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, 2006OR__
            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)




172
      King Street East, 3rd Floor, Toronto, Ontario CANADA M5A
      1J3


(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:   34,090,685




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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  ___ 
Non-accelerated filer  xx





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


Tableof
      Contents





**PART
                1**
            **PAGE**Item
                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
            66Item
                5.
            Operating
                and Financial Review and
                Prospects
            66Item
                6.
            Directors,
                Senior Management and
                Employees
            70Item
                7.
            Major
                Shareholders and Related Party
                Transactions
            80Item
                8.
            Financial
                Information
            81Item
                9.
            The
                Offer and Listing
            81Item
                10.
            Additional
                Information
            83Item
                11.
            Quantitative
                and Qualitative Disclosures about Market
                Risk
            93Item
                12.
            Description
                of Securities Other than Equity
                Securities
            94**PART
                II**Item
                13.
            Default,
                Dividend Arrearages and
                Delinquencies
            94Item
                14.
            Material
                Modifications to the Rights of Securities Holders
                and Use of Proceeds
            94Item
                15.
            Controls
                and Procedures
            94Item
                16A.
            Audit
                Committee Financial Expert
            94Item
                16B.
            Code
                of Business Ethics
            94Item
                16C.
            Principal
                Accountant Fees and
                Services
            95Item
                16D.
            Exemptions
                from the Listing Standards for Audit
                Committees
            95Item
                16E.
            Purchases
                of Equity Securities by the Issuer and
                Affiliated Purchasers
            95**PART
                III**Item
                17.
            Financial
                Statements
            95Item
                18.
            Financial
                Statements
            95Item
                19.
            Exhibits
            95





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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
                by**Hectares
            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 43-101****Reserve:**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




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**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** - is 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.




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**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** - is 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 (FeS 2 ),
      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.




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**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
      parameter *s,* 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.




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**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
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**PartI**




**Item1.   Identity
      of Directors, Senior
      Management and Advisers**




**A. 
      Directors and Senior Management**




Table
      No.
      1


Company
      Directors and Senior Officers


As
      of
      March 20, 2007




Name
            Position
            Business
                AddressJames
                Anthony
            Chairman
                and Director
            172
                King Street East, 3rdFloor,
              Toronto,
                Ontario M5A 1J3
              CanadaRudi
                Fronk
            President,
              Chief
                Executive Officer and Director
            172
                King Street East, 3rdFloor,
              Toronto,
                Ontario M5A 1J3
              CanadaFrederick
                Banfield
            Director
            3544
                E. Fort Lowell,
              Tucson,
                Arizona 85716William
                Calhoun
            Director
            P.O.
                Box 0090
              Silverton,
                Idaho 83867Thomas
                Dawson
            Director
            736
                O’Connor Drive
              Toronto,
                Ontario M4C 3A9
              CanadaHenry
                Fenig
            Director
            Suite
                250, BCE Place,
              181
                Bay Street,
              Toronto,
                Ontario M5J 2T3
              CanadaLouis
                J. Fox
            Director
            3200
                North Ocean Blvd, #2410
              Fort
                Lauderdale, Florida 33308Eliseo
                Gonzalez-Urien
            Director
            10911
                Corp Ranch Rd.
              Ashland,
                Oregon 95720William
                Threlkeld
            Senior
                Vice President
            172
                King Street East, 3rdFloor,
              Toronto,
                Ontario M5A 1J3
              CanadaRoderick
                Chisholm
            Chief
                Financial Officer and Corporate Secretary
            172
                King Street East, 3rdFloor,
              Toronto,
                Ontario M5A 1J3
              Canada




9
 Table
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**B. 
      Advisers**





Not
      Applicable





**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.




**Item2. 
Offer
      Statistics and Expected
      Timetable**




Not
      Applicable




**Item3. 
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 for the Years Ended December 31, 2006,
      December 31, 2005 and December 31, 2004 was derived from the financial
      statements audited by KPMG LLP, Chartered Accountants, as indicated in its
      audit
      report which is included elsewhere in this Annual Report. The selected financial
      data for the years ended December 31, 2003 and December 31, 2002 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 #9 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
            Ended12/31/06
            12/31/05
            12/31/04
            12/31/03
            12/31/02Interest
                Income
            $363
            $135
            $83
            $107
            $85Net
                Loss
            $3,300
            $1,157
            $1,226
            $1,338
            $1,630Net
                Loss Per Share
            $0.10
            $0.04
            $0.04
            $0.05
            $0.10Dividends
                Per Share
            $0
            $0
            $0
            $0
            $0Weighted
                Average Shares (000)
            33,459
            30,682
            28,876
            26,191
            16,212Working
                Capital
            $6,420
            $10,603
            $4,220
            $1,886
            $3,819Mineral
                Properties
            $53,262
            $24,395
            $20,999
            $16,635
            $9,018Long-Term
                Debt
            $0
            $0
            $0
            $0
            $828Shareholder’s
                Equity
            $59,279
            $35,385
            $25,703
            $19,154
            $12,052Total
                Assets
            $61,244
            $37,085
            $27,172
            $22,869
            $14,143US
                GAAP Net Loss
            $14,161
            $5,127
            $6,671
            $5,255
            $3,236US
                GAAP Loss Per Share
            $0.42
            $0.17
            $0.23
            $0.20
            $0.20US
                GAAP Weighted Average Shares (000)
            33,459
            30,682
            28,876
            26,191
            16,212US
                GAAP Equity
            $34,326
            $19,727
            $13,616
            $12,132
            $9,044US
                GAAP Total Assets
            $36,684
            $21,848
            $15,287
            $15,756
            $11,026US
                GAAP Mineral Properties
            $28,649
            $9,159
            $9,113
            $9,522
            $5,901





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 31 st ,
      the
      average rates for the period, and the range of high and low rates for the
      period. 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 12/31/06
            $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
            $1.29Year
                Ended 12/31/02
            $1.57
            $1.61
            $1.51
            $1.52Three
                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
            $1.21Three
                Months Ended 12/31/04
            $1.22
            $1.27
            $1.18
            $1.20Three
                Months Ended 9/30/04
            $1.31
            $1.33
            $1.26
            $1.31Three
                Months Ended 6/30/04
            $1.36
            $1.39
            $1.31
            $1.34Three
                Months Ended 3/31/04
            $1.32
            $1.34
            $1.27
            $1.31





**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
 Table
          of Contents




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
 Table
          of Contents




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 $1,529,948 in
      reclamation liabilities for its properties. $1,000,000 has been deposited for
      the benefit of the Province of British Columbia 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**


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, 2006,




16
 Table
          of Contents




the
      Company historical net loss totals $21,809,113. 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, 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 mineral. The Company’s common
      shares can be expected to be subject to volatility in both price
      and




17
 Table
          of Contents




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.





**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 upon a disposition of common shares, as ordinary income and
      to
      pay an interest charge




18
 Table
          of Contents




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




19
 Table
          of Contents




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.




**Item4. 
Information
      on the Company**




**DESCRIPTION
      OF BUSINESS**





**Introduction**





The
      Company’s executive office is located at:


172
      King
      Street East, 3 rd Floor,
      Toronto, Ontario M5A 1J3 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 on a sub-lease from
      the Academy of Canadian Cinema and Television. The lease covers the entire
      3 rd floor of
      a building located at 172 King Street East, Toronto, Ontario, Canada. The
      original sublease was effective January 21, 1999 and expired February 28, 2004.
      The sublease was renewed commencing March 1, 2004 and will expire on May 1,
      2007. The Company is in the process of committing to a new five-year lease
      at a
      new location at higher rents. The initial rent was for $4,265 per month, and
      is
      adjusted annually based upon a building cost operating adjustment. Current
      monthly rent is approximately $4,500.





The
      Company's fiscal year ends December 31 st .





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,
      2006, the end of the most recent fiscal year, there were 34,090,685 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. 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, 2006, the Company’s non-current assets were located as
      follows:





United
      States: $  
      8,184,853


Canada: $
      41,065,306


Mexico: $  
      5,138,693





**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.
      In March 2003, the Company completed the purchase of the Grassy Mountain project
      by paying Atlas US$600,000.In June 2000, the Company entered into a Letter
      of
      Intent with Placer Dome (CLA) Limited to acquire a 100% interest in the
      Kerr-Sulphurets project located in the Iskut-Stikine River region, approximately
      20 km southeast of the Eskay Creek Mine in British Columbia. The Company agreed
      to issue Placer 500,000 common shares, 500,000 common share purchase warrants
      exercisable at $2.00 per share for two years and grant a 1% NSR royalty for
      the
      property. In June 2001, Seabridge completed the acquisition of Placer Dome’s
      100% interest in the project. In September 2002, Seabridge optioned the property
      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. If after
      earning its 50% interest, Noranda elected not to proceed with a feasibility
      study, Seabridge had the option to acquire Noranda’s interest for $3 million.
      After having earned its 50% interest, Noranda had the right to delay its
      decision to proceed with a feasibility study for up to 3




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years
      by
      either spending $1.25 million per year on the property or making payments to
      Seabridge which would total $1.5 million over the 3-year period. During 2003
      and
      2004, Noranda conducted geophysics, surface mapping, surface sampling and target
      delineation at the project. Noranda completed a $1.3 million drill program
      on
      six new targets during the summer of 2005. In April 2006, the Company announced
      that it had reached agreement with Noranda whereby Seabridge would re-acquire
      Noranda’s option to earn a 65% interest at Kerr-Sulphurets for 200,000 common
      shares of Seabridge and up to 2.0 million conditional common share purchase
      warrants of Seabridge exercisable for five years at a strike price of C$13.50
      per share. One warrant would be issued for each new ounce of gold resources
      discovered at Kerr-Sulphurets, up to a maximum of two million. The transaction
      closed in August 2006 and all 2.0 million warrants became exercisable in
      February 2007, based upon the results of the 2006 exploration program. Noranda
      also has a limited right of first refusal should the Company desire to sell
      all
      or any portion of its interest at Kerr-Sulphurets.




In
      October 2000, the Company acquired a 100% leasehold interest in the Castle/Black
      Rock gold project in Esmeralda County, Nevada. The Company issued 5,000 common
      shares and paid US$7,500 in advance royalty payments and agreed to payments
      of
      up to $25,000 per year as well as granting a sliding 3-5% NSR on precious metals
      and a 3.5% NSR from all other metals produced to Platoro West Inc. in exchange
      for a 100% interest in the project.




In
      November 2000, the Company acquired a 100% leasehold interest in the Hog Ranch
      gold project in northern Nevada. The Company paid Platoro West Inc. US$75,000
      and issued 500,000 common shares to Platoro for a 100% interest in the project.
      The Company also granted Platoro a sliding 3-5% NSR on precious metals produced
      and a 3.5% NSR from all other metals produced. In August 2003, the Company
      granted Romarco Minerals an option to earn a 60% interest in the Hog Ranch
      gold
      project in Nevada. Romarco can earn a 60% interest by spending $2.5 million
      in
      exploration and project holding costs and issuing to the Company 1.5 million
      Romarco common shares, by December 31, 2007. In February 2005, Romarco
      terminated its interest in Hog Ranch and the property reverted to the
      Company.





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. Seabridge
      agreed to pay to Quartz Mountain Gold Corporation US$100,000 cash, 300,000
      shares, 200,000 warrants and a 1% NSR for Quartz Mountain’s 100% interest in the
      project. In addition, the Company agreed to pay a 0.5% NSR on the property
      as a
      finders fee. The acquisition was completed in January 2002. In October 2003,
      the
      Company granted Quincy Resources Inc. (now known as Quincy Energy 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%.





In
      December 2001, the Company entered into an agreement to acquire a 100% interest
      in the Red Mountain Gold Project and related assets located near Stewart,
      British Columbia. Seabridge agreed to issue to North American Metals Corporation
      800,000 common




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shares
      in
      exchange for a 100% interest in the project and the assumption by Seabridge
      of
      all liabilities, including reclamation and underlying lease obligations,
      associated with the project. The transaction was completed in April 2002. In
      2003, the Company commissioned SRK to undertake an engineering study on the
      Red
      Mountain project. The SRK study was completed in August 2003.





In
      May
      2002, the Company reached agreement to purchase a 100% interest in the
      Courageous Lake Project located in the Northwest Territories, Canada. Seabridge
      paid former owners Newmont Canada Limited and Total Resources (Canada)
      US$2,500,000 and granted 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, the
      Company made a US$1,500,000 payment to Newmont and Total which was triggered
      by
      the price of gold reaching US$360 per ounce. A final payment of US$1,500,000
      was
      due to Newmont and Total when the price of gold exceeds US$400 for 10
      consecutive days. This final payment was made in February 2004. 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. From 2003 through 2006, the Company completed significant
      exploration activities at the project including core drilling. In September
      2005, an independent engineering study was completed on the
      project.





In
      June
      2002, the Company and an independent third-party incorporated a Nevada company
      named Pacific Intermountain Gold Corporation (“PIGCO”) to acquire and explore
      early-stage exploration projects which have previously identified gold systems
      potentially capable of hosting large-scale gold deposits. In July 2004, the
      Company acquired a 100% interest in PIGCO by forgiving debt of approximately
      $65,000 and agreeing to pay 10% of any sale of PIGCO projects to third parties.
      The Company intends to explore some of the acquired properties itself and form
      joint ventures to explore the remainder.




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.




**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.**





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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.




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The
      individual mineral properties are described 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.





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**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.





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




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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 1936. 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




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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
      Issuer 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 program in 2005 and 2006
      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 targets which had not been assayed. The drill core, an estimated
      110,000 meters, was




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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 TJS Mining-Met Services Inc. (TJS), Roscoe Postle Associates Inc.
      (RPA) and EBA Engineering Consultants Limited (EBA) (TJS, RPA and EBA
      collectively, the “Project 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.





During
      2007, the Company plans to update the engineering study incorporating drill
      results from 2005 and 2006 and updating the capital and operating cost
      estimates.





The
      Company estimates its annual holding costs of the Courageous Lake Project to
      be
      $186,000 with $136,000 of these costs paid to the Department of Indian Affairs
      and Northern Development, Northwest Territories and the remaining $50,000 as
      an
      option payment on the Red 25 claim payable to Bathurst Inlet Developments (1984)
      Ltd.




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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 September
      2005 an engineering study was completed for the project which indicated that
      a
      0.83 gram per tonne cut-off grade was appropriate for the deposit. Using its
      own
      estimation parameters and a cut-off grade of 0.83 grams of gold per tonne,
      RMI
      calculated resources for the project as follows:





Courageous
      Lake Gold Resources at 0.83 grams per tonne cut-off:





Measured
            IndicatedTonnes
              (000’s)
            Grade
              (g/T)
            Ounces
              (000’s)
            Tonnes
              (000’s)
            Grade
              (g/T)
            Ounces
              (000’s)6,293
            2.92
            591
            53,020
            2.14
            3,648





**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.**





Courageous
      Lake Gold Inferred Resources at 0.83 grams per tonne cut-off





InferredTonnes
              (000’s)
            Grade
              (g/T)
            Ounces
              (000’s)93,720
            1.98
            5,966





**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,




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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.





**Grassy
      Mountain Project**





The
      Grassy Mountain Property covers approximately 6.7 square miles or 4,300 acres,
      and is located in eastern Oregon. Seabridge 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
      property consists of 320 unpatented lode claims of approximately 4,600 acres
      and
      lies approximately 22 miles southwest of Vale, Oregon and 70 miles west of
      Boise, Idaho. The property is accessed by traveling 4 miles west from Vale
      on US
      Highway 20, then south on the Twin Springs County Road for 23 miles, or by
      driving south from Nyssa, Oregon on US Highway 95 to Owyhee and then west to
      Rock Springs Canyon and by gravel road for 14 miles.





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**How
      Acquired**





In
      February 2000, Seabridge acquired an option to purchase 100% of the Grassy
      Mountain gold project located in eastern Oregon from Atlas Precious Metals
      Inc.
      The Company originally had until December 31, 2002 to acquire for
      US $1,700,000, a 100% interest in 214 mineral claims located in Malheur
      County, Oregon, USA. The purchase price was to be a combination of cash,
      Seabridge common shares and notes.





In
      December 2002, the Company and Atlas restructured the terms of the acquisition
      agreement due to Atlas’ preference for cash. In exchange for a US$300,000 option
      payment, Atlas granted Seabridge the right to acquire a 100% interest in the
      property for an additional US$600,000 cash payment on or before March 31, 2003.
      Seabridge also agreed to provide US$500,000 in financing for an Atlas subsidiary
      on or before March 31, 2003. Seabridge paid the US$300,000 option payment,
      as
      well as the US$600,000 cash payment and the US$500,000 in financing and now
      holds a 100% interest in the property as well as 1,000,000 common shares of
      the
      Atlas subsidiary.





The
      property lies on Bureau of Land Management (“BLM”) lands, and ownership includes
      four leasehold interests covering 76 unpatented lode and placer claims and
      an
      additional 138 unpatented lode claims. There is one Oregon State section within
      the property for which applications for State prospecting permits have been
      submitted. A sliding scale NSR royalty applies to the main Grassy Mountain
      deposit. The royalty rate is a 4% NSR for gold prices up to US$500 per ounce,
      to
      a maximum of 7% for gold prices above US$800 per ounce.





**Regional
      and Property Geology**





The
      property is situated in the Oregon Plateau portion of the northern Great Basin
      and is characterized by abundant Cenozoic volcanism. The flat-lying to gently
      dipping volcanics and volcanic sediments were deposited over wide areas during
      this time of crustal extension. The rocks exposed at Grassy Mountain are part
      of
      the late to middle-Miocene Grassy Mountain Formation; Mineralization is
      associated with a low-grade gold-silver bearing siliceous hot springs system
      with enrichment along multi-stage quartz-adularia veins and favorable
      lithologies. The mineralized rock is highly silicified and locally brecciated
      in
      the vicinity of the feeder structures. As silicification decreases so does
      grade. The finer grained siltstones contain the bulk of the lower grade
      material. The higher grades are found in the coarser arkosic
      sandstones.





**Previous
      Exploration History**




Atlas
      acquired the property in 1986 from two prospectors after recognizing its
      potential to host hot springs type gold mineralization. There were no
      significant mining or major mineral occurrences known in the area prior to
      the
      discovery of the Grassy Mountain Deposit.




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Detailed
      mapping and sampling were completed and Atlas drilled six holes on two target
      areas. A follow up drill program consisting of five holes was completed in
      the
      spring of 1988. Hole 26-9 is considered the discovery hole with 145 feet of
      mineralization averaging 0.075 opt Au. The claim block was expanded at this
      time
      and exploration work continued through 1991. Atlas completed 388 drill holes
      for
      a total of approximately 221,500 feet on the property.




