---

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,
D.C. 20549


FORM 20-F

|   |                                                                                                                                   
|-- | ----------------------------------------------------------------------------------------------------------------------------------
|o  | REGISTRATION STATEMENT
 PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934                                   
|OR
|x  | ANNUAL REPORT PURSUANT TO
 SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal
 year ended December 31, 2008
|   |                                                                                                                                   
|OR
|   |                                                                                                                                   
|o  | TRANSITION REPORT PURSUANT
 TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                                         
|   | For the transition period from __________ to
 _______________                                                                     
|   |                                                                                                                                   
|OR
|   |                                                                                                                                   
|o  | 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: 1-32135

|                                                                                       
|---------------------------------------------------------------------------------------
|Seabridge Gold Inc.                                                                    
|                                                                                       
|(Exact name of
 Registrant as specified in its charter)                                
|Not Applicable                                                                         
|                                                                                       
|(Translation of
 Registrants Name into English)                                       
|                                                                                       
|Canada                                                                                 
|                                                                                       
|(Jurisdiction of
 incorporation or organization)                                       
|                                                                                       
|106 Front Street East,
 4th Floor, Toronto, Ontario CANADA M5A 1E1                     
|                                                                                       
|(Address of principal
 executive offices)                                              
|                                                                                       
|Rudi Fronk, Telephone:
 (416) 367-9292, rudi@seabridgegold.net                         
|106 Front Street, East,
 4th Floor, Toronto, Ontario, Canada M5A 1E1                   
|                                                                                       
|(Name, Telephone,
 E-mail and/or Facsimile number and Address of Company Contact Person

Securities registered or to be registered pursuant to
Section 12(b) of the Act.

|                           |  |                                          
|-------------------------- |  | -----------------------------------------
|Title of each class        |  | Name of each exchange on which registered
|                           |  |                                          
|Common Stock, no par value |  | NYSE Amex LLC                            
|Common Stock, no par value |  | Toronto Stock Exchange                   

Securities registered or to be registered pursuant to
Section 12(g) of the Act.

NONE
(Title of Class)

Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act. None

---

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Indicate the number of outstanding shares of each of
the issuers classes of capital or common stock as of the close of the period
covered by the annual report:37,386,185

Indicate by check mark if the registrant is a
well-known seasoned issuer as defined in Rule 405 of the Securities Act

o  Yes     x  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.

o  Yes     
x  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.

x  Yes     o  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  o     Accelerated filer  x     Non-accelerated filer  o

Indicate by check mark which basis of accounting the
registrant has used to prepare the financial statements included in this
filing:

|  |                                                                                                                                                                
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|o | US GAAP                                                                                                                                                        
|o | International Financial Reporting Standards as
 issued by the International Accounting Standards Board                                                         
|x | Other                                                                                                                                                          
|  | If Other has been checked in response to the
 previous question, indicate by check mark which financial statement item the
 registrant has elected to follow.

x  Item
17     o  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).

o  Yes     
x  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.

o  Yes     o  No

2

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Seabridge
Gold Inc.Form 20-F Annual
Report
Table of Contents

|          |  |                                                                                 |  |     
|--------- |  | ------------------------------------------------------------------------------- |  | ----
|          |  |                                                                                 |  | PAGE
|          |  |                                                                                 |  |     
|          |  |                                                                                 |  |     
|          |  | PART 1                                                                          |  |     
|          |  |                                                                                 |  |     
|          |  | Metric
 Equivalents                                                             |  | 4   
|          |  | Glossary
 of Terms                                                              |  | 4   
|Item 1.   |  | Identity
 of Directors, Senior Management and Advisers                          |  | 9   
|Item 2.   |  | Offer
 Statistics and Expected Timetable                                        |  | 9   
|Item 3.   |  | Key
 Information                                                                |  | 9   
|Item 4    |  | Information
 on the Company                                                     |  | 19  
|Item 4A   |  | Unresolved
 Staff Comments                                                      |  | 41  
|Item 5.   |  | Operating
 and Financial Review and Prospects                                   |  | 41  
|Item 6.   |  | Directors,
 Senior Management and Employees                                     |  | 47  
|Item 7.   |  | Major
 Shareholders and Related Party Transactions                              |  | 57  
|Item 8.   |  | Financial
 Information                                                          |  | 58  
|Item 9.   |  | The
 Offer and Listing                                                          |  | 59  
|Item 10.  |  | Additional
 Information                                                         |  | 61  
|Item 11.  |  | Quantitative
 and Qualitative Disclosures about Market Risk                     |  | 70  
|Item 12.  |  | Description
 of Securities Other than Equity Securities                         |  | 71  
|          |  |                                                                                 |  |     
|          |  | PART
II                                                                         |  |     
|          |  |                                                                                 |  |     
|Item 13.  |  | Default,
 Dividend Arrearages and Delinquencies                                 |  | 71  
|Item 14.  |  | Material
 Modifications to the Rights of Securities Holders and Use of Proceeds |  | 71  
|Item 15.  |  | Controls
 and Procedures                                                        |  | 71  
|Item 16A. |  | Audit
 Committee Financial Expert                                               |  | 72  
|Item 16B. |  | Code
 of Business Ethics                                                        |  | 73  
|Item 16C. |  | Principal
 Accountant Fees and Services                                         |  | 73  
|Item 16D. |  | Exemptions
 from the Listing Standards for Audit Committees                     |  | 73  
|Item 16E. |  | Purchases
 of Equity Securities by the Issuer and Affiliated Purchasers         |  | 73  
|Item 16F. |  | Change
 in Registrants Certifying Accountants                                  |  | 73  
|Item 16G. |  | Corporate
 Governance                                                           |  | 73  
|          |  |                                                                                 |  |     
|          |  | PART
III                                                                        |  |     
|          |  |                                                                                 |  |     
|Item 17.  |  | Financial
 Statements                                                           |  | 74  
|Item 18.  |  | Financial
 Statements                                                           |  | 74  
|Item 19.  |  | Exhibits                                                                        |  | 74  

3

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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              |  | 2.471       
|Meters                 |  | Feet (ft.)         |  | 3.281       
|Kilometers (km)        |  | Miles              |  | 0.621       
|Tonnes                 |  | Tons (2000 pounds) |  | 1.102       
|Grams/tonne            |  | Ounces (troy/ton)  |  | 0.029       

GLOSSARY OF TERMS

S.E.C Industry Guide

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.

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.

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.

National Instrument 43-101

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 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 Mineral Reserve:The economically
mineable part of an indicated, and in some circumstances, a Measured Mineral
Resource, demonstrated by at least a Preliminary Feasibility Study. This study
must include adequate information on mining, processing, metallurgical,
economic and other relevant factors that demonstrate, at the time of reporting,
that economic extraction can be justified.

Adularia -A colorless, moderate- to
low-temperature variety of orthoclase feldspar typically with relatively high
barium content.

Andesite - A dark-colored, fine-grained
extrusive rock that, when porphyritic, contains phenocrysts composed primarily
of zoned sodic plagioclase and one or more of the mafic minerals.

Argulite -A variety of asphaltic sandstone

4

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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 - A definitive study of the
viability of a mineral project by a qualified professional which defines: (1)
mining methods, pit configuration, mine scheduling, mine equipment and all
related costing, (2) method of mineral processing and all related plant,
equipment and costing, (3) necessary determination of all infrastructure
required and relevant costs and (4) all requirements of government and markets
for mine operation. A definitive financial analysis of the mineral project
taking into consideration all relevant factors, which will establish the
presence of a Mineral Reserve and the details of its economic viability.

Geochemistry - The study of the chemical
properties of rocks.

Geophysical Survey - A scientific method of
prospecting that measures the physical properties of rock formations. Common
properties investigated include magnetism, specific gravity, electrical
conductivity and radioactivity.

Grade - The metal content of rock with precious
metals, grade can be expressed as troy ounces or grams per tonne of rock.

Granite - Any holocrystalline,
quartz-bearing plutonic rock.

Granitic - Pertaining to or composed
of granite.

5

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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 -A comprehensive study of
the viability of a mineral project that has advanced to a stage where the
mining method, in the case of underground mining, or the pit configuration, in
the case of an open pit, has been established, and where an effective method of
mineral processing had been determined. This Study must include a financial
analysis based on reasonable assumptions of technical engineering, operating,
and economic factors, which are sufficient for a Qualified Person acting
reasonably, to determine if all or part of the Mineral Resource may be
classified as a Mineral Reserve.

Pyrite - An iron sulphide mineral (FeS2),
the most common naturally occurring sulphide mineral.

Quartz - Crystalline silica; often forming veins
in fractures and faults within older rocks.

Quartz Monzonite - A coarse grained, quartz
rich igneous rock usually occurring as a smaller rock mass associated with
major granitic bodies.

6

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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
parameters,including
cut-off grades and economic mining widths, based on factors typical for the
type of deposit, may be used if these factors have not been specifically
established for the deposit at the time of the mineral resource estimate. A
mineral resource is categorized on the basis of the degree of confidence in the
estimate of quantity and grade or quality of the deposit, as follows:

Measured Mineral Resource:Under CIM standards, a Measured
Mineral Resource is that part of a Mineral Resource for which quantity, grade
or quality, densities, shape, physical characteristics are so well established
that they can be estimated with confidence sufficient to allow the appropriate
application of technical and economic parameters, to support production
planning and evaluation of the economic viability of the deposit. The estimate
is based on detailed and reliable exploration, sampling and testing information
gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely enough to
confirm both geological and grade continuity.

Indicated Mineral Resource:Under CIM standards, an Indicated
Mineral Resource is that part of a Mineral Resource for which quantity, grade
or quality, densities, shape and physical characteristics can be estimated with
a level of confidence sufficient to allow the appropriate application of
technical and economic parameters, to support mine planning and evaluation of
the economic viability of the deposit. The estimate is based on detailed and
reliable exploration and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings and drill
holes that are spaced closely enough for geological and grade continuity to be
reasonably assumed.

Inferred Mineral Resource:Under CIM standards, an Inferred
Mineral Resource is that part of a Mineral Resource for which quantity and
grade or quality can be estimated on the basis of geological evidence and
limited sampling and reasonably assumed, but not verified, geological and grade
continuity. The estimate is based on limited information and sampling gathered
through appropriate techniques from such as outcrops, trenches, pits, workings
and drill holes.

Rhyolite - A group of extrusive igneous
rocks, typically porphyritic and commonly exhibiting flow texture, with
phenocrysts of quartz and alkali feldspar in a glassy to cryptocrystalline
groundmass; also, any rock in that group; the extrusive equivalent of granite.

Sedimentary - Formed by the deposition of
sediment or pertaining to the process of sedimentation.

Sediments -Solid
fragmental material that originates from weathering of rocks and is transported
or deposited by air, water, or ice, or that accumulates by other natural
agents, such as chemical precipitation from solution or secretion by organisms,
and that forms in layers on the Earths surface at ordinary temperatures in a
loose, unconsolidated form; e.g., sand, gravel, silt, mud, alluvium.

Sericite - A fine-grained potassium
mica found in various metamorphic rocks.

Silification - The in situ alteration of a
rock, which involves an increase in the proportion of silica minerals.

Trenching - The process of exploration by which till
is removed from a trench cut from the earths surface.

7

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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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Part I

Item 1. Identity of Directors,
Senior Management and Advisers

A. Directors and Senior Management

Not Applicable

B. Advisers

Not Applicable

C. Auditors

Not Applicable

Item 2. Offer Statistics and
Expected Timetable

Not Applicable

Item 3. Key Information

As used within this Annual Report, the terms
Seabridge, the Company, Issuer and Registrant refer collectively
to
Seabridge Gold Inc., and depending on the context, its predecessors,
subsidiaries and affiliates.

In this Annual Report, unless otherwise specified, all
dollar amounts are expressed in Canadian Dollars (CDN$). The Government of
Canada permits a floating exchange rate to determine the value of the Canadian
Dollar against the U.S. Dollar (US$).

