$
                    89,861,733
                    
                    
                    $
                    61,243,796LIABILITIESCURRENT
      LIABILITIESAccounts payable and
      accruals
                    
                    $
                    678,827
                    
                    
                    $
                    435,148PROVISIONS
      FOR RECLAMATION LIABILITIES  (Note 5)
                    
                    
                    1,849,475
                    
                    
                    
                    1,529,948FUTURE
      INCOME TAX LIABILITIES (Notes 6 and 9)
                    
                    
                    586,562
                    
                    
                    
                    -3,114,864
                    
                    
                    
                    1,965,096SHAREHOLDERS’ EQUITY(Note 6)SHARE
      CAPITAL
                    
                    
                    109,736,473
                    
                    
                    
                    66,774,637STOCK
      OPTIONS
                    
                    
                    4,282,974
                    
                    
                    
                    2,857,676SHARE
      PURCHASE WARRANTS
                    
                    
                    -
                    
                    
                    
                    11,436,000CONTRIBUTED
      SURPLUS
                    
                    
                    19,500
                    
                    
                    
                    19,500DEFICIT
                    
                    
                    (27,350,897
                    )
                    
                    
                    (21,809,113
                    )ACCUMULATED
      OTHER COMPREHENSIVE INCOME (Note 2(n))
                    
                    
                    58,819
                    
                    
                    
                    -86,746,869
                    
                    
                    
                    59,278,700$
                    89,861,733
                    
                    
                    $
                    61,243,796COMMITMENTS
      (Note 10)See
      accompanying notes to consolidated financial statements
 
 ON
      BEHALF OF THE BOARD OF DIRECTORS/s/
      Rudi P. Fronk
                    
                    /s/
      James S. AnthonyRudi
      P. Fronk
                      Director
                    James
      S. Anthony
                      Director
  F-3
 Table of Contents
  Consolidated
      Statements of Operations and Deficit
                      For
      the Years Ended December 31, 2007, 2006 and 2005
                      (in
      Canadian dollars)
 
 2007
                    
                    
                    2006
                    
                    
                    2005EXPENDITURESCorporate
      and general expenses
                    
                    $
                    6,688,504
                    
                    
                    $
                    4,747,724
                    
                    
                    $
                    2,100,791Interest income
                    
                    
                    (822,563
                    )
                    
                    
                    (362,957
                    )
                    
                    
                    (134,677
                    )Gain
      on sale of marketable securities
                    
                    
                    -
                    
                    
                    
                    (88,800
                    )
                    
                    
                    -Write-down
      of investment (Note 4(c))
                    
                    
                    -
                    
                    
                    
                    749,450
                    
                    
                    
                    -Foreign exchange
      losses
                    
                    
                    295,843
                    
                    
                    
                    161,267
                    
                    
                    
                    11,967LOSS
      BEFORE INCOME TAXES
                    
                    
                    6,161,784
                    
                    
                    
                    5,206,684
                    
                    
                    
                    1,978,081Income
      tax recoveries (Notes 6(a)(ii) and 9)
                    
                    
                    (620,000
                    )
                    
                    
                    (1,906,684
                    )
                    
                    
                    (820,800
                    )NET
      LOSS FOR YEAR
                    
                    
                    5,541,784
                    
                    
                    
                    3,300,000
                    
                    
                    
                    1,157,281DEFICIT,
      BEGINNING OF YEAR
                    
                    
                    21,809,113
                    
                    
                    
                    18,509,113
                    
                    
                    
                    17,351,832DEFICIT,
      END OF YEAR
                    
                    $
                    27,350,897
                    
                    
                    $
                    21,809,113
                    
                    
                    $
                    18,509,113LOSS
      PER SHARE – basic and diluted
                    
                    $
                    0.
      15
                    
                    
                    $
                    0.
      10
                    
                    
                    $
                    0.04WEIGHTED
      AVERAGE NUMBER OF SHARES OUTSTANDING
                    
                    
                    35,991,034
                    
                    
                    
                    33,458,517
                    
                    
                    
                    30,682,026
 
  Consolidated
      Statements of Comprehensive Loss
                      For
      the Years Ended December 31, 2007, 2006 and 2005
                      (in
      Canadian dollars)
 
 2007
                    
                    
                    2006
                    
                    
                    2005NET
      LOSS FOR YEAR
                    
                    $
                    (5,541,784
                    )
                    
                    $
                    (3,300,000
                    )
                    
                    $
                    (1,157,281
                    )OTHER
      COMPREHENSIVE INCOME (Note 2(m))
                    
                    
                    58,819
                    
                    
                    
                    -
                    
                    
                    
                    -COMPREHENSIVE
      LOSS
                    
                    $
                    (5,482,965
                    )
                    
                    $
                    (3,300,000
                    )
                    
                    $
                    (1,157,281
                    )
  
 Consolidated
      Statements of Accumulated Other Comprehensive Income
                      For
      the Years Ended December 31, 2007, 2006 and 2005
                      (in
      Canadian dollars)
 
 2007
                    
                    
                    2006
                    
                    
                    2005BALANCE,
      BEGINNING OF YEAR
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -OTHER
      COMPREHENSIVE INCOME (Note 2(m))
                    
                    
                    58,819
                    
                    
                    
                    -
                    
                    
                    
                    -BALANCE,
      END OF YEAR
                    
                    $
                    58,819
                    
                    
                    $
                    -
                    
                    
                    $
                    -
 
 See
accompanying notes to consolidated financial statements
  F-4
 Table of Contents
  Consolidated
      Statements of Cash Flows
                      For
      the Years Ended December, 2007, 2006 and 2005
                      (in
      Canadian dollars)
 
 2007
                    
                    
                    2006
                    
                    
                    2005CASH
      PROVIDED FROM (USED FOR) OPERATIONSNet loss for year
                    
                    $
                    (5,541,784
                    )
                    
                    $
                    (3,330,000
                    )
                    
                    $
                    (1,157,281
                    )Items not involving
      cashStock option
      compensation
                    
                    
                    2,830,270
                    
                    
                    
                    1,978,807
                    
                    
                    
                    361,350Write-down of investment (Note
      4(c))
                    
                    
                    -
                    
                    
                    
                    749,450
                    
                    
                    
                    -Foreign
exchange
                    
                    
                    -
                    
                    
                    
                    (53,768
                    )
                    
                    
                    -Accretion (Note
    5)
                    
                    
                    145,665
                    
                    
                    
                    123,214
                    
                    
                    
                    113,285Amortization
                    
                    
                    24,761
                    
                    
                    
                    2,611
                    
                    
                    
                    7,215Income tax
      recoveries
                    
                    
                    (620,000
                    )
                    
                    
                    (1,906,684
                    )
                    
                    
                    (820,800
                    )Changes in non-cash working
      capital itemsAmounts receivable and prepaid
      expenses
                    
                    
                    (327,520
                    )
                    
                    
                    32,269
                    
                    
                    
                    83,707Accounts payable and
      accruals
                    
                    
                    138,540
                    
                    
                    
                    43,793
                    
                    
                    
                    192,037(3,350,068
                    )
                    
                    
                    (2,330,308
                    )
                    
                    
                    (1,220,487
                    )INVESTING
      ACTIVITIESMineral interests
                    
                    
                    (8,350,885
                    )
                    
                    
                    (14,571,174
                    )
                    
                    
                    (3,815,625
                    )Short-term
    deposits
                    
                    
                    (11,
      557,493
                    )
                    
                    
                    5,871,753
                    
                    
                    
                    (3,241,551
                    )Reclamation
    deposits
                    
                    
                    (200,000
                    )
                    
                    
                    (20,900
                    )
                    
                    
                    -Property and
      Equipment
                    
                    
                    (174,339
                    )
                    
                    
                    (30,921
                    )
                    
                    
                    (27,334
                    )(20,
      282,717
                    )
                    
                    
                    (8,751,242
                    )
                    
                    
                    (7,084,510
                    )FINANCING
      ACTIVITIESIssue of share capital and
      warrants
                    
                    
                    31,327,426
                    
                    
                    
                    12,545,702
                    
                    
                    
                    11,299,051NET
      CASH PROVIDED
                    
                    
                    7,694,641
                    
                    
                    
                    1,464,152
                    
                    
                    
                    2,994,054CASH
      AND CASH EQUIVALENTS, BEGINNING OF YEAR
                    
                    
                    5,785,506
                    
                    
                    
                    4,321,354
                    
                    
                    
                    1,327,300CASH
      AND CASH EQUIVALENTS, END OF YEAR
                    
                    $
                    13,480,147
                    
                    
                    $
                    5,785,506
                    
                    
                    $
                    4,321,354CASH
      AND CASH EQUIVALENTS, END OF YEAR:Cash and cash
      equivalents
                    
                    $
                    13,480,147
                    
                    
                    $
                    5,578,691
                    
                    
                    $
                    293,107Cash held for exploration
      expenditures
                    
                    
                    -
                    
                    
                    
                    206,815
                    
                    
                    
                    4,028,247$
                    13,480,147
                    
                    
                    $
                    5,785,506
                    
                    
                    $
                    4,321,354CHANGES
      IN ACCOUNTS RECEIVABLE AND
                      LIABILITIES
      IN MINERAL INTERESTS
                    
                    $
                    1,054,875
                    
                    
                    $
                    (300,248
                    )
                    
                    $
                    (418,858
                    )
 
 See
accompanying notes to consolidated financial statements
  F-5
 Table of Contents
  Notes
to the Financial Statements
 At
December 31, 2007 and 2006 and
 For
the Years Ended December 31, 2007, 2006 and 2005
 (in
Canadian dollars, except where noted)
  1.NATURE
OF OPERATIONS
 The
Company is engaged in the acquisition, exploration and development of mineral
properties. To date, the Company has not earned significant revenues and is
considered to be in the exploration stage. The ability of the Company to carry
out its business plan rests with its ability to secure equity and other
financings and develop the properties.
  2.      SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
 The
consolidated financial statements of the Company have been prepared in
accordance with generally accepted accounting principles (“GAAP”) in Canada
which, except as noted in Note 11, are consistent in all material respects with
GAAP in the United States of America.
 