In
      1990,
      Atlas commissioned Kilborn Engineering (“Kilborn”) to complete a feasibility
      study on Grassy Mountain. Based on the positive Kilborn study, Atlas sold the
      property to Newmont Exploration Ltd. in September 1992 for US$30 million plus
      a
      5% net smelter royalty interest. Newmont continued the property evaluation
      through August 1994, completing an additional 13 core and reverse circulation
      holes while concentrating on the higher-grade ore zones. At the conclusion
      of
      its exploration programs, Newmont determined the property did not currently
      meet
      its project criteria and returned the project to Atlas in September
      1996.




In
      January 1998, Atlas executed an agreement with Tombstone Exploration Company
      Ltd. and associated sister company Orinoco Gold Inc. ("Tombstone"), whereby
      Tombstone was granted the option to purchase 100% of the property. Exploration
      work during Tombstone's initial program at Grassy Mountain included 8,500 of
      reverse circulation and core drilling in 10 drill holes. Prior to the drill
      program and execution of the definitive option agreement, Tombstone completed
      an
      extensive review of previous work at the property and commissioned an economic
      study of alternative development scenarios by Pincock, Allen and Holt (“PAH”). A
      second phase drill program was proposed by Tombstone to assess the highly
      prospective structural trends identified by geophysics, and to upgrade previous
      mineralization models. Due to a downturn in the resource market and its
      resulting inability to raise venture capital during 1998 forced Tombstone to
      return Grassy Mountain to Atlas in May 1998.




**Environmental/Regulatory
      Information**





The
      Bureau of Land Management (BLM), through its Vale District office, is the lead
      agency responsible for the Grassy Mountain area. In 2000, Seabridge retained
      Gochnour & Associates of Parker, Colorado (“Gochnour”) to undertake an
      environmental review and regulatory permitting due diligence on Grassy Mountain.
      The report of Gochnour, prepared by Lee “Pat” Gochnour, is entitled “Grassy
      Mountain Project Permitting/Environmental Report” (the “P/E Report”) and dated
      June 27, 2000. The Gochnour study examined three potential scenarios: (1)
      open-pit mining with a combination of heap-leach and milling processing; (2)
      underground mining with on-site milling; and (3) underground mining with
      off-site milling. Gochnour concluded that each of the development scenarios
      is
      permittable under current federal and state law. To complete the permitting
      process, Gochnour estimates that the open-pit scenario would take 3-5 years
      to
      permit once a Plan of Operations (“POO”) had been submitted. Gochnour estimated
      the permitting time frame for the underground scenarios at 2-3 years after
      the
      POO was submitted. Gochnour also reviewed the extensive database of all previous
      environmental and baseline work and estimated the cost and time
      frame




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associated
      with bringing the work up to date. In aggregate, Gochnour estimated a minimum
      of
      one year to bring the base-line work up to date at a cost of approximately
      US$500,000. Gochnour recommended that this work be performed concurrently with
      the preparation of a final feasibility study.





**Current
      and Planned Work**





During
      2007, the Company plans to conduct a program to re-examine the economic
      potential for both the open pit and underground development scenarios at Grassy
      Mountain and choose the appropriate path for future work.





Holding
      costs of the property are currently approximately US$98,000 annually broken
      down
      as follows:





a)
            US$20,000
                paid to the United States Bureau of Land Management and Malheur County,
                Oregon;


b)
            US$35,000
                paid to Sherry & Yates, a Montana Corporation, as an annual advance
                royalty, escalating by US$5,000 per year to a maximum of US$60,000;


c)
            US$33,000
                paid to the Bishop family of Vale,
                Oregon;


d)
            Approximately
                US$10,000 in storage and warehouse
                fees.





**Kerr-Sulphurets
      Project**





The
      Kerr-Sulphurets 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
      Kerr-Sulphurets 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.





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**How
      Acquired**





Seabridge
      entered into a Letter of Intent with Placer Dome in June 2000 to acquire a
      100%
      interest in Kerr-Sulphurets. 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.





The
      Kerr-Sulphurets 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 $86,000.





**Property
      Description**





The
      Kerr
      Property consists of 18 mineral claims (190 units) and 10 placer claims along
      Sulphurets Creek. Annual assessment requirements or cash-in-lieu payments for
      the 190 Kerr units is approximately $40,000. The associated placer claims
      require annual rental payments totaling C$6,000.





The
      Sulphurets property consists of 40 mineral claims totaling 158 units. Annual
      assessment requirements for the 158 Sulphurets units are approximately $33,000.
      Three of the claims are subject to a contractual royalty obligation in
      accordance with terms in the underlying Dawson Agreement. The three claims
      were
      purchased from Mrs. Dawson in 1990, for a sum of US$25,000, subject to a net
      smelter return royalty of 2% of one-half of net smelter returns (effectively
      1%
      NSR) on ore production. The Dawson Royalty is capped at US$650,000 less the
      property purchase amount. Advance annual royalties of US$5,000 per year
      commenced on December 15, 1991, and may be bought out for US$450,000.





There
      is
      a further underlying agreement between Placer Dome Inc. and Newhawk Gold Mines
      Ltd. dated February 4, 1992, whereby the advance annual royalties payable to
      Dawson are being paid two-thirds by Placer Dome and one third by Newhawk. This
      split is based on the fact that two of three claims, namely the XRAY 2 and
      6,
      are now part of Placer Dome’s Sulphurets Property and the XRAY 8 is on Newhawk’s
      property.





**Regional
      and Property Geology**





The
      Kerr-Sulphurets 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




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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
      deposit 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 deposit 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.




*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 deposit 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




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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 with 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 deposit 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 deposit. Placer further completed a major diamond drill
      program on the Sulphurets Gold Zones and adjoining Kerr deposit during the
      summer of 1992, with the total exploration expenditures incurred by Placer
      on
      the Kerr-Sulphurets property through to year-end 1992 was C$6.6 million.





**Environmental/Regulatory
      Information**





The
      Kerr-Sulphurets 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 Kerr-Sulphurets 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 Kerr-Sulphurets 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 Kerr-Sulphurets Property, could impact the approval process
      of potential development plans and valley access to the project.





Reclamation
      and decommissioning activities associated with previous exploration activities
      have been initiated and almost completed on the Kerr-Sulphurets Property. The
      main activities include response to periodic inspections by the British Columbia
      Ministry of Energy and Mines. 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. The British
      Columbia Ministry of Energy and Mines estimates  $225,000
      of additional reclamation work may be required and the Company has deposited
      this amount  under
      a
      safekeeping agreement with the Ministry for these obligations.





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**Current
      and Planned Work**


In
      September 2002, Seabridge optioned the property 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. If after earning its 50% interest, Noranda
      elected not to proceed with a feasibility study, Seabridge has the option to
      acquire Noranda’s interest for $3 million. After having earned its 50% interest,
      Noranda had the right to delay its decision to proceed with a feasibility study
      for up to 3 years by either spending $1.25 million per year on the property
      or
      making payments to Seabridge which would total $1.5 million over the 3-year
      period.





During
      2003 and 2004, Noranda conducted field programs at Kerr-Sulphurets designed
      to
      explore outside the known deposits in order to expand the known resources.
      The
      programs consisted of mapping, rock and soil sampling, and IP surveys. The
      size
      of mineralized zones at Iron Cap, Mitchell and Main Copper were expanded into
      areas of recent glacier retreat which were not accessible by Placer Dome.





During
      2005, Noranda completed a summer drill program consisting of 16 widely-spaced
      core drill holes totaling 4,092 meters designed to test six targets situated
      outside the resources previously defined for the Kerr and Sulphurets deposits.
      Gold-copper mineralization was encountered at all six targets, with the Iron
      Cap
      and West Mitchell zones yielding the most encouraging results.





In
      April
      2006, the Company announced that it had reached agreement with Noranda whereby
      Seabridge would re-acquire Noranda’s option to earn a 65% interest at
      Kerr-Sculptures for 200,000 common shares of Seabridge and up to 2.0 million
      conditional common share purchase warrants of Seabridge exercisable for five
      years at a strike price of C$13.50 per share. One warrant would be issued for
      each new ounce of gold resources discovered at Kerr-Sulphurets, up to a maximum
      of two million. The transaction closed in August 2006 and all 2.0 million
      warrants became exercisable in February 2007.





In
      2006,
      Seabridge completed a 9,100 meter core drill program at Kerr-Sulphurets designed
      to expand the project’s known gold resource by testing for the strike and depth
      extensions of the Sulphurets deposit and by systematically drilling the
      promising new Mitchell gold zone identified in previous work.





**Noche
      Buena Project**





The
      Noche
      Buena project consists of two separate mining concessions comprising
      approximately 1,000 hectares which expire in 2052. Seabridge 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
      project is located in the state of Sonora, Mexico at 31° 01’ 51” north latitude,
      112°




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38’
49”
      west longitude approximately 270 kilometers northwest of the state capital,
      Hermosillo. Tucson, Arizona (USA) is located about 200 kilometers to the
      northeast. The following is a general location map.










The
      property is accessed via Mexico Highway 2, which is a two-lane blacktop road
      that connects Caborca and Sonoyta, Mexico along the US border. A 27 kilometer
      dirt road departing westerly from Highway 2 at Kilometer 156 provides access
      to
      the property. A secondary access route is available via an unimproved dirt
      road
      that originates at El Diamante south of the project. This route ties into the
      main access route about 2 kilometers east of the project site.





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**How
      Acquired**





Seabridge
      purchased the concessions from Minera Hecla S.A. de C.V. for US$4.35 million
      in
      cash.





**Regional
      and Property Geology**





The
      deposit is localized along a significant northwest trending right lateral fault
      zone, which is believed to be the same structural zone that hosts the nearby
      La
      Herradura deposit. The Noche Buena deposit is contained in a block of relatively
      uniform, thoroughly oxidized rhyolitic crystal tuff. Mineralization is
      controlled by a number of shallow dipping zones of strong fracturing, sheeted
      quartz veining, and sericite alteration. These zones are often cut by a series
      of steeply dipping higher grade quartz veins. Gold generally occurs as supergene
      recystallized particles on fracture surfaces and on the margins of oxidized
      pyrite grains.





**Previous
      Exploration History**





Gold
      occurrence at the project for many decades before USMX acquired the prospect
      in
      1991. USMX performed basic geologic mapping, limited geochemical sampling and
      drilled 51 reverse circulation holes totaling about 4,800 meters.





Kennecott
      optioned the property from USMX in 1995 and commenced to perform various
      exploration activities including air and ground based magnetic and radiometric
      studies, geologic mapping, surface geochemistry, and drilling 44 reverse
      circulation holes totaling about 5,500 meters. All of Kennecott’s drilling was
      conducted outside of the area that was previously defined by USMX. Reportedly
      they were looking for a much larger deposit and terminated their option in
      1996.





Minera
      Hecla (a wholly owned Mexican subsidiary of Hecla Mining Company) acquired
      the
      property in late 1997 from the receivership of the USMX organization. In 1998
      and 1999 Minera Hecla drilled 102 core holes and 319 reverse circulation holes
      totaling about 12,500 meters and 34,500 meters, respectively. From 2000 through
      2003, Minera Hecla did not conduct any significant work on the project due
      to
      low gold prices. In 2004, Minera Hecla drilled an additional 86 core holes
      totaling about 9,200 meters and took a 400 tonne bulk sample from a
      25-meter-deep exploration shaft for metallurgical testwork which was completed
      by Kappes, Cassidy Associates (KCA) from Reno, Nevada.





**Current
      and Planned Work**





During
      2007, Seabridge plans to conduct additional drilling at Noche
      Buena.





Holding
      costs of the property are currently approximately US$100,000
      annually.





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**Red
      Mountain Project**





The
      Red
      Mountain Project is a 20,175 hectares gold project located in northern British
      Columbia, Canada. Seabridge currently has a 100% interest in the project,
      subject to net smelter royalty obligations ranging from 2 to 6.5% on various
      segments 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
      Red
      Mountain project is situated in northwestern British Columbia near the town
      of
      Stewart, 880 km northwest of Vancouver and 180 km north of Prince Rupert. The
      property lies in the Skeena Mining Division, approximately 18 km east-northeast
      of the town of Stewart, at 55 ° 57’N
      latitude and 129 ° 42’
W
      longitude, between the Cambria Ice Field and the Bromley Glacier at elevations
      ranging between 1,500 and 2000 meters.





Access
      to
      the property is currently by helicopter from Stewart with a flight time of
      10
      to15 minutes. Road access along the Bitter Creek valley from Highway 37A was
      partially completed for 13 km by Lac Minerals in 1994 to the Hartley Gulch-Otter
      Creek area. Currently this road is passable for only a few kilometers from
      the
      highway. The remainder is not passable, as sections have been subjected to
      washout or landslide activity.





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**How
      Acquired**





Effective
      December 31, 2001, the Company agreed to acquire a 100% interest in the Red
      Mountain project from North American Metals Corp. (“NAMC”), a subsidiary of
      Wheaton River Minerals Ltd. (“WRM”). Closing of the acquisition was completed in
      April 2002. At closing, the Company issued NAMC 800,000 common shares of the
      Company in exchange for a 100% interest in the Red Mountain project which
      includes 106 mineral claims comprising 19,030 hectares; all project data
      including an extensive, high-quality data base and drill core repository; an
      office/warehouse building in Stewart; a large complement of mining equipment
      at
      the Red Mountain site which has been independently valued at approximately
      $0.5
      million; mineral exploration permit MX-1-422 and a related $1.5 million cash
      reclamation deposit lodged with the B.C. Mines Ministry. In January 2002, WRM
      filed a revised reclamation plan with the B.C. Mines Ministry which has reduced
      the $1.5 million cash reclamation deposit to $1.0 million. Of the $500,000
      that
      was released by the Ministry, $350,000 was retained by Seabridge and $150,000
      was paid to WRM. During 2003 Seabridge purchased additional claims at Red
      Mountain totaling 1,145 hectares.





At
      closing Seabridge also assumed obligations of various underlying property
      agreements which include net smelter royalty obligations ranging from 2 to
      6.5%,
      as well as an annual minimum royalty payment of $50,000 on the Wotan Resources
      Corp. (“Wotan”) claim group. Production from the Wotan claims, which contain the
      Red Mountain gold deposit, is subject to two separate royalties aggregating
      3.5%
      of net smelter returns (“NSR”), comprising a 1.0% NSR payable to Barrick and a
      2.5% NSR payable to Wotan.





The
      Company also paid a finder’s fee of 40,000 common shares of Seabridge in regards
      to the acquisition of the property.





**Regional
      and Property Geology**





Red
      Mountain is located near the western margin of the Stikine terrain in the
      Intermontane Belt. Structurally, Red Mountain lies along the western edge of
      a
      complex, northwest-southeast trending, doubly-plunging structural culmination,
      which was formed during the Cretaceous. Structural deformation at the property
      scale is consistent with the observations at the regional and tectonic
      scales.





**Previous
      Exploration History**





Prospecting
      and small-scale mining took place near Red Mountain, in the Bitter Creek Valley,
      as early as 1900 and persisted intermittently through the first half of the
      20 th century.
      At that time much of Red Mountain was covered with snow or glacial ice. Since
      that time the glaciers have retreated significantly, exposing large portions
      of
      the summit and surrounding bedrock.





Porphyry
      molybdenum and copper occurrences in the immediate Red Mountain area were
      explored in the 1960s and 1970s. In 1965, molybdenum and native gold
      occurrences




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were
      discovered at McAdam Point, on the south side of Red Mountain. Additional small
      molybdenum showings were subsequently located and explored in the central cirque
      of Red Mountain. Gold exploration at Red Mountain then ceased as it was
      generally regarded as a setting favorable for porphyry style molybdenum
      mineralization.





Evaluation
      of the Red Mountain area for gold potential recommenced in 1987. The Wotan
      claims were staked in 1988 by local prospectors and optioned to Bond Gold in
      1989. In that year, gold mineralization that was the surface expression of
      the
      Marc zone was discovered and a drill program was initiated. From 1989 to 1991
      Bond carried out exploration programs including 17,638 meters of diamond
      drilling, surface mapping and sampling and airborne EM and magnetic surveys.
      Lac
      Minerals acquired Bond in early 1991. Surface drilling on the Marc, AV, JW,
      AV
      Tails and 141 zones continued in 1991, 1992, 1993 and 1994, totaling 48,000
      meters. Underground exploration of the Marc zone, including a total of 38,600
      meters of diamond drilling, was conducted in 1993 and 1994 via the use of a
      1,000-metre production-sized decline.





In
      September 1994, Barrick acquired Lac and the Red Mountain project assets were
      transferred to Barrick. Barrick sold the project to Royal Oak in August 1995.
      Royal Oak extended the underground workings, undertook a drill program seeking
      extensions to the known deposits, and worked on plans for the possible
      development of the project. In 1996, lacking funds for exploration, Royal Oak
      virtually ceased all activity at Red Mountain. By early 1999 Royal Oak was
      in
      serious financial difficulty and an Interim Receiver was appointed to dispose
      of
      Royal Oak’s assets, including Red Mountain.





NAMC’s
      purchase of the Red Mountain project was completed on February 10, 2000. During
      2000, NAMC completed a comprehensive review of the Red Mountain geological
      and
      environmental data. NAMC also carried out geological work including the
      re-logging of a substantial quantity of drill core in order to produce an
      improved resource estimation model. An access road route was designed from
      the
      end of the existing road to the site. During 2001 new management at WRM elected
      to dispose of certain assets, including Red Mountain. Effective December 31,
      2001, Seabridge agreed to acquire the Red Mountain project.





In
      total,
      466 surface and underground diamond drill holes totaling 134,807.24 meters
      have
      tested a variety of targets on the Red Mountain property. Four hundred and
      six
      holes, totaling 105,129.20 meters, were drilled by Bond and Lac between 1989
      and
      1994. The remaining 60 holes, totaling 29,678.04 meters, were drilled by Royal
      Oak in 1996. No drilling was conducted by NAMC. The majority of drilling has
      tested the Marc, AV, JW and AV-JW Tails mineralized zones. A total of 368 drill
      holes from the Bond and Lac programs, including 207 surface drill holes and
      161
      underground drill holes, have tested this area. In addition, 2,000 meters of
      underground workings have been excavated, including a 1,000-meter
      production-sized decline.





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**Mineral
      Resources**





Red
      Mountain is a structurally-controlled gold deposit. In May 2001, WRM completed
      a
      comprehensive review and validation of the project’s geological and
      environmental data. This review included re-logging all drill core and the
      construction of a new kriged resource block model. Prior to the closing of
      the
      acquisition of the property, Seabridge commissioned D.L. Craig, Professional
      Geologist, to perform an independent technical review of the new resource model.





The
      new
      mineral resource estimate for Red Mountain incorporates data from 206 drill
      holes that were relogged in 2000 by NAMC. Gemcom software was used to create
      geological and mineralization outlines in plan and section for a 3D block model.
      Gold and silver grades were interpolated using ordinary kriging with anisotropic
      search ellipses designed to fit the geology.