3A. Selected Financial Data

The selected financial data of the Company as at
December 31, 2008 and 2007 and for the years ended December 31, 2008, December
31, 2007 and December 31, 2006 was derived from the financial statements
audited by KPMG LLP, Chartered Accountants, indicated in their audit report
which is included elsewhere in this Annual Report. The selected financial data
as at December 31, 2006, 2005 and 2004 and for the years ended December 31,
2005 and December 31, 2004 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 this 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.

9

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Table No. 2 is derived from the financial statements
of the Company, which have been prepared in accordance with Canadian Generally
Accepted Accounting Principles (GAAP), the application of which, in the case of
the Company, conforms in all material respects for the periods presented with
US GAAP, except as disclosed in footnote #11 to the financial statements.

Table No. 2
Selected Financial Data
($s in 000, except per share data)

|                                     |  |                       |         |                       |   |                       |   |                       |        |                       |   |        |   |   |        |  
|------------------------------------ |  | --------------------- | ------- | --------------------- | - | --------------------- | - | --------------------- | ------ | --------------------- | - | ------ | - | - | ------ | -
|                                     |  | Year
 Ended
 12/31/08 |         | Year
 Ended
 12/31/07 |   | Year
 Ended
 12/31/06 |   | Year
 Ended
 12/31/05 |        | Year
 Ended
 12/31/04 |  
|                                     |  |                       |         |                       |   |                       |   |                       |        |                       |  
|                                     |  |                       |         |                       |   |                       |   |                       |        |                       |   |        |   |   |        |  
|Gain on sale of
 Noche Buena Project |  | $                     | 19,891  |                       | $ | 0                     |   | $                     | 0      |                       | $ | 0      |   | $ | 0      |  
|Interest Income                      |  | $                     | 621     |                       | $ | 823                   |   | $                     | 363    |                       | $ | 135    |   | $ | 83     |  
|Net Profit
 (Loss)                   |  | $                     | 10,290  |                       | $ | (5,542                | ) | $                     | (3,300 | )                     | $ | (1,157 | ) | $ | (1,226 | )
|Net Profit
 (Loss) Per Share         |  | $                     | 0.28    |                       | $ | (0.15                 | ) | $                     | (0.10  | )                     | $ | (0.04  | ) | $ | (0.04  | )
|Dividends Per
 Share                 |  | $                     | 0       |                       | $ | 0                     |   | $                     | 0      |                       | $ | 0      |   | $ | 0      |  
|Basic Weighted
 Average Shares (000) |  |                       | 37,327  |                       |   | 35,991                |   |                       | 33,459 |                       |   | 30,682 |   |   | 28,876 |  
|Working Capital                      |  | $                     | 30,628  |                       | $ | 25,020                |   | $                     | 6,420  |                       | $ | 10,603 |   | $ | 4,220  |  
|Mineral
 Properties                  |  | $                     | 69,029  |                       | $ | 62,668                |   | $                     | 53,262 |                       | $ | 24,395 |   | $ | 20,999 |  
|Long-Term Debt                       |  | $                     | 0       |                       | $ | 0                     |   | $                     | 0      |                       | $ | 0      |   | $ | 0      |  
|Shareholders
 Equity                |  | $                     | 99,108  |                       | $ | 86,747                |   | $                     | 59,279 |                       | $ | 35,385 |   | $ | 25,703 |  
|Total Assets                         |  | $                     | 109,802 |                       | $ | 89,862                |   | $                     | 61,244 |                       | $ | 37,085 |   | $ | 27,172 |  

Table No. 3 sets forth the rate of exchange for the
Canadian Dollar at the end of the five most recent fiscal periods ended December
31st, the average rates for the periods, and the range of high and
low rates for the periods. Table No. 3 also sets forth the rate of exchange for
the Canadian Dollar at the end of the six most recent months, the average rate,
and range of high and low rates for these periods.

Canadian/US Exchange Rates
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 (2009 rates are from
the Bank of Canada). 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.

10

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As of March 30, 2009, the exchange rate was $1.26
for each US$1.

Table No. 3
Canadian Dollar/US Dollar

|                    |  |         |      |      |   |      |  |       |      |  |   |      | 
|------------------- |  | ------- | ---- | ---- | - | ---- |  | ----- | ---- |  | - | ---- | 
|                    |  | Average |      | High |   | Low  |  | Close |     
|                    |  |         |      |      |   |      |  |       |     
|                    |  |         |      |      |   |      |  |       |      |  |   |      | 
|Year Ended 12/31/08 |  | $       | 1.07 |      | $ | 1.30 |  | $     | 0.97 |  | $ | 1.22 | 
|Year Ended 12/31/07 |  | $       | 1.07 |      | $ | 1.19 |  | $     | 0.92 |  | $ | 0.99 | 
|Year Ended 12/31/06 |  | $       | 1.13 |      | $ | 1.17 |  | $     | 1.10 |  | $ | 1.17 | 
|Year Ended 12/31/05 |  | $       | 1.21 |      | $ | 1.27 |  | $     | 1.15 |  | $ | 1.17 | 
|Year Ended 12/31/04 |  | $       | 1.30 |      | $ | 1.39 |  | $     | 1.18 |  | $ | 1.20 | 
|                    |  |         |      |      |   |      |  |       |      |  |   |      | 
|February 2009       |  | $       | 1.25 |      | $ | 1.27 |  | $     | 1.22 |  | $ | 1.27 | 
|January 2009        |  | $       | 1.23 |      | $ | 1.27 |  | $     | 1.18 |  | $ | 1.24 | 
|December 2008       |  | $       | 1.23 |      | $ | 1.30 |  | $     | 1.20 |  | $ | 1.22 | 
|November 2008       |  | $       | 1.22 |      | $ | 1.29 |  | $     | 1.15 |  | $ | 1.24 | 
|October 2008        |  | $       | 1.18 |      | $ | 1.29 |  | $     | 1.06 |  | $ | 1.22 | 
|September 2008      |  | $       | 1.06 |      | $ | 1.08 |  | $     | 1.03 |  | $ | 1.06 | 

3B. Capitalization and Indebtedness

Not applicable

3C. Reasons for the Offer and Use of Proceeds

Not applicable

3D. 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
OperationsResource
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.

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The Companys
Operations Contain Significant Uninsured Risks which Could Negatively Impact
ProfitabilityThe
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 of 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 shareholders 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 ValuationDespite 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 profit from
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 ValuationThe Company has only
done a preliminary legal survey of the boundaries of its 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.

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The Mining Industry is Highly
Competitive which could Restrict the Companys GrowthThe 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 OperationsThe 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 OperationsThe 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. 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.

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 $1,999,000 in
reclamation liabilities for its properties. $1,324,000 has been deposited for
the benefit of the various government agencies until released or applied to
reclamation costs. If the reclamation requires funds in addition to those
already allocated, Seabridge could be forced to pay for the extra work and it
could have a significant negative effect upon the Companys financial position
and operations.

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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 OperationsIn 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.

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.

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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
May Require Additional Financing which Could Result in Substantial Dilution to
Existing Shareholders and/or the Delay or Cessation of OperationsThe
Company, while engaged in the business of exploring and developing mineral
properties, has sufficient funds to undertake its planned current exploration
projects for the next two years. If the Companys exploration programs are
successful, additional financing may be required to continue to develop the
mineral properties identified. The exploration of the Companys mineral
properties is, therefore, dependent upon the Companys ability to obtain
financing through the sale of projects, joint venturing of projects, or 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 stated that its business plan is to increase gold
ounces in the ground. The Company will either sell projects or participate in
joint ventures towards production with major mining companies, but not to go
into production on its own.

The Company Has Had a History of
Net Losses and Expects Losses to Continue for the Foreseeable FutureThe Company has had a
history of losses, although in 2008 a net profit of $10,290,000 was achieved,
and there is no assurance that it can continue profitability in the future. As
of the end of the last fiscal year dated December 31, 2008, the Companys
historical net losses total approximately $17,000,000. The Company may 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 properties and to cover corporate expenses. The
Company may not be able to obtain additional financing on reasonable terms, or
at all. If equity financing is required 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 or the sale of its projects.

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The Company Has Had a Lack of Cash Flow to Sustain Operations
and Does Not Expect to Begin Receiving Operating Revenue in the Foreseeable
FutureNone 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, convertible debt
instruments and, in 2008, the sale of its properties. 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 ResultsWhile
engaged in the business of exploiting mineral properties, the Companys
operations outside of Canada, i.e. in the United States, 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. Such
fluctuations may adversely affect the Companys financial position and results
of operations. 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 SharesThe
market for the common shares of the Company may be highly volatile for reasons
both related to the performance of the Company or events pertaining to the
industry (i.e., mineral price fluctuation/high production costs/accidents) as
well as factors unrelated to the Company or its industry. In particular, the
price for gold has recently been at an all time high and may not sustain such
levels, and in addition, recently the stock market share prices have fluctuated
significantly. In addition, market demand for products incorporating minerals
in their manufacture fluctuates from one business cycle to the next, resulting
in change of demand for the mineral and an attendant change in the price for
the mineral. The Companys common shares can be expected to be subject to
volatility in both price and volume arising from market expectations,
announcements and press releases regarding the Companys business, and changes
in estimates and evaluations by securities analysts or other events or factors.
In recent years the securities markets in the United States and Canada have experienced
a high level of price and volume volatility, and the market price of securities
of many companies, particularly small-capitalization companies such as the
Company, have experienced wide fluctuations that have not necessarily been
related to the operations, performances, underlying asset values, or prospects
of such companies. For these reasons, the shares of the Companys common shares
can also be expected to be subject to volatility resulting from purely market
forces over which the Company will have no control. Further, despite the
existence of markets for trading the Companys common shares in Canada and the
United States, stockholders of the Company may be unable to sell significant
quantities of common shares in the public trading markets without a significant
reduction in the price of the stock. Also see Item 9A. of this Report.

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The Company
has a Dependence Upon Key Management Employees, the Absence of Which Would Have
a Negative Effect on the Companys OperationsThe 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 OperationsCertain
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. InvestorsDepending upon the
composition of the Companys gross income or its assets, 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 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. See Item 10E. of this Report.

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U.S. Investors May Not Be Able to
Enforce Their Civil Liabilities Against The Company or Its Directors,
Controlling Persons and OfficersIt 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 StatementsCertain statements presented in this Report 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 beyond the control of the Company 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.
Shareholders should carefully review the cautionary statements and risk factors
contained in this and other documents that the Company files from time to time
with the securities commissions in Canada (see SEDAR filings at www.sedar.com)
and with the U.S. Securities and Exchange Commission (see EDGAR filings at
www.sec.com). 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.

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Item 4. Information on the Company

4A. History and Development of the Company

Introduction

The Companys executive office is located at:
106 Front Street East, 4th Floor, Toronto, Ontario M5A 1E1 Canada
Telephone: (416) 367-9292
Facsimile: (416) 367-2711
E-Mail: info@seabridgegold.net
Website: www.seabridgegold.net

The Contact person
in Toronto is Rudi Fronk, President and CEO.
Telephone: (416)
367-9292, rudi@seabridgegold.net106 Front Street, East, 4th Floor, Toronto, Ontario, Canada M5A
1E1

The Company currently leases its executive offices in
Toronto from Allied Property REIT. The lease covers the entire 4th floor of a
building located at 106 Front Street East, Toronto, Ontario, Canada. The lease
was effective commencing May 1, 2007 and will expire on April 30, 2012. The
rent in 2008 was $9,400 per month, and may be adjusted annually based upon a
building cost operating adjustment. Current monthly rent for 2009 is
approximately $9,400.

The Companys fiscal year ends December 31.

The Companys common shares trade on the Toronto Stock
Exchange under the symbol SEA and on the NYSE Amex 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, 2008, the end of the most recent fiscal year, there
were 37,348,685 common shares issued and outstanding and no preferred shares
issued and outstanding.

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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.

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. The Company
plans to continue to advance its two major projects (KSM located in British
Columbia, Canada and Courageous Lake located in the Northwest Territories,
Canada) towards feasibility while looking to either sell or joint venture its
other projects.

In February 2000, the
Company acquired an option to purchase 100% of the Grassy Mountain gold project
located in eastern Oregon from Atlas Precious Metals Inc. (Atlas).
In March 2003, the Company exercised its option and acquired a 100% interest in
the Grassy Mountain Property.