 The
consolidated financial statements have, in management’s opinion, been properly
prepared within the framework of the significant accounting policies summarized
below:
 
 a)     Principles of
Consolidation
 These
consolidated financial statements include the accounts of Seabridge Gold Inc.
and its wholly-owned subsidiaries, Seabridge Gold Corp., a company incorporated
under the laws of the State of Nevada, USA, 5073 N.W.T. Limited, a company
incorporated under the laws of the Northwest Territories of Canada; Pacific
Intermountain Gold Inc. (“PIGCO”), a company incorporated under the laws of the
State of Nevada, USA and Minera Seabridge Gold SA de CV, a company incorporated
in Mexico in 2006 to hold the Noche Buena project. All significant inter-company
transactions and balances have been eliminated.
 
 b)    Mineral Interests
 Direct
property acquisition costs, advance royalties, holding costs, field exploration
and field supervisory costs relating to specific properties are deferred until
the properties are brought into production, at which time, they will be
amortized on a unit of production basis, or until the properties are abandoned,
sold or considered to be impaired in value, at which time an appropriate charge
will be made. The recovery of costs of mining claims and deferred exploration is
dependent upon the existence of economically recoverable reserves, the ability
of the Company to obtain the necessary financing to complete exploration and
development and future profitable production or proceeds from disposition of
such properties.
 
 The
Emerging Issues Committee of the CICA issued EIC-126 – “Accounting by Mining
Enterprises for Exploration Costs” which interprets how Accounting Guideline No.
11 entitled Enterprises in the Development Stage - (AcG-11) affects mining
companies with respect to the deferral of exploration costs.  EIC-126
refers to CICA Handbook Section 3061 "Property, Plant and Equipment", paragraph
21, which states that for a mining property, the cost of the asset includes
exploration costs if the enterprise considers that such costs have the
characteristics of property, plant and equipment. EIC-126 then states that a
mining enterprise that has not established mineral reserves objectively, and
therefore does not have a basis for preparing a projection of the estimated cash
flow from the property, is not precluded from considering the exploration costs
to have the characteristics of property, plant and equipment. EIC-126 also sets
forth the Committee’s consensus that a mining enterprise in the development
stage is not required to consider the conditions in AcG-11 regarding impairment
in determining whether exploration costs may be initially capitalized. With
respect to impairment of capitalized exploration costs, EIC-126 sets forth the
Committee’s consensus that a mining enterprise in the development stage that has
not established mineral reserves objectively, and therefore does not have a
basis for preparing a projection of the estimated cash flow from the property is
not obliged to conclude that capitalized costs have been impaired. However, such
an enterprise should consider the conditions set forth in AcG-11 and CICA
Handbook sections relating to long-lived assets in determining whether
subsequent write-down of capitalized exploration costs related to mining
properties is required.  Any resulting write-downs are charged to the
statement of operations.
 
 The
Company considers that exploration costs have the characteristics of property,
plant and equipment, and, accordingly, defers such costs. Furthermore, pursuant
to EIC-126, deferred exploration costs would not automatically be subject to
regular assessment of recoverability, unless conditions, such as those discussed
in AcG 11 exist.
  AcG 11
also provides guidance on measuring impairment of when pre-operating costs have
been deferred. While this guidance is applicable, its application did not result
in impairment.
  F-6
 Table of Contents
 
 c)    
Asset Retirement
Obligations
 The
Company recognizes the fair value of liabilities for asset retirement
obligations in the period in which they occur and/or in which a reasonable
estimate of such costs can be made using the total undiscounted cash flows
required to settle estimated obligations, estimated expected timing of cash flow
payments required to settle the obligations and estimated credit-adjusted
risk-free discount rates and inflation rates (see Note 5).
 
 d)    Stock-based
Compensation
 The
Company applies the fair value method for stock-based compensation and other
stock-based payments.  Options are valued using the Black Scholes
option-pricing model and other models for the two-tiered options as may be
appropriate. The resulting value is charged against income over the anticipated
vesting period of the option (see Note 5(b)). The Company reviews estimated
forfeitures of options on an ongoing basis.
 
 e)    
Property and
Equipment
 Property
and Equipment are carried at cost less accumulated amortization. Amortization is
provided using the straight-line method at an annual rate of 20% from the date
of acquisition.
 
 f)     Cash and Short-term
Deposits
 Cash and
short-term investments consist of balances with banks and investments in money
market instruments. These investments are carried at fair value. Cash and cash
equivalents consist of investments with maturities of up to 90 days at the date
of purchase. Short-term deposits consist of investments with maturities greater
than 90 days at the date of purchase.
 
 g)    Marketable
Securities
 Short-term
investments in marketable securities accounted for as available for sale
securities are recorded at market value (prior years – at cost). The market
values of investments are determined based on the closing prices reported on
recognized securities exchanges and over-the-counter markets. Such individual
market values do not necessarily represent the realizable value of the total
holding of any security, which may be more or less than that indicated by market
quotations. When there has been a loss in the value of an investment in
marketable securities that is determined to be other than a temporary decline,
the investment is written down to recognize the loss. The securities are
recorded at market value at December 31, 2007 and at cost at December 31, 2006
(market value was $219,000). See Note 2(n).
 
 h)    
Flow-through
Shares
 The
Company financed a portion of its exploration and development activities through
the issue of flow-through shares.  Under the terms of these share
issues, the tax attributes of the related expenditures are renounced to
subscribers.  When the renunciation is made, the tax value of the
renunciation is recorded as a liability and charged against share capital. Where
the Company has a valuation allowance, which reduces future income tax assets,
the valuation allowance is reduced and an income tax recovery is recorded in the
statement of operations.
 
 i)      Translation of Foreign
Currencies
 The
functional currency of the Company and its subsidiaries is considered to be the
Canadian dollar. Foreign currency transactions entered into by the Company and
financial statements of integrated foreign operations are translated using the
temporal method.  Under this method, monetary assets and liabilities
are translated at year-end rates of exchange, non-monetary assets and
liabilities are translated at historic rates of exchange and statement of
operations items are translated at average exchange rates prevailing during the
year.  Exchange gains and losses on foreign currency transactions and
foreign currency denominated balances are included in the statement of
operations.
 
 j)      Income Taxes
 The
Company accounts for income taxes using the asset and liability method. Under
this method of tax allocation, future income tax assets and liabilities are
determined based on differences between the financial statement carrying values
and their respective income tax bases (temporary differences). Future income tax
assets and liabilities are measured using the tax rates expected to be in effect
when the temporary differences are expected to reverse. The effect on future
income tax assets and liabilities of a change in tax rates enacted is included
in operations in the period in which the change is enacted or substantively
enacted. The amount of future income tax assets recognized is limited to the
amount that is more likely than not to be realized.
 
 k)     Loss Per Share
 Loss per
share of common stock is computed based on the weighted average number of common
shares outstanding during the year. The Company uses the treasury stock method
for calculating diluted earnings per share. As the Company incurred net losses
for the year ended December 31, 2007, 2006 and 2005, all outstanding options and
warrants have been excluded from the calculation of diluted loss per
share.
 
 l)      Use of Estimates
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reported year. The most
significant estimates relate to the carrying values of exploration properties,
accrued liabilities and contingencies, valuation of stock options and
calculations of future income tax assets.  Actual results could be
materially different from those estimates.
 
 m)    Changes in Accounting
Policies
 On
January 1, 2007, the Company adopted the following Canadian Institute of
Chartered Accountants accounting standards which were effective for fiscal years
beginning on or after October 1, 2006: Section 1530 Comprehensive Income;
Section 3855 Financial Instruments – Recognition and Measurement; Section 3861
Financial Instruments – Presentation and Disclosure; and, Section 3865 –
Hedges.  These sections require certain financial instruments
and
  F-7
 Table of Contents
  hedge
positions to be recorded at fair value.  The standards also introduce the
concept of comprehensive income and accumulated other comprehensive
income.  Adoption of these standards is generally on a retrospective
basis without restatement.
 