**Cautionary
      Note to U.S. Investors concerning estimates of Measured and Indicated
      Resources**


This
      section uses the terms “measured” and “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.**





In
      January 2003, the Company engaged SRK Consulting to complete an engineering
      study of the Red Mountain project. In their study, which was completed in August
      2003, SRK determined that a 6.0 gram per tonne cut-off grade was appropriate
      for
      determining gold resources which may be available for economic
      extraction.





Red
      Mountain Measured and Indicated Resources at 6.0-gram-per-tonne
      cutoff:





Measured
            
            IndicatedTonnes
              (000s)
            Grade
              (g/t)
            
            Tonnes
              (000s)
            Grade
              (g/t)866
            9.39
            
            193
            8.43




**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




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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.**





Red
      Mountain Inferred Resource at 6.0 gram-per-tonne cutoff:





InferredTonnes
              (000s)
            Grade
              (g/t)158
            8.62





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 resource are economic and can be profitably mined.





**Environmental/Regulatory
      Information**





The
      Red
      Mountain project is covered by the British Columbia Ministry of Energy and
      Mines, Mineral Exploration Permit MX-1-422. This permit was first issued on
      June
      24, 1993 and was most recently transferred to the Company in April
      2002.





Exploration
      work to date includes surface geological examinations, surface diamond drilling,
      and creation of underground workings. Underground workings totaled 1000 meters
      of declines and 1000 meters of crosscuts and drifts. There are 90,000 tonnes
      of
      waste from exploration work stored in two locations on surface. Of this
      material, 5,000 tonnes is situated adjacent to the portal and 85,000 tonnes
      is
      stored 250 meters south of the portal. The underground workings remain intact
      to
      the water level at the first main crosscut and the portal is sealed with a
      wooden door to prevent access. The piles were started in 1993 and the last
      waste
      rock was added in the summer of 1996. There is a small fleet of mobile equipment
      at the site, mostly parked on top of the waste dump. There are also several
      sea
      containers near the portal, a wooden exploration camp in the bowl below the
      portal and a steel Quonset hut hanger near the camp. The equipment on site
      is
      considered adequate to carry out the proposed reclamation plan.





A
      reclamation plan was filed in June 1996 by Royal Oak Mines along with $1.5
      million in cash reclamation security held by the Province of BC under a safe
      keeping agreement. Based on subsequent monitoring and site work performed by
      NAMC, with technical assistance provided by SRK Consulting of Vancouver B.C.,
      in
      January 2002, NAMC submitted a revised reclamation plan to the B.C. Ministry
      of
      Energy and Mines. The major difference between the original Royal Oak plan
      and
      the revised NAMC plan is the proposed treatment of the 90,000 tonnes of waste
      material. The revised plan, endorsed by SRK, involves in-place recountouring
      of
      the waste material rather than placing the




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material
      underground. In April 2002, the B.C. Ministry of Energy and Mines reduced the
      cash reclamation bond to $1.0 million.





**Current
      and Planned Work**





In
      August
      2003, SRK Consulting completed an engineering study of the Red Mountain project.
      SRK reviewed previous reviewed previous work performed on the project and
      evaluated the development alternatives relating to various aspects of the
      project. In their study, SRK determined that the best development alternatives
      for Red Mountain are:





·
            Road
                access to the site. A road was designed by NAMC in 2001 to access
                the
                project site.


·
            A
                seasonal operation from May to October was selected in favor of year-round
                operations on the basis of safety and
                reliability.


·
            An
                on-site mill using a grinding and cyanidation leaching (CIP) circuit
                was
                selected. The alternative of using flotation to produce a sulphide
                concentrate for offshore marketing was discarded on the basis of
                poor
                economics caused by lower overall gold recovery and smelting
                costs.


·
            A
                conventional type of mill was selected instead of a portable type
                due to
                the tonnage required (1000tpd) and the very fine grind
                needed.


·
            The
                full use of backfill was selected to optimize the mining recovery
                of the
                resources. Minimizing backfill was considered to reduce costs, but
                the
                possible savings are not enough to justify the lower mining recovery
                that
                results.





SRK
      identified that the main risks associated with the project are related
      to:


·
            The
                construction and operation of the mine access road, which must traverse
                rugged mountainous terrain.


·
            A
                lack of continuity in the workforce due to the seasonal
                operation.


·
            Project
                economics requiring a higher gold price than currently exists.


·
            The
                tailings facility, which must retain a water cover on the tailings
                in
                perpetuity.





SRK
      recommends that the following follow up work could prove beneficial to the
      project:


·
            Exploration
                to increase the potentially economic
                mineralization.


·
            A
                revised design for the cirque tailings facility to reduce its capital
                cost
                and its long-term costs after
                closure.





None
      of
      the resource at Red Mountain 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 resource are economic and can be profitably mined.





The
      Company estimates annual holding costs of the property to currently be
      approximately $215,000 broken down as follows:





a)
            $130,000
                to the British Columbia Ministry of Energy and
                Mines




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b)
            $50,000
                to Wotan Resources Corporation as an annual advance
                royalty


c)
            Approximately
                $15,000 in property taxes, utilities and rentals on warehouse space
                paid
                to the District of Stewart, British
                Columbia


d)
            Approximately
                $20,000 for ongoing environmental monitoring at the project
                site.





**Quartz
      Mountain Project**





The
      Quartz Mountain Project is a 542 hectare (1,340 acres) gold project located
      in
      southern Oregon. Seabridge currently has a 100% interest in the project, subject
      to NSR’s totaling 1.5%, and an option agreement with Quincy Energy Corp.
      (formerly Quincy Resources Inc.), who can earn an initial 50% interest in the
      property by expending $1,500,000 on exploration by October 15, 2008 and issuing
      250,000 common shares of Quincy to Seabridge. The agreement with Quincy excludes
      the mineral resource already outlined on the property as discussed below. **The
      Property is without known mineral reserves and is at the exploration stage;
      the
      Company’s current efforts are exploratory in nature.**





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**Location
      and Access**




The
      Quartz Mountain property is located in the Fremont National Forest, Bly Ranger
      District, of South-central Oregon about 30 miles west-northwest of the town
      of
      Lakeview along Oregon State Highway 140. Two claim groups make up the property
      holdings and consist of 67 mining claims that total 542 ha (1,340 acres).




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Access
      to
      the property from Oregon State Highway 140 is via several paved and gravel
      covered forest access roads. These forest service access roads are used on
      a
      seasonal basis by local logging companies that operate in the area. Connected
      to
      the network of forest service roads are a variety of trails that were
      constructed to facilitate logging and previous mineral exploration. Access
      to
      the resource areas can be gained on existing secondary trails or by
      rehabilitating old trails.





**How
      Acquired**





In
      December 2001, the Company entered into an Asset Purchase and Sale and Royalty
      Agreement with Quartz Mountain Gold Corp. whereby Seabridge agreed to acquire
      100% of the Quartz Mountain Gold Project in consideration of the following
      payments to Quartz Mountain Gold Corp. US$100,000 in cash; 300,000 common shares
      of Seabridge; 200,000 common share purchase warrants, exercisable for two years
      at a price of $0.90 per share (exercised in 2003); and a 1% NSR in the project.
      Closing of the acquisition was completed in January 2002. Additionally, a 0.50%
      NSR will be payable to an unrelated third-party as a finder’s fee.





On
      October 15, 2003, the Company signed an option agreement with Quincy Resources
      (now known as Quincy Energy Corp.) where Quincy can earn an initial 50% interest
      in the project (not including the “Excluded Ounces” as defined below”) by
      spending $1,500,000 on exploration at the project on or before October 15,
      2008
      under the following schedule.


Date
            Required
                Expenditure AmountBy
                October 15, 2004
            $100,000
              (completed)By
                October 15, 2005
            $250,000
              (completed)By
                October 15, 2006
            $500,000
              (completed)By
                October 15, 2008
            $1,500,000





Quincy
      must also issue 250,000 of its common shares to Seabridge under the following
      schedule:





Date
            Required
                Share IssuanceUpon
                Execution of the Agreement
            50,000
                shares (issued)Within
                30 days satisfying the expenditure
              obligations
                above
            200,000
                shares





Once
      the
      expenditure amounts and the share issuances have been satisfied, Quincy will
      be
      deemed to have earned a 50% interest in the property and will form a
      Joint-Venture with Seabridge. Quincy can earn an additional 12.5% interest
      (for
      62.5% total) in the project by funding 100% of a feasibility study on the
      project within 3 years and issuing




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an
      additional 250,000 common shares to Seabridge upon completion of the study.
      If
      Quincy decides against preparing a feasibility study, or fails to deliver a
      study within 3 years, Seabridge has a one-time option to purchase Quincy’s
      interest in the project for US$750,000. Quincy will be responsible for all
      land
      holding fees and costs associated with the property as long as the option
      remains in effect.





The
      option agreement with Quincy excludes the potential mineral resource already
      outlined on the property under a Winters, Dorsey & Company LLC study. That
      area of the property, known as the “Excluded Ounces”, remains 100% held by
      Seabridge, subject to the NSR. If Quincy delivers to Seabridge a Feasibility
      Study that incorporates within the mine plan the Excluded Ounces, those ounces
      shall be transferred to the Joint Venture at a price to be paid by Quincy to
      Seabridge equal to Quincy’s working interest times the estimated gross operating
      margin of those ounces, less a 25% discount. Payment for the Excluded Ounces
      will be due on a quarterly basis as they are produced.





Under
      the
      option agreement, the companies also agreed that should either party acquire
      and/or stake claims, exploration permits, mining leases or any other form of
      mineral right or interest within an area of interest within 2 miles of the
      outer
      boundaries of the property, that additional property will automatically become
      part of the property subject to the agreement.





**Regional
      and Property Geology**





The
      Quartz Mountain gold and mercury district is located in a Mid-Tertiary volcanic
      highland within the northern transitional zone of the Great Basin. One of the
      primary structural features of the district is a wide (3 miles) northwest
      trending structural zone that interrupts the thick sequence of basalt flows.
      Hydrothermal alteration in the district is characterized by acid leaching of
      the
      host rocks and subsequent precipitation of quartz in the gold zones. Ryholitic
      domes make up the central feature of the volcanic stratigraphy of the area
      and
      are characterized by glassy tops.





The
      Quartz Mountain project is a volcanic-hosted, hot-spring gold deposit.
      Disseminated, micron-size, native gold mineralization at Quartz Mountain
      accompanies pervasive silica flooding and quartz veining. Mineralized zones
      measure up to 300 feet in thickness and 3000 feet in diameter on Crone Hill
      and
      up to 100 feet in thickness and 1000 feet in diameter on Quartz Butte. There
      are
      two distinct areas of gold mineralization present at Quartz Mountain, Crone
      Hill
      and Quartz Butte.





**Previous
      Exploration**





Quartz
      Mountain was believed to have been initially prospected for gold by migrant
      Chinese in the 1890s. Rare prospect pits that contain ponderosa pine trees
      over
      four feet in diameter are indirect evidence of this initial early stage of
      exploration activity.





The
      earliest recorded work was performed by the Sun Oil Company, between 1936 and
      1940. Sun Oil was prospecting for mercury with shallow pits and trenches. In
      1949, small




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amounts
      of gold were reportedly recovered from two shafts on Crone Hill and Quartz
      Butte. The shafts were sunk by employees of the Ewauna Camp Lumber Company
      and
      have since caved in. The property saw renewed interest in the late 1950’s due to
      a nation-wide mercury "boom". Local prospectors staked dozens of claims in
      what
      became the 60-square mile Quartz Mountain mercury district. Most of the cinnabar
      claims were allowed to become delinquent during the 1960s in a general collapse
      of the mercury mining industry.





In
      1980,
      the claims were staked by a prospector and acquired by Exploration Ventures
      Company (“EXVENCO”) of Spokane, Washington in 1982. The Anaconda Company entered
      a joint venture partnership with EXVENCO in December 1982, and subsequently
      enlarged the claim block to include the entire Quartz Mountain district.
      Anaconda was the operating partner and initiated the first systematic
      exploration program for gold in the district. In the spring of 1985, Anaconda
      was disbanded by its parent company, Atlantic Richfield Corporation, and Quartz
      Mountain, along with all of their other mineral properties, was placed up for
      sale.





Wavecrest
      Resources Ltd secured Anaconda's interest in the property through a purchase
      agreement in the autumn of 1985. Wavecrest quickly consolidated their holdings
      on the entire claim block by purchasing EXVENCO's interest. The remaining small,
      inlaying claim blocks dating from the late 1950’s were systematically acquired
      and for the first time in its history, the Quartz Mountain district was
      consolidated under a single owner in June of 1986. Wavecrest Resources Ltd.
      and
      Galactic Resources Ltd. created Quartz Mountain Gold Corporation in June of
      1987
      to jointly advance the project. In 1987, 460 drill holes were completed on
      Crone
      Hill, Quartz Butte and Angel’s Camp totaling 52,284 meters (171,537 feet) of
      drilling. In 1988, 100 drill holes (including 47 large diameter metallurgical
      drill core holes) were completed on Crone Hill, Quartz Butte, Angel East and
      Drews Dome for a total of 10,600 meters (34,778 feet). The Crone Hill and Quartz
      Butte deposits were drilled off on at least 30.5 meters (100-foot) centers
      during these programs. Between mid-September and late November 1988, 19 deep
      drill holes totaling 4,473 meters (14,675 feet) were completed on Quartz Butte
      to explore for high-grade feeder veins within the throat of the Quartz Butte
      dome. A total of 34 deep drill holes now define this feeder zone
      system.





In
      July
      1989, Pegasus Gold became operator of the Quartz Mountain Gold Project. In
      December 1994, Pegasus terminated the joint venture agreement with Quartz
      Mountain. Some of the key terms of this termination agreement required Pegasus
      to return its interest in the property, forgive outstanding loans to Quartz
      Mountain and performed all required reclamation work. Pegasus completed these
      obligations and Quartz Mountain Gold assumed undivided ownership of the property
      without debt or reclamation obligations. In August 1995, Quartz Mountain Gold
      Corporation concluded a letter agreement with Newmont Exploration Ltd. on the
      Quartz Mountain property. This agreement allowed Newmont to earn an 80%
      operating interest in the property for certain cash payments and work
      commitments. Newmont drilled 10 holes on the project, which were focused on
      expanding the near-surface, low-grade gold resources that had been previously
      identified. The project did not satisfy Newmont’s investment criteria and
      was




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returned
      to Quartz Mountain Gold in 1996. Since 1996, little exploration work has been
      performed on the project.





**Environmental/Regulatory
      Information**





The
      United States Forest Service (USFS) would be the lead regulatory agency on
      the
      federal level that is responsible for review and approval of mining activities
      at Quartz Mountain. The Quartz Mountain Project is characterized as an
      exploration stage project
      that has undergone considerable exploration and a Feasibility Study level
      evaluation of an open pit(s) mine with heap leach processing in the mid-to-late
      1980's. Environmental baselines and monitoring at Quartz Mountain were initiated
      by previous owners in the late 1980's. These activities were directed by SRK
      Consulting’s Reno Office. These reports are valuable in assessing impacts and
      making recommendations for future work. The reports also provide valuable
      information that may be used by Seabridge in limiting liability as well as
      supporting future efforts should Seabridge decide to proceed with preparation
      of
      a particular plan at the Quartz Mountain Project.





To
      further study the permitting issues at Quartz Mountain, Seabridge retained
      Gochnour & Associates of Parker, Colorado (“Gochnour”) to undertake an
      environmental review and regulatory permitting due diligence on Quartz Mountain.
      The report of Gochnour is entitled “Quartz Mountain Project;
      Permitting/Environmental Report” (the “QMP P/E Report”) and dated November 28,
      2001.





The
      Gochnour study examined various potential development scenarios including an
      open pit and/or underground mining operations. Processing Alternatives include
      on-site milling and/or heap leach technology utilizing cyanide, and off-site
      processing (toll milling). Waste disposal alternatives include overburden
      stockpiles adjacent to the orebody (under an open pit scenario). With an
      underground or combination open-pit/underground mining scenario, waste could
      be
      used as backfill and/or stockpiled on the surface, adjacent to mining
      operations. Each Alternative would require the preparation of a different
      reclamation strategy. Gochnour concluded that each of the scenarios is
      permittable under current federal and state law. To complete the permitting
      process, Gochnour estimates that the open-pit scenario would take 3-5 years
      to
      permit once a Plan of Operations (“POO”) had been submitted. Gochnour estimated
      the permitting time frame for the underground scenarios at 2-3 years after
      the
      POO was submitted.





**Exploration
      Potential**





The
      Quartz Mountain mineral system can be classified as a low-sulfidation epithermal
      deposit based on the characteristic mineralogical suite of adularia, cinnabar
      and stibnite. The characteristic geometry and bonanza vein  occurrences
      associated with low-sulfidation systems have not been recognized at Quartz
      Mountain because resource delineation has been focused on the shallow parts
      of
      the system that favor the bulk-mineable or disseminated gold concentrations.
      The
      low-sulfidation epithermal model seems to best explain the distribution of
      gold,
      characteristic boiling textures in the veins and mineralogy at Quartz Mountain.
      This model implies that there is a potential for




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discovering
      high-grade bonanza veins at depth that provided fluid pathways for the large
      volumes of gold-bearing fluids that created the system.





**Current
      and Planned Work**





During
      2004, Quincy completed approximately 4,000 meters of core drilling at the
      property designed to test for higher grade feeder zones. Quincy plans to conduct
      additional drilling in 2007. Annual holding costs at the project are
      approximately US$10,000 primarily paid to the U.S. Bureau of Land
      Management.





**Hog
      Ranch Project**





The
      Hog
      Ranch Project is a gold project of approximately 5,000 acres located in northern
      Nevada. Seabridge currently has a 100% interest in the project, subject to
      a 3%
      to 5% NSR which varies depending upon the commodity price of gold. In August
      2003, the Company granted Romarco Minerals an option to earn an initial 60%
      interest in 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
      Hog
      Ranch project is located in northern Washoe County, Nevada, approximately 230
      kilometers north of Reno. Access to the property is 2 miles off of Nevada state
      highway 477, midway between Gerlach, Nevada and Susanville,
      California.





**How
      Acquired**





In
      November 2000, the Company acquired a 100% leasehold interest in the Hog Ranch
      gold project in northern Nevada. Under the agreement with Platoro West Inc.,
      Seabridge paid Platoro US$75,000 cash and issued 500,000 common shares. Platoro
      will be paid a further US$250,000 upon the earlier of:





a)
            confirmation
                by an independent third party of a measured and indicated gold reserve
                of
                more than 1.0 million ounces, or


b)
            completion
                of a positive bankable feasibility study which demonstrates a mine
                capable
                of producing at least 100,000 ounces of gold per
                annum.





Commencing
      on the 4 th anniversary of the agreement, Platoro will receive an annual advance royalty
      payment of US$10,000, escalating by US$2,500 per annum to a maximum of US$20,000
      per annum. Additionally, Seabridge is required to maintain the property claim
      block in good standing at an estimated annual cost of US$35,000. Should
      production commence at Hog Ranch, Platoro West will be paid a sliding-scale
      net
      smelter royalty ranging from 3% when gold is less than $300 per ounce, to 5%
      when gold is greater than $500 per ounce. In addition, Platoro will be paid
      a
      royalty of 3.5% on gross proceeds from any other metals produced. Seabridge
      retains the right to buy back 40% of the royalty at any time for US$2
      million.