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In June 2000, the Company entered into a Letter of
Intent with Placer Dome (CLA) Limited to acquire a 100% interest in the KSM
project located in the Iskut-Stikine River region, approximately 20 km
southeast of the Eskay Creek Mine in British Columbia. In June 2001, the
Company completed the acquisition of Placer Domes 100% interest in the
project. In September 2002, the Company announced that it had entered into an
agreement with Noranda Inc. (which subsequently became Falconbridge Limited and
then Xstrata plc) whereupon Falconbridge could earn a 50% interest in the
project by spending $6,000,000 on exploration at the project within 6 years.
Falconbridge could earn an additional 15% interest by funding all costs to
complete a feasibility study. During 2003 and 2004, Falconbridge conducted
field programs at KSM consisting of mapping, rock and soil sampling, and IP
surveys. During 2005 Falconbridge drilled 16 widely-spaced core drill holes
totaling 4,092 meters designed to test six targets situated outside the
resources previously defined for the Kerr and Sulphurets zones. In 2006
Falconbridge was acquired by Xstrata plc. In April 2006, the Company announced that
it had reached agreement with Falconbridge whereby the Company would purchase
Falconbridges option to earn up to a 65% interest at KSM by issuing
Falconbridge 200,000 common shares and 2.0 million conditional common share
purchase warrants with an exercise price of C$13.50 per share. One warrant
would become exercisable for each new ounce of gold resources discovered at
KSM, up to a maximum of two million. The transaction closed in August 2006. In
2006 the Company drilled 24 holes at the Mitchell zone and defined an initial
mineral resource thereby triggering the vesting of all 2.0 million Xstrata
warrants. In 2007, Xstrata exercised all 2.0 million warrants, thereby
providing the Company with $27.0 million in proceeds. During 2007, the Company
continued exploration activities at the Mitchell zone. In January 2008, the
Company announced independent resource estimates for the Kerr and Sulphurets
zones at KSM. In February 2008, the Company announced independent resource
estimates for the Mitchell zone at KSM. During 2008, the Company completed a
Preliminary Assessment of the KSM project, while continuing additional
exploration of the Mitchell and Sulphurets zones. In March 2009, updated
independent resource estimates were completed for the project.

In December 2001, the Company entered into an
agreement to acquire a 100% interest in the Quartz Mountain Gold Project
located in Lake County, Oregon. The Quartz Mountain acquisition was completed
in January 2002. In October 2003, the Company granted Quincy Gold Corp. an
option to earn a 50% interest in the Quartz Mountain gold project, excluding
the existing gold resources. The option was terminated in 2008.

Effective December 31, 2001,
the Company entered into an agreement to acquire a 100% interest in the Red Mountain
Gold Project located near Stewart, British Columbia. Closing of the Red
Mountain transaction was completed in April 2002.

In May 2002, the Company
reached agreement to purchase a 100% interest in the Courageous Lake Project
located in the Northwest Territories, Canada. The Company paid former owners
Newmont Canada Limited and Total Resources (Canada) US$2,500,000 and granted
them a 2.0% NSR for 100% of the project. Seabridge also agreed to pay Newmont
and Total up to an additional US$3,000,000 depending upon the price of gold.
The purchase was closed in July 2002. In April 2003 and February 2004, the
Company paid the former owners of the Courageous Lake Project the US$3,000,000
($1,500,000 on each date) as the price of gold exceeded the two threshold
levels that triggered the obligations to make these payments. In 2004, an
additional property was optioned in the area (Red 25). Under the terms of
the agreement, the Company paid $50,000 on closing and is required to make
option payments of $50,000 on each of the first two anniversary dates and
subsequently $100,000 per year. In addition, the property may be purchased at
any time for $1,250,000 with any option payments being credited against the
purchase price. During 2005, an independent Preliminary Assessment was
completed on the known FAT (felsic ash tuff) resources at that time including
capital and operating costs estimates for a large-scale open pit operation. In
March 2008, the Company announced the results of an updated Preliminary
Assessment incorporating a new resource estimate and updating capital and
operating cost estimates from the 2005 study.

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In June 2002, the Company
and an independent third party incorporated a Nevada company named Pacific
Intermountain Gold Corporation to acquire and explore early-stage exploration
projects which have previously identified gold systems capable of hosting
large-scale deposits. In 2004, the Company increased its ownership in Pacific
Intermountain Gold to 100%, subject to a 10% net profits interest retained by
the previous equity owner. To date, Pacific Intermountain Gold has entered into
a number of option agreements with third parties whereby the third parties can
earn interests in specific projects by funding exploration and making payments
to Pacific Intermountain Gold.

In
April 2006, the Company acquired a 100% interest in the Noche Buena gold project located in
Sonora, Mexico from Hecla Mining Company for US$4,350,000 in cash. In December
2008 the Company sold Noche Buena for US$25 million in cash. A further US$5
million is payable to the Company upon commencement of commercial production
from Noche Buena and a 1.5% net smelter royalty is payable on all production
sold for US$800 per ounce or greater of gold.

4B. Business Overview

All of the Companys operations are located in Canada
and the United States. The Company operates in the mineral exploration sector.

As of December 31, 2008, the Companys non-current
assets were located as follows:

|               |  |   |            | 
|-------------- |  | - | ---------- | 
|United States: |  | $ | 9,609,215  | 
|Canada:        |  | $ | 60,869,089 | 

All of the Companys properties are
currently at the exploration stage. There is no assurance that an economic and
commercially viable deposit exists on any of the Companys properties, and
substantial additional work will be required in order to determine if any
economic and legally feasible deposits occur on the Companys properties.

Operations are not seasonal as the Company can conduct
exploration at certain of its properties year-round. To date, the Companys
income has been limited to interest on its cash balances, except that in 2008,
the Company sold its Noche Buena project in Mexico for $30,842,000 in gross
proceeds and a net gain before income taxes of $19,891,000. Since the Company
does not have any operating mines it is not currently dependent upon market
prices for minerals, nor is it dependent upon any patents, licenses or
manufacturing processes.

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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.

4C. Organizational Structure

The Company presently has
three active wholly-owned subsidiaries: Seabridge Gold Corporation, a Nevada
corporation; Pacific Intermountain Gold Inc., a Nevada corporation; and 5073
N.W.T. Limited, a company incorporated under the laws of the Northwest
Territories of Canada. A fourth subsidiary, Minera Seabridge Gold SA de CV, was
sold in December 2008. The following diagram illustrates the current
inter-corporate relationship between the Company, its subsidiaries and its
projects:

(ORGANIZATIONAL STRUCTURE)

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4D. Property, Plants and Equipment

Mineral Properties

The Company currently
operates in the mineral exploration sector. All of the Companys properties are
located in Canada and the United States and are at the exploration stage.

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(MAP)

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Seabridge considers its
material properties to be the KSM Project and the Courageous Lake Project.
These material properties are described in detail below.

Courageous Lake Project

The Courageous Lake project
is a gold project covering approximately 67,000 acres located in the Northwest
Territories, Canada. Seabridge has a 100% interest in the project, subject to a
2% NSR on certain portions of the property. The Property is without known mineral
reserves and is at the exploration stage; the Companys current efforts are
exploratory in nature.

Location and Access

The project is located approximately 240 kilometers
northeast of Yellowknife in the Northwest Territories. Year round access is
available by air, either by fixed wing aircraft to the airstrip at the former
Salmita mine 6 kilometers to the south or via float-equipped aircraft to
several adjacent lakes. During mid-winter, access is available via a winter
road. There are about 10 kilometers of gravel roads located on the property.

26

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(MAP)

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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. The purchase by Seabridge closed on July 31,
2002. 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 March 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 million 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. 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 49,133 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.

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Both the main Tundra and carbonate zones within the
Courageous Lake property strike north-south and have a near vertical dip
component. The zones are characterized by moderate to intense shearing,
sericite-carbonate alteration, and quartz veining. These mineralized zones are
very persistent along strike and down dip. The continuity of gold
mineralization has been demonstrated to be at least 800 meters along strike
based upon previous drilling results. Within the area that has been tested by
drilling, the continuity of gold mineralization is at least 100 meters in a
down dip direction. The limits of gold mineralization have not been fully
tested and the deposit remains open along strike and down dip.

Previous Exploration History

Gold was first discovered in the Courageous Lake area
in the early 1940s. Beginning in 1976, Noranda Exploration Ltd. initiated
exploration in the Courageous Lake Volcanic Belt. Exploration activities
included geological reconnaissance, airborne, EM and magnetic surveys, ground
follow-up and claim staking. In 1982, Noranda initiated a limited drill program
to evaluate rock units north of Matthews Lake. Detailed geophysics, geological
mapping, and extensive diamond drilling followed this initial program leading
to the discovery of two gold deposits, the Tundra Deposit (Main Zone), known as
the FAT Deposit, and the Carbonate Zone.

From 1982 to 1987, Noranda continued core drilling the
property from the surface and also constructed a winter road to the property.
They also began an environmental impact study. In late 1987, Noranda made the
decision to sink a vertical shaft to provide access for conducting an
underground definition drilling program and to be able to test gold grade
continuity and tenor by drifting and raising on ore grade shoots. This also
allowed Noranda to extract a bulk sample for metallurgical testing. In
conjunction with the development of the shaft, surface core drilling, magnetic,
VLF, and HLM surveys were also completed.

In late 1987, Noranda completed an in-house
preliminary resource estimate. Based upon this work, a two-year underground
exploration program was initiated. The program was designed to establish an
underground mining reserve, access material for bulk metallurgical sampling and
provide engineering information for mine design and planning. The shaft was
timbered and completed to a depth of 472.6 meters in April 1988. 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.

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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 drill plan as well
as conducting a ground magnetic survey to define the zone of mineralization.
Placer utilized two diamond drill rigs to provide detailed information on the
continuity of the Tundra Main Zone and to confirm the Carbonate Zone. The total
diamond drilling completed by Placer was 15,988 meters in 76 drill holes.
Placer dropped its option on the property in 1999.

Environmental/Regulatory Information

As part of its due diligence review on the property,
Seabridge engaged EBA Engineering Consultants Ltd. of Yellowknife, Northwest
Territories, to prepare an Environmental Review of the Courageous Lake
property. EBA determined the governmental environmental review process in the
NWT would likely take 24 to 36 months from the time a Project Description
Report had been filed with the authorities before the review process began. An
additional 12 to 16 months would likely be required to complete the regulatory
review process, all at a cost of $2-8 million, plus another $0.5-1 million for
costs during the regulatory phase.

Additionally, EBA visited and evaluated the site for
any current or potential environmental damage related to historical exploration
work conducted at Courageous Lake by previous operators. EBA found no
significant environmental concerns, but did note several areas of potential
concerns, including the existing land disturbances, acid rock drainage from
waste rock and drill casings.

The Company began to collect
environmental data at their Courageous Lake, NWT property in 2003. The data
collection was designed and implemented by EBA Engineering Consultants Ltd and
focused on multi-year studies required to obtain operating permits. To date the
data includes archaeology, fisheries, water quality, hydrology and wildlife.
The environmental programs in 2005, 2006 and 2007 included hydrology and a
comprehensive review of environmental data collection programs to support the
application to the McKenzie Valley Land and Water Board for development
licenses and permits.

Current and Planned Work

In late 2002, Seabridge engaged a group of independent
consulting firms to undertake an engineering study for Courageous Lake. During
2003, preliminary reports were completed on key mining and metallurgical issues
relating to the project. In January 2004, Seabridge authorized the independent
consultants to upgrade capital and operating cost estimates in its Courageous
Lake study to pre-feasibility levels to better define the economics of the
project. As a result of a 2004 drilling program, the Company commissioned a new
independent resource estimate for the FAT deposit which was completed in
December 2004 and was incorporated into the engineering study. The engineering
study was completed in September 2005 and the results are presented below.