 Under the
new standards, financial instruments designated as “held-for-trading” and
“available-for-sale” will be carried at their fair value while financial
instruments such as “loans and receivables”, “financial liabilities” and those
classified as “held-to-maturity” will be carried at their amortized cost. 
All derivatives will be carried on the consolidated balance sheets at their fair
value, including derivatives designated as hedges.  Unrealized gains and
losses on effective cash flow hedges will be carried in “Accumulated Other
Comprehensive Income”, a component of “Shareholders’ Equity” on the consolidated
balance sheets, while any gains or losses on ineffective hedges will be
recognized in earnings. The amount related to unrealized gains or losses on
marketable securities as a result of this change was $58,819 for 2007 of which
$53,561 relates to opening accumulated other comprehensive income.
 
 n)    New Pronouncements Not Yet
Adopted
 The
Canadian Institute of Chartered Accountants (“CICA”) issued the following
accounting standards effective for the Company’s fiscal year beginning on
January 1, 2008:
 
 Capital
Disclosures
 In
December 2006, the CICA issued Handbook Section 1535, Capital Disclosures, which
establishes standards for disclosing information about an entity’s capital and
how it is managed.  The entity’s disclosure should include information
about its objectives, policies and processes for managing capital and disclose
whether or not it has complied and the consequences of non-compliance with any
capital requirements to which it is subject.  The Company is currently
evaluating the impact of the adoption of this section on the consolidated
financial statements.
 
 Financial
Instruments – Disclosures and Financial Instruments - Presentation
 In
December 2006, the CICA issued Handbook Section 3862 Financial Instruments –
Disclosures and Section 3863 Financial Instruments –
Presentation.  Section 3862 modifies the disclosure requirements of
Section 3861 Financial Instruments - Disclosures and Presentation including
required disclosure of the assessment of the significance of financial
instruments for an entity’s financial position and performance; and of the
extent of risks arising from financial instruments to which the Company is
exposed and how the Company manages those risks. Section 3863 carries forward
the presentation related requirements of Section 3861.  The Company is
currently evaluating the impact of the adoption of Section 3862, while it does
not expect the adoption of 3863 to have a significant effect on the consolidated
financial statements.
 
 Inventories
 In March
2007, the CICA issued Handbook Section 3031 Inventories, which replaces Section
3030 Inventories.   Under the new section, inventories are
required to be measured at the “lower of cost and net realizable value, which is
different from the existing guidance of the “lower of cost and market
value”.  The new section contains guidance on the determination of
cost and also requires the reversal of any write-downs previously recognized, if
applicable.  Certain minimum disclosures are required, including the
accounting policies used, carrying amounts, amounts recognized as an expense,
write-downs, and the amount of any reversal of any write-downs recognized as a
reduction in expenses.  The Company evaluated the impact of the
adoption of this new section on the consolidated financial statements and
concluded the impact will not be material.
 
 3.      CASH
AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
 2007
                    
                    
                    2006Cash
                    
                    $
                    1,416,376
                    
                    
                    $
                    961,765Canadian
      bank guaranteed notes
                    
                    
                    23,621,264
                    
                    
                    
                    4,616,92625,037,640
                    
                    
                    
                    5,578,691Short-term
      deposits
                    
                    
                    (11,557,493
                    )
                    
                    
                    -Cash
      and cash equivalents
                    
                    $
                    13,480,147
                    
                    
                    $
                    5,578,691Short-term
      deposits consist of Canadian bank guaranteed notes with a term of 91
      days to one year.
  F-8
 Table of Contents
  4.      MINERAL
INTERESTS
 Expenditures made on account of mineral interests by the Company were as
follows:
  2007Property and
      Expense
                    Balance,
      December
      31, 2006
                    
                    
                    Expenditures
                    
                    
                    Recoveries
                    
                    
                    Balance,
                      December
      31,
                      2007Courageous
      LakeAcquisition
      costs
                    
                    $
                    8,302,305
                    
                    
                    $
                    100,000
                    
                    
                    $
                    -
                    
                    
                    $
                    8,402,305Deferred
      exploration
                    
                    
                    12,072,797
                    
                    
                    
                    615,512
                    
                    
                    
                    -
                    
                    
                    
                    12,688,30920,375,102
                    
                    
                    
                    715,512
                    
                    
                    
                    -
                    
                    
                    
                    21,090,614Castle
      Black RockAcquisition
      costs
                    
                    
                    140,426
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    140,426Deferred
      exploration
                    
                    
                    289,198
                    
                    
                    
                    42,937
                    
                    
                    
                    -
                    
                    
                    
                    332,135429,624
                    
                    
                    
                    42,937
                    
                    
                    
                    -
                    
                    
                    
                    472,561Grassy
      MountainAcquisition
      costs
                    
                    
                    2,261,299
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,261,299Deferred
      exploration
                    
                    
                    986,741
                    
                    
                    
                    113,538
                    
                    
                    
                    -
                    
                    
                    
                    1,100,2793,248,040
                    
                    
                    
                    113,538
                    
                    
                    
                    -
                    
                    
                    
                    3,361,578Hog
      RanchAcquisition
      costs
                    
                    
                    443,838
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    443,838Deferred
      exploration
                    
                    
                    700,888
                    
                    
                    
                    61,610
                    
                    
                    
                    -
                    
                    
                    
                    762,4981,144,726
                    
                    
                    
                    61,610
                    
                    
                    
                    -
                    
                    
                    
                    1,206,336KSM
      (Kerr-Sulphurets-Mitchell)Acquisition
      costs
                    
                    
                    15,061,208
                    
                    
                    
                    245,338
                    
                    
                    
                    -
                    
                    
                    
                    15,306,546Deferred
      exploration
                    
                    
                    3,717,826
                    
                    
                    
                    6,291,034
                    
                    
                    
                    -
                    
                    
                    
                    10,008,86018,779,034
                    
                    
                    
                    6,536,372
                    
                    
                    
                    -
                    
                    
                    
                    25,315,406Quartz
      MountainAcquisition
      costs
                    
                    
                    357,139
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    357,139Deferred
      exploration
                    
                    
                    85,348
                    
                    
                    
                    8,910
                    
                    
                    
                    -
                    
                    
                    
                    94,258442,487
                    
                    
                    
                    8,910
                    
                    
                    
                    -
                    
                    
                    
                    451,397Red
      MountainAcquisition
      costs
                    
                    
                    82,090
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    82,090Deferred
      exploration
                    
                    
                    859,180
                    
                    
                    
                    169,350
                    
                    
                    
                    -
                    
                    
                    
                    1,028,530941,270
                    
                    
                    
                    169,350
                    
                    
                    
                    -
                    
                    
                    
                    1,110,620Pacific
      Intermountain Gold Corp.Acquisition
      costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Deferred
      exploration
                    
                    
                    2,488,602
                    
                    
                    
                    556,261
                    
                    
                    
                    (44,831
                    )
                    
                    
                    3,000,0322,488,602
                    
                    
                    
                    556,261
                    
                    
                    
                    (44,831
                    )
                    
                    
                    3,000,032Other
      Nevada ProjectsAcquisition
      costs.
                    
                    
                    20,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    20,000Deferred
      exploration
                    
                    
                    254,602
                    
                    
                    
                    68,323
                    
                    
                    
                    -
                    
                    
                    
                    322,925274,602
                    
                    
                    
                    68,323
                    
                    
                    
                    -
                    
                    
                    
                    342,925Noche
      Buena, MexicoAcquisition
      costs.
                    
                    
                    4,888,270
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    4,888,270Deferred
      exploration
                    
                    
                    250,423
                    
                    
                    
                    1,177,688
                    
                    
                    
                    -
                    
                    
                    
                    1,428,1115,138,693
                    
                    
                    
                    1,177,688
                    
                    
                    
                    -
                    
                    
                    
                    6,316,381TotalAcquisition
      costs
                    
                    
                    31,556,575
                    
                    
                    
                    345,338
                    
                    
                    
                    -
                    
                    
                    
                    31,901,913Deferred
      exploration
                    
                    
                    21,705,605
                    
                    
                    
                    9,105,163
                    
                    
                    
                    (44,831
                    )
                    
                    
                    30,765,937Total
      Mineral Interests
                    
                    $
                    53,262,180
                    
                    
                    $
                    9,450,501
                    
                    
                    $
                    (44,831
                    )
                    
                    $
                    62,667,850
  F-9
 Table of Contents
  2006Property
      and Expense
                    Balance,
      December
      31, 2005
                    
                    
                    Expenditures
                    
                    
                    Recoveries
                    
                    Balance,
      December
      31, 2006Courageous
      LakeAcquisition
      costs
                    
                    $
                    8,252,305
                    
                    
                    $
                    50,000
                    
                    
                    $
                    -
                    
                    
                    $
                    8,302,305Deferred
      exploration
                    
                    
                    7,519,488
                    
                    
                    
                    4,553,309
                    
                    
                    
                    -
                    
                    
                    
                    12,072,79715,771,793
                    
                    
                    
                    4,603,309
                    
                    
                    
                    -
                    
                    
                    
                    20,375,102Castle
      Black RockAcquisition
      costs
                    
                    
                    140,426
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    140,426Deferred
      exploration
                    
                    
                    243,642
                    
                    
                    
                    45,556
                    
                    
                    