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In
      August
      2003, the Company granted Romarco Minerals an option to earn an initial 60%
      interest in the property by spending US$2.5 million on exploration and issuing
      to Seabridge 1.5 million Romarco common shares by December 31, 2007. In February
      2005 Romarco terminated its rights under the agreement and the property reverted
      back to the Company.





**Regional
      and Property Geology**





Hog
      Ranch
      is situated on the southeast edge of the Cottonwood Creek volcanic center
      (“CVCC”), which is located at the southern end of the Northwest Nevada volcanic
      field. The CVCC is thought to be a failed or downsag caldera with no recognized
      large volume ash flow eruption or catastrophic caldera collapse event. Hog
      Ranch
      is an epithermal low-sulfidation gold deposit hosted by rhyolite volcanic and
      volcanoclastic rocks. Ore zones exploited by Ferret and Western Mining were
      principally disseminated occurrences hosted by poorly welded tuff and lacustine
      rocks. Veins are better developed in the component densely welded tuff. Volcanic
      centers and the historical open pits are aligned in a northeast trend coincident
      with the Black Rock Structural Boundary. The identified high-grade vein system
      is contained in the northwest trending faults.





**Previous
      Exploration**





Gold
      was
      first discovered at Hog Ranch in 1980 by Noranda Exploration, Inc. Noranda
      geologists were led to the area by an airborne radiometric survey of
      northwestern Nevada during a 1979 uranium reconnaissance program. No significant
      uranium occurrences were found but anomalous gold concentrations were discovered
      in the Bell Springs area. By 1981, Noranda had extended their claim holdings
      across the northern part of the Hog Ranch area and had drilled out a small
      gold
      resource at Bell Springs. Ferret Exploration Company, Inc. assumed operation
      of
      the Hog Ranch project in 1982 and proceeded to discover and drill out gold
      resources in the northern part of the Hog Ranch area and at Bell
      Springs.





Exploration
      activities by various owners through 1986 focused exclusively on open-pit
      deposits amenable to heap leach processing. In 1986 Western Goldfields commenced
      mining activities at Hog Ranch. In 1988 Western Mining Corporation purchased
      Hog
      Ranch and continued mining until 1993. The mine has been shut down since 1993
      and final reclamation activities by Western Mining have been largely completed.





Exploration
      activities by previous owners at Hog Ranch focused exclusively on open pit
      resources amenable to heap leach processing. At least 2,640 holes were drilled
      at Hog Ranch, of which only 247 were drilled as angle holes and only 65 were
      drilled to a depth greater than 200 meters. A high percentage of these deeper
      inclined holes were in exploration areas away from the productive deposits.
      The
      vast majority of the drilling was vertical holes focused on the delineation
      of
      disseminated low-grade open-pit reserves. The Company believes that the
      unrealized opportunity at Hog Ranch rests with




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high-grade
      gold mineralization associated with the high-angle, structurally-controlled
      feeder zones.





In
      early
      2001, Seabridge initiated an eight-hole diamond drill program to test for the
      potential of a high-grade underground gold deposit similar to the nearby Midas
      and Sleeper mines. The program successfully confirmed all the necessary
      conditions for such a deposit. High-grade gold intercepts from two different
      structures intersected in the drilling may represent the discovery of the upper
      levels of such a deposit. Results from this drilling program yielded assay
      results of up to 19.9 grams of gold per tonne within a fracture and vein zone.
      Observations of the core from the recent program have enabled Company geologists
      to reinterpret previous data and conclude that: (1) alteration has the scale
      (seven by eight kilometers) and intensity similar to other major deposits in
      northern Nevada; (2) the gold has been concentrated in specific, identifiable
      structures which have significant strike and down-dip potential; and (3)
      previous open pit mining was in the very top of the mineralized system, leaving
      the higher-grade potential intact and below the level of previous workings.
      A
      further program has been recommended to test for the higher grade ‘boiling’ zone
      which evidence suggests should be below the intercepts from the recent
      program.




**Current
      and Planned Work**




In
      2004,
      Romarco completed two phases of drilling at Hog Ranch. The initial phase of
      drilling consisted of a total of 725 meters in three rotary-reverse circulation
      drill holes that were designed to begin testing bonanza gold vein targets below
      and around the previously mined Geib Pit. One of the holes intersected 21.3
      meters averaging 5.23 grams of gold per tonne. Included in this intercept were
      two 1.5-meter high-grade intercepts which assayed 28.7 grams of gold per tonne
      and 17.2 grams of gold per tonne respectively. Romarco’s second phase of
      drilling consisted of approximately 1,400 meters in six diamond drill core
      holes. The purpose of the program was to begin testing bonanza gold vein targets
      below and around the previously mined Geib and Krista Pits and to try to expand
      on the significant mineralization encountered in Romarco initial phase of
      drilling. The highlight of the second phase program was 1.5-meter intercept
      that
      assayed 15.3 grams of gold per tonne. In February 2005 Romarco terminated its
      rights under the agreement and the property reverted back to the
      Company.





There
      is
      no immediate exploration planned at Hog Ranch for the current year.  Current
      holding costs at Hog Ranch are estimated to be US$47,000 per year including
      $34,500 in payments to the US Bureau of Land Management and Washoe County,
      Nevada, and an annual advanced royalty payment of US$12,500 to Platoro West
      Inc.
      The annual advanced royalty payment to Platoro increases by US$2,500 per year
      to
      a maximum of US$20,000 per year.





**Castle/Black
      Rock Project**





The
      Castle/Black Rock Project is a 2,500 acres gold project located in west-central
      Nevada. Seabridge currently has a 100% interest in the project, subject to
      a 3%
      to 5%




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NSR
      which
      varies depending upon the commodity price of gold. **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
      Castle/Black Rock project is located in Esmeralda County, Nevada, off the flank
      of the Monte Cristo Mountain Range in the southwest part of the Big Smokey
      Valley. The property consists of 131 contiguous unpatented mining claims located
      on public lands administered by the U.S. Bureau of Land Management. The project
      straddles U.S. highway 95/6, approximately 20 miles west of Tonopah,
      Nevada.





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**How
      Acquired**





In
      October 2000, the Company acquired a 100% leasehold interest in the Castle/Black
      Rock gold from Platoro West Inc. The purchase agreement included the Company
      issuing 5,000 common shares to Platoro and for annual advance royalty payments
      of US$7,500 in the first year, US$8,500 in year 2, US$17,500 in year 3, and
      thereafter US$25,000 annually. Additionally, Seabridge is required to maintain
      the 2,500-acre claim block in




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good
      standing at an estimated annual cost of US$15,000. Should production commence
      at
      Castle/Black Rock, Platoro West will be paid a net smelter royalty ranging
      from
      3% when gold is less than $320 per ounce, to 5% when gold is greater than $500
      per ounce. In addition, Platoro will be paid a royalty of 3.5% on gross proceeds
      from any other metals produced. Seabridge retains the right to buy back half
      of
      the royalty at any time for US$1.8 million.





**Regional
      and Property Geology**





The
      property occurs within the Walker Lane gold belt. Quaternary gravel and alluvial
      fan deposits cover most of the Castle/Black Rock property. Hydrothermal
      alteration in the volcanic rock is focused on structures and zoned vertically
      and laterally. Vertical zonation of the alteration sequence has created an
      intense argillic cap above the gold bearing structures, from 3 to 30 meters
      thick.





The
      known
      gold mineralization on the property is concentrated in 3 zones; Castle, Black
      Rock and Berg-Boss. In each zone, gold is concentrated in structures hosted
      by
      sedimentary rocks, andesite and rhyolite. Gold is also distributed away from
      the
      structures in andesite and rhyolite.





**Previous
      Exploration**





Outcropping
      gold mineralization was discovered by a Tonopah prospector in the 1960s in
      the
      hills just northwest of Black Rock and Highway US 95/6. The mineralization
      was
      explored at that time by a 50-foot deep shaft (Boss Mine) and some dozer
      trenches plus 2 diamond and 8 rotary drill holes.





Houston
      Oil and Minerals Corporation (HOM) began systematic surface exploration of
      the
      outcropping mineralization and surrounding area in 1979 and outlined a small
      unclassified resource of about 200,000 tons at an average gold grade of 0.07
      ounces per ton. Disappointed with the small size and their inability to get
      the
      ore to leach, HOM relinquished the property at the end of 1979. The property
      was
      then acquired in 1981 by Ebco Enterprises and optioned in that year by Falcon
      Exploration, who proceeded to delineate a larger reported ore zone at the Boss
      and elected to construct a small open-pit, heap leach mine. Homestake Mining
      Company optioned Falcon’s peripheral claims in 1987 and discovered gold
      mineralization south of Black Rock during their drill program. Homestake
      relinquished the property that same year.





Falcon
      poured their first bar of gold in January 1988 and began an exploration program
      on the peripheral claims in the spring of that year. Westley Explorations and
      Mintec Resources optioned the Boss claims from Falcon in August of 1988 and
      undertook a surface exploration and drilling program. The area northeast of
      Black Rock, now known as the Castle zone, was never drilled by Mintec. Mintec
      eventually relinquished their claims in the early 1990s, including the
      northeastern corner of the block, which covered the current Castle
      deposit.




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Kennecott
      Exploration staked a large block of claims northeast of the Boss pit in 1992
      as
      part of a large regional exploration program in the Walker Lane District. This
      original claim block did not include what eventually became the Castle
      discovery. Kennecott executed a surface exploration program with initial
      drilling in 1993. Kennecott eventually drilled a total of 65 Reverse Circulation
      (“RC”) holes totaling 26,435 feet, which delineated a broad mineralized zone
      2400 feet wide and at least 4200 feet long. The last RC hole was drilled in
      August 1995. Within this broad zone, Kennecott identified at least one ore
      zone
      that was never systematically drilled out and other mineralized drill holes
      were
      left without follow-up.





In
      October 1996, Fischer-Watt Gold Company (FWG) purchased the Castle property,
      consisting of 20 “CP” claims, from Kennecott. They staked an additional 32 lode
      claims around the periphery of the Kennecott block. The surrounding ground
      to
      the west and south, including the Berg and Black Rock zones, was staked by
      Platoro Resources, LLC earlier in that same year. In January 1998, the property
      was optioned from FWG by Zephyr Resources. Subsequent to Zephyr Resources,
      Cordex Exploration Co (a 100% subsidiary of Ray rock Resources Inc.) leased
      the
      FWG properties and conducted additional exploration activities, including RC
      drilling. In 1999 Glamis Gold acquired Ray rock and the Castle/Black Rock
      project was dropped. Later in 1999, Platoro acquired the FWG ground, thereby
      consolidating the property positions under a single owner.





**Current
      and Planned Work**





There
      is
      no immediate exploration planned at Castle/Black Rock for the current year.
      However, management intends to retain the project within its property portfolio.
      The Company estimates annual holding costs of the property to be a total of
      US$40,000, with US$25,000 paid to Platoro West as an annual advance royalty
      and
      US$15,000 paid to the US Bureau of Land Management and to Esmeralda County,
      Nevada.





**Pacific
      Intermountain Gold Corporation Projects**





The
      Company currently 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.





**All
      of PIGCO’s Properties are without known mineral reserves and are at the
      exploration stage; PIGCO’s current efforts are exploratory in
      nature.**





To
      date,
      PIGCO has staked approximately 1,800 claims, or about 36,000 acres, of mineral
      exploration land in Nevada. This acreage covers more than 20 identified gold
      exploration targets, with most of the property located in Nye County. All lands
      in the area are managed by the US Bureau of Land Management, and annual holding
      costs of the property are approximately US$250,000 plus an additional US$99,500
      in underlying lease payments.




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Seabridge
      intends to seek joint-venture partners to carry out exploration on the majority
      of PIGCO’s staked lands. However, Seabridge intends to maintain certain
      properties for its own exploration portfolio and conduct work on these
      properties in the future. Seabridge plans to drill test the Four-Mile Basin
      project and Golden Arrow project during 2007.




**Item4A. 
Unresolved
      Staff Comments**




Not
      applicable




**Item5. 
Operating
      and Financial Review and
      Prospects**




**Overview**





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 #9 to its audited annual consolidated financial statements
      for
      the year ended December 31, 2006. The value of the U.S. Dollar in relationship
      to the Canadian Dollar was $1.17 as of December 31, 2006.


The
        Company's Management Discussion and Analysis precedes the financial statements
        included at the end of this Report.


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, 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 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 valued
      at
      $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 $749,450 as that
      company has not been




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able
      to
      secure financing due to perceived political risks in the jurisdiction where
      its
      main asset is located.





**Year
      Ended December 31, 2005 Compared to Year Ended December 31,
      2004**





The
      net
      loss for the year ended December 31, 2005 totalled $1,157,000 or $0.04 per
      share
      compared to $1,226,000, or $0.04 per share for the year ended December 31,
      2004.
      The loss in 2005 was reduced by $821,000 (2004 - $575,000) in income tax
      recovery largely relating to the Company renouncing the Canadian Exploration
      Expenses to the investors of the flow-through financings completed in 2004
      and
      2003, respectively. Also in 2004, Pacific Intermountain Gold Inc. (“PIGCO”) a
      subsidiary of the Company sold shares which it had received on optioning out
      a
      mineral property resulting in a gain of $75,000 offset by $19,000 representing
      the minority interest in the gain. Corporate and general expenses were slightly
      lower in 2005 compared to 2004 as additional expenses in 2004 were incurred
      related to the listing of the Company’s shares on the American Stock Exchange
      and investor relations activity offset by slightly higher management fees in
      2005. In 2005, stock option compensation expense was $361,000 compared to
      $115,000 in 2004. Approximately $332,000 of the 2005 amount relates to the
      recognition of compensation expense for the two-tiered options to management.
      The expense was for reaching the $6 and $9 share price vesting requirements
      with
      the consequent vesting of 500,000 of the 750,000 stock options
      outstanding.





**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.





**Year
      Ended December 31, 2006**





The
      Company’s working capital position, at December 31, 2006, was $6,420,000 a
      decrease of $4,183,000 compared to $10,603,000 at the prior year-end. In 2006,
      two private placement financings were completed which netted $12,008,000 (2005
      -
      $10,076,000). In addition, during 2006, $585,000 was received from the exercise
      of stock options while in 2005 $1,223,000 was received from the exercise of
      stock options and warrants. The increase in share capital in 2006 was used
      for
      expenditures on operating costs, the acquisition of the Noche Buena property
      for
      $4.9 million and on exploration activities including drilling programs at the
      Courageous Lake and Kerr-Sulphurets properties.





C ash
      and
      short-term deposits at December 31, 2006 were $5,786,000, down from $10,193000
      at December 31, 2005. Operations activities used $2,330,000 in 2006 compared
      to
      $1,220,000 in the prior year due to increased compensation costs,
      investor




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activities
      and corporate costs. Cash expenditures on Mineral Interests were $14,571,000
      compared to the $3,843,000 cash expenditures in 2005.




In
      April
      2006, the Company reacquired the exploration rights to the Kerr-Sulphurets
      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 (deemed value $3,140,000) and issued 2 million
      warrants to purchase common shares of the Company at $13.50 each (deemed value
      $11,436,000). One warrant becomes exercisable for five years from the date
      each
      new ounce of gold resources at Kerr-Sulphurets is declared (up to 2 million
      ounces of gold) for work undertaken on the property through the year 2010.
      The
      warrants vested in February 2007, based on the results of the 2006 exploration
      program. Falconbridge also has a limited right of first refusal should the
      Company desire to sell all or any portion of its interest at
      Kerr-Sulphurets.




The
      Company’s cash position at December 31, 2006 plus expected funding from the
      exercise of options in 2007 is sufficient to undertake planned exploration
      and
      corporate activities in 2007, except for the next program of exploration at
      the
      Kerr-Sulphurets property when it is designed, which will likely be funded by
      a
      share issue.




**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, 2006, particularly Note #9, 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.




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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 $421,800 for the flow-through shares issued in
      2006
      (2005 - $202,000). 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.





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 9 to the 2006 audited financial statements. The value of the
      Canadian Dollar in relationship to the US Dollar was $1.17 as of December 31,
      2006.





**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.





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Table
      No.
      4


Contractual
      Obligations ($000’s)




Payments
                due by periodTotal
            2007
            2008-10
            2011-12
            After
                2012Mineral
                interests
            
            10,595
            1,607
            3,543
            3,647
            1,798Reclamation
                liabilities
            
            1,530
            -
            -
            -
            1,53012,125
            1,607
            3,543
            3,647
            3,328





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.




**Item6. 
Directors,
      Senior Management and
      Employees**




A. 
      Directors and Senior Management





Table
      No.
      5 lists as of March 20, 2007 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. Rudi Fronk is a citizen of both Canada and the United
      States.





Table
      No.
      5


Directors





Name
            Age
            Date
                First Elected/AppointedJames
                Anthony
            59
            October
                1999Rudi
                Fronk
            48
            October
                1999Frederick
                Banfield (1,3)
            64
            October
                1999William
                Calhoun (1,2,3)
            74
            February
                2000Thomas
                Dawson (1,3)
            70
            January
                2006Henry
                Fenig (2,3)
            61
            November
                2001Louis
                Fox (2,3)
            64
            January
                2000Eliseo
                Gonzalez-Urien (2,3)
            66
            January
                2006





(1)
            Member
                of Audit Committee.


(2)
            Member
                of Compensation Committee


(3)
            Member
                of Corporate Governance Committee




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Table
      No.
      6 lists, as of March 20, 2007 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. Mr. Chisholm is a citizen
      of
      Canada. Mr. Fronk is a citizen of both Canada and the United
      States.





Table
      No.
      6


Executive
      Officers





Name
            Position
            Age
            Date
                of
              AppointmentRudi
                Fronk
            President
                and CEO
            48
            October
                1999William
                Threlkeld
            Senior
                Vice President
            52
            November
                2001Roderick
                Chisholm
            Secretary
                and CFO
            57
            August
                2004





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,




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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. In 1981 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. Mr. Dawson currently serves as a Director and Chief
      Financial Officer of Arizona Star Resource Corp. He received his B.Comm. from
      Loyola College (now Concordia University), Canada, in 1959. Mr. Dawson is also
      a
      director of Southern Era Diamonds Inc., 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.