During a 2003 summer exploration program, Seabridge
successfully identified 12 gold targets at Courageous Lake with characteristics
similar to the existing FAT zone at the project. The Company also identified
significant drill core from previous owners of these targets which had not been
assayed. The drill core, an estimated 110,000 meters, was retained on the
property but never evaluated for bulk mineable potential. From September
through December of 2003, Seabridge conducted a program to evaluate and
prioritize these 12 targets by sampling and assaying available core. The
results from this program confirmed that nine of the 12 targets have the
potential to host bulk mineable deposits similar to FAT. Of these nine targets,
four have been consolidated into what is now called the Salmita Zone and five
have been consolidated into what is now called the Tundra Zone. A 10,000-meter
core drill program was conducted by Seabridge during 2004 that focused on
testing the Salmita and Tundra Zones as well as the potential strike extension
of the FAT zone and the FAT hanging wall zone.

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In
2004, drill testing of selected priority targets was undertaken by the Company.
The program was conceived in 2 stages, initial testing for strataform gold
concentrations similar to the FAT Deposit and sectional drilling for potential
resource additions. The initial program intended to test 3 target areas, Olsen
Lake, Walsh Lake and the South FAT Extension. Ground conditions precluded a
test of the Walsh Lake target, but the other targets were tested. Results from
the initial stage of the program led Seabridge to initiate sectional drilling
on the South FAT Extension. The South FAT Extension was a projection of the
previous resource model where little work had been completed. Surface and
initial drilling results indicated that 300 meters of strike could be added to
the FAT Deposit with the completion of sectional drilling. The second stage of
the 2004 program completed the sectional drilling on 50-meter section lines
across these 300 meters of strike.

In September 2005, an
engineering study (classified as a Preliminary Assessment under National
Instrument 43-101 in Canada) for the Courageous Lake project was completed by a
team of independent consultants. The Preliminary Assessment is dated September
7, 2005 and is entitled Seabridge Gold Inc., Courageous Lake Project,
Preliminary Technical Assessment. The independent consultants concluded that
given the resource size, location and grade, a year round, open-pit bulk
mineable operation with on-site processing is the most suitable development
scenario. A base case scenario was developed for the project incorporating a
25,000 tonne per day operation (9.0 million tonne per year throughput)
resulting in a projected 8.5 year operation with average annual production of
545,000 ounces of gold.

During
2005 and 2006, the Company completed an additional 15,689 meters of core
drilling at Courageous Lake, designed to test areas to the west of the main
mineralized zones and to the north.

In 2007, the Company
commissioned a group of independent consultants to update the Preliminary
Assessment by incorporating the new 2007 resource estimate for the project and
updating all capital and operating cost estimates. An updated Preliminary
Assessment was completed in March 2008, and the results are mentioned in the
next section.

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The Company estimates its annual holding costs of the
Courageous Lake Project to be $236,000 with $136,000 of these costs paid to the
Department of Indian Affairs and Northern Development, Northwest Territories
and the remaining $100,000 as an option payment on the Red 25 claim payable to
Bathurst Inlet Developments (1984) Ltd.

Mineral Resources

Over the period of previous
exploration at Courageous Lake, several resource estimates have been prepared.
The most detailed historic estimates were conducted by Noranda in 1990 at the
conclusion of its underground exploration program, by Placer Dome in 1999 at
the conclusion of its exploration program and by Resource Modeling Inc. (an
independent consulting firm based in Tucson, Arizona) in July 2002 as part of
the Companys due diligence when it acquired the project from Newmont and
Total, and in December 2004 incorporating additional exploration results
subsequent to the 2002 estimate.

In January 2007, RMI
completed a new resource model for Courageous Lake, incorporating the results
from the Companys 2005 and 2006 exploration programs. The study provided
resource estimates at various cut-off grades.

In March 2008, an updated
Preliminary Assessment for the Courageous Lake project was completed by a group
of independent consultants including Wardrop Engineering Inc. (Wardrop),
Snowden Mining Consultants Inc. (Snowden), EBA Engineering Consultants Ltd.
(EBA), TJS Mining-Met Services Inc. (TJS), W.N. Brazier & Associates
Inc. (Brazier), and Resource Modeling Inc. (RMI) (collectively the Project
Consultants).

In the March 2008
Preliminary Assessment, Snowden determined that based on a mining cost of $1.14
per tonne, a processing and G&A cost of $14.19 per tonne, an 88.9% recovery
rate, and a gold price of US$690, that a 0.76 gram per tonne cut-off grade was
appropriate for the deposit.

Courageous
Lake Gold Resources at 0.76 grams per tonne cut-off:

|                |  |              |      |               |  |               |  |            |        |               |  |      |  |  |       | 
|--------------- |  | ------------ | ---- | ------------- |  | ------------- |  | ---------- | ------ | ------------- |  | ---- |  |  | ----- | 
|Measured        |  | Indicated    |     
|                |  |              |     
|Tonnes
 (000s) |  | Grade
 (g/T) |      | Ounces(000s) |  | Tonnes(000s) |  | Grade(g/T) |        | Ounces(000s) | 
|                |  |              |      |               |  |               |  |            |        |               | 
|                |  |              |      |               |  |               |  |            |        |               |  |      |  |  |       | 
|6,531           |  |              | 2.85 |               |  | 598           |  |            | 56,577 |               |  | 2.05 |  |  | 3,729 | 

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

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Courageous
Lake Gold Inferred Resources at 0.76 grams per tonne cut-off

|                |  |              |  |                
|--------------- |  | ------------ |  | ---------------
|Inferred       
|               
|Tonnes
 (000s) |  | Grade
 (g/T) |  | Ounces
 (000s)
|                |  |              |  |                
|101,394         |  | 1.89         |  | 6,161          

Cautionary Note to U.S. investors
concerning estimates of Inferred ResourcesThis section uses the
term inferred resources. We advise U.S. investors that while this term is
recognized and required by Canadian regulations, the U.S. Securities and
Exchange Commission does not recognize it. Inferred resources have a great amount
of uncertainty as to their existence, and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or any part of an
Inferred Mineral Resource will ever be upgraded to a higher category. Under
Canadian rules estimates of Inferred Mineral Resources may not form the basis
of feasibility or other economic studies. U.S. investors are cautioned not to assume that part
or all of an inferred resource exists, or is economically or legally mineable.

None of the resource can be
classified as a Mineral Reserve. Additional exploration work will be required
in order to upgrade the resources into reserve categories, and a full
feasibility study will be required in order to determine if any of the mineral
resources are economic and can be profitably mined.

The resource model
constructed for the Courageous Lake deposit incorporates data from 488 holes
drilled by Seabridge, Noranda and Placer Dome totaling 131,338 meters. Block
model gold grades in the Courageous Lake resource model were estimated using an
inverse distance weighting interpolation procedure.

KSM Project

The KSM Project consists of three separate gold zones
(Kerr, Sulphurets and Mitchell) located in the Iskut-Stikine River region of
British Columbia. Seabridge currently has a 100% interest in the project. The Property
is without known mineral reserves and is at the exploration stage; the
Companys current efforts are exploratory in nature.

Location and Access

The KSM property is located in the Iskut-Stikine River
region, approximately 65 km northwest of Stewart, British Columbia. Access to
the property is by helicopter from Stewart. Mobilization of equipment and
personnel can be staged quite effectively from the Tide Lake airstrip, Bronson
Strip or from Bob Quinn and Bell II Crossing on the Stewart Cassiar Highway.

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(MAP)

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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 KSM. On March 28, 2001, the
Company and Placer Dome executed a definitive acquisition agreement and the
acquisition closed in June 2001. At closing, the Company issued Placer Dome (i)
500,000 common shares of Seabridge; (ii) 500,000 common share purchase
warrants, exercisable by Placer Dome at C$2.00 per share for two years; and
(iii) a 1% net smelter royalty interest on the Project, capped at C$4.5
million. Seabridge will be obligated to purchase the 1% net smelter royalty
from Placer Dome for $4.5 million in the event that a positive feasibility
study demonstrates a 10% internal rate of return after tax and financing costs.

In September 2002, the Company optioned KSM to Noranda
Inc. (which subsequently became Falconbridge Limited and then Xstrata plc.)
which could have earned a 50% interest by spending $6 million on exploration
within 6 years. Noranda was entitled to earn a further 15% by funding all costs
to complete a feasibility study on the project.

In April 2006, the Company announced that it had
reached agreement with Falconbridge whereby the Company would re-acquire
Falconbridges option to earn a 65% interest at KSM for 200,000 common shares
of the Company and 2.0 million conditional common share purchase warrants of
the Company with an exercise price of C$13.50 per share. One warrant becomes
exercisable for each new ounce of gold resource discovered at KSM, up to the
maximum of two million. The transaction closed in August 2006. With the
announcement of an initial mineral resource at the Mitchell mineral resource,
the full 2.0 million warrants became exercisable in February 2007. During 2007,
all two million warrants were exercised by Xstrata and the Company received $27
million in proceeds.

The KSM project consists of two contiguous claim
blocks known as the Kerr Property and the Sulphurets Property. Total minimum
annual holding costs associated with the project are approximately $100,000.

Property Description

The property consists of 30
contiguous mineral claims and 19 contiguous placer claims covering an area of
approximately 6,726 hectares while the placer claims cover about 4,554
hectares. It should be noted that most of the placer claims lie over the top
of the mineral claims. Seabridge also has acquired 45 contiguous mineral claims
(Seabee Property) that are located about 19 kilometers northeast of the KSM
property.

The KSM mineral claims were
converted from 58 legacy claims to B.C.s new Mineral Titles Online (MTO)
system in 2005. Eleven legacy placer claims were converted in 2005 to nine cell
placer claims. Ten cell placer claims have been added to the property and are
contiguous with the converted legacy placer claims. In the MTO system, claims
are located digitally using a fixed grid on lines of latitude and longitude
with cells measuring 15 seconds north-south and 22.5 seconds east-west (approx.
460 by 380 meters at KSM). The legacy claims were located by previous owners by
placing tagged posts along the boundaries; however the survey method employed
in locating the legacy claims is not known. With the MTO system no markings are
required on the ground and the potential for gaps and/or overlapping claims
inherent in the old system is eliminated.

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The claims are 100% owned by
Seabridge. Placer Dome Inc. (now Barrick Gold) retains a 1% net smelter royalty
(NSR) that is capped at $4.5 million. Two of the pre-converted claims (Xray 2
and 6) are subject to a contractual royalty obligation in accordance with terms
in the underlying Dawson Agreement. The lands covered by these claims are now
contained within the converted Xray 1 claim (Tenure No. 516245). There is an
additional underlying agreement whereby advance annual royalties payable to
Dawson are being paid by Placer Dome Inc.

Annual holding costs for all
of the claims (mineral and placer) are approximately $172,988. In 2007,
assessment work was filed to advance the year of expiry to 2018. Neither the
KSM placer claims nor the Seabee Property claims have had any work filed to
date, but both are in good standing to 2008 and 2009.

Regional and Property Geology

The KSM property lies within the Stikine Terrane and
is underlain largely volcanic, volcaniclastic and sedimentary rocks at the
western edge of the Bowser Basin. Within this geologic framework, copper, gold
and molybdenum mineralization and associated alteration are focused in a local
core where intense folding, faulting, thrust faulting and intrusions are
prevalent. A number of deformed porphyry and vein type deposits occur in the
Mitchell-Sulphurets area. These deposits are characterized by a strong
copper-gold and minor molybdenum association, and spatially occur along the
flanks of a horseshoe-shaped trend.

The project consists of three separate gold/copper
zones (Kerr, Sulphurets and Mitchell) and are discussed separately below:

Kerr
ZoneThe Kerr zone extends approximately 3,000 m in a northerly
trend from the crest of a ridge above the southwestern branch of the Sulphurets
Glacier down to the lower slopes of a cirque-like basin just above Sulphurets
Lake. The zone is a pyrite-rich copper-gold system that occurs in strongly
altered and deformed monzonitic intrusions in sedimentary and volcaniclastic
rocks. The most important mineralization type is quartz stockwork. The
strongest copper-gold mineralization is associated with a core of
chlorite-bearing alteration and quartz stockwork.

Sulphurets
ZoneDisseminated 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.