                    -
                    
                    
                    
                    289,198384,068
                    
                    
                    
                    45,556
                    
                    
                    
                    -
                    
                    
                    
                    429,624Grassy
      MountainAcquisition
      costs
                    
                    
                    2,261,299
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,261,299Deferred
      exploration
                    
                    
                    844,548
                    
                    
                    
                    142,193
                    
                    
                    
                    -
                    
                    
                    
                    986,7413,105,847
                    
                    
                    
                    142,193
                    
                    
                    
                    -
                    
                    
                    
                    3,248,040Hog
      RanchAcquisition
      costs
                    
                    
                    443,838
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    443,838Deferred
      exploration
                    
                    
                    629,850
                    
                    
                    
                    71,038
                    
                    
                    
                    -
                    
                    
                    
                    700,8881,073,688
                    
                    
                    
                    71,038
                    
                    
                    
                    -
                    
                    
                    
                    1,144,726KSMAcquisition
      costs
                    
                    
                    465,542
                    
                    
                    
                    14,595,666
                    
                    
                    
                    -
                    
                    
                    
                    15,061,208Deferred
      exploration
                    
                    
                    61,382
                    
                    
                    
                    3,656,444
                    
                    
                    
                    -
                    
                    
                    
                    3,717,826526,924
                    
                    
                    
                    18,252,110
                    
                    
                    
                    -
                    
                    
                    
                    18,779,034Quartz
      MountainAcquisition
      costs
                    
                    
                    357,139
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    357,139Deferred
      exploration
                    
                    
                    85,348
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    85,348442,487
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    442,487Red
      MountainAcquisition
      costs
                    
                    
                    82,090
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    82,090Deferred
      exploration
                    
                    
                    690,720
                    
                    
                    
                    168,460
                    
                    
                    
                    -
                    
                    
                    
                    859,180772,810
                    
                    
                    
                    168,460
                    
                    
                    
                    -
                    
                    
                    
                    941,270Pacific
      Intermountain Gold Corp.Acquisition
      costs
                    
                    
                    14,860
                    
                    
                    
                    -
                    
                    
                    
                    (14,860
                    )
                    
                    
                    -Deferred
      exploration
                    
                    
                    2,060,644
                    
                    
                    
                    472,568
                    
                    
                    
                    (44,610
                    )
                    
                    
                    2,488,6022,075,504
                    
                    
                    
                    472,568
                    
                    
                    
                    (59,470
                    )
                    
                    
                    2,488,602Other
      Nevada ProjectsAcquisition
      costs.
                    
                    
                    20,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    20,000Deferred
      exploration
                    
                    
                    193,416
                    
                    
                    
                    61,186
                    
                    
                    
                    -
                    
                    
                    
                    254,602213,416
                    
                    
                    
                    61,186
                    
                    
                    
                    -
                    
                    
                    
                    274,602Noche
      Buena, MexicoAcquisition
      costs.
                    
                    
                    28,901
                    
                    
                    
                    4,859,369
                    
                    
                    
                    -
                    
                    
                    
                    4,888,270Deferred
      exploration
                    
                    
                    -
                    
                    
                    
                    250,423
                    
                    
                    
                    -
                    
                    
                    
                    250,42328,901
                    
                    
                    
                    5,109,792
                    
                    
                    
                    -
                    
                    
                    
                    5,138,693TotalAcquisition
      costs
                    
                    
                    12,066,400
                    
                    
                    
                    19,505,035
                    
                    
                    
                    (14,860
                    )
                    
                    
                    31,556,575Deferred
      exploration
                    
                    
                    12,329,038
                    
                    
                    
                    9,421,177
                    
                    
                    
                    (44,610
                    )
                    
                    
                    21,705,605Total
      Mineral Interests
                    
                    $
                    24,395,438
                    
                    
                    $
                    28,926,212
                    
                    
                    $
                    (59,470
                    )
                    
                    $
                    53,262,180
  F-10
 Table of Contents
  2005Property
      and Expense
                    Balance,
      December
      31, 2004
                    
                    
                    Expenditures
                    
                    
                    Recoveries
                    
                    Balance,
      December
      31, 2005Courageous
      LakeAcquisition
      costs
                    
                    $
                    8,202,305
                    
                    
                    $
                    50,000
                    
                    
                    $
                    -
                    
                    
                    $
                    8,252,305Deferred
      exploration
                    
                    
                    5,388,752
                    
                    
                    
                    2,130,736
                    
                    
                    
                    -
                    
                    
                    
                    7,519,48813.591,057
                    
                    
                    
                    2,180,736
                    
                    
                    
                    -
                    
                    
                    
                    15,771,793Castle
      Black RockAcquisition
      costs
                    
                    
                    140,426
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    140,426Deferred
      exploration
                    
                    
                    194,214
                    
                    
                    
                    49,428
                    
                    
                    
                    -
                    
                    
                    
                    243,642334,640
                    
                    
                    
                    49,428
                    
                    
                    
                    -
                    
                    
                    
                    384,068Grassy
      MountainAcquisition
      costs
                    
                    
                    2,261,299
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,261,299Deferred
      exploration
                    
                    
                    708,837
                    
                    
                    
                    135,711
                    
                    
                    
                    -
                    
                    
                    
                    844,5482,970,136
                    
                    
                    
                    135,711
                    
                    
                    
                    -
                    
                    
                    
                    3,105,847Hog
      RanchAcquisition
      costs
                    
                    
                    443,838
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    443,838Deferred
      exploration
                    
                    
                    563,897
                    
                    
                    
                    65,953
                    
                    
                    
                    -
                    
                    
                    
                    629,8501,007,735
                    
                    
                    
                    65,953
                    
                    
                    
                    -
                    
                    
                    
                    1,073,688KSMAcquisition
      costs
                    
                    
                    465,542
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    465,542Deferred
      exploration
                    
                    
                    59,177
                    
                    
                    
                    2,205
                    
                    
                    
                    -
                    
                    
                    
                    61,382524,719
                    
                    
                    
                    2,205
                    
                    
                    
                    -
                    
                    
                    
                    526,924Quartz
      MountainAcquisition
      costs
                    
                    
                    357,139
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    357,139Deferred
      exploration
                    
                    
                    85,348
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    85,348442,487
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    442,487Red
      MountainAcquisition
      costs
                    
                    
                    82,090
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    82,090Deferred
      exploration
                    
                    
                    534,866
                    
                    
                    
                    155,854
                    
                    
                    
                    -
                    
                    
                    
                    690,720616,956
                    
                    
                    
                    155,854
                    
                    
                    
                    -
                    
                    
                    
                    772,810Pacific
      Intermountain Gold Corp.Acquisition
      costs
                    
                    
                    48,215
                    
                    
                    
                    -
                    
                    
                    
                    (33,355
                    )
                    
                    
                    14,860Deferred
      exploration
                    
                    
                    1,303,058
                    
                    
                    
                    757,586
                    
                    
                    
                    -
                    
                    
                    
                    2,060,6441,351,273
                    
                    
                    
                    757,586
                    
                    
                    
                    (33,355
                    )
                    
                    
                    2,075,504Other
      Nevada ProjectsAcquisition
      costs.
                    
                    
                    20,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    20,000Deferred
      exploration
                    
                    
                    139,668
                    
                    
                    
                    53,748
                    
                    
                    
                    -
                    
                    
                    
                    193,416159,668
                    
                    
                    
                    53,748
                    
                    
                    
                    -
                    
                    
                    
                    293,416Noche
      Buena, MexicoAcquisition
      costs.
                    
                    
                    -
                    
                    
                    
                    28,901
                    
                    
                    
                    -
                    
                    
                    
                    28,901Deferred
      exploration
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    --
                    
                    
                    
                    28,901
                    
                    
                    
                    -
                    
                    
                    
                    28,901TotalAcquisition
      costs
                    
                    
                    12,020,854
                    
                    
                    
                    78,901
                    
                    
                    
                    (33,355
                    )
                    
                    
                    12,066,400Deferred
      exploration
                    
                    
                    8,977,817
                    
                    
                    
                    3,351,221
                    
                    
                    
                    -
                    
                    
                    
                    12,329,038Total
      Mineral Interests
                    
                    $
                    20,998,671
                    
                    
                    $
                    3,430,122
                    
                    
                    $
                    (33,355
                    )
                    
                    $
                    24,395,438
 
 Continued
exploration of the Company’s mineral properties is subject to certain lease
payments, project holding costs, rental fees and filing fees.
  The
Company’s business plan is to increase its gold ounces in the ground but not to
go into production on its own.  The Company will either sell projects
or participate in joint ventures towards production with major mining
companies.
 
 a)
                    Courageous
      Lake
 In 2002,
the Company purchased a 100% interest in the Courageous Lake gold project from
Newmont Canada Limited and Total Resources (Canada) Limited (“the Vendors”) for
US$2.5 million. The Courageous Lake gold project consists of mining leases
located in Northwest Territories of Canada.
 
 The
Vendors were granted a 2% net smelter royalty interest in the
project.  In addition, the Company agreed to pay the Vendors US$1.5
million when the spot price of gold closed at or above US$360 per ounce for 10
consecutive days (paid in March 2003), and pay the Vendors US$1.5 million when
the spot price of gold closed at or above US$400 per ounce or a production
decision is made at Courageous Lake, whichever is earlier (paid in February
2004).
 