Henry
      Fenig has been the Chief Financial Officer and Vice President of Friedberg
      Mercantile Group Ltd. (FMG) since April 1983. FMG is a Toronto based, privately
      owned Investment Dealer and Futures Commission Merchant and member of the
      Toronto Stock Exchange. Mr. Fenig holds primary responsibility for overseeing
      compliance for FMG and its affiliates with all applicable Canadian and United
      States laws and regulations. Since December 1984, Mr. Fenig has been Executive
      Vice-President, Treasurer and a Director of FCMI Financial Corporation, the
      sole
      shareholder of Pan Atlantic Bank and Trust Limited. Mr. Fenig has a Bachelor
      of
      Arts degree in Economics from Yeshiva College and a Masters of Business
      Administration degree in International Business and Marketing from Columbia
      University in New York City. Mr. Fenig spends less than 10% of his time on
      Seabridge business.





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.




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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 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 remains
      in effect as of the date hereof.





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.




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**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 2006, unrelated directors
      received US20,000 per annum, the Chairman of the Audit Committee received an
      additional US7,500 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".





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
                CompensationRudi
                Fronk,
              President,
                CEO andDirector
            2006
              2005
              2004
            $300,000
              $250,000
              $250,000
            250,000
              Nil
              Nil
            Nil
              $7,750
              $43,269
                (2)James
                Anthony,
              Chairman
            2006
              2005
              2004
            Nil
              Nil
              Nil
            125,000
              Nil
              Nil
            $144,000
              $120,000
              $132,500Frederick
                Banfield,
              Director
            2006
              2005
              2004
            Nil
              Nil
              Nil
            100,000
              Nil
              Nil
            US$20,000
              US$20,000
              US$15,000William
                Calhoun,
              Director
            2006
              2005
              2004
            Nil
              Nil
              Nil
            100,000
              Nil
              Nil
            US$21,250
              US$20,000
              US$15,000Thomas
                Dawson (3)
            2006
            Nil
            50,000
            US$27,500Vahid
                Fathi (4),
              Director
            2006
              2005
              2004
            Nil
              Nil
              Nil
            Nil
              Nil
              Nil
            Nil
              US$20,000
              US$15,000Henry
                Fenig,
              Director
            2006
              2005
              2004
            Nil
              Nil
              Nil
            100,000
              Nil
              Nil
            US$21,250
              US$20,000
              US$15,000Louis
                Fox,
              Director
            2006
              2005
              2004
            Nil
              Nil
              Nil
            100,000
              Nil
              Nil
            US$20,000
              US$20,000
              US$15,000Eliseo
                Gonzalez-Urien (3)
            2006
            Nil
            50,000
            US$36,000Roderick
                Chisholm
              Secretary
                and CFO
            2006
              2005
              2004
            Nil
              Nil
              Nil
            Nil
              115,000
              15,000
            $240,000
              $145,000
              $106,000William
                Threlkeld,
              Senior
                VP
            2006
              2005
              2004
            $140,000
              $160,000
              $156,000
            Nil
              50,000
              Nil
            $140,000
              $29,200
              Nil




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(1)
      The
      stock options were granted under the stock option plans which are described
      under “Item 10: Stock Options”


(2)
      The
“Other Compensation” listed for Rudi Fronk, President, relate to certain
      educational expenses reimbursed to Mr. Fronk by the Corporation and in 2004
      also
      includes a $25,000 bonus.


(3)
      Messrs. Dawson and Gonzalez-Urien were appointed directors in January
      2006


(4)
      Mr.
      Fathi resigned as a director in January 2006.





No
      funds
      were set aside or accrued by the Company during Fiscal 2006 to provide pension,
      retirement or similar benefits for Directors or Executive Officers.





**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.




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(h)
            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.





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 eight members are "unrelated" within the meaning of the TSE Report:
      Frederick A. Banfield; William Calhoun; Thomas C. Dawson; Henry Fenig 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 eight 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




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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,




(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 performanceof
                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 Committee




The
      Corporate Governance Committee is presently composed of all five “un-related”
and outside directors. This Committee has prepared and obtained approval by
      the
      Board of




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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.




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 four 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.




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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.




**D. 
      Employees**




The
      Company currently has 5 employees and 3 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, 2007, 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)
            1,393,125
            4.03%Common
            Rudi
                Fronk (2)
            1,399,500
            4.04%Common
            Frederick
                Banfield (3)
            245,000
            0.71%Common
            William
                Calhoun (4)
            183,334
            0.53%Common
            Thomas
                Dawson (5)
            78,100
            0.23%Common
            Henry
                Fenig (6)
            130,000
            0.38%Common
            Louis
                Fox (7)
            325,000
            0.95%Common
            Eliseo
                Gonzalez-Urien (8)
            75,000
            0.22%Common
            William
                Threlkeld (9)
            340,000
            0.99%Common
            Roderick
                Chisholm (10)
            178,700
            0.52%**Total
                Directors/Officers (11)**
            **4,347,759**
            **12.04%**





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 Table
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(1)
            Of
                these shares 291,667 represent currently exercisable share purchase
                options; 83,333 represent share purchase options subject to certain
                vesting requirements; and 493,334 shares are held
                indirectly.


(2)
            Of
                these shares 333,333 represent currently exercisable share purchase
                options and 166,667 represent share purchase options subject to certain
                vesting requirements.


(3)
            Of
                these shares 58,333 represent currently exercisable share purchase
                options
                and 66,667 represent share purchase options subject to certain vesting
                requirements.


(4)
            Of
                these shares 73,333 represent currently exercisable share purchase
                options
                and 66,667 represent share purchase options subject to certain vesting
                requirements.


(5)
            Of
                these shares 16,666 represent exercisable share purchase options;
                33,334
                represent share purchase options subject to certain vesting requirements;
                and 10,000 are held indirectly.


(6)
            Of
                these shares 63,333 represent currently exercisable share purchase
                options
                and 66,667 represent share purchase options subject to certain vesting
                requirements, which does not include shares owned by Pan Atlantic
                Bank and
                Trust Ltd.- See Item 7.


(7)
            Of
                these shares 58,333 represent currently exercisable share purchase
                options
                and 66,667 represent share purchase options subject to certain vesting
                requirements.


(8)
            Of
                these shares 16,666 represent exercisable share purchase options
                and
                33,334 represent share purchase options subject to certain vesting
                requirements


(9)
            Of
                these shares, 300,000 represent currently exercisable share purchase
                options.


(10)
            Of
                these shares, 140,000 represent currently exercisable share purchase
                options.


(11)
            See
                notes (1) through (10)





Percent
      of Class number is based on 34,168,685 shares outstanding as of March 20, 2007
      and Stock options held by each beneficial holder.





Based
      upon information provided by the Company’s transfer agent, as of March 20, 2007,
      approximately 7.6 % of the Company’s common shares were held of record by US
      residents.




**Item7. 
Major
      Shareholders and Related Party
      Transactions**




**A. 
      Major Shareholders**





As
      of
      March 20, 2007, Pan Atlantic Bank and Trust Ltd. owned 6,291,152 shares of
      the
      Company representing 18.4% of the outstanding shares of the Company. In
      addition, as of March 20, 2007 principals of, and funds managed by, the
      Friedberg Mercantile Group Ltd. owned 492,200 shares of the Company representing
      1.4% of the outstanding shares 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. Henry Fenig, a Director of the
      Company, is CFO and Vice President 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.




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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, 2006, Mintec, Inc., a private company
      controlled by Fred Banfield, a Director of Seabridge, was paid $33,900 (2005
      -
      $39,000, 2004 - $57,000) 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 FMCI Financial Corporation. Henry
      Fenig, Director of Seabridge, serves as Executive Vice-President, Treasurer
      and
      a Director of FMCI.





None
      of
      the Company’s interests in its mineral properties were acquired from affiliates.




**C. 
        Interests of Experts and Counsel**




Not
      applicable




**Item8. 
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, 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, 2006.




**Item9. 
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 Sept 1979.
      The
      current stock symbol is “SEA”, and the CUSIP number is #811916105.




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 Table
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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.





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
            Close**Annual
                Information**2006
            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/A2002
            26,919,200
            $3.67
            $0.38
            $3.39
            N/A
            N/A
            N/A
            N/A**Quarterly
                Information**3
                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
            $8.903
                Months Ended 31-Dec-05
            1,744,743
            $12.00
            $5.57
            $11.01
            11,781,343
            $10.49
            $4.60
            $9.403
                Months Ended 30-Sep-05
            1,641,935
            $7.05
            $2.99
            $7.05
            8,615,235
            $6.08
            $2.47
            $5.993
                Months Ended 30-Jun-05
            1,339,578
            $3.30
            $2.40
            $3.12
            3,346,878
            $2.78
            $1.91
            $2.563
                Months Ended 31-Mar-05
            1,475,938
            $4.23
            $3.15
            $3.25
            2,993,738
            $3.75
            $2.60
            $2.71**Monthly
                Information**February
                2007
            627,400
            $20.05
            $14.46
            $18.80
            4,417,071
            $17.31
            $12.24
            $16.07January
                2007
            362,300
            $16.60
            $12.98
            $14.35
            3,775,400
            $14.00
            $11.02
            $12.19December
                2006
            410,136
            $17.25
            $14.35
            $16.55
            2,923,300
            $15.00
            $12.50
            $14.12November
                2006
            429,879
            $17.02
            $14.27
            $17.02
            3,698,000
            $14.93
            $12.50
            $14.90October
                2006
            551,269
            $14.26
            $11.85
            $14.16
            4,446,900
            $12.70
            $10.50
            $12.58September
                2006
            756,391
            $16.91
            $11.50
            $13.95
            5,408,500
            $15.30
            $10.21
            $12.53August
                2006
            589,365
            $16.70
            $13.90
            $16.14
            4,691,400
            $14.90
            $12.25
            $14.61July
                2006
            968,387
            $15.50
            $12.70
            $15.00
            4,199,900
            $13.90
            $11.13
            $13.34





American
      Depository Receipts . 
      Not applicable.


Other
      Securities to be Registered . 
      Not applicable





**B. 
      Plan and Distribution**




Not
      Applicable





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**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





**F. 
      Expenses of the Issue**




Not
      Applicable




**Item10. 
Additional
      Information**




**A. 
      Share Capital**





Not
      Applicable





**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;


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.




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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
      Ac* t")
      governs acquisitions of Canadian business by a non-Canadian person or entity.
      The *IC
      Act* requires
      a non-Canadian (as defined in the *IC
      Ac* t)
      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
      Act* provides,
      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
      Act* to
      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
      Act* are
      applicable.





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




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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
      Act* are
      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
      Ac* t:
      (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
      Ac* t.
      However, under the *IC
      Ac* t,
      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
      Ac* t,
      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.





In
      addition to the foregoing, the *IC
      Act* provides
      for formal notification under the *IC
      Act* of
      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.





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**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 Customs and
      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.




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**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 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




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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.




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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. 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




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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.




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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
      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,




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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., 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.




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          of Contents




**I. 
      Subsidiary Information**




Not
      Applicable




**Item11. 
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**
            **2007**
            **2008**
            **2009**Grassy
                Mountain
            $102,200
            $107,200
            $112,200Quartz
                Mountain (1)
            $10,000
            $10,000
            $10,000Castle/Black
                Rock
            $42,250
            $42,250
            $42,250Hog
                Ranch
            $52,000
            $54,500
            $54,500Other
                Nevada Properties
            $465,500
            $493,500
            $521,500





(1)
      The
      Quartz Mountain Property is currently under option to 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.




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.




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**Item12. 
Description
      of Securities Other than Equity
      Securities**




Not
      Applicable




**PartII**




**Item13. 
Defaults,
      Dividend Arrearages and
      Delinquencies**




None





**Item14. 
Material
      Modifications of Rights of Security
      Holders and Use of Proceeds**




None





**Item15. 
Controls
      and Procedures**





The
      Company's Chief Executive Officer and President and its Chief Financial Officer
      have evaluated the effectiveness of the Company's disclosure controls and
      procedures as such term is defined under Rules 13a-15(e) and 15d-15(e) of the
      U.S. Securities Exchange Act of 1934 (the "Exchange Act") as of the end of
      the
      period covered by this Report. Based on this evaluation, these officers have
      concluded that, as of the end of such period, the Company’s controls and
      procedures are effective in recording, processing, summarizing and reporting,
      on
      a timely basis, information required to be disclosed by the Company in its
      reports that it files or submits under the Exchange Act.





There
      have been no significant changes in the Company's internal controls and
      procedures that could materially affect these controls and procedures subsequent
      to the date of the Company's most recent evaluation.





**Item16A.
 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."





**Item16B.
 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 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 neither (i) amended
      its
      Code of Business Ethics, nor (ii) granted any waiver including an explicit
      waiver, from a provision of the Code of Business Ethics to any executive officer
      or director.




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**Item16C. 
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:


2006
              
              2005Audit
                  fees
              
              $
              70,000
              
              $
              55,457Audit
                  related fees
              
              
              30,000
              
              
              23,770Tax
                  Fees
              
              
              0
              
              
              0All
                  Other Fees
              
              
              0
              
              
              0$
              100,000
              
              $
              79,227
 **Item16D. 
Exemptions
        from the Listing Standards for
        Audit Committees**





Not
      Applicable





**Item16E. 
Purchases
      of Equity Securities by the Issuer
      and Affiliated Purchasers**





None




**PartIII**




**Item17. 
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 9 to the 2006 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.




**Item18. 
Financial
      Statements**




The
      Company has elected to provide financial statements pursuant to ITEM
      #17.




**Item19. 
Exhibits**




A. The
      financial statements thereto as required under ITEM #17 are attached hereto
      and
      found immediately following the text of this Annual Report.




95
 Table
          of Contents





**Audited
      Financial Statements**




Auditors’
      Report to the Shareholders, dated March 20, 2007.





Consolidated
      Balance Sheets at December 31, 2006 and 2005





Consolidated
      Statements of Operations and Deficit for the Years Ended December 31, 2006,
      2005
      and 2004.





Consolidated
      Statements of Cash Flows for the Years Ended December 31, 2006, 2005, and 2004.




Notes
      to
      Consolidated Financial Statements at December 31, 2006 and 2005 and for the
      Years Ended December 31, 2006, 2005 and 2004.




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).


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).




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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





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 Ethics (incorporated by reference in the Company’s Form 20-F dated
                March 15, 2005)





12.
            Certifications





12.1(*)
            Rule13a-14(a)/Rule15d-14(a)
                Certification of Chief
                Executive Officer





12.2(*)
            Rule
                13a14(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




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14.
            Opinion
                - N/A





(*)  Filed
      herewith





98
 Table
          of Contents
  **SEABRIDGE
          GOLD INC.**
 
 **Management’s
          Discussion and Analysis**
 
 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, 2006, December 31, 2005 and December 31, 2004. This report is dated
          March
          20, 2007 and should be read in conjunction with the audited consolidated
          financial statements for the years ended December 31, 2006, 2005 and 2004,
          the
          Company’s Annual Information Form filed on SEDAR at www.sedar.com ,
          and the
          20F Report filed on EDGAR at *www.sec.gov/edgar.shtml* .
          Other
          corporate documents are also available on SEDAR and EDGAR as well as the
          Company’s website www.seabridgegold.net .
          As the
          Company has no revenue generating projects at this time, its ability to
          carry
          out its business plan rests with its ability to secure equity and other
          financings.
 
 **Company
          Overview**
 Seabridge
          Gold Inc. 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.
          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. 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,
          the
          Kerr-Sulphurets property located in British Columbia and the Noche Buena
          property located in Mexico. 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**($)
                
                2006
                
                2005
                
                2004Interest
                    income
                
                363,000
                
                135,000
                
                83,000Operating
                    costs
                
                5,658,000
                
                2,113,000
                
                1,940,000Loss
                
                3,300,000
                
                1,157,000
                
                1,226,000Loss
                    per share
                
                0.10
                
                0.04
                
                0.04
 
 **Summary
                    balance sheets**($)
                
                2006
                
                2005
                
                2004Current
                    assets
                
                6,855,000
                
                10,896,000
                
                4,396,000Mineral
                    interests
                
                53,
                    262,000
                
                24,395,000
                
                20,999,000Total
                    assets
                
                61,244,000
                
                37,085,000
                
                27,172,000Total
                    long-term liabilities
                
                1,530,000
                
                1,407,000
                
                1,293,000
  **Results
          of Operations**
 ***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 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 valued
          at
          $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. as
          that company has not been able to secure financing due to perceived political
          risks in the jurisdiction where its main asset is located.
 
 M-1
 Table
              of Contents
 
 ***Year
          Ended December 31, 2005 Compared to Year Ended December 31,
          2004***
 The
          net
          loss for the year ended December 31, 2005 totalled $1,157,000 or $0.04
          per share
          compared to $1,226,000, or $0.04 per share for the year ended December
          31, 2004.
          The loss in 2005 was reduced by $821,000 (2004 - $575,000) in income tax
          recovery largely relating to the Company renouncing the Canadian Exploration
          Expenses to the investors of the flow-through financings completed in 2004
          and
          2003, respectively. Also in 2004, Pacific Intermountain Gold Corp. (“PIGCO”) a
          subsidiary of the Company sold shares which it had received on optioning
          out a
          mineral property resulting in a gain of $75,000 offset by $19,000 representing
          the minority interest in the gain. Corporate and general expenses were
          slightly
          lower in 2005 compared to 2004 as additional expenses in 2004 were incurred
          related to the listing of the Company’s shares on the American Stock Exchange
          and investor relations activity offset by slightly higher management fees
          in
          2005. In 2005, stock option compensation expense was $361,000 compared
          to
          $115,000 in 2004. Approximately $332,000 of the 2005 amount relates to
          the
          recognition of compensation expense for the two-tiered options to management.
          The expense was for reaching the $6 and $9 share price vesting requirements
          with
          the consequent vesting of 500,000 of the 750,000 stock options
          outstanding.
 
 ***Year
          Ended December 31, 2004 Compared to Year Ended December 31,
          2003***
 The
          Net
          Loss for the year ended December 31, 2004 totaled $1,226,000 or $0.04 per
          share
          compared to $1,338,000, or $0.05 per share for the year ended December
          31, 2003.
          The loss in 2004 was reduced by a $575,000 income tax recovery largely
          relating
          to the recognition of the Company’s tax assets after renouncing the Canadian
          Exploration Expenses to the investors of the flow-through financings completed
          in 2003. Also in 2004, PIGCO sold shares which it had received on optioning
          out
          a mineral property resulting in a gain of $75,000 offset by $19,000 representing
          the minority interest in the gain. Corporate and general expenses increased
          by
          $867,000 in 2004 over 2003. Approximately 39% of this increase was due
          to
          increased investor relations activities including listing on the American
          Stock
          Exchange and investor communications. Approximately 27% of the increase
          in
          corporate and general expenses was due to higher salaries and benefits
          for
          senior personnel and the hiring of a Chief Financial Officer. A further
          15% of
          the increase reflects a full year of directors’ fees which the Company commenced
          paying in mid 2003 as well as the introduction of a comprehensive directors
          and
          officers liability insurance policy. About 12% of the increase was due
          to the
          recognition of the accretion for costs of reclamation liabilities. Finally,
          about 6% of the increase was due to higher costs of regulatory compliance,
          principally accounting and legal fees required by changes in regulations.
          In
          2003, the Company wrote off the Tobin Basin exploration project in Nevada
          amounting to $342,000 due to unsuccessful exploration results.
 