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Mitchell ZoneThe Mitchell zone is
situated at the base of the Mitchell Glacier within an erosional window through
the major thrust fault complex that crosses the property. The intermediate
volcanic rocks exposed in the erosional window are dominated by intense phyllic
alteration that diminishes to the west. This conspicuous phyllic alteration is
characterized by abundant fine-grained pervasive sericite, 5 to 20% pyrite and
quartz stockwork veins that locally exceed 80% of the rock mass. Gold and
copper are associated with fine grained sulfide minerals which are disseminated
in the rock and in stockwork veins. Gold and copper grades in the drill results
are remarkably consistent down hole, along and across strike. This homogeneity
of grades and the lack of sharp grade contrasts across the Mitchell zone
probably resulted from regional deformation of the mineral system after its
deposition.

Exploration History

Placer gold was discovered in Sulphurets Creek in the
1880s. In 1935, copper mineralization was discovered on Mitchell-Sulphurets
Ridge in a location now known as the Main Copper Zone. In 1959, gold-silver
mineralization was discovered in the Brucejack Lake area. These showings were
subsequently explored with surface and underground exploration in the 1980s and
1990s as three comparatively small high-grade gold-silver zones by Newhawk Gold
Mines Ltd. and Lacana Mining Corp.

In 1960, claims on the Sulphurets property were staked
by Granduc Mines Ltd. and some independent prospectors. Exploration including
diamond drilling was completed over an eight-year period on Sulphurets Gold,
Main Copper and Quartz Stockwork Zones by Granduc and the Newmont Mines Joint
Venture. From 1971 to 1975 Granduc continued exploration on the Sulphurets
Property. From 1980 to 1985, Esso Minerals optioned the Sulphurets Property
from Granduc in order to explore for porphyry molybdenum, bulk mineable
copper-molybdenum-gold and gold-bearing vein type deposits. In 1985, Esso
surrendered its interest in the Sulphurets Property to Granduc.

The Alpha Joint Venture (Alpha) staked the Kerr
Property in 1982. Anomalous gold values in soils were identified in 1983 by
Alpha and based on these results Brinco Limited optioned the Kerr Property in
1984 and funded the next phase of geological mapping, prospecting and
geochemical sampling. This work outlined a gold anomaly over one kilometer
long. In 1985, Newhawk Gold Mines Ltd. and Lacana Mining Corp. formed a joint
venture, and optioned the adjoining Sulphurets Property from Granduc and
explored several zones, including conducting diamond drilling.

In 1989, fieldwork completed by Placer Dome included
additional diamond drilling to extend the Kerr zone to a strike length of more
than 1,600 meters. In 1990, Placer Dome completed a major diamond drill program
on the Kerr Property to further define the zone. Placer further completed a
major diamond drill program on the Sulphurets Gold Zones and adjoining Kerr
zone during the summer of 1992, with the total exploration expenditures
incurred by Placer on the KSM property through to year-end 1992 was C$6.6
million.

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During 2003 and 2004, under
its option to earn up to a 65% interest in the project from the Company,
Falconbridge conducted geophysics, surface mapping, surface sampling and target
delineation at the project. Falconbridge completed a $1.3 million drill program
on six new targets during the summer of 2005.

In 2006, the Company
completed a 9,100 meter core drill program at KSM designed to expand the
projects known gold resource by testing for the strike and depth extensions of
the Sulphurets zone and by systematically drilling the promising new Mitchell
gold zone identified in previous work. In February 2007, the Company announced
a 43-101 compliant resource estimate for the Mitchell zone prepared by RMI.

In 2007, the Company
completed a 15,300 meter core drill program at KSM designed to expand the Mitchell
zones known gold resource by testing for the strike and depth extensions. In
January 2008, RMI completed a 43-101 compliant resource estimate for the Kerr
and Sulphurets zones. In February 2008, RMI completed an updated 43-101
compliant resource estimate for the Mitchell zone.

Mineral Resources

A significant amount of work
has been performed on the Kerr and Sulphurets zones by previous owners
including Placer Dome. In February 2008, RMI remodeled these zones, as well as the
Mitchell zone, using independently constructed gold and copper grade envelopes
as the primary constraint for estimating block grades and then tabulated
Mineral Resources by using various gold equivalent cutoff grades (which
converts copper values to gold values at set prices and estimated metal
recoveries).

RMI estimated gold and
copper grades using inverse distance weighting methods within gold and copper
grade envelopes that were constructed for each zone. The grade models were
validated visually and by comparisons with nearest neighbor models. The
estimated block grades were classified into indicated and inferred mineral
resource categories based on mineralized continuity that was determined both
visually and statistically (i.e. variogram ranges) together with the proximity
to drill hole data.

In December 2008 a National
Instrument 43-101 Preliminary Assessment for the KSM project was completed by a
group of independent consultants including Resource Modeling Inc., Moose
Mountain Technical Services, WN Brazier Associates Inc., Klohn Crippen Berger
Ltd., Bosche Ventures Ltd., McElhanney Consulting Services, Ltd., BGC
Engineering Inc. and Rescan Environmental Services Ltd. The study envisaged
a large tonnage open-pit mining operation at 120,000 metric tonnes per day of
mill feed to a flotation mill which would produce a combined gold/copper/silver
concentrate for transport by truck or pipeline to the nearby deep-sea port at
Stewart, B.C.

The study incorporated gold
and copper mineral resources using a gold equivalent cut-off grade of 0.50
grams per tonne. The key parameters used in determining this cut-off included
gold and copper prices of US$650/ounce (70% recovery) and US$2.00/pound (85%
recovery). Mining costs of US$1.25/tonne and processing, smelting/refining and
general and administrative costs of US$8.20/tonne were also used.

38

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KSM
Indicated Mineral Resources at 0.50 grams per tonne gold equivalent cut-off:

|           |  |                             |           |             |  |             |  |                     |      |                            |  |        |  |  |       | 
|---------- |  | --------------------------- | --------- | ----------- |  | ----------- |  | ------------------- | ---- | -------------------------- |  | ------ |  |  | ----- | 
|           |  | Indicated Mineral Resources |          
|           |  |                             |          
|Zone       |  | Tonnes
 (000)               |           | Gold
 (g/t) |  | Copper
 (%) |  | Gold
 Ounces
 (000) |      | Copper
 Pounds
 (millions) | 
|           |  |                             |           |             |  |             |  |                     |      |                            | 
|           |  |                             |           |             |  |             |  |                     |      |                            |  |        |  |  |       | 
|Mitchell   |  |                             | 734,163   |             |  | 0.69        |  |                     | 0.18 |                            |  | 16,287 |  |  | 2,913 | 
|Kerr       |  |                             | 206,272   |             |  | 0.25        |  |                     | 0.45 |                            |  | 1,651  |  |  | 2,037 | 
|Sulphurets |  |                             | 74,655    |             |  | 0.75        |  |                     | 0.24 |                            |  | 1,798  |  |  | 388   | 
|           |  |                             |           |             |  |             |  |                     |      |                            |  |        |  |  |       | 
|Total      |  |                             | 1,015,090 |             |  | 0.61        |  |                     | 0.24 |                            |  | 19,736 |  |  | 5,338 | 
|           |  |                             |           |             |  |             |  |                     |      |                            |  |        |  |  |       | 

Cautionary Note to U.S. Investors
concerning estimates of Indicated ResourcesThis section uses the
term indicated resources. We advise U.S. investors that while those terms are
recognized and required by Canadian regulations, the U.S. Securities and
Exchange Commission does not recognize them. U.S. investors are cautioned not to
assume that any part or all of mineral deposits in these categories will ever
be converted into reserves.

KSM
Inferred Mineral Resources at 0.50 grams per tonne gold equivalent cut-off:

|           |  |                            |         |             |  |             |  |                     |      |                             |  |        |  |  |       | 
|---------- |  | -------------------------- | ------- | ----------- |  | ----------- |  | ------------------- | ---- | --------------------------- |  | ------ |  |  | ----- | 
|           |  | Inferred Mineral Resources |        
|           |  |                            |        
|Zone       |  | Tonnes
 (000)              |         | Gold
 (g/t) |  | Copper
 (%) |  | Gold
 Ounces
 (000) |      | Copper 
 Pounds
 (millions) | 
|           |  |                            |         |             |  |             |  |                     |      |                             | 
|           |  |                            |         |             |  |             |  |                     |      |                             |  |        |  |  |       | 
|Mitchell   |  |                            | 667,421 |             |  | 0.62        |  |                     | 0.15 |                             |  | 13,304 |  |  | 2,206 | 
|Kerr       |  |                            | 51,387  |             |  | 0.21        |  |                     | 0.45 |                             |  | 352    |  |  | 506   | 
|Sulphurets |  |                            | 33,636  |             |  | 0.62        |  |                     | 0.20 |                             |  | 675    |  |  | 147   | 
|           |  |                            |         |             |  |             |  |                     |      |                             |  |        |  |  |       | 
|Total      |  |                            | 752,444 |             |  | 0.59        |  |                     | 0.18 |                             |  | 14,331 |  |  | 2,859 | 
|           |  |                            |         |             |  |             |  |                     |      |                             |  |        |  |  |       | 

Cautionary Note to U.S. investors
concerning estimates of Inferred ResourcesThis section uses the
term inferred resources. We advise U.S. investors that while this term is
recognized and required by Canadian regulations, the U.S. Securities and
Exchange Commission does not recognize it. Inferred resources have a great
amount of uncertainty as to their existence, and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or any part of an
Inferred Mineral Resource will ever be upgraded to a higher category. Under
Canadian rules estimates of Inferred Mineral Resources may not form the basis
of feasibility or other economic studies. U.S. investors are cautioned not to assume that part
or all of an inferred resource exists, or is economically or legally mineable.

39

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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 database for the Kerr
zone incorporated 144 core drill holes totaling 26,409 meters. The database for
the Sulphurets zone incorporated 60 core drill holes totaling 13,033 meters.
The database for the Mitchell zone incorporated 69 core holes totaling 24,824
meters.

Environmental/Regulatory Information

The KSM project requires an
Environmental Assessment Certificate from the Province of BC. The Canadian
federal government will also require approvals for some portions of the project
involving tailing storage and any major stream crossings. The Environmental
Assessment process was initiated in March of 2008 with submittal of a Project
Description to the BC Environmental Assessment Office. On-site baseline
environmental work was initiated by Rescan in the spring of 2008. Rescan will
be leading this work, the preparation of the Environmental Assessment
Certificate Application, and the submissions required to acquire operating
permits. Rescan and Seabridge are involved with consultation meetings with
local communities, regulatory agencies, regional and municipal governments, the
First Nations, and the Nisgaa Nation.

Current and Planned Work

During 2008, the Company
completed an additional 17,000 meters of core drilling at KSM designed to
further upgrade and expand mineral resources. In March 2009, RMI completed an
updated KSM resource estimate. The Issuer plans to update the January 2009
National Instrument 43-101 Preliminary Assessment with this new resource
estimate during 2009. The Company also plans to conduct additional exploration,
engineering and permitting activities during 2009.

Other Projects

The Company also holds a 100% interest in several
other projects, all of which are situated in North America. The Company does
not consider any of these other projects material to the overall operations.
These projects include Quartz Mountain (Oregon), Grassy Mountain (Oregon), Hog
Ranch (Nevada) and Red Mountain (British Columbia, Canada). In December 2008,
the Company sold its interest in the Noche Buena (Sonora, Mexico).

The Company also owns a 100% interest in Pacific
Intermountain Gold Corporation (PIGCO), a private company focused on the
acquisition and exploration of early-stage gold and silver properties in
Nevada. The Companys ownership interest in PIGCO is subject to a 10% net
profits interest held by a previous minority shareholder in PIGCO.

The Company is not planning any additional work on any
of these other projects at this time.

40

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All of the Companys Properties are without known mineral
reserves and are at the exploration stage.

Item 4A. Unresolved Staff Comments

None

Item 5. Operating and Financial
Review and Prospects
The following discussion for
the fiscal years ended December 31, 2008, 2007 and 2006, should be read in
conjunction with the Companys audited consolidated financial statements for
the referenced periods and the notes thereto, and in particular Note 11,
Reconciliation to United States Generally Accepted Accounting Principles,
included in this Annual Report. As a Canadian company, the financial statements
have been prepared in accordance with Canadian GAAP, and reconciled to US GAAP,
and are in Canadian dollars.