 In 2004,
an additional property was optioned in the area.  Under the terms of
the agreement, the Company paid $50,000 on closing and was required to make
option payments of $50,000 on each of the first two anniversary dates and
subsequently $100,000 per year.  In addition, the property may be
purchased at any time for $1,250,000 with any option payments being credited
against the purchase price.
  F-11
 Table of Contents
 
 b)
                    Castle Black
      Rock
 The
Company entered into a mining lease agreement dated August 15, 2000, and amended
on August 1, 2001, with respect to mineral claims located in Esmeralda
County, Nevada, USA. In 2002, the Company paid US$17,500 and in 2003, US$25,000
in advance royalties and is required to pay further advance royalties of
US$25,000 each August 15 thereafter and to pay a production royalty, varying
with the price of gold, of 3% to 5%, and a 3.5% royalty on gross proceeds from
other metals produced. The Company has the right to purchase 50% of the
production royalty for US$1.8 million.
  c)
                      Grassy
      Mountain
 In 2000,
the Company acquired an option on a 100% interest in mineral claims located in
Malheur County, Oregon, USA. During 2002, the Company paid US$50,000 in option
payments. On December 23, 2002, the agreement was amended and the Company made a
further option payment of US$300,000 and in March 2003 acquired the property for
a payment of US$600,000.  As part of the acquisition of the Grassy
Mountain property, the Company acquired one million shares of a U.S. based
private exploration company at US$0.50 per share which represented approximately
6.9% of the private company’s issued and outstanding
shares.  Subsequently, the private company was merged with Atlas
Precious Metals Inc. (“APMI”).  On the merger, the Company’s one
million shares of the private company were converted into 1,200,000 common
shares of APMI representing approximately 5.7% of APMI’s issued and outstanding
shares. At December 31, 2006, the Company had written down the value of its
investment, as APMI has not been able to secure financing due to perceived
political risks in the jurisdiction where its main asset is
located.
  d)
                      Hog
  Ranch
 In 2000,
the Company entered into a mining lease agreement for mineral claims located in
Washoe County, Nevada. Advance royalties are payable as to US$15,000 on November
15, 2006; US$17,500 on November 15, 2007; US$20,000 on November 15, 2008 and
each November 15 thereafter. A production royalty is payable varying with the
price of gold, ranging from 3% to 5%, and a 3.5% royalty on the gross proceeds
from other metals.  40% of the production royalty may be purchased for
US$2 million. In August 2003, the Company optioned a 60% interest in the Hog
Ranch project in Nevada, USA to Romarco Minerals Inc.
(“Romarco”).  Under the terms of the agreement the Company received
200,000 shares of Romarco valued at $52,000 in 2003 and in 2004 received 200,000
shares valued at $45,000 which amounts were shown as a recovery of mineral
interests and the investments are included in marketable securities on the
balance sheet.  In February 2005, Romarco terminated its option on the
Hog Ranch property.
  e)
                      KSM
      (Kerr-Sulphurets-Mitchell)
 In 2001,
the Company purchased a 100% interest in contiguous claim blocks in the Skeena
Mining Division, British Columbia. The vendor maintains a 1% net smelter royalty
interest on the project, subject to maximum aggregate royalty payments of $4.5
million. The Company is obligated to purchase the net smelter royalty interest
for the price of $4.5 million in the event that a positive feasibility study
demonstrates a 10% or higher internal rate of return after tax and financing
costs.
 
 In 2002,
the Company optioned the property to Noranda Inc. (which subsequently became
Falconbridge Limited and then Xstrata plc.) which could earn up to a 65%
interest by incurring exploration expenditures and funding the cost of a
feasibility study.
 
 In April
2006, the Company reacquired the exploration rights to the KSM property in
British Columbia, Canada from Falconbridge Limited. On closing of the formal
agreement in August 2006, the Company issued Falconbridge 200,000 common shares
of the Company with a deemed value $3,140,000 excluding share issue
costs.  The Company also issued 2 million warrants to purchase common
shares of the Company at $13.50 each. The warrants become exercisable for five
years from the date each new ounce of gold resources is declared (up to 2
million ounces of gold) for work undertaken on the property through the year
2010. At closing of the formal agreement in August 2006 the fair value of
warrants was estimated at $11,436,000 using a Black-Scholes option-pricing
model. The value of the warrants was calculated using a volatility of 60%,
interest rate of 4% and expected life of 1.5
years.   Falconbridge also has the right of first refusal should
the Company desire to sell all or any portion of its interest
therein.  On February 20, 2007, the Company announced a new mineral
resource at the Mitchell zone of the property based on the 2006 drilling program
and consequently the above 2 million warrants became exercisable.  The
2,000,000 warrants were exercised in May and June 2007 and proceeds of
$27,000,000 were received by the Company.
  f)
                    Quartz
      Mountain
 In 2001,
the Company purchased a 100% interest in mineral claims in Lake County, Oregon.
The vendor retained a 1% net smelter royalty interest on unpatented claims
acquired and there is a 0.5% net smelter royalty interest to an unrelated third
party as a finder’s fee.  In October 2003, the Company optioned a 50%
interest in the Quartz Mountain project in Oregon, USA to Golden Predator Mines
Inc. (formerly Quincy Resources Inc.). The current gold resource known on the
property is excluded from the agreement.  The terms of the agreement
require Golden Predator to incur US$1.5 million in exploration and issue the
deemed fair value of the original 250,000 Quincy shares in stages by October
2008.  Golden predator can earn a further 12.5% interest in the
project by funding a feasibility study and issuing a further deemed fair value
of the original 250,000 Quincy shares to the Company.  If after
earning its 50% interest, Golden Predator elects not to proceed with a
feasibility study, the Company has the option to acquire Golden Predator’s
interest for US$750,000.  In 2003, the Company received the first
payment of 50,000 shares of Quincy valued at $13,100 which amount was shown as a
recovery of mineral interests and the investment is included in marketable
securities on the balance sheet.
  g)
                      Red Mountain
 In 2001,
the Company purchased a 100% interest in an array of assets associated with
mineral claims in the Skeena Mining Division, British Columbia, together with
related project data and drill core, an owned office building and a leased
warehouse, various mining equipment on the project site, and a mineral
exploration permit which is associated with a cash reclamation deposit of $1
million.
 
 The
Company assumed all liabilities associated with the array of assets acquired,
including all environmental liabilities, all ongoing licensing obligations and
ongoing leasehold obligations including net smelter royalty obligations on
certain mineral claims ranging from 2.0% to 6.5% as well as an annual minimum
royalty payment of $50,000.
  F-12
 Table of Contents
  h)
                        Pacific Intermountain Gold
      Corporation
 During
2002, the Company and an unrelated party incorporated Pacific Intermountain Gold
Corporation (“PIGCO”). The Company funded PIGCO’s share capital of $755,000 and
received a 75% interest. The other party provided the exclusive use of an
exploration database and received a 25% interest. The value associated with the
use of this database, being the minority interest in PIGCO at December 31, 2002
was charged to operations as PIGCO exploration. Subsequent to 2002, funding
which was for deferred exploration expenditures has been by way of loans to
PIGCO.  In July 2004, the Company acquired the 25% interest in PIGCO
which it did not own for forgiving debt of approximately $65,000 and agreeing to
pay 10% of any sale of projects to third parties.  The minority
interest liability value amounting to $207,369 was deleted and the amount
credited against PIGCO deferred exploration expenses on the balance
sheet.
 
 The
Company and PIGCO acquired approximately 30 claim blocks in Nevada, USA in
2002.  A 50% interest in one property, Thunder Mountain, was optioned
to a third party in 2002. The optionee paid US$25,000 in cash and issued 250,000
of its shares and was required to spend US$1.5 million in exploration over a
three year period and issue PIGCO 500,000 common shares on or before the first
anniversary and 750,000 on or before the second anniversary. At the completion
of the earn-in, a 50-50 joint venture would have been formed with the optionee
as operator.  In 2003, the agreement was amended with the Clifford
property, another PIGCO owned property, added to the agreement and the 500,000
shares becoming payable in 2004.  During 2004, the third party
terminated all of its rights under the option agreement.
  i)
                          Noche Buena,
      Mexico
 In April
2006, the Company acquired 100% interest in the 1,000 hectare Noche Buena gold
project in the Sonora district of Mexico for US$4,350,000 in cash. In January
2008, the Company reported increased NI-43-101 mineral resources resulting from
the 2007 drilling program.  The Company plans to seek interested third
parties to acquire this project.
  5.      RECLAMATION
DEPOSITS AND PROVISIONS FOR RECLAMATION LIABILITIES
 The
reclamation deposits consist of short-term investments or cash deposits held as
security for either the governments in Canada or the USA to cover estimated
reclamation liabilities on various exploration properties.
 