 **Quarterly
          Information**
 Selected
          financial information for each of the last eight quarters ended December
          31,
          2006 is as follows (unaudited):
 4thQuarter Ended
                  December
                    31, 2006
                3rdQuarter Ended
                  September
                    30, 2006
                2ndQuarter 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
  4thQuarter Ended
                  December
                    31, 2005
                3rdQuarter Ended
                  September
                    30, 2005
                2ndQuarter Ended
                  June
                    30, 2005
                1stQuarter Ended
                  March
                    31, 2005Revenue
                $Nil
                $Nil
                $Nil
                $NilIncome
                    (loss) for period
                $(807,000)
                $(389,000)
                $(384,000)
                $   
                    423,000Income
                    (loss) per share
                $(0.03)
                $(0.01)
                $(0.01)
                $0.01
 
 The
          loss
          in the fourth quarter of 2005 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.
  M-2
 Table
              of Contents
 
 The
          income for the first quarters in 2006 and 2005 was due to the recognition
          of the
          Company’s tax assets after renouncing the Canadian Exploration Expenses to the
          investors of the flow-through financings completed in 2005 and
          2004.
 
 **Mineral
          Interest Activities**
 During
          the year ended December 31, 2006, the Company incurred net expenditures
          of
          $28,867,000 on mineral interests compared to $3,397,000 in the year ended
          December 31, 2005. Almost $15 million of these costs were for the deemed
          value
          of the shares and warrants issued to acquire the Kerr-Sulphurets 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 on the Kerr-Sulphurets project where drilling
          work
          enabled the Company to determine a new 13.1 million ounce gold mineral
          resource
          at the Mitchell zone which was announced early in 2007. The balance of
          expenditures on mineral interests during 2006 was related to the preliminary
          assessment of the Noche Buena project and holding costs, including underlying
          lease payments and payments to government agencies for claim maintenance.
 
 At
          Courageous Lake, the 2006 work and new mineral resource will be used to
          complete
          a revised Preliminary Economic Assessment (“PEA”) and engineering studies in
          2007. At Kerr-Sulphurets an expanded drilling program is planned for 2007
          to
          increase the knowledge of the deposit and the extent of mineralization.
          In
          Nevada, 2007 exploration activities will include drilling by the Company
          on the
          Golden Arrow and Four-Mile Basin projects.
 
 **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.
  ***Year
          Ended December 31, 2006***
 The
          Company’s working capital position, at December 31, 2006, was $6,420,000 a
          decrease of $4,183,000 compared to $10,603,000 at the prior year-end. In
          2006,
          two private placement financings were completed which netted $12,008,000
          (2005 -
          $10,076,000). In addition, during 2006, $585,000 was received from the
          exercise
          of stock options while in 2005 $1,223,000 was received from the exercise
          of
          stock options and warrants. The increase in share capital in 2006 was used
          for
          expenditures on operating costs, the acquisition of the Noche Buena property
          for
          $4.9 million and on exploration activities including drilling programs
          at the
          Courageous Lake and Kerr-Sulphurets properties.
 
 C ash
          and
          short-term deposits at December 31, 2006 were $5,786,000, down from $10,193000
          at December 31, 2005. Operations activities used $2,330,000 in 2006 compared
          to
          $1,220,000 in the prior year due to increased compensation costs, investor
          activities and corporate costs. Cash expenditures on Mineral Interests
          were
          $14,571,000 compared to the $3,843,000 cash expenditures in 2005.
  In
          April
          2006, the Company reacquired the exploration rights to the Kerr-Sulphurets
          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 (deemed value $3,140,000) and issued 2 million
          warrants to purchase common shares of the Company at $13.50 each (deemed
          value
          $11,436,000). One warrant becomes exercisable for five years from the date
          each
          new ounce of gold resources at Kerr-Sulphurets is declared (up to 2 million
          ounces of gold) for work undertaken on the property through the year 2010.
          The
          warrants vested in February 2007, based on the results of the 2006 exploration
          program. Falconbridge also has a limited right of first refusal should
          the
          Company desire to sell all or any portion of its interest at
          Kerr-Sulphurets.
  The
          Company’s cash position at December 31, 2006 plus expected funding from the
          exercise of options in 2007 is sufficient to undertake planned exploration
          and
          corporate activities in 2007, except for the next program of exploration
          at the
          Kerr-Sulphurets property when it is designed, which will likely be funded
          by a
          share issue.
  M-3
 Table
              of Contents
  **Contractual
                    Obligations**($,000)
                
                
                Payments
                    due by periodTotal
                2007
                2008-10
                2011-12
                After
                    2012Mineral
                    interests
                
                10,595
                1,607
                3,543
                3,647
                1,798Reclamation
                    liabilities
                
                1,530
                -
                -
                -
                1,53012,125
                1,607
                3,543
                3,647
                3,328
 
 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.
 
 **Outlook**
 During
          2007, the Company will continue to make exploration expenditures to advance
          the
          Courageous Lake and Kerr-Sulphurets projects, undertake exploration principally
          in Mexico and Nevada and to review its other projects for possible joint
          venture
          opportunities 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, 2006, 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
            President and Chief Executive Officer and the Chief Financial Officer
            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, 2006. There have been no changes in these
            controls during fiscal year 2006 which has materially affected, or is
            reasonably
            likely to materially affect, the Company’s
            internal
            controls over financial reporting.
  **Shares
          Issued and Outstanding**
 At
          March
          20, 2007, the issued and outstanding common shares of the Company totaled
          34,168,685. In addition, there were 2,000,000 share purchase warrants and
          2,152,500 stock options granted (of which 613,333 were unexercisable and
          contingent upon achieving certain future goals). On a fully diluted basis
          there
          would be 38,321,185 common shares issued and outstanding.
 
 **Related
          Party Transactions**
 During
          the year ended December 31, 2006; a private company controlled by a director
          of
          the Company was paid $33,900 (2005 - $39,400) for technical services provided
          by
          his company related to mineral properties; a private company controlled
          by a
          second director was paid $144,000 (2005 - $120,000) for corporate consulting
          services rendered; a new director (effective January 4, 2006) was paid
          $18,000
          for geological consulting and outstanding accounts payable to directors
          at year
          end was $32,000. 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.
 M-4
 Table
                of Contents
 **Recently
          Issued Accounting Pronouncements**
 The
          Canadian Institute of Chartered Accountants issued the following accounting
          standards effective for the fiscal years beginning on or after October
          1, 2006:
          Accounting Standards Section 1530 “Comprehensive Income”; Accounting Standards
          Section 3855 “Financial Instruments - Recognition and Measurement”; Accounting
          Standards Section 3861 “Financial Instruments - Presentation and Disclosure”;
          and, Accounting Standards 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 other comprehensive income.
  Adoption
          of these standards will be effective from January 1, 2007 on a prospective
          basis
          without retroactive restatement of prior periods, except for the
          reclassification of equity balances to reflect “Accumulated other comprehensive
          income” which will include foreign currency translation
          adjustments.
  Under
          the
          new standard, 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
          Company has not yet quantified the impact of the implementation of this
          new
          accounting pronouncement on its financial results.
 
 **Risks
          and Uncertainties**
 ***Exploration
          and Development Risks*** ******
 The
          business of exploring for minerals involves a high degree of risk. Attracting
          and maintaining educated and knowledgeable technical personnel may be difficult
          at times. Few properties that are explored are ultimately developed into
          producing mines. At present, none of the Company’s properties have a known body
          of commercial ore. The mineral resource estimates set out herein are not
          mineral
          reserves and do not have demonstrated economic viability. Major expenses
          may be
          required to establish ore reserves, to develop metallurgical processes
          and to
          construct mining and processing facilities at a particular site. It is
          impossible to ensure that the current exploration programs planned by the
          Company will result in a profitable commercial mining operation.
 
 ***Financing
          Risks***
 The
          Company has limited financial resources, has no operating cash flow and
          has no
          assurance that sufficient funding will be available to it for further
          exploration and development of its projects or to fulfill its obligations
          under
          any applicable agreements. There can be no assurance that the Company will
          be
          able to obtain adequate financing in the future or that the terms of such
          financing will be favourable. Failure to obtain such additional financing
          could
          result in delay or indefinite postponement of further exploration and
          development of its projects with the possible forced sale or loss of such
          properties. The Company will require additional financing if ongoing exploration
          of its properties is warranted.
 
 ***Mineral
          Interests***
 Mineral
          interests represent the capitalized expenditures related to the exploration
          and
          development of mineral properties. Upon commencement of commercial production,
          all related capital expenditures for any given mining interest are amortized
          over the estimated economic life of the property. If a property is abandoned
          or
          deemed economically unfeasible, the related project balances are written
          off.
 
 **Critical
          Accounting Estimates**
 Critical
          accounting estimates used in the preparation of the consolidated financial
          statements include the Company’s estimate of recoverable value of its mineral
          properties and related deferred exploration expenditures as well as the
          value of
          stock-based compensation. Both of these estimates involve considerable
          judgment
          and are, or could be, affected by significant factors that are out of the
          Company’s control.
 
 The
          factors affecting stock-based compensation include estimates of when stock
          options and compensation warrants might be exercised and the stock price
          volatility. The timing for exercise of
 M-5
 Table
                of Contents
 options
          is out of the Company’s control and will depend upon a variety of factors,
          including the market value of the Company’s shares and financial objectives of
          the stock-based instrument holders. The Company used historical data to
          determine volatility in accordance with the Black-Scholes model. However,
          the
          future volatility is uncertain and the model has its limitations.
 
 The
          Company’s recoverability of its recorded value of its mineral properties and
          associated deferred exploration expenses is based on market conditions
          for
          minerals, underlying mineral resources associated with the properties and
          future
          costs that may be required for ultimate realization through mining operations
          or
          by sale. The Company is in an industry that is dependent on a number of
          factors
          including environmental, legal and political risks, the existence of
          economically recoverable reserves, the ability of the Company and its
          subsidiaries to obtain necessary financing to complete the development,
          and
          future profitable production or the proceeds of disposition
          thereof.
 
 **Forward
          Looking Statements**
 These
          consolidated financial statements and management’s discussion and analysis
          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 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.
  M-6
 Table
            of Contents
 **Management’s
        Report**


The
        management of
        Seabridge Gold Inc.  is
        responsible for
        the preparation of the consolidated financial statements as well as the
        financial and other information contained in the annual report, annual
        information form and form 20-F. Management maintains an internal control
        system
        in order to provide reasonable assurance as to the reliability of financial
        information and the safeguarding of assets.
 
 The
        consolidated
        financial statements are prepared in accordance with generally accepted
        accounting principles in Canada and necessarily include amounts determined
        in
        accordance with estimates and judgments made by management. KPMG LLP, the
        external auditors, express their opinion on the consolidated financial
        statements in the annual report.
 
 The
        Board of
        Directors, through the Audit Committee, is responsible for ensuring that
        management fulfills its responsibilities for financial reporting and internal
        control.
 
 The
        consolidated
        financial statements of the Company have been approved by the Board of
        Directors.
   /s/
          Rudi P.
          Fronk
 Rudi
          P.
          Fronk
 President
&
          CEO
 March
          20,
          2007
   **Auditors'
          Report to the Shareholders**
 We
          have audited the
          consolidated **** balance
          sheets of
          Seabridge Gold Inc. as at December 31, 2006 **** and
          2005 and the
          consolidated **** statements
          of
          operations and deficit and cash flows for each of the years in the three-year
          period ended December 31, 2006. 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 Canadian generally accepted auditing standards
          and the
          standards of the Public Company Accounting Oversight Board (United States).
          Those standards require that we plan and perform an audit to obtain reasonable
          assurance 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.
  In
          our opinion,
          these consolidated financial statements present fairly, in all material
          respects, the financial position of the Company as at December 31, 2006
          and 2005
          and the results of its operations and its cash flows for each of the years
          in
          the three year period then ended in accordance with Canadian generally
          accepted
          accounting principles.
  Canadian
          generally
          accepted accounting principles vary in certain significant respects from
          accounting principles generally accepted in the United States of America.
          Information relating to the nature and effect of such differences is presented
          in Note 9 to the consolidated financial statements.
   /s/
          KPMG
          LLP
 Chartered
            Accountants
 Toronto,
            Canada
 March
            20,
            2007
  F-1
 Table
                of Contents
  **Consolidated
            Balance Sheets**
 **December
            31, 2006 and 2005**
 **(in
            Canadian dollars)**
  **2006**
                      
                      
                      **2005****ASSETS**CURRENT
                          ASSETSCash
                          and cash
                          equivalents
                      
                      **$**
                      **5,578,691**
                      
                      $
                      293,107Cash held for exploration expenditures (Note 5)
                      
                      
                      **206,815**
                      
                      
                      4,028,247Short-term
                          deposits
                      
                      
                      **-**
                      
                      
                      5,871,753Amounts
                          receivable and prepaid expenses
                      
                      
                      **904,437**
                      
                      
                      543,123Marketable
                          securities
                      
                      
                      **165,001**
                      
                      
                      160,101**6,854,944**
                      
                      
                      10,896,331MINERAL
                          INTERESTS (Note 3)
                      
                      
                      **53,262,180**
                      
                      
                      24,395,438INVESTMENT
                          (Note 3(c))
                      
                      
                      **-**
                      
                      
                      749,450RECLAMATION
                          DEPOSITS (Note 4)
                      
                      
                      **1,069,900**
                      
                      
                      1,000,000PROPERTY
                          AND
                          EQUIPMENT
                      
                      
                      **56,772**
                      
                      
                      43,510**$**
                      **61,243,796**
                      
                      $
                      37,084,729**LIABILITIES**CURRENT
                          LIABILITIESAccounts
                          payable and accruals
                      
                      **$**
                      **435,148**
                      
                      $
                      293,120PROVISIONS
                          FOR RECLAMATION LIABILITIES (Note 4)
                      
                      
                      **1,529,948**
                      
                      
                      1,406,734**1,965,096**
                      
                      
                      1,699,854**SHAREHOLDERS’
                          EQUITY**(Note
                          5)SHARE
                          CAPITAL
                      
                      
                      **66,774,637**
                      
                      
                      52,914,945STOCK
                          OPTIONS
                      
                      
                      **2,857,676**
                      
                      
                      959,543SHARE
                          PURCHASE WARRANTS
                      
                      
                      **11,436,000**
                      
                      
                      -CONTRIBUTED
                          SURPLUS
                      
                      
                      **19,500**
                      
                      
                      19,500DEFICIT
                      
                      
                      **(21,
                          809,113**
                      **)**
                      
                      (18,509,113
                      )**59,278,700**
                      
                      
                      35,384,875COMMITMENTS
                          (Note 3(e) and 5(a))
                      
                      **$**
                      **61,243,796**
                      
                      $
                      37,084,729See
                          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-2
 Table
              of Contents
  **Consolidated
        Statements of Operations and Deficit**
 **For
        the
        Years Ended December 31, 2006, 2005 and 2004**
 **(in
        Canadian dollars)**
  **2006**
                
                **2005**
                
                **2004**EXPENDITURESCorporate
                    and
                    general expenses
                
                **$**
                **4,747,724**
                
                $
                2,100,791
                
                $
                1,943,789Interest
                    income
                
                
                **(362,957**
                **)**
                
                (134,677
                )
                
                (82,763
                )Gain on sale of marketable securities
                
                
                **(88,800**
                **)**
                
                -
                
                
                (74,900
                )Write-down of investment (Note 3(c))
                
                
                **749,450**
                
                
                -
                
                
                -Foreign
                    exchange losses (gains)
                
                
                **161,267**
                
                
                11,967
                
                
                (3,563
                )Minority
                    interest
                
                
                **-**
                
                
                -
                
                
                18,725LOSS
                    BEFORE
                    INCOME TAXES
                
                
                **5,206,684**
                
                
                1,978,081
                
                
                1,801,288Income
                    tax
                    recoveries (Note 5(a)(ii))
                
                
                **(1,906,684**
                **)**
                
                (820,800
                )
                
                (575,000
                )NET
                    LOSS FOR
                    YEAR
                
                
                **3,300,000**
                
                
                1,157,281
                
                
                1,226,288DEFICIT,
                    BEGINNING OF YEAR
                
                
                **18,509,113**
                
                
                17,351,832
                
                
                16,125,544DEFICIT,
                    END
                    OF YEAR
                
                **$**
                **21,809,113**
                
                $
                18,509,113
                
                $
                17,351,832LOSS
                    PER
                    SHARE - basic
                
                **$**
                **0.10**
                
                $
                0.04
                
                $
                0.04WEIGHTED
                    AVERAGE NUMBER OF SHARES OUTSTANDING
                
                
                **33,458,517**
                
                
                30,682,026
                
                
                28,876,451See
                    accompanying notes to consolidated financial
                    statements
  F-3
 Table
            of Contents
  **Consolidated
          Statements of Cash Flows**
 **For
          the
          Years Ended December, 2006, 2005 and 2004**
 **(in
          Canadian dollars)**
  **2006**
                
                **2005**
                
                **2004**CASH
                    PROVIDED
                    FROM (USED FOR) OPERATIONSNet
                    loss for
                    year
                
                **$**
                **(3,330,000**
                **)**
                $
                (1,157,281
                )
                $
                (1,226,288
                )Items
                    not
                    involving cashStock
                    option
                    compensation
                
                
                **1,978,807**
                
                
                361,350
                
                
                114,735Write-down of investment (Note 3(c))
                
                
                **749,450**
                
                
                -
                
                
                -Foreign
                    exchange
                
                
                **(53,768**
                **)**
                
                -
                
                
                -Minority
                    interest
                
                
                **-**
                
                
                -
                
                
                18,725Accretion
                
                
                **123,214**
                
                
                113,285
                
                
                104,160Amortization
                
                
                **2,611**
                
                
                7,215
                
                
                4,339Income
                    tax
                    recoveries
                
                
                **(1,906,684**
                **)**
                
                (820,800
                )
                
                (580,800
                )Changes
                    in
                    non-cash working capital itemsAmounts
                    receivable and prepaid expenses
                
                
                **32,269**
                
                
                83,707
                
                
                (109,911
                )Accounts
                    payable and accruals
                
                
                **43,793**
                
                
                192,037
                
                
                (89,305
                )**(2,330,308**
                )
                
                (1,220,487
                )
                
                (1,764,345
                )INVESTING
                    ACTIVITIESMineral
                    interests
                
                
                **(14,571,174**
                **)**
                
                (3,815,625
                )
                
                (6,714,026
                )Short-term
                    deposits
                
                
                **5,871,753**
                
                
                (3,241,551
                )
                
                (1,739,302
                )Reclamation
                    deposits
                
                
                **(20,900**
                **)**
                
                -
                
                
                225,000Property
                    and
                    Equipment
                
                
                **(30,921**
                **)**
                
                (27,334
                )
                
                -**(8,751,242**
                **)**
                
                (7,084,510
                )
                
                (8,228,328
                )FINANCING
                    ACTIVITIESIssue
                    of
                    share capital and warrants
                
                
                **12,545,702**
                
                
                11,299,051
                
                
                8,241,374NET
                    CASH
                    PROVIDED (USED)
                
                
                **1,464,152**
                
                
                2,994,054
                
                
                (1,751,299
                )CASH
                    AND CASH
                    EQUIVALENTS, BEGINNING OF YEAR
                
                
                **4,321,354**
                
                
                1,327,300
                
                
                3,078,599CASH
                    AND CASH
                    EQUIVALENTS, END OF YEAR
                
                **$**
                **5,785,506**
                
                $
                4,321,354
                
                $
                1,327,300CASH
                    AND CASH
                    EQUIVALENTS, END OF YEAR:Cash
                    and cash
                    equivalents
                
                **$**
                **5,578,691**
                
                $
                293,107
                
                $
                157,502Cash
                    held for
                    exploration expenditures
                
                
                **206,815**
                
                
                4,028,247
                
                
                1,169,798**$**
                **5,785,506**
                
                $
                4,321,354
                
                $
                1,327,300
  See
          accompanying
          notes to consolidated financial statements
  F-4
 Table
              of Contents
 **Notes
            to
            the Financial Statements**
 **At
            December
            31, 2006 and 2005 and**
 **For
            the
            Years Ended December 31, 2006, 2005 and 2004**
 **(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 10, 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. Prior to July 2004,
            PIGCO was
            75% owned. 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, except for those noted in Note 3.
 