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. The Companys
business plan is to increase its gold ounces in the ground but not to go into
production on its own. The Company will either sell projects or participate in
joint ventures towards production with major mining companies. During the
period 1999 through 2002, when the price of gold was lower than it is today,
Seabridge acquired 100% interests in eight advanced-stage gold projects
situated in North America. Subsequently, the Company acquired a 100% interest
in the Noche Buena project in Mexico. As the price of gold has moved higher
over the past several years, Seabridge has commenced exploration activities and
engineering studies at several of its projects. The Company sold the Noche
Buena project for US$25 million ($30,842,000) in December 2008. Seabridges
principal projects include the Courageous Lake property located in the
Northwest Territories and the KSM (Kerr-Sulphurets-Mitchell) property located
in British Columbia. Seabridges common shares trade in Canada on the Toronto
Stock Exchange under the symbol SEA and in the United States on the NYSE Amex
stock exchange under the symbol SA.

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.

The value of the U.S. Dollar in
relationship to the Canadian Dollar was $1.22 as of December 31, 2008.

41

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5A. Operating Results

Year
Ended December 31, 2008 Compared to Year Ended December 31, 2007

The
net profit for the year ended December 31, 2008 was $10,290,000 or $0.28 per
share compared to a net loss of $5,542,000 or $0.15 per share for 2007. In
December 2008, the Company sold the Noche Buena project for gross proceeds of
US$25 million ($30,842,000) and recorded a net gain of $19,891,000 before
income taxes of $5,593,000. The Companys interest income from cash investments
was down in 2008, at $621,000 compared with $823,000 in 2007 with lower cash
balances to invest and lower interest rates. Corporate and general expenses
were lower in 2008 compared to 2007, as stock option expenses were $1,852,000
compared to $2,830,000 and bonus grants were higher in 2007. In 2008, the
Company reported a gain on foreign exchange of $378,000 compared to a loss in
2007 of $296,000 as the US dollar and Mexican peso moved favourably compared to
the Canadian dollar.

Year
Ended December 31, 2007 Compared to Year Ended December 31, 2006

The
net loss for the year ended December 31, 2007 was $5,542,000 or $0.15 per share
compared to a net loss of $3,300,000 or $0.10 per share for 2006. For both
years, reported losses were reduced due to the recognition of income tax
recoveries ($620,000 in 2007 and $1,907,000 in 2006) relating to the renouncing
of Canadian Exploration Expenses to the investors of flow-through financings.
The Companys interest income from cash investments was up considerably at
$823,000 compared with $363,000 in 2006 with higher cash balances resulting
primarily from the exercise of share purchase warrants for proceeds of $27
million. Corporate and general expenses were higher in the 2007 period due to
activity levels, bonus payments and stock option compensation expenses of
$2,830,000 (2006 - $1,979,000), resulting mainly from the vesting of stock
options granted in 2006 due to the increase in the Companys share price. At
December 31, 2006, the Company wrote down the value of its investment in Atlas
Precious Metals Inc. amounting to $749,000 as that company was not able to
secure financing due to perceived political risks in the jurisdiction where its
main asset was located.

5B. Liquidity and Capital Resources

During 2009, the Company
plans to continue to advance its two major gold projects, KSM and Courageous
Lake in order to either sell them or joint venture them towards production with
major mining companies. In addition, it will seek to sell off its other
properties. At December 31, 2008, the Companys working capital position was
$30.6 million which should allow the Company to continue its major development
plans for 2009 and continue ongoing operating activities through at least 2011.

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 and/or the sale of non-core assets. 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.

42

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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.

Year Ended December 31, 2008The Companys working
capital position, at December 31, 2008, was $30,628,000 up from $25,020,000 at
the end of 2007. In 2008, the Company received $30,842,000 from the sale of the
Noche Buena project which produced a net gain of $19,891,000 before income
taxes. In addition, during 2008, $383,000 was received from the exercise of
stock options while in 2007 it received $31,327,000 from the exercise of
warrants and options. Cash in 2008 was used for expenditures on exploration
principally the KSM project ($10.8 million) and at the Noche Buena project on
the surface rights acquisition costs of $1.8 million. A further $2.6 million
was spent on commissions and other costs in connection with the sale of the
project.

Cash and short-term deposits
at December 31, 2008 totalled $38,995,000, up from $25,038,000 at December 31,
2007. Operations activities used only $2,552,000 in 2008 compared to $3,350,000
in the prior year due. In 2008, investor activities and corporate costs were
slightly higher while compensation costs were down significantly from 2007 Cash
expenditures on mineral interests were $14,706,000 compared to the $8,351,000
cash expenditures in 2007. In addition, the Company received $30,842,000 from
the sale of the Noche Buena project.

|                                  |  |                        |        |      |  |         |  |         |       |            |  |       |  |  |       | 
|--------------------------------- |  | ---------------------- | ------ | ---- |  | ------- |  | ------- | ----- | ---------- |  | ----- |  |  | ----- | 
|                                  |  | Payments due by period |       
|                                  |  |                        |       
|Contractual
 Obligations ($,000)  |  | Total                  |        | 2009 |  | 2010-12 |  | 2013-14 |       | After 2014 | 
|                                  |  |                        |        |      |  |         |  |         |       |            | 
|                                  |  |                        |        |      |  |         |  |         |       |            |  |       |  |  |       | 
|Mineral interests                 |  |                        | 9,877  |      |  | 1,244   |  |         | 4,317 |            |  | 2,894 |  |  | 1,422 | 
|Reclamation liabilities           |  |                        | 1,999  |      |  |        |  |         | 189   |            |  |      |  |  | 1,810 | 
|Business premises operating lease |  |                        | 377    |      |  | 113     |  |         | 264   |            |  |      |  |  |      | 
|                                  |  |                        |        |      |  |         |  |         |       |            |  |       |  |  |       | 
|                                  |  |                        | 12,253 |      |  | 1,357   |  |         | 4,770 |            |  | 2,894 |  |  | 3,232 | 
|                                  |  |                        |        |      |  |         |  |         |       |            |  |       |  |  |       | 

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.

Year Ended December 31, 2007

During 2008, the Company
plans to continue to advance its two major gold projects, KSM and Courageous
Lake in order to either sell them or joint venture them towards production with
major mining companies. In addition, it will seek to sell off its other
properties, initially, Noche Buena and Red Mountain.

The Companys working
capital position, at December 31, 2007, was $25,055,000 up from $6,420,000 at
the end of 2006. In 2007, the two million share purchase warrants issued as
part of the KSM project acquisition in 2006 were exercised for proceeds of $27
million. In addition, during 2007 $4,327,000, (2006 - $585,000) was received
from the exercise of stock options. In 2006, two private placement financings
were completed which netted $12,008,000. The increase in share capital in 2007
was used for expenditures on exploration and operating costs.

43

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Cash and short-term deposits
at December 31, 2007 totaled $25,038,000, up from $5,786,000 at December 31,
2006. Operations activities used $3,350,000 in 2007 compared to $2,330,000 in
the prior year due to increased compensation costs, investor activities and
corporate costs. Cash expenditures on Mineral Interests were $8,351,000
compared to the $14,571,000 cash expenditures in 2006.

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.

Accounting Matters

Disclosure Controls and ProceduresDisclosure controls
and procedures are designed to provide reasonable assurance that all relevant
information is gathered and reported to 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, 2008, 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 National Instrument 52-109 of the Canadian
Securities Administrators and has concluded that such controls and procedures
are effective.

Internal Controls Over Financial ReportingThe
Companys management, under the supervision of the CEO and the CFO, are
responsible for establishing and maintaining the Companys internal controls
over financial reporting. Management conducted an evaluation of internal
controls over financial reporting based on the framework established in
Internal Control  Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation, management
concluded that the Companys internal controls over financial reporting were
effective as at December 31, 2008.

44

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Changes in Accounting Policies

The Company has adopted the
following new accounting policies effective January 1, 2008 as issued by the
Canadian Institute of Chartered Accountants (CICA):

Capital DisclosuresIn December 2006,
the CICA issued Handbook Section 1535, Capital Disclosures, which establishes
standards for disclosing information about an entitys capital and how it is
managed. The entitys disclosure should include information about its
objectives, policies and processes for managing capital and disclose whether or
not it has complied and the consequences of non-compliance with any capital
requirements to which it is subject. The Company has included disclosures
recommended by the new Handbook section in Note 6 to the consolidated financial
statements for the year ended December 31, 2008.

Financial Instruments  Disclosures and
Financial Instruments - PresentationIn December 2006,
the CICA issued Handbook Section 3862 Financial Instruments  Disclosures and
Section 3863 Financial Instruments  Presentation. Section 3862 modifies the
disclosure requirements of Section 3861 Financial Instruments - Disclosures and
Presentation including required disclosure of the assessment of the
significance of financial instruments for an entitys financial position and
performance; and of the extent of risks arising from financial instruments to
which the Company is exposed and how the Company manages those risks. Section
3863 carries forward the presentation related requirements of Section 3861. The
Company has included disclosures recommended by the new handbook section in
Note 8 to the consolidated financial statements for the year ended December 31,
2008.

Changes in Accounting Standards Not
Yet AdoptedGoodwill and Intangible AssetsIn
February 2008, the CICA issued Handbook Section 3064 Goodwill and Intangible Assets which is required to be adopted
for fiscal years beginning on or after October 1, 2008. This section
establishes standards for the recognition, measurement, presentation and
disclosure of goodwill and intangible assets subsequent to their initial
recognition by profit-oriented enterprises. The Company is currently evaluating
the impact of this new standard.

International
Financial Reporting Standards (IFRS)In 2006, the
Canadian Accounting Standards Board (AcSB) published a new strategic plan
that will significantly affect financial reporting requirements for Canadian
companies. The AcSB strategic plan outlines the convergence of Canadian GAAP
with IFRS over an expected five year transitional period. In February 2008, the
AcSB announced that 2011 is the changeover date for public accountable
companies to use IFRS, replacing Canadas own GAAP. The transition date is for
interim and annual financial statements relating to fiscal years beginning on
or after January 1, 2011. The transition date of January 1, 2011 will require
the restatement for comparative purposes of amounts reported by the Company for
the year ended December 31, 2010. The Company has begun assessing the adoption
of IFRS for 2011, and the identification of the new standards and their impact
on financial reporting. At this time, the Company has not determined the impact
of the transition to IFRS.

45

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Business Combinations, Consolidated
Financial Statements, Non-controlling InterestsThe CICA issued
Handbook Sections 1582 Business Combinations, 1601 Consolidated Financial
Statements and 1602 Non-controlling Interests and are effective for years
beginning on or after January 1, 2011. These Handbook Sections replace 1581
Business Combinations and 1600 Consolidated Financial Statements and establish
a new Section for accounting for non-controlling interest in a subsidiary. The
Company is currently evaluating the impact of these new standards.

See Note 11 to Notes to
Consolidated Financial Statements for information regarding the impact of
recent United States accounting pronouncements.

5C. Research and Development

The Company conducts no Research
and Development activities, nor is it dependent upon any patents or
intellectual property licenses.

5D. 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.

5E. Off
Balance Sheet Disclosure

Not
Applicable

5F. Contractual Obligations

On-going contractual obligations of the Company are
limited to property holding costs and reclamation liabilities. Although
property holding costs are at the discretion of the Company, if payments are
not made the Company will lose their rights to the project. Table No. 4 provides
details of the Companys future contractual obligations which are required to
be satisfied in order to keep its projects in good standing.