 The
balance in the provision for reclamation liabilities is as follows:
 
 AmountBalance
      at December 31, 2005
                    
                    $
                    1,406,734Accretion
                    
                    
                    123,214Balance
      at December 31, 2006
                    
                    
                    1,529,948Additional
      reclamation liability
                    
                    
                    173,862Accretion
                    
                    
                    145,665Balance
      at December 31, 2007
                    
                    $
                    1,849,475
 
 
 The fair
value of the asset retirement obligations was calculated using the total
undiscounted cash flows required to settle estimated obligations (estimated to
be $3,277,000), expected timing of cash flow payments required to settle the
obligations between 2008 and 2020, credit-adjusted risk-free discount rates of
7.9% to 8.76% and an inflation rate of 2.0%.  During 2007, a liability
was set up for the KSM project amounting to $149,862 and a deposit of $200,000
was held as security.
  F-13
 Table of Contents
  6.      SHAREHOLDERS'
EQUITY
 a)
         Share Capital
 Shares
                    
                    
                    AmountAuthorizedUnlimited
      number of common shares without par value
                      Unlimited
      number of preference shares (none issued)Issued
      – Common sharesBalance, December 31, 2004
                    
                    
                    29,714,785
                    
                    
                    $
                    42,230,336Issued during
    yearFor
      cash, exercise of stock options
                    
                    
                    169,400
                    
                    
                    
                    360,905For
      cash, exercise of warrants
                    
                    
                    287,500
                    
                    
                    
                    862,500For
      cash, private placements
                    
                    
                    1,935,000
                    
                    
                    
                    10,075,646Value of share purchase warrants
      and stock options exercised
                    
                    
                    -
                    
                    
                    
                    206,358Renunciation of flow-through
      share value (ii)
                    
                    
                    -
                    
                    
                    
                    (820,800
                    )2,391,900
                    
                    
                    
                    10,684,609Balance, December 31,
      2005
                    
                    
                    32,106,685
                    
                    
                    
                    52,914,945Issued during
    yearFor
      cash, exercise of stock options
                    
                    
                    584,000
                    
                    
                    
                    584,780For
      cash, private placements (i)
                    
                    
                    1,200,000
                    
                    
                    
                    12,008,144Acquisition
      of mineral interest (Note 4(e))
                    
                    
                    200,000
                    
                    
                    
                    3,092,778Value of stock options
      exercised
                    
                    
                    -
                    
                    
                    
                    80,674Renunciation of flow-through
      share value (ii)
                    
                    
                    -
                    
                    
                    
                    (1,906,684
                    )1,984,000
                    
                    
                    
                    13,859,692Balance,
      December 31, 2006
                    
                    
                    34,090,685
                    
                    
                    
                    66,774,637Issued during
    yearFor
      cash, exercise of share purchase warrants (Note 4(e))
                    
                    
                    2,000,000
                    
                    
                    
                    27,000,000For
      cash, exercise of stock options
                    
                    
                    1,207,200
                    
                    
                    
                    4,327,426Value of warrants and stock
      options exercised
                    
                    
                    -
                    
                    
                    
                    12,840,972Renunciation of flow-through
      share value (ii)
                    
                    
                    -
                    
                    
                    
                    (1,206,562
                    )3,207,200
                    
                    
                    
                    42,961,836Balance,
      December 31, 2007
                    
                    
                    37,297,885
                    
                    
                    $
                    109,736,473
  (i)
                      In
      April 2006, the Company completed a private placement consisting of
      875,000 common shares for gross proceeds of
  $8,443,750.
 
 In
      June 2006, the Company completed a private placement flow-through
      financing of 325,000 common shares for gross proceeds of
      $3,656,250.  Under the terms of the financing the Company will
      renounce to the investors the Canadian Exploration Expenses (“CEE”)
      incurred with the proceeds of the financing.  The balance of
      funds not spent by December 31, 2006 was recorded on the balance sheet as
      Cash held for Exploration Expenditures. In January 2007, the CEE was
      renounced to the investors.
  (ii)
                    In
      January 2007, the Company renounced $3,656,250 (2006 - $5,278,750, 2005 -
      $2,272,500) in Canadian Exploration Expenses to investors of flow-through
      shares in 2006, 2005 and 2004, respectively.  The tax value of
      these renunciations has been recorded as a future tax liability and
      charged against share capital.  In the 2007, 2006 and 2005
      years, the Company had a valuation allowance which reduced future income
      tax assets and therefore a portion of the valuation  allowance
      was reduced and income tax recoveries recognized in the statement of
      operations in the amount of $620,000 for 2007, $1,907,000 for 2006 and
      $821,000 for 2005.
  b)
                      Stock
      Options Outstanding
 The Company provides compensation to
directors, employees and consultants in the form of stock options. In August
2002, the Company announced new provisions to the stock option plan for
directors and senior manage­ment. New option grants to directors and senior
management are subject to a two-tiered vesting policy designed to better align
option compensation with the interests of shareholders.  Grants to
other employees and consultants do not have the two-tiered
provision.
 
 The
two-tier option grants require a certain share price above the grant date price
for 10 successive days for the first third to vest, a higher share price for the
second third to vest and a further higher share price for the final third to
vest. Once the share price has met the first test, the Company’s share price
performance must have exceeded the S&P/TSX Global Gold Index by more than
20% over the preceding six months or these options would be
cancelled.
 
 The Board
has granted the following two-tiered options:
 
 Date
      of Grant
                    Number
                    Exercise
      Price
                    Share
      Price Vesting
                    Year
      VestedAugust
      2002
                    600,000
                    $  2.20
                    $6,
      $9, $12
                    2005
      and 2006August
      2004
                    100,000
                    $  3.37
                    $6,
      $9, $12
                    2005
      and 2006January
      2005
                    50,000
                    $  4.00
                    $6,
      $9, $12
                    2005
      and 2006January
      2006
                    875,000
                    $10.56
                    $15,
      $18, $21
                    2006
      and 2007
 
 The
weighted average grant date fair value of the 200,000 options granted during
2007 which were not subject to the two-tiered vesting policy described above was
$9.73 (2006 - $2.70, 2005 - $3.33).  The grant of these 200,000
options resulted in compensation costs totaling $1,945,640 compared to 15,000
options resulting in compensation costs totaling $40,485 during 2006 and 45,000
options resulting in compensation costs of $29,784 during 2005. 170,000 of the
2007 options will
  F-14
 Table of Contents
  vest over
the period January 2007 to August 2008 and consequently $948,447 was expensed in
2007 and $997,193 will be expensed
in 2008.The fair
value of the options granted is estimated on the dates of grant using a
Black-Scholes option-pricing model with the following assumptions:
 
 2007
                    2006
                    2005Dividend
      yield
                    Nil
                    Nil
                    NilExpected
      volatility
                    55%
                    65%
                    60%Risk
      free rate of return
                    4.3%
                    3.8%
                    4.21%Expected
      life of options
                    2.7
      years
                    1
      year
                    3.5
      years
 
 
 The
weighted average grant date fair value of the 875,000 two-tiered options granted
during 2006 was $4.03.  The fair value of the options granted was
estimated on the date of grant using a Monte Carlo simulation and a binomial
option-pricing model to consider the two-tier vesting probabilities using the
following assumptions:
 
 Dividend
      yield
                    NilExpected
      volatility
                    60%Risk
      free rate of return
                    3.8%Expected
      life of options
                    4.6
      years
 
 
 The
estimated fair value of the two-tiered options granted in 2006 amounted to
$3,523,333.  In 2006, the $15 per share vesting requirement was met on
the options granted in 2006 and in 2007 the $18 and $21 per share vesting
requirements were met.  During 2006, $1,641,510 of this amount was
expensed and the balance of $1,881,823 was expensed in 2007.
 
 A summary
of the status of the plans at December 31, 2007 and changes during the years are
presented below:
 
 Shares
                    
                    
                    Weighted
      Average Exercise Price
                    
                    
                    AmountOutstanding
      at December 31, 2004
                    
                    
                    1,953,900
                    
                    
                    $
                    1.57
                    
                    
                    $
                    703,926Granted
                    
                    
                    95,000
                    
                    
                    
                    5.74
                    
                    
                    
                    29,784Exercised
                    
                    
                    (169,400
                    )
                    
                    
                    (2.13
                    )
                    
                    
                    (105,733
                    )Value
      of two-tiered options vested
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    331,566Outstanding
      at December 31, 2005
                    
                    
                    1,879,500
                    
                    
                    
                    2.21
                    
                    
                    
                    959,543Granted
                    
                    
                    890,000
                    
                    
                    
                    10.55
                    
                    
                    
                    1,681,995Exercised
                    
                    
                    (584,000
                    )
                    
                    
                    (1.00
                    )
                    
                    
                    (80,674
                    )Value
      of 2002-2005 options vested
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    296,812Outstanding
      at December 31, 2006
                    
                    
                    2,185,500
                    
                    
                    
                    5.93
                    
                    
                    
                    2,857,676Granted
                    
                    
                    200,000
                    
                    
                    
                    25.29
                    
                    
                    
                    948,448Exercised
                    
                    
                    (1,207,200
                    )
                    
                    
                    (3.58
                    )
                    
                    
                    (1,404,973
                    )Value
      of 2006 options vested
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,881,823Outstanding
      at December 31, 2007
                    