 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 (Note 4).
 
 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.
  F-5
 Table
                of Contents
  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 cost, which approximates
            market.
            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 are recorded at the lower of cost
            or market
            value. 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 valued at cost. The market value of the marketable securities
            holdings at December 31, 2006 was $219,000.
 
 h)
                  **Investments**
 Investments
            in
            companies where the Company does not have significant influence are carried
            at
            cost less any allowance for other than temporary impairment.
 
 i)
                  **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.
  j)
                  **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 in the current year.
 
 k)
                  **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 likely 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.
 
 l)
                  **Loss
                      Per Share**
 Loss
            per share of
            common stock is computed based on the
            weight ed
            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, 2006 and 2005, all outstanding
            options have been excluded from the calculation of diluted loss per
            share.
 
 m)
                  **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, amortization
            rates,
            accrued liabilities and contingencies and calculations of future income
            tax
            assets. Actual results could be materially different from those
            estimates.
  F-6
 Table
                of Contents
  **3.**
                    **MINERAL
                        INTERESTS**
 Expenditures
              made
              on account of mineral interests by the Company were as follows:
  **2006****Property
                        and Expense**
                    
                    **Balance,
                        December 31, 2005**
                    
                    
                    
                    **Expenditures**
                    
                    **Recoveries**
                    
                    **Balance,**
                      **December
                        31, 2006****Courageous
                        Lake**Acquisition
                        costs
                    
                    
                    $
                    
                    
                    8,252,305
                    
                    
                    
                    
                    $
                    50,000
                    
                    
                    $
                    
                    
                    -
                    
                    
                    $
                    
                    
                    8,302,305Deferred
                        exploration
                    
                    
                    
                    
                    
                    7,519,488
                    
                    
                    
                    
                    
                    4,553,309
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    12,072,797**15,771,793**
                    
                    
                    
                    
                    
                    **4,603,309**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **20,375,102****Castle
                        Black Rock**Acquisition
                        costs
                    
                    
                    
                    
                    
                    140,426
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    140,426Deferred
                        exploration
                    
                    
                    
                    
                    
                    243,642
                    
                    
                    
                    
                    
                    45,556
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    289,198**384,068**
                    
                    
                    
                    
                    
                    **45,556**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **429,624****Grassy
                        Mountain**Acquisition
                        costs
                    
                    
                    
                    
                    
                    2,261,299
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    2,261,299Deferred
                        exploration
                    
                    
                    
                    
                    
                    844,548
                    
                    
                    
                    
                    
                    142,193
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    986,741**3,105,847**
                    
                    
                    
                    
                    
                    **142,193**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **3,248,040****Hog
                        Ranch**Acquisition
                        costs
                    
                    
                    
                    
                    
                    443,838
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    443,838Deferred
                        exploration
                    
                    
                    
                    
                    
                    629,850
                    
                    
                    
                    
                    
                    71,038
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    700,888**1,073,688**
                    
                    
                    
                    
                    
                    **71,038**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **1,144,726****Kerr-Sulphurets**Acquisition
                        costs
                    
                    
                    
                    
                    
                    465,542
                    
                    
                    
                    
                    
                    14,595,666
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    15,061,208Deferred
                        exploration
                    
                    
                    
                    
                    
                    61,382
                    
                    
                    
                    
                    
                    3,656,444
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    3,717,826**526,924**
                    
                    
                    
                    
                    
                    **18,252,110**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **18,779,034****Quartz
                        Mountain**Acquisition
                        costs
                    
                    
                    
                    
                    
                    357,139
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    357,139Deferred
                        exploration
                    
                    
                    
                    
                    
                    85,348
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    85,348**442,487**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **442,487****Red
                        Mountain**Acquisition
                        costs
                    
                    
                    
                    
                    
                    82,090
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    82,090Deferred
                        exploration
                    
                    
                    
                    
                    
                    690,720
                    
                    
                    
                    
                    
                    168,460
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    859,180**772,810**
                    
                    
                    
                    
                    
                    **168,460**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **941,270****Pacific
                        Intermountain Gold Corp.**Acquisition
                        costs
                    
                    
                    
                    
                    
                    14,860
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    (14,860
                    )
                    
                    
                    
                    
                    -Deferred
                        exploration
                    
                    
                    
                    
                    
                    2,060,644
                    
                    
                    
                    
                    
                    472,568
                    
                    
                    
                    
                    
                    (44,610
                    )
                    
                    
                    
                    
                    2,488,602**2,075,504**
                    
                    
                    
                    
                    
                    **472,568**
                    
                    
                    
                    
                    
                    **(59,470**
                    **)**
                    
                    
                    
                    
                    **2,488,602****Other
                        Nevada Projects**Acquisition
                        costs.
                    
                    
                    
                    
                    
                    20,000
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    20,000Deferred
                        exploration
                    
                    
                    
                    
                    
                    193,416
                    
                    
                    
                    
                    
                    61,186
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    254,602**213,416**
                    
                    
                    
                    
                    
                    **61,186**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **274,602****Noche
                        Buena, Mexico**Acquisition
                        costs.
                    
                    
                    
                    
                    
                    28,901
                    
                    
                    
                    
                    
                    4,859,369
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    4,888,270Deferred
                        exploration
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    250,423
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    250,423**28,901**
                    
                    
                    
                    
                    
                    **5,109,792**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **5,138,693****Total**Acquisition
                        costs
                    
                    
                    
                    
                    
                    12,066,400
                    
                    
                    
                    
                    
                    19,505,035
                    
                    
                    
                    
                    
                    (14,860
                    )
                    
                    
                    
                    
                    31,556,575Deferred
                        exploration
                    
                    
                    
                    
                    
                    12,329,038
                    
                    
                    
                    
                    
                    9,421,177
                    
                    
                    
                    
                    
                    (44,610
                    )
                    
                    
                    
                    
                    21,705,605**Total
                        Mineral Interests**
                    
                    
                    **$**
                    
                    
                    **24,395,438**
                    
                    
                    
                    
                    **$**
                    **28,926,212**
                    
                    
                    **$**
                    
                    
                    **(59,470**
                    **)**
                    
                    **$**
                    
                    
                    **53,262,180**
  F-7
 Table
                  of Contents
 **2005****Property
                          and Expense**
                      
                      **Balance,
                          December 31, 2004**
                      
                      
                      
                      **Expenditures**
                      
                      **Recoveries**
                      
                      **Balance,**
                        **December
                          31, 2005****Courageous
                          Lake**Acquisition
                          costs
                      
                      
                      $
                      
                      
                      8,202,305
                      
                      
                      
                      
                      $
                      50,000
                      
                      
                      $
                      
                      
                      -
                      
                      
                      $
                      
                      
                      8,252,305Deferred
                          exploration
                      
                      
                      
                      
                      
                      5,388,752
                      
                      
                      
                      
                      
                      2,130,736
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      7,519,488**13.591,057**
                      
                      
                      
                      
                      
                      **2,180,736**
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      **15,771,793****Castle
                          Black Rock**Acquisition
                          costs
                      
                      
                      
                      
                      
                      140,426
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      140,426Deferred
                          exploration
                      
                      
                      
                      
                      
                      194,214
                      
                      
                      
                      
                      
                      49,428
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      243,642**334,640**
                      
                      
                      
                      
                      
                      **49,428**
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      **384,068****Grassy
                          Mountain**Acquisition
                          costs
                      
                      
                      
                      
                      
                      2,261,299
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      2,261,299Deferred
                          exploration
                      
                      
                      
                      
                      
                      708,837
                      
                      
                      
                      
                      
                      135,711
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      844,548**2,970,136**
                      
                      
                      
                      
                      
                      **135,711**
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      **3,105,847****Hog
                          Ranch**Acquisition
                          costs
                      
                      
                      
                      
                      
                      443,838
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      443,838Deferred
                          exploration
                      
                      
                      
                      
                      
                      563,897
                      
                      
                      
                      
                      
                      65,953
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      629,850**1,007,735**
                      
                      
                      
                      
                      
                      **65,953**
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      **1,073,688****Kerr-Sulphurets**Acquisition
                          costs
                      
                      
                      
                      
                      
                      465,542
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      465,542Deferred
                          exploration
                      
                      
                      
                      
                      
                      59,177
                      
                      
                      
                      
                      
                      2,205
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      61,382**524,719**
                      
                      
                      
                      
                      
                      **2,205**
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      **526,924****Quartz
                          Mountain**Acquisition
                          costs
                      
                      
                      
                      
                      
                      357,139
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      357,139Deferred
                          exploration
                      
                      
                      
                      
                      
                      85,348
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      85,348**442,487**
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      **442,487****Red
                          Mountain**Acquisition
                          costs
                      
                      
                      
                      
                      
                      82,090
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      82,090Deferred
                          exploration
                      
                      
                      
                      
                      
                      534,866
                      
                      
                      
                      
                      
                      155,854
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      690,720**616,956**
                      
                      
                      
                      
                      
                      **155,854**
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      **772,810****Pacific
                          Intermountain Gold Corp.**Acquisition
                          costs
                      
                      
                      
                      
                      
                      48,215
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      (33,355
                      )
                      
                      
                      
                      
                      14,860Deferred
                          exploration
                      
                      
                      
                      
                      
                      1,303,058
                      
                      
                      
                      
                      
                      757,586
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      2,060,644**1,351,273**
                      
                      
                      
                      
                      
                      **757,586**
                      
                      
                      
                      
                      
                      **(33,355**
                      **)**
                      
                      
                      
                      
                      **2,075,504****Other
                          Nevada Projects**Acquisition
                          costs.
                      
                      
                      
                      
                      
                      20,000
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      20,000Deferred
                          exploration
                      
                      
                      
                      
                      
                      139,668
                      
                      
                      
                      
                      
                      53,748
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      193,416**159,668**
                      
                      
                      
                      
                      
                      **53,748**
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      **293,416****Noche
                          Buena, Mexico**Acquisition
                          costs.
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      28,901
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      28,901Deferred
                          exploration
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      **-****-**
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      **28,901**
                      
                      
                      
                      
                      
                      **-**
                      
                      
                      
                      
                      
                      **28,901****Total**Acquisition
                          costs
                      
                      
                      
                      
                      
                      12,020,854
                      
                      
                      
                      
                      
                      78,901
                      
                      
                      
                      
                      
                      (33,355
                      )
                      
                      
                      
                      
                      12,066,400Deferred
                          exploration
                      
                      
                      
                      
                      
                      8,977,817
                      
                      
                      
                      
                      
                      3,351,221
                      
                      
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      12,329,038**Total
                          Mineral Interests**
                      
                      
                      **$**
                      
                      
                      **20,998,671**
                      
                      
                      
                      
                      **$**
                      **3,430,122**
                      
                      
                      **$**
                      
                      
                      **(33,355**
                      **)**
                      
                      **$**
                      
                      
                      **24,395,438**
  F-8
 Table
                  of Contents
 **2004****Property
                        and Expense**
                    
                    **Balance,
                        December 31,**
                      **2003**
                    
                    
                    
                    **Expenditures**
                    
                    **Recoveries**
                    
                    **Balance,**
                      **December
                        31,**
                      **2004****Castle
                        Black Rock**Acquisition
                        costs
                    
                    
                    $
                    
                    
                    140,426
                    
                    
                    
                    
                    $
                    -
                    
                    
                    $
                    
                    
                    -
                    
                    
                    $
                    
                    
                    140,426Deferred
                        exploration
                    
                    
                    
                    
                    
                    137,141
                    
                    
                    
                    
                    
                    57,073
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    194,214**277,567**
                    
                    
                    
                    
                    
                    **57,073**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **334,640****Grassy
                        Mountain**Acquisition
                        costs
                    
                    
                    
                    
                    
                    2,261,299
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    2,261,299Deferred
                        exploration
                    
                    
                    
                    
                    
                    490,785
                    
                    
                    
                    
                    
                    218,052
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    708,837**2,752,084**
                    
                    
                    
                    
                    
                    **218,052**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **2,970,136****Hog
                        Ranch**Acquisition
                        costs
                    
                    
                    
                    
                    
                    488,838
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    (45,000
                    )
                    
                    
                    
                    
                    443,838Deferred
                        exploration
                    
                    
                    
                    
                    
                    563,220
                    
                    
                    
                    
                    
                    677
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    563,897**1,052,058**
                    
                    
                    
                    
                    
                    **677**
                    
                    
                    
                    
                    
                    **(45,000**
                    **)**
                    
                    
                    
                    
                    **1,007,735****Kerr-Sulphurets**Acquisition
                        costs
                    
                    
                    
                    
                    
                    465,542
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    465,542Deferred
                        exploration
                    
                    
                    
                    
                    
                    58,673
                    
                    
                    
                    
                    
                    504
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    59,177**524,215**
                    
                    
                    
                    
                    
                    **504**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **524,719****Quartz
                        Mountain**Acquisition
                        costs
                    
                    
                    
                    
                    
                    357,139
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    357,139Deferred
                        exploration
                    
                    
                    
                    
                    
                    85,348
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    85,348**442,487**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **442,487****Red
                        Mountain**Acquisition
                        costs
                    
                    
                    
                    
                    
                    82,090
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    82,090Deferred
                        exploration
                    
                    
                    
                    
                    
                    344,691
                    
                    
                    
                    
                    
                    190,175
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    534,866**426,781**
                    
                    
                    
                    
                    
                    **190,175**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **616,956****Courageous
                        Lake**Acquisition
                        costs
                    
                    
                    
                    
                    
                    8,152,305
                    
                    
                    
                    
                    
                    50,000
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    8,202,305Deferred
                        exploration
                    
                    
                    
                    
                    
                    1,708,693
                    
                    
                    
                    
                    
                    3,680,059
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    5,388,752**9,860,998**
                    
                    
                    
                    
                    
                    **3,730,059**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **13,591,057****Pacific
                        Intermountain Gold Corp.**Acquisition
                        costs
                    
                    
                    
                    
                    
                    137,461
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    (89,246
                    )
                    
                    
                    
                    
                    48,215Deferred
                        exploration
                    
                    
                    
                    
                    
                    1,049,893
                    
                    
                    
                    
                    
                    460,534
                    
                    
                    
                    
                    
                    (207,369
                    )
                    
                    
                    
                    
                    1,303,058**1,187,354**
                    
                    
                    
                    
                    
                    **460,534**
                    
                    
                    
                    
                    
                    **(296,615**
                    **)**
                    
                    
                    
                    
                    **1,351,273****Other
                        Nevada Projects**Acquisition
                        costs.
                    
                    
                    
                    
                    
                    20,000
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    20,000Deferred
                        exploration
                    
                    
                    
                    
                    
                    91,329
                    
                    
                    
                    
                    
                    48,339
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    139,668**111,329**
                    
                    
                    
                    
                    
                    **48,339**
                    
                    
                    
                    
                    
                    **-**
                    
                    
                    
                    
                    
                    **159,668****Total**Acquisition
                        costs
                    
                    
                    
                    
                    
                    12,105,100
                    
                    
                    
                    
                    
                    50,000
                    
                    
                    
                    
                    
                    (134,246
                    )
                    
                    
                    
                    
                    12,020,854Deferred
                        exploration
                    
                    
                    
                    
                    
                    4,529,773
                    
                    
                    
                    
                    
                    4,655,413
                    
                    
                    
                    
                    
                    (207,369
                    )
                    
                    
                    
                    
                    8,977,817**Total
                        Mineral Interests**
                    
                    
                    **$**
                    
                    
                    **16,634,873**
                    
                    
                    
                    
                    **$**
                    **4,705,413**
                    
                    
                    **$**
                    
                    
                    **(341,615**
                    **)**
                    
                    **$**
                    
                    
                    **20,998,671**
  Continued
              exploration of the Company’s mineral properties are subject to certain lease
              payments, project holding costs, rental fees and filing fees.
  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.
 
 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.
 F-9
 Table
                    of Contents
  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 has 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)
                    **Kerr-Sulphurets**
 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 Falconbridge Limited (formerly Noranda
              Inc.)
              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 Kerr-Sulphurets 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 o unce
              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 were
              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.
 
 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 Energy Metals Corp. (formerly
              Quincy
              Resources Inc.). The current gold resource known on the property is
              excluded
              from the agreement. The terms of the agreement require Quincy to incur
              US$1.5
              million in exploration and issue 250,000 of its shares in stages by
              October
              2008. Quincy can earn a further 12.5% interest in the project by funding
              a
              feasibility study and issuing a further 250,000 of its shares to the
              Company. If
              after earning its 50% interest, Quincy elects not to proceed with a
              feasibility
              study, the Company has the option to acquire Quincy’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.
 
 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.
  F-10
 Table
                  of Contents
  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.
  **4.**
                      **RECLAMATION
                          DEPOSITS AND PROVISIONS FOR RECLAMATION
                          LIABILITIES**
 $1
              million of the
              balance in reclamation deposits represents the Company’s interest in Canadian
              bank term deposits which are held for the benefit of the Province of
              British
              Columbia until released or applied to reclamation costs which may arise
              in the
              future. Interest earned is paid to the Company. During 2001, a deposit
              of $1
              million was transferred to the Company’s name for the Red Mountain project. A
              corresponding reclamation provision of $1 million was recorded as an
              estimation
              of any potential future reclamation costs. This reclamation provision
              is an
              estimate, and therefore the provision is subject to changes in regulatory
              requirements and other external factors. During 2003, a reclamation
              provision of
              US$146,000 (CDN$189,289) was recorded on the Grassy Mountain property.
              The
              corresponding reclamation deposit is in the process of being finalized
              and
              deposited with the regulatory authorities.
 