Table No. 4
Contractual Obligations ($000s)

|                                   |  |                        |        |      |  |         |  |         |       |            |  |       |  |  |       | 
|---------------------------------- |  | ---------------------- | ------ | ---- |  | ------- |  | ------- | ----- | ---------- |  | ----- |  |  | ----- | 
|                                   |  | Payments due by period |       
|                                   |  |                        |       
|                                   |  | Total                  |        | 2009 |  | 2010-12 |  | 2013-14 |       | After 2014 | 
|                                   |  |                        |        |      |  |         |  |         |       |            | 
|                                   |  |                        |        |      |  |         |  |         |       |            |  |       |  |  |       | 
|Mineral interests                  |  |                        | 9,877  |      |  | 1,244   |  |         | 4,317 |            |  | 2,894 |  |  | 1,422 | 
|Reclamation liabilities            |  |                        | 1,999  |      |  |        |  |         | 189   |            |  |      |  |  | 1,810 | 
|Business premises
 operating lease |  |                        | 377    |      |  | 113     |  |         | 264   |            |  |      |  |  |      | 
|                                   |  |                        |        |      |  |         |  |         |       |            |  |       |  |  |       | 
|                                   |  |                        | 12,253 |      |  | 1,357   |  |         | 4,770 |            |  | 2,894 |  |  | 3,232 | 
|                                   |  |                        |        |      |  |         |  |         |       |            |  |       |  |  |       | 

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.

46

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5G. Safe Harbor

See Forward Looking Statements in Item 3D.

Item 6. Directors, Senior
Management and Employees

6A. Directors and Senior Management

Table No. 5 lists as of March 23, 2009 the names of
the Directors of the Company. The Directors have served in their respective
capacities since their election and/or appointment and will serve until the
next Annual General Meeting or until a successor is duly elected, unless the
office is vacated in accordance with the Articles/By-Laws of the Company. All
Directors are citizens of Canada, except, William Calhoun, Eliseo
Gonzalez-Urien and Louis Fox, all of whom are citizens of the United States.
Frederick Banfield and Rudi Fronk are citizens of both Canada and the United
States.

Table No. 5
Directors

|                          |  |     |  |                             
|------------------------- |  | --- |  | ----------------------------
|Name                      |  | Age |  | Date First Elected/Appointed
|                          |  |     |  |                             
|                          |  |     |  |                             
|James Anthony             |  | 61  |  | October 1999                
|Rudi Fronk                |  | 50  |  | October 1999                
|Frederick Banfield (1,3)  |  | 66  |  | October 1999                
|William Calhoun (1,2,3)   |  | 76  |  | February 2000               
|Thomas Dawson (1,3)       |  | 72  |  | January 2006                
|Louis Fox (2,3)           |  | 66  |  | January 2000                
|Eliseo Gonzalez-Urien (2) |  | 68  |  | January 2006                

| |     |                                                         
| | --- | --------------------------------------------------------
| | (1) | Member of Audit Committee.                              
| | (2) | Member of Compensation Committee                        
| | (3) | Member of Corporate Governance and Nominating
 Committee

Table No. 6 lists, as of March 23, 2009 the names of
the Executive Officers of the Company. The Executive Officers serve at the
pleasure of the Board of Directors. Mr. Threlkeld is a citizen of the United
States. Messrs. Anthony and Chisholm are citizens of Canada. Mr. Fronk is a
citizen of both Canada and the United States.

Table No. 6
Executive Officers

|                  |  |                       |  |     |  |                     
|----------------- |  | --------------------- |  | --- |  | --------------------
|Name              |  | Position              |  | Age |  | Date of
 Appointment
|                  |  |                       |  |     |  |                     
|                  |  |                       |  |     |  |                     
|James Anthony     |  | Chairman              |  | 61  |  | October 1999        
|Rudi Fronk        |  | President and CEO     |  | 50  |  | October 1999        
|William Threlkeld |  | Senior Vice President |  | 54  |  | November 2001       
|Roderick Chisholm |  | Secretary and CFO     |  | 59  |  | August 2004         

47

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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 25 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 is also a director of Paramount Gold and Silver Corp. a Canadian
public company. Mr. Fronk spends 100% of his time on Seabridge business.

Frederick Banfield is the Founder of Mintec since
1970. Mintec is a consulting and software company that provides consulting
services to the mineral industry. Mr. Banfield has also served as an
independent reserves auditor and mine planning advisor gold mining
organizations with respect to projects in the United States, Canada, Africa,
Australia and Latin America. Mr. Banfield holds an engineering degree from the
Colorado School of Mines. Mr. Banfield spends less than 10% of his time on
Seabridge business.

William Calhoun is President of W.M. Calhoun Inc., an
independent consultant that provides consulting services to the minerals
industry in the areas of mining operations, mine planning, mine design, ore
reserves and environmental issues. From 1972 through 1981, Mr. Calhoun served
as President and CEO of Day Mines, Inc., an American Stock Exchange Company
with mining operations in the western United States that was acquired by Hecla
Mining. Mr. Calhouns extensive public service record includes membership on
President Ronald Reagans Strategic Minerals Task Force, President Gerald
Fords Inflation Task Force; Director of the Silver Institute; Trustee of the
Northwest Mining Association; Chairman of the Mining Advisors Committee to the
Governors of Washington and Idaho; President of the Idaho Mining Association;
Chairman of Advisory Committee of Idaho College of Mines; and numerous other
civil and professional organizations. Mr. Calhoun has a Bachelor of Science
degree in Mining/Geology from the University of Texas at El Paso. Mr. Calhoun
spends less than 10% of his time on Seabridge business.

48

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Thomas Dawson has been a Chartered
Accountant since 1961. He is a retired senior audit and accounting partner with
40 years of experience at Deloitte & Touche LLP, Chartered Accountants. He
received his B.Comm. from Loyola College (now Concordia University), Canada, in
1959. Mr. Dawson is also a director of the following Canadian public companies:
Waterfurnace Renewable Energy, 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.

Louis Fox has more than 25 years experience in
precious metals trading, merchanting and merchant banking activities. From 1984
to 1999, Mr. Fox was a Senior Vice President of Gerald Metals, Inc., commodity
trading, refining and merchant banking firm, in Stamford, Connecticut. At
Gerald Metals, Mr. Fox was the head of the companys worldwide precious metals
group. Prior to Gerald Metals, from 1974 to 1981, Mr. Fox was a Vice President
of J. Aron & Co., a precious metals trading firm. Following the acquisition
of J. Aron & Co. by Goldman Sachs in 1981, Mr. Fox was a Vice President of
Goldman Sachs through 1984. Mr. Fox holds a B.A. from the University of
Pittsburgh and a J.D. from the Boston University Law School. Mr. Fox spends less than 10% of his time on
Seabridge business.

Eliseo Gonzalez-Urien has
over 30 years of experience in the mining industry. From 1989 through 2001 Mr.
Gonzalez-Urien held various executive positions with Placer Dome Inc. including
Senior Vice President of the parent company and President of Placer Dome
Exploration Inc. During this period he was charged with ultimate responsibility
for Placer Domes worldwide exploration activities. Prior to Placer Dome, Mr.
Gonzalez-Urien held senior positions with BHP-Utah Inc. and Noranda. He holds a
degree in Geology from the University of Santiago, Chile, followed by post
graduate studies in Geology at the University of California, Berkley. Mr.
Gonzalez-Urien is also a director of Paramount Gold and Silver Corp. a Canadian
public company. 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 is a Chartered Accountant and 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 also Chief Financial Officer of North
Atlantic Resources Ltd. a Canadian public company. Mr. Chisholm spends
approximately 80% of his time on Seabridge business.

49

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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 was rescinded in April 2007.

There are no arrangements or understandings between
any two or more directors or executive officers, pursuant to which he was
selected as a director or executive officer. There are no family relationships
between any directors or executive officers.

6B. 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 2008, unrelated directors received US$25,000 per annum, the chairman of the
audit committee received an additional US$7,500 per annum and the chairman of
the compensation committee received US$2,500 per annum, all paid quarterly in
arrears.

During 2003, the Company adopted a formalized stock
option plan, approved by its shareholders, for the granting of incentive stock
options. To assist the Company in compensating, attracting, retaining and
motivating personnel, the Company grants stock options to directors, executive
officers and employees; refer to Item 10A, Stock Options.

50

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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) |  | Consulting Fees |         | Other
 Compensation 
 Bonus |         | Directors Fees |    
|                                          |  |      |      |        |         |                     |  |                 |         |                             |         |                |    
|                                          |  |      |      |        |         |                     |  |                 |         |                             |         |                |     |         |         |     |        |        | 
|Rudi Fronk,
 President, CEO and
 Director |  |      | 2008 |        | $       | 400,000             |  |                 | 150,000 | (2)                         |         | Nil            |     | $       | 100,000 |     |        | Nil    | 
|                                          |  | 2007 |      | $      | 300,000 |                     |  | Nil             |         |                             | Nil     |                | $   | 450,000 |         |     | Nil    |       
|                                          |  | 2006 |      | $      | 300,000 |                     |  | 250,000         |         |                             | Nil     |                |     | Nil     |         |     | Nil    |       
|James Anthony,
 Chairman                  |  |      | 2008 |        |         | Nil                 |  |                 | 150,000 | (2)                         | $       | 200,000        |     | $       | 50,000  |     |        | Nil    | 
|                                          |  | 2007 |      |        | Nil     |                     |  | Nil             |         | $                           | 144,000 |                | $   | 216,000 |         |     | Nil    |       
|                                          |  | 2006 |      |        | Nil     |                     |  | 125,000         |         | $                           | 144,000 |                |     | Nil     |         |     | Nil    |       
|Frederick Banfield,
 Director             |  |      | 2008 |        |         | Nil                 |  |                 | 25,000  | (2)                         |         | Nil            |     |         | Nil     |     | US$    | 25,000 | 
|                                          |  | 2007 |      |        | Nil     |                     |  | Nil             |         |                             | Nil     |                |     | Nil     |         | US$ | 20,000 |       
|                                          |  | 2006 |      |        | Nil     |                     |  | 100,000         |         |                             | Nil     |                |     | Nil     |         | US$ | 20,000 |       
|William Calhoun,
 Director                |  |      | 2008 |        |         | Nil                 |  |                 | 25,000  | (2)                         |         | Nil            |     |         | Nil     |     | US$    | 25,000 | 
|                                          |  | 2007 |      |        | Nil     |                     |  | Nil             |         |                             | Nil     |                |     | Nil     |         | US$ | 21,500 |       
|                                          |  | 2006 |      |        | Nil     |                     |  | 100,000         |         |                             | Nil     |                |     | Nil     |         | US$ | 21,250 |       
|Thomas Dawson
 Director                   |  |      | 2008 |        |         | Nil                 |  |                 | 25,000  | (2)                         |         | Nil            |     |         | Nil     |     | US$    | 32,500 | 
|                                          |  | 2007 |      |        | Nil     |                     |  | Nil             |         |                             | Nil     |                |     | Nil     |         | US$ | 27,500 |       
|                                          |  | 2006 |      |        | Nil     |                     |  | 50,000          |         |                             | Nil     |                |     | Nil     |         | US$ | 27,500 |       
|Louis Fox,
 Director                      |  |      | 2008 |        |         | Nil                 |  |                 | 25,000  | (2)                         |         | Nil            |     |         | Nil     |     | US$    | 25,000 | 
|                                          |  | 2007 |      |        | Nil     |                     |  | Nil             |         |                             | Nil     |                |     | Nil     |         | US$ | 20,000 |       
|                                          |  | 2006 |      |        | Nil     |                     |  | 100,000         |         |                             | Nil     |                |     | Nil     |         | US$ | 20,000 |       
|Eliseo Gonzalez-
 Urien                   |  |      | 2008 |        |         | Nil                 |  |                 | 25,000  | (2)                         | US$     | 16,000         |     |         | Nil     |     | US$    | 27,500 | 
|                                          |  | 2007 |      |        | Nil     |                     |  | Nil             |         | US$                         | 16,000  |                |     | Nil     |         | US$ | 21,250 |       
|                                          |  | 2006 |      |        | Nil     |                     |  | 50,000          |         | US$                         | 16,000  |                |     | Nil     |         | US$ | 20,000 |       
|Roderick Chisholm
 Secretary and CFO      |  |      | 2008 |        |         | Nil                 |  |                 | 40,000  | (2)                         | $       | 160,000        |     |         | 40,000  |     |        | Nil    | 
|                                          |  | 2007 |      |        | Nil     |                     |  | 60,000          |         | $                           | 134,334 |                | $   | 67,167  |         |     | Nil    |       
|                                          |  | 2006 |      |        | Nil     |                     |  | Nil             |         | $                           | 120,000 |                | $   | 120,000 |         |     | Nil    |       
|William Threlkeld,
 Senior VP             |  |      | 2008 |        | US$     | 165,000             |  |                 | 50,000  | (2)                         |         | Nil            |     | US$     | 41,250  |     |        | Nil    | 
|                                          |  | 2007 |      | US$    | 150,000 |                     |  | 60,000          |         |                             | Nil     |                | US$ | 75,000  |         |     | Nil    |       
|                                          |  | 2006 |      | US$    | 120,000 |                     |  | Nil             |         |                             | Nil     |                | US$ | 120,000 |         |     | Nil    |       

| |                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) The stock options were granted under the stock
 option plans which are described under Item 10A.                                                                                                               
| | (2) These stock option grants, which were made on
 December 4, 2008, are exercisable for five years at $10.54 each, and are
 subject to shareholder approval which will be sought at the 2009
 shareholders meeting.