                    
                    1,178,300
                    
                    
                    $
                    11.62
                    
                    
                    $
                    4,282,974
 
 
 Number
      of Shares
                    
                    Options
      Vested
                    
                    Option
      Price Per Share
                    
                    Expiry
      Date15,000
                    
                    15,000
                    
                    $    2.08
                    
                    June 3,
      200817,000
                    
                    17,000
                    
                    $    2.58
                    
                    August
      12, 20083,800
                    
                    3,800
                    
                    $    3.82
                    
                    October
      28, 200837,500
                    
                    37,500
                    
                    $    5.65
                    
                    January
      13, 2009100,000
                    
                    100,000
                    
                    $    3.37
                    
                    August
      13, 200965,000
                    
                    65,000
                    
                    $    4.00
                    
                    January
      11, 201030,000
                    
                    30,000
                    
                    $    9.50
                    
                    December 20,
      2010725,000
                    
                    725,000
                    
                    $  10.56
                    
                    January
      4, 201130,000
                    
                    -
                    
                    $  13.77
                    
                    January
      17, 201215,000
                    
                    15,000
                    
                    $  19.57
                    
                    June
      27, 2008140,000
                    
                    -
                    
                    $  29.60
                    
                    August
      8, 20121,178,300
                    
                    1,008,300
                    
                    $  11.62
 
 
 At
December 31, 2007, there were 1,178,300 options outstanding of which 1,008,300
were exercisable at prices ranging from $2.08 to $19.57 each.
 
 In
addition to the 1,178,300 options outstanding there were 120,000 options under
the two-tiered vesting provisions granted in August 2007 subject to an increase
in the share option plan and the approval of shareholders at the next meeting of
shareholders.  These options would vest as to one third at a share
price of $34, an additional one third at $37 and the final one third at a price
of $40.
  F-15
 Table of Contents
  c)
                    Share
      Purchase Warrants
  The Company’s movement in
share purchase warrants is as follows:
   Number
      of Warrants
                    
                    
                    AmountBalance
      at December 31, 2004
                    
                    
                    287,500
                    
                    
                    $
                    100,625Exercised
                    
                    
                    (287,500
                    )
                    
                    
                    (100,625
                    )Balance
      at December 31, 2005
                    
                    
                    -
                    
                    
                    
                    -Issued
      for mineral property
                    
                    
                    2,000,000
                    
                    
                    
                    11,436,000Balance
      at December 31, 2006
                    
                    
                    2,000,000
                    
                    
                    
                    11,436,000Exercised
                    
                    
                    (2,000,000
                    )
                    
                    
                    (11,436,000
                    )Balance
      at December 31, 2007
                    
                    
                    -
                    
                    
                    $
                    -
 
 The share
purchase warrants issued in 2006 were part of the acquisition of the KSM project
(see Note 4(e)).
 
 The grant
date fair value of the 2,000,000 warrants was deemed to be $5.72
each.  The fair value of the warrants granted was estimated on the
date of grant using a Black-Scholes option-pricing model with the following
assumptions:
 
 Dividend
      yield
                    NilExpected
      volatility
                    60%Risk
      free rate of return
                    4%Expected
      life of warrants
                    1.5
      years
 
 7.      RELATED
PARTY TRANSACTIONS
 a)
                    During
      the year, a private company controlled by a director of the Company was
      paid $33,300 (2006 - $33,900, 2005
      -       $39,400) for technical services
      provided by his company related to the mineral
  properties.
 
 b)
                    During
      the year, a private company controlled by a second director was paid
      $360,000 (2006 - $144,000, 2005 - $120,000) for consulting services
      rendered.
 
 c)
                    During
      the year, a third director was paid 17,300 (2006- $18,000) for geological
      consulting services.
 
 These
transactions were in the normal course of operations and were measured at the
exchange amount, which is the amount of consideration established and agreed to
by the related parties.
 
 8. FINANCIAL
INSTRUMENTS
 The fair
value of the Company’s cash and cash equivalents and short term deposits, cash
held for exploration expenditures, amounts receivable, reclamation deposits and
accounts payable and accruals at December 31, 2007 and December 31, 2006 is
estimated to approximate their carrying values due to the immediate or
short-term maturity of these financial instruments.
  9. INCOME
TAXES
 The
income tax recovery varies from the amounts that would be computed by applying
the basic federal and provincial income tax rates aggregating to 36.12% (2006 –
36.12%, 2005 – 36.12%) as follows:
 
 2007
                    
                    
                    2006
                    
                    
                    2005Statutory
      rate applied to loss for year
                    
                    $
                    2,226,000
                    
                    
                    $
                    1,881,000
                    
                    
                    $
                    714,000Non
      deductible items
                    
                    
                    (1,026,000
                    )
                    
                    
                    (785,000
                    )
                    
                    
                    (217,000
                    )Valuation
      allowance
                    
                    
                    (1,200,000
                    )
                    
                    
                    (1,096,000
                    )
                    
                    
                    (497,000
                    )Reduction
      in valuation allowance
                    
                    
                    620,000
                    
                    
                    
                    1,907,000
                    
                    
                    
                    820,800$
                    620,000
                    
                    
                    $
                    1,907,000
                    
                    
                    $
                    820,800
 
 Significant
      components of the Company’s future tax assets and liabilities are as
      follows:
 
 Future
      income tax assets
                    
                    2007
                    
                    
                    2006Mineral interests
                    
                    $
                    (2,733,000
                    )
                    
                    $
                    (1,611,000
                    )Share issue costs
                    
                    
                    68,000
                    
                    
                    
                    104,000Non capital
losses
                    
                    
                    2,783,000
                    
                    
                    
                    1,979,000Provision for
      reclamation
                    
                    
                    220,000
                    
                    
                    
                    157,000Unrealized capital
      losses
                    
                    
                    293,000
                    
                    
                    
                    291,000631,000
                    
                    
                    
                    920,000Valuation
      allowance
                    
                    
                    (1,218,000
                    )
                    
                    
                    (920,000
                    )Future
      income tax liabilities, net
                    
                    $
                    (587,000
                    )
                    
                    $
                    -
 
 A future
tax asset of approximately $3,128,000 (2006 - $1,594,000) in one Canadian entity
has been offset with a future tax liability in another Canadian entity on the
basis that management has undertaken to carry out tax planning measures when
required.
  F-16
 Table of Contents
 
 The
Company has accumulated non-capital losses for Canadian tax purposes of
approximately $9,004,000 which expire in various years to 2027 as
follows:
 
 2008
                    
                    $
                    338,0002009
                    
                    
                    735,0002010
                    
                    
                    707,0002014
                    
                    
                    943,0002015
                    
                    
                    1,092,0002026
                    
                    
                    1,920,0002027
                    
                    
                    3,269,000$
                    9,004,000
 
 The tax
value of the non-capital losses is included in the future tax assets
above.
  10. COMMITMENTS
 The
Company is committed to payments for an operating lease for business premises as
follows:
 2008
                    
                    $
                    101,0002009
                    
                    $
                    101,0002010
                    
                    $
                    101,0002011
                    
                    $
                    101,0002012
                    
                    $
                    34,000
 
 11. RECONCILIATION
TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
 These
financial statements have been prepared in accordance with generally accepted
accounting principles (“GAAP”) in Canada.  Except as set out below,
these consolidated financial statements also comply, in all material aspects,
with accounting principles generally accepted in the United States and the rules
and regulations of the U.S. Securities and Exchange Commission.  The
following tables reconcile results as reported under Canadian GAAP with those
that would have been reported under United States GAAP:
 
 Consolidated
statements of operations:
 2007
                    
                    
                    2006
                    
                    
                    2005Net
      loss for year – Canadian GAAP
                    
                    $
                    (5,541,784
                    )
                    
                    $
                    (3,300,000
                    )
                    
                    $
                    (1,157,281
                    )Mineral
      interests prior to the establishment
                      of
      proven and probable reserves (a)
                    
                    
                    (9,060,332
                    )
                    
                    
                    (9,376,567
                    )
                    
                    
                    (3,351,221
                    )Flow-through
      share renunciation
                    
                    
                    (1,206,562
                    )
                    
                    
                    (1,906,684
                    )
                    
                    
                    (820,800
                    )Flow-through
      share value
                    
                    
                    393,250
                    
                    
                    
                    421,800
                    
                    
                    
                    202,000Net
      loss for the year  - U.S. GAAP
                    
                    
                    (15,415,428
                    )
                    
                    
                    (14,161,451
                    )
                    
                    
                    (5,127,302
                    )Other
      comprehensive income:Unrealized
      gains on marketable securities (c)
                    
                    
                    5,258
                    
                    
                    
                    53,561
                    
                    
                    
                    -Comprehensive
      loss – U.S. GAAP
                    
                    $
                    (15,410,170
                    )
                    
                    $
                    (14,107,890
                    )
                    
                    $
                    (5,127,302Loss
      per share – U.S. GAAP, Basic and Diluted
                    
                    $
                    (0.43
                    )
                    
                    $
                    (0.42
                    )
                    
                    $
                    (0.17
                    )
 