 The
              fair value of
              the asset retirement obligations was calculated using the total undiscounted
              cash flows required to settle estimated obligations of $1,189,000,
              expected
              timing of cash flow payments required to settle the obligations, credit-adjusted
              risk-free discount rate of 8.76% and an inflation rate of 2.0%.
 
 **5.**
                    **SHAREHOLDERS’
                        EQUITY**
  **a)**
                      **Share
                          Capital**
 **Shares**
                    
                    **Amount**AuthorizedUnlimited
                        number of common shares without par value
                      Unlimited
                        number of preference shares (none issued)Issued
                        -
                        Common sharesBalance,
                        December 31, 2003
                    
                    
                    27,584,785
                    
                    $
                    34,470,262Issued
                        during
                        yearFor
                        cash,
                        exercise of stock options
                    
                    
                    200,000
                    
                    
                    212,650For
                        cash,
                        exercise of warrants
                    
                    
                    225,000
                    
                    
                    562,500For
                        cash,
                        private placements
                    
                    
                    1,705,000
                    
                    
                    7,466,224Value
                        of
                        share purchase warrants and stock options exercised
                    
                    
                    -
                    
                    
                    99,500Renunciation
                        of flow-through share value (ii)
                    
                    
                    -
                    
                    
                    (580,800
                    )2,130,000
                    
                    
                    7,760,074Balance,
                        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 (iii)
                    
                    
                    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 3 (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
                    
                    $
                    66,774,637
 
 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 has been recorded on the balance sheet as Cash held
              for
              Exploration Expenditures. In January 2007, the CEE was renounced to
              the
              investors.
 
 (ii)
                    In
                        January
                        2006, the Company renounced $5,278,750 (2005 - $2,272,500,
                        2004 -
                        $1,608,000) in Canadian Exploration Expenses to investors
                        of flow-through
                        shares in 2005, 2004 and 2003, respectively. The tax value
                        of these
                        renunciations has been recorded as a future tax liability
                        and charged
                        against share capital. Since the Company has a valuation
                        allowance which
                        reduces the future income tax assets, the valuation allowance
                        has been
                        reduced and income tax recoveries have been recognized in
                        the statement of
                        operations.
  F-11
 Table
                  of Contents
  (iii)
                    In
                        October
                        2005, the Company completed a private placement consisting
                        of 1,000,000
                        common shares for gross proceeds of
                        $5,000,000.
 
 In
              February 2005
              and December 2005, the Company completed private placement flow-through
              financings of 500,000 common shares for gross proceeds of $2,125,000
              and 435,000
              common shares for gross proceeds of $3,153,750, respectively. Under
              the terms of
              the financings the Company will renounce to the investors the CEE incurred
              with
              the proceeds of the financings. The balance of funds not spent by December
              31,
              2005 has been recorded on the balance sheet as Cash held for Exploration
              Expenditures. In February 2006, the CEE was renounced to the
              investors.
 
 **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 manage-ment. 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
              Board granted
              options as to 600,000 in August 2002, as to 100,000 in August 2004
              and as to
              50,000 in January 2005 to senior management in lieu of market rate
              salaries.
              These option grants required a $6.00 share price for 10 successive
              days for the
              first third to vest, a $9.00 share price for the second third and a
              $12.00 share
              price for the final third. Once the share price has met the first test,
              the
              Company’s share price performance must have exceeded the Toronto Stock Exchange
              Canadian Gold Index by more than 20% over the preceding six months
              or these
              options will be cancelled.
 
 In
              October 2005,
              the $6 vesting criteria was reached, in December 2005 the $9 vesting
              criteria
              was reached and in May 2006 the $12 vesting criteria was reached. Compensation
              expense on the former two vesting criteria, which related to the vesting
              of
              500,000 shares was recognized in 2005 in the amount of $332,000 and
              the balance
              of $176,791 was recognized in 2006 with the vesting of the remaining
              250,000
              shares.
 
 In
              January 2006,
              the Board granted 875,000 additional five-year options to directors
              and senior
              management exercisable at $10.56 each and subject to the two-tiered
              vesting
              policy. These options require a $15.00 share price for 10 successive
              days for
              the first third to vest, an $18.00 share price for the second third
              and a $21.00
              share price for the final third. Once the share price has met the first
              test,
              the Company’s share price performance must have exceeded the Toronto Stock
              Exchange Canadian Gold Index by more than 20% over the preceding six
              months or
              these options will be cancelled. These option grants were also subject
              to the
              approval of shareholders which was received on May 17, 2006.
 
 The
              weighted
              average grant date fair value of the 15,000 options granted during
              2006 which
              were not subject to the two-tiered vesting policy described above was
              $2.70
              (2005 - $3.33, 2004 - $1.53). The grant of these 15,000 options resulted
              in
              compensation expense totalling $40,485 compared to 45,000 options resulting
              in
              compensation expense totalling $29,784 during 2005 and 75,000 options
              resulting
              in compensation expense of $114,735 during 2004. 30,000 of the 2005
              options
              vested over the period December 2005 to December 2006 and consequently
              $3,729
              was expensed in 2005 and $120,021 in 2006. **** 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:
 
 **2006**
                    **2005**
                    **2004**Dividend
                        yield
                    Nil
                    Nil
                    NilExpected
                        volatility
                    65%
                    60%
                    37%Risk
                        free
                        rate of return
                    3.8%
                    4.21%
                    4.0%Expected
                        life
                        of options
                    1
                        year
                    3.5
                        years
                    3
                        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
              September 2006, the $15 per share and 20% out performance of the TSX
              Gold Index
              vesting requirements were met on the options granted in 2006 and the
              value
              related to that vesting provision has been expensed in the current
              year. During
              2006 in total, $1,641,510 of this amount has been expensed and the
              balance will
              be expensed over the shorter of the term of the option and when the
              remaining
              vestings actually occur.
  F-12
 Table
                  of Contents
  A
              summary of the
              status of the plans at December 31, 2006 and changes during the years
              are
              presented below:
 
 **Shares**
                    
                    **Weighted
                        Average Exercise Price**
                    
                    **Amount**Outstanding
                        at December 31, 2003
                    
                    1,978,900
                    
                    $ 1.66
                    
                    $609,941Granted
                    
                    
                    175,000
                    
                    
                    4.14
                    
                    
                    114,735Exercised
                    
                    
                    (200,000
                    )
                    
                    1.06
                    
                    
                    (20,750
                    )Outstanding
                        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
                    
                    
                    -
                    
                    
                    -
                    
                    
                    296,812**Outstanding
                        at December 31, 2006**
                    
                    
                    **2,185,500**
                    
                    **$**
                    **5.93**
                    
                    **$**
                    **2,857,676**
 
 
 **Number
                        of Shares**
                    
                    **Option
                        Price**
                      **Per
                        Share**
                    
                    **Expiry
                        Date**78,000
                    
                    $0.88
                    
                    February
                        17,
                        200740,000
                    
                    $2.63
                    
                    May
                        30,
                        2007295,000
                    
                    $2.90
                    
                    July
                        1,
                        2007600,000
                    
                    $2.20
                    
                    August
                        19,
                        200710,000
                    
                    $2.58
                    
                    December
                        18,
                        200715,000
                    
                    $2.08
                    
                    June
                        3,
                        200817,000
                    
                    $2.58
                    
                    August
                        12,
                        20088,000
                    
                    $3.82
                    
                    October
                        28,
                        200837,500
                    
                    $5.65
                    
                    January
                        13,
                        2009100,000
                    
                    $3.37
                    
                    August
                        13,
                        200965,000
                    
                    $4.00
                    
                    January
                        11,
                        201030,000
                    
                    $9.50
                    
                    December
                        20,
                        2010875,000
                    
                    $   10.56
                    
                    January
                        4,
                        201115,000
                    
                    US$9.13
                    
                    June
                        14,
                        2007**2,185,500**
                    
                    $    
                        5.93
 
 At
              December 31,
              2006 there were 2,185,500 options outstanding of which 1,602,166 were
              exercisable at prices ranging from $0.88 to $10.56 each. In addition,
              there were
              583,334 options subject to the two-tiered vesting provisions.
 
 **c)**
                    **Share
                        Purchase Warrants**
 The
              Company’s
              movement in share purchase warrants is as follows:
  **Number
                        of Warrants**
                    
                    **Amount**Balance
                        at
                        December 31, 2003
                    512,500
                    $
                    179,375Exercised
                    (225,000)
                    
                    (78,750)Balance
                        at
                        December 31, 2004
                    287,500
                    
                    100,625Exercised
                    (287,500)
                    
                    (100,625)Balance
                        at
                        December 31, 2005
                    **-**
                    
                    **-**Issued
                        for
                        Mineral Property
                    2,000,000
                    
                    11,436,000**Balance
                        at December 31, 2006**
                    **2,000,000**
                    **$**
                    **11,436,000**
 
 The
              share purchase
              warrants granted in 2006 were part of the acquisition of the Kerr-Sulphurets
              project (see Note 3(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
 
 F-13
 Table
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 **6.**
                    **RELATED
                        PARTY TRANSACTIONS**
 a)
                    During
                        the
                        year, a private company controlled by a director of the Company
                        was paid
                        $33,900 (2005 - $39,400, 2004 - $56,700) 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 $144,000
                        (2005 - $120,000, 2004 - $132,500) for consulting services
                        rendered.
 c)
                    During
                        the
                        year, a new director (effective January 4, 2006) was paid
                        $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.
 **7.**
                      **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, 2006 and December 31, 2005 is
                estimated to
                approximate their carrying values due to the immediate or short-term
                maturity of
                these financial instruments.
 
 **8.**
                      **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% (2005
                - 36.12%,
                2004 - 36.12%) as follows:
 **2006**
                        **2005**
                        **2004**Statutory
                            rate applied to loss for year
                        $
                        1,881,000
                        $
                        714,000
                        $
                        650,000Non
                            deductible items
                        
                        (785,000)
                        
                        (217,000)
                        
                        (151,000)Valuation
                            allowance
                        
                        (1,096,000)
                        
                        (497,000)
                        
                        (499,000)Reduction
                            in
                            valuation allowance
                        
                        1,907,000
                        
                        820,800
                        
                        575,000$
                        1,907,000
                        $
                        820,800
                        $
                        575,000
 Significant
                    components of the Company’s future tax assets and liabilities are as
                    follows:
  **2006**
                            
                            **2005**Future
                                income
                                tax assetsMineral
                                interests
                            $
                            (1,611,000)
                            $
                            135,000Share
                                issue
                                costs****
                            
                            104,000
                            
                            103,000Non
                                capital
                                losses
                            
                            1,979,000
                            
                            1,508,000Provision
                                for
                                reclamation
                            
                            157,000
                            
                            68,000Unrealized
                                capital losses
                            
                            291,000
                            
                            29,000920,000
                            
                            1,843,000Valuation
                                allowance
                            
                            (920,000)
                            
                            (1,843,000)Future
                                income
                                tax assets, net
                            $
                            -
                            $
                            -
 A
                future tax asset
                of approximately $1,594,000 (2005 - $975,000) 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.
 
 The
              Company has
              accumulated non-capital losses for Canadian tax purposes of approximately
              $6,234,000 which expire in various years to 2026 as follows:
 
 2007
                    
                    $ 185,0002008
                    
                    
                    338,0002009
                    
                    
                    735,0002010
                    
                    
                    707,0002014
                    
                    
                    910,0002015
                    
                    
                    1,092,0002026
                    
                    
                    2,267,000$
                    6,234,000
 
 The
              benefit of the
              above loss carry forwards has not been recognized for accounting
              purposes.
 
 F-14
 Table
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  **9.**
                    **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:
 **2006**
                    
                    **2005**
                    
                    **2004**Net
                        loss for
                        year - Canadian GAAP
                    
                    $(3,300,000)
                    
                    $(1,157,281)
                    
                    $(1,226,288)Mineral
                        interests prior to the establishment
                      of
                        proven and probable
                        reserves (a)
                    
                    
                    (9,376,567
                    )
                    
                    (3,351,221
                    )
                    
                    (4,448,044
                    )Amortization
                        of acquisition costs (a)
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (324,402
                    )Amortization
                        of option payments (a)
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -Flow-through
                        share renunciation
                    
                    
                    (1,906,684
                    )
                    
                    (820,800
                    )
                    
                    (580,800
                    )Flow-through
                        share value
                    
                    
                    421,800
                    
                    
                    202,000
                    
                    
                    97,200Minority
                        interest (b)
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (188,644
                    )Net
                        loss for
                        the year - U.S. GAAP
                    
                    
                    (14,161,451
                    )
                    
                    (5,127,302
                    )
                    
                    (6,670,978
                    )Other
                        comprehensive income:Unrealized
                        gains on marketable securities (d)
                    
                    
                    53,561
                    
                    
                    -
                    
                    
                    -Comprehensive
                        loss - U.S. GAAP
                    
                    $
                    (14,107,890
                    )
                    $
                    (5,127,302
                    )
                    $
                    (6,670,978
                    )Loss
                        per
                        share - U.S. GAAP, Basic and diluted
                    
                    $
                    (0.42
                    )
                    $
                    (0.17
                    )
                    $
                    (0.23
                    )
 
 Accumulated
              other
              comprehensive income - U.S. GAAP
 **2006**
                    
                    **2005**
                    
                    **2004**Unrealized
                        gains on short-term investments
                    
                    $
                    53,561
                    
                    $
                    -
                    
                    $
                    -
 Consolidated
              statements of cash flows:
 **Canadian
                        GAAP**
                    **U.S.
                        GAAP****2006**
                    **2005**
                    **2004**
                    **2006**
                    **2005**
                    **2004**Cash
                        used in
                        operating activities
                    $(2,330,308)
                    $(1,220,487)
                    $(1,764,345)
                    $(11,706,875)
                    $(4,571,708)
                    $(6,212,389)Cash
                        provided
                        by (used for) investing activities
                    $(8,751,242)
                    $(7,084,510)
                    $(8,228,328)
                    $
                        625,325
                    $(3,733,289)
                    $(3,780,284)
  Consolidated
              balance sheets:
 ******Canadian
                        GAAP**
                    
                    ******U.S.
                        GAAP****2006**
                    
                    **2005**
                    
                    **2006**
                    
                    **2005**Current
                        assets- marketable securities
                    
                    $
                    165,001
                    
                    $
                    160,101
                    
                    $
                    218,562
                    
                    $
                    160,101Mineral
                        interests - unproven (a)
                    
                    $
                    53,262,180
                    
                    $
                    24,395,438
                    
                    $
                    28,649,170
                    
                    $
                    9,158,995Liabilities
                    
                    $
                    -
                    
                    $
                    -
                    
                    $
                    393,250
                    
                    $
                    421,800Shareholders’
                        equity
                    
                    $
                    59,278,700
                    
                    $
                    35,384,875
                    
                    $
                    34,326,001
                    
                    $
                    19,726,632
  **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.
  F-15
 Table
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  **b)**
                    **Minority
                        interest**
 Under
              United States
              GAAP the minority interest recognized in respect of PIGCO is nil at
              December 31,
              2003. The US GAAP net assets of PIGCO are reduced compared to the net
              assets
              under Canadian GAAP due to the write off of exploration expenditures
              and the
              amortization of acquisition expenditures (as explained in (a) above).
              In 2004,
              the minority interest in PIGCO was acquired by the Company and the
              balance
              credited to Deferred Exploration.
 
 **c)**
                    **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 $421,800
              for the
              flow-through shares issued in 2005 (2004 - 202,000). 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.
 
 **d)**
                    **Comprehensive
                        income**
 Under
              Canadian GAAP
              short-term investments are recorded at the lower of cost and quoted
              market
              value. 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.
 
 Statement
              of
              Financial Standards No. 130 “Reporting Comprehensive Income” (“FAS 130”) is
              applicable for U.S. GAAP purposes. FAS 130 establishes standards for
              the
              reporting and display of comprehensive income and its components in
              a full set
              of general purpose financial statements. FAS 130 requires that all
              items that
              are required to be recognized under accounting standards as components
              of
              comprehensive income be reported in a financial statement. No material
              difference arises from the application of FAS 130.
 
 In
              January 2005,
              the CICA issued re-exposure drafts of the proposed Handbook Section
              1530 *Comprehensive
              Income* which
              harmonizes
              Canadian GAAP with U.S. GAAP. The CICA has proposed that mandatory
              implementation of these standards be for interim and annual financial
              statements
              relating to years commencing on or after October 1, 2006.
 
 **e)**
                    **Impact
                        of recent United States accounting
                        pronouncements**
 In
              November 2004,
              the FASB issued FAS 151, which clarifies the accounting for abnormal
              amounts of
              idle facility expense, freight, handling costs and wasted material
              as they
              relate to inventory costing and requires these items to be recognized
              as current
              period expenses. Additionally, the allocation of fixed production overheads
              to
              the cost of inventory should be based on the normal capacity of the
              production
              facilities. FAS 151 is effective for inventory costs incurred during
              fiscal
              years beginning after June 15, 2005. The application of FAS 151 did
              not have an
              impact on the consolidated financial statements under U.S. GAAP.
 
 In
              December 2004,
              the FASB issued FAS 153, which deals with the accounting for the exchanges
              of
              non-monetary assets and is an amendment of Accounting Principles Board
              (“APB”)
              Opinion 29. FAS 153 eliminates the exception from using fair market
              value for
              non-monetary exchanges of similar productive assets and replaces it
              with a
              general exception for exchanges of non-monetary assets that do not
              have
              commercial substance, as defined. FAS 153 is effective for non-monetary
              asset
              exchanges occurring in fiscal periods beginning after June 15, 2005.
              The
              application of FAS 153 did not have an impact on the consolidated financial
              statements under U.S. GAAP.
 
 In
              December 2004,
              the FASB Statement No. 123 (revised), Shared-based Payment, was issued.
              This
              statement requires an entity to recognize the grant date fair value of stock
              options and other equity-based compensation issued to employees. In
              the income
              statement, FASB Statement No. 123 (revised) eliminates the ability
              to account
              for share-based compensation transactions using the intrinsic value
              method in
              APB Opinion No. 25. The Company, effective January 1, 2003, adopted
              FASB
              Statement No. 123, Accounting for Stock-based Compensation, as amended
              by FASB
              Statement No. 148, Accounting for Stock-based Compensation - Transition
              and
              Disclosure, and adopted FASB Statement No. 123 (revised) in 2006. These
              applications did not have an impact on the consolidated financial statements
              under U.S. GAAP.
 
 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 Company has not yet determined the impact on
              2007
              results.
 
 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. 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 o fair value measurements on earnings. 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 Company has not yet determined
              the impact on
              2007 results.
 
 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 Company has not yet determined the impact on
              2007
              results.
  F-16
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**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, 2007**
            **Signed:**
            **/s/
                Rudi Fronk**Rudi
                Fronk
              President
                and C.E.O.




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