See Item 7B. Interest of Management in Certain
Transactions for items considered.

No funds were set aside or accrued by the Company
during Fiscal 2008 to provide pension, retirement or similar benefits for
directors or executive officers.

51

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6C. Board Practices

Mandate
of the Board

The Companys board of directors, which is elected
annually, is responsible for the supervision of the management of the Companys
business and affairs. Under its governing statute (the Canada Business
Corporations Act), the board is required to carry out its duties with a view to
the best interests of the Company. The board specifically recognizes its
responsibility for the following areas:

|    |                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | representing the interests of the shareholders in
 all significant decisions affecting the Company and ensuring that
 shareholders are kept informed of developments affecting their Company;
|    |                                                                                                                                                                                              
|(b) | reviewing and approving corporate objectives, goals
 and strategies with a view to enhancing shareholder value;                                                                              
|    |                                                                                                                                                                                              
|(c) | reviewing and approving the Companys operating
 plans and monitoring performance;                                                                                                           
|    |                                                                                                                                                                                              
|(d) | reviewing significant operational and financial
 issues as they arise and providing direction to management on these matters;                                                                
|    |                                                                                                                                                                                              
|(e) | acting diligently to ensure that the Company fulfils
 its legal and regulatory requirements;                                                                                                 
|    |                                                                                                                                                                                              
|(f) | evaluating the effectiveness of senior management
 and establishing their compensation; and                                                                                                  
|    |                                                                                                                                                                                              
|(g) | evaluating whether or not directors receive the
 information they require to perform their duties as directors.                                                                              

The frequency of the meetings of the board of
directors as well as the nature of agenda items change depending upon the state
of the Companys affairs and in light of opportunities or risks which the
Company faces. There are no agreements or understandings for designation of
directors. There are no termination agreements for directors.

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.

52

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---



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 four of the boards present seven members are unrelated within the
meaning of the TSE Report: Frederick A. Banfield; William Calhoun; Thomas C.
Dawson; and Louis J. Fox. The Corporate Governance Committee is responsible for
reviewing and recommending a suitable approach for the Company to assess
director performance.

The board considers seven directors to be an
appropriate size for the Board at the current time. The board believes that the
inclusion of the President and Chief Executive Officer, Rudi P. Fronk, on the
Companys board of directors is useful to the effective governance of the
Company. Each director brings to the board a specific area of expertise which
is instrumental in creating a board which is able to implement the Companys
strategy effectively.

At present, in addition to those matters which must by
law be approved by the board, management seeks board approval for any
transaction which is out of the ordinary course of business or could be
considered to be material to the business of the Company.

Committees

The board has assigned specific governance
responsibilities to three committees. A description of the mandate of each
committee follows:

Audit Committee

The following constitutes the Charter of the audit
committee.

The Audit Committee of Seabridge is a committee of the
board composed entirely of three outside and unrelated directors. Its overall
goal is to ensure that the Company adopts and follows a policy of full, plain,
true and timely disclosure of material financial information to its
stakeholders. It reviews all material matters affecting the risks and financial
well being of the Company and is a key part of the Corporate Governance system.
The committee is mandated to satisfy the requirements of the Canada Business
Corporations Act.

The audit committee meets at a minimum, quarterly and
on such other occasions as required. The auditors are invited to attend the
meetings called to discuss the annual audit plan and the final review of the
year-end financial statements. At least annually, the committee meets with the
auditors to review managements performance relating to financial reporting
matters.

Specifically, the committee:

|    |                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------
|(a) | reviews the annual statements of the Company and
 makes recommendations to the board with respect to these statements,  
|    |                                                                                                                         
|(b) | reviews the quarterly financial statements and makes
 recommendations to the board regarding these financial statements,

53

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|    |                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | reviews and approves financial information in all
 prospectuses, offering circulars, and similar documents,                                                         
|    |                                                                                                                                                                     
|(d) | oversees the adequacy and accuracy of the Companys
 financial disclosure policies and obligations,                                                                 
|    |                                                                                                                                                                     
|(e) | reviews significant accounting policies and
 estimates,                                                                                                             
|    |                                                                                                                                                                     
|(f) | monitors the Companys internal controls, financial
 systems and procedures, and management information systems,                                                    
|    |                                                                                                                                                                     
|(g) | oversees managements reporting on internal control,                                                                                                                
|    |                                                                                                                                                                     
|(h) | meets with the Companys auditors to review
 managements financial stewardship and to review their recommendations to
 management, and                             
|    |                                                                                                                                                                     
|(i) | recommends the appointment of auditors and reviews
 the terms of the audit engagement and the appropriateness of the proposed
 fee,                                 
|    |                                                                                                                                                                     
|(j) | reviews through discussions or by way of a formal
 document the plan followed for the annual audit with the auditors and
 management,                               
|    |                                                                                                                                                                     
|(k) | evaluates the performance of the auditors,                                                                                                                          
|    |                                                                                                                                                                     
|(l) | confirms the independence of auditors,                                                                                                                              
|    |                                                                                                                                                                     
|(m) | establishes procedures
 for the receipt, retention and treatment of complaints received regarding
 accounting, internal accounting controls or auditing matters, and
|    |                                                                                                                                                                     
|(n) | establishes procedures for the confidential,
 anonymous submission by employees of concerns regarding questionable
 accounting or auditing matters.                 

Corporate Governance and
Nominating Committee

The corporate governance and nominating committee is
presently composed of all four un-related and outside directors. This
committee has prepared and obtained approval by the board of written policies
on Fair Disclosure, Insider Trading and Conflict of Interest. Reporting to the
full board of directors, this committee is mandated to:

|   |                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Prepare and recommend to the board on an annual
 basis, proposed goals for the Company and its CEO and a mandate for the CEO;                                                                          
|   |                                                                                                                                                                                                        
|2. | Ensure that the board is adequately informed of
 developments and issues within the Company such that it is able to fulfill
 its duties and responsibilities;                                          
|   |                                                                                                                                                                                                        
|3. | Ensure that the board reviews and approves all major
 corporate decisions which could reasonably be expected to affect shareholder
 value;                                                             
|   |                                                                                                                                                                                                        
|4. | Assess the effectiveness of the board as a whole, of
 each of the directors and of each committee of directors and consider the
 impact that the number of directors has on effectiveness of the board.

54

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|   |                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | Conduct an annual discussion among non-management
 directors on the role and effectiveness of independent directors;                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                     
|6. | Ensure that each board committee has a clear,
 written mandate and is performing diligently the tasks necessary to limit
 board liability;                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                     
|7. | Oversee the administration of the Companys Fair
 Disclosure Policy and Insider Trading Policy;                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                     
|8. | Oversee an annual review of each directors business
 interests in accordance with the Companys Conflict of Interest Policy to
 ascertain which conflicts might exist with respect to the interests of
 Seabridge and how such conflicts, if any, are to be managed so as to ensure
 the independence of directors and to protect the interests of Seabridge and
 its shareholders;
|   |                                                                                                                                                                                                                                                                                                                                                                                     
|9. | Review disclosure of corporate governance matters to
 ensure that shareholders are adequately informed of the boards procedures
 for governance on their behalf.                                                                                                                                                                                                                   

Compensation Committee

The compensation committee is presently composed of
three directors, all of which are outside and unrelated directors. Reporting to
the full board of directors, this Committee is mandated to:

|   |                                                                                                                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | On an annual basis, review the total compensation of
 the President and Vice President(s) against their performance, mandates and
 goals and make recommendations on their compensation to the board;                               
|   |                                                                                                                                                                                                                                     
|2. | Review, approve and recommend to the board for
 confirmation all grants of options to all directors and employees; ensure the
 proper administration of the Companys options program in conformity with the
 Companys Option Plan;
|   |                                                                                                                                                                                                                                     
|3. | Review on an annual basis the Companys overall
 hiring and compensation practices with reference to industry norms.                                                                                                                

None of the members of the
Committee have any indebtedness to the Company or any of its subsidiaries nor
have they any material interest, or have any associates or affiliates which
have any material interest, direct or indirect, in any actual or proposed
transaction in the last financial year which has materially affected or would
materially affect the Company or any of its subsidiaries.

The compensation of the
Companys executive officers is determined by the Board of Directors upon
recommendations made by the Committee. The Committee met twice during the last
financial year. The Companys executive compensation program consists of an
annual base salary or consulting fee and a longer-term component consisting of
stock options, however, the Committee may also recommend a bonus for management
or its directors which is reviewed annually.

55

---

---



6D. Employees

The Company currently has 8 employees and 4 executive
officers.

6E. Share Ownership

The Companys shares are publicly held. The Company is
not controlled by another corporation as described in Item 7A.

Table No. 8 lists, as of March 23, 2009, 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 Class |     
|                               |  |                           |  |                                             |       |                  |     
|                               |  |                           |  |                                             |       |                  |      |   | 
|Common                         |  | James Anthony (1)         |  | 1,353,125                                   |       |                  | 3.61 | % | 
|Common                         |  | Rudi Fronk (2)            |  | 1,318,000                                   |       |                  | 3.50 | % | 
|Common                         |  | Frederick Banfield (3)    |  | 245,000                                     |       |                  | 0.65 | % | 
|Common                         |  | William Calhoun (4)       |  | 196,667                                     |       |                  | 0.52 | % | 
|Common                         |  | Thomas Dawson (5)         |  | 75,000                                      |       |                  | 0.20 | % | 
|Common                         |  | Louis Fox (6)             |  | 350,000                                     |       |                  | 0.93 | % | 
|Common                         |  | Eliseo Gonzalez-Urien (7) |  | 47,000                                      |       |                  | 0.13 | % | 
|Common                         |  | William Threlkeld (8)     |  | 336,000                                     |       |                  | 0.90 | % | 
|Common                         |  | Roderick Chisholm (9)     |  | 202,400                                     |       |                  | 0.54 | % | 
|                               |  |                           |  |                                             |       |                  |      |   | 
|Total
 Directors/Officers (10) |  | 4,123,192                 |  |                                             | 10.77 | %                |     

|    |                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Of these shares 125,000 represent currently
 exercisable share purchase options and 543,334 represent shares held
 indirectly. Not reflected are 150,000 share purchase options which are
 subject to shareholder approval.
|(2) | Of these shares 250,000 represent currently
 exercisable share purchase options and 18,000 represent shares held
 indirectly. Not reflected are 150,000 share purchase options which are
 subject to shareholder approval. 
|(3) | Of these shares 100,000 represent currently
 exercisable share purchase options. Not reflected are 25,000 share purchase
 options which are subject to shareholder approval.                                               
|(4) | Of these shares 100,000 represent currently
 exercisable share purchase options. Not reflected are 25,000 share purchase
 options which are subject to shareholder approval.                                               
|(5) | Of these shares 50,000 represent currently
 exercisable share purchase options. Not reflected are 25,000 share purchase
 options which are subject to shareholder approval.                                                

56

---

---



|     |                                                                                                                                                                                                                                                                                        
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6)  | Of these shares 100,000 represent currently
 exercisable share purchase options. Not reflected are 25,000 share purchase
 options which are subject to shareholder approval.                                                                                                           
|(7)  | Not reflected are 25,000 share purchase options
 which are subject to shareholder approval.                                                                                                                                                                                            
|(8)  | Of these shares 