 Accumulated
other comprehensive income – U.S. GAAP
 2007
                    
                    
                    2006
                    
                    
                    2005Accumulated
      other comprehensive income – Canadian GAAP
                    
                    $
                    58,819
                    
                    
                    $
                    -
                    
                    
                    $
                    -Unrealized
      gains on marketable securities – U.S. GAAP adjustment
                    
                    
                    -
                    
                    
                    
                    53,561Accumulated
      other comprehensive income – U.S. GAAP
                    
                    $
                    58,819
                    
                    
                    $
                    53,561
                    
                    
                    $
                    -
 
 
 Consolidated
statements of cash flows:
 Canadian
      GAAP
                    
                    
                    U.S.
      GAAP2007
                    
                    
                    2006
                    
                    
                    2005
                    
                    
                    2007
                    
                    
                    2006
                    
                    
                    2005Cash
      used in operating activities
                    
                    $
                    (3,350,068
                    )
                    
                    $
                    (2,330,308
                    )
                    
                    $
                    (1,220,487
                    )
                    
                    $
                    (12,410,400
                    )
                    
                    $
                    (11,706,875
                    )
                    
                    $
                    (4,571,708
                    )Cash
      provided by (used for) investing activities
                    
                    $
                    (20,282,717
                    )
                    
                    $
                    (8,751,242
                    )
                    
                    $
                    (7,084,510
                    )
                    
                    $
                    (11,222,385
                    )
                    
                    $
                    625,325
                    
                    
                    $
                    (3,733,289
                    )
 
  Consolidated
balance sheets:
 Canadian
      GAAP
                    
                    
                    U.S.
      GAAP2007
                    
                    
                    2006
                    
                    
                    2007
                    
                    
                    2006Current
      assets- marketable securities
                    
                    $
                    240,695
                    
                    
                    $
                    165,001
                    
                    
                    $
                    240,695
                    
                    
                    $
                    218,562Mineral
      interests – unproven (a)
                    
                    $
                    62,667,850
                    
                    
                    $
                    53,262,180
                    
                    
                    $
                    28,994,508
                    
                    
                    $
                    28,649,170Liabilities
                    
                    $
                    586,562
                    
                    
                    $
                    -
                    
                    
                    $
                    586,562
                    
                    
                    $
                    393,250Shareholders’
      equity
                    
                    $
                    86,746,869
                    
                    
                    $
                    59,278,700
                    
                    
                    $
                    53,073,527
                    
                    
                    $
                    34,326,001
  F-17
 Table of Contents
  a)
                    Mineral
      interests
 Under
United States GAAP, acquisition costs associated with mining interests are
classified according to the land tenure position and the existence of proven and
probable reserves as defined under Industry Guide 7.
 
 Under
United States GAAP, through to March 31, 2004, costs associated with owned
mineral claims and mining leases were classified as definite life intangible
assets and amortized over the period of intended use or until proven and
probable reserves are established ranging from four to eleven
years.  Effective April 1, 2004, pursuant to EITF 04-2, the Company
classified its mineral rights as tangible assets and stopped amortizing
them.  This change was accounted for prospectively.  These
assets are tested for recoverability whenever events or changes in circumstances
indicate that its carrying value may not be recoverable.  Under
Canadian GAAP the unit of production basis of amortization is acceptable prior
to the establishment of proven and probable reserves resulting in no
amortization during the exploration and development phase.
 
 Under
United States GAAP, costs associated with options to acquire mineral claims and
mining leases are regarded as having a finite life expiring over the term of the
option agreement and are not a component of the acquisition
cost.  Under Canadian GAAP the option payments are regarded as part of
the acquisition cost and are deferred until the option is exercised when they
are reclassified depending on the ownership position acquired or charged to
operations if the option is not exercised.
 
 Under
United States GAAP, exploration expenditures relating to mining interests prior
to the completion of a definitive feasibility study, which establishes proven
and probable reserves must be expensed as incurred.  Under Canadian
GAAP these costs may be deferred.
 
 b)
                    Flow-through
      shares
 Under
United States GAAP when flow-through shares are issued, the proceeds are
allocated between the issue of shares and the sale of tax
benefits.  The allocation is made based on the difference between the
quoted price of the existing shares and the amount that the investor pays for
the shares.  The shareholders’ equity is reduced and a liability is
recognized for this difference which amounted to $393,250 for the flow-through
shares issued in 2006 (2005 - 421,800).  The liability is reversed
when the tax benefits are renounced and a deferred tax liability recognized at
that time.  Income tax expense is the difference between the amount of
the deferred tax liability and the liability recognized on
issuance.
 
 c)
                    Comprehensive
      income
 Under
Canadian GAAP short-term investments were recorded at the lower of cost and
quoted market value until December 31, 2006 and in 2007 at fair value and were
considered as available for sale since January 1, 2007 (see Note
2(m)).  Under United States GAAP, unrealized gains and losses on
short-term investments classified as available for sale securities are recorded
in comprehensive income until realized for all periods presented.
 
 c)
                    Impact
      of recent United States accounting
  pronouncements
 In June
2006, the FASB issued FIN No. 48, “Accounting for Uncertainty in Income Taxes”,
which clarifies accounting for income taxes by prescribing a minimum recognition
threshold a tax position is required to meet before being
recognized.  A company would be required to recognize the best
estimate of a tax position if that position is more likely than not of being
sustained upon examination, based solely on the technical merits of the
position. This change is effective beginning in 2007. The application of FIN 48
did not have an impact on the consolidated financial statements under U.S.
GAAP.
 
 In
September 2006, the FASB issued FASB Statement No. 157, Fair Market Measurements
that provides enhanced guidance for using fair value to measure assets and
liabilities. FASB Statement No. 157 is meant to remedy the diversity and
inconsistency within generally accepted accounting principles in measuring fair
value, especially for items that are not actively traded. FAS No. 157 also
responds to investors’ requests for expanded information about the extent to
which companies measure assets and liabilities at fair value, the information
used to measure fair value, and the effect of fair value measurements on
earnings. FAS No. 157 applies whenever other standards require (or permit)
assets or liabilities to be measured at fair value but does not expand the use
of fair value in any new circumstances.  This change is effective
beginning in 2007. The application of FAS 157 did not have an impact on the
consolidated financial statements under U.S. GAAP.
 
 In
September 2006, the Securities and Exchange Commission (“SEC”) issued Staff
Accounting Bulletin No. 108 – Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements.  This bulletin addresses the multiple methods used to
quantify financial statement misstatements and evaluate the accumulation of
misstatements on the balance sheet.  This change is effective
beginning in 2007.  The application of SAB 108 did not have an impact
on the consolidated financial statements under U.S. GAAP.
 
 In
February 2007, the FASB issued FASB Statement No. 159, which offers an
irrevocable option to carry eligible financial assets and liabilities at fair
value, with the election to be made on an instrument by instrument basis, with
changes in fair value recorded in earnings.  This Statement is
effective for 2008 fiscal year.  The Company is in the process of
reviewing this Statement and financial assets and liabilities which may be
affected.
 F-18
 Table of Contents
  
 KPMG
      LLP
                      Chartered
      Accountants
                      Suite
      3300 Commerce Court West
                      PO
      Box 31 Stn Commerce Court
                      Toronto
      ON M5L 1B2
                      Canada
                    Telephone
                      Fax
                      Internet
                    (416)
      777-8500
                      (416)
      777-8818
                      www.kpmg.ca
   REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To the
Board of Directors of Seabridge Gold Inc.
 
 
 We have
audited the accompanying consolidated balance sheets of Seabridge Gold Inc.
("the Company") as of December 31, 2007 and December 31, 2006 and the related
consolidated statements of operations and deficit, comprehensive loss,
accumulated other comprehensive income and cash flows for each of the years in
the three-year period ended December 31, 2007. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of the Company as of December
31, 2007 and December 31, 2006 and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 2007 in
conformity with Canadian generally accepted accounting principles.
 
 As
discussed in note 2(m) to the financial statements, the Company changed its
method of accounting for financial instruments.
 
 Canadian
generally accepted accounting principles vary in certain significant respects
from US generally accepted accounting principles. Information relating to the
nature and effect of such differences is presented in Note 11 to the
consolidated financial statements.
 
 
 KPMG LLP,
a Canadian limited liability partnership is the Canadian
 member
firm of KPMG International, a Swiss cooperative.
 
 R-1
 Table of Contents
  Page
2
 
 
 We also
have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the Company's internal control over financial
reporting as of December 31, 2007, based on the criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO), and our report dated March 19, 2008 expressed
an unqualified opinion on the effectiveness of the Company's internal control
over financial reporting.
   /s/ KPMG
LLP
 
 Chartered
Accountants, Licensed Public Accountants
 
 Toronto,
Canada
 March 19,
2008
  R-2
 Table of Contents
 Signature
Page
 
 The
Registrant hereby certifies that it meets all of the requirements for filing on
Form 20-F and that it has duly caused and authorized the undersigned to sign
this annual report on its behalf.
 
 
 Seabridge Gold
Inc.
 Registrant
 
 
 Dated:  March
      28, 2008
                  Signed:
                  /s/ Rudi FronkRudi
      Fronk
                    President
      and C.E.O.
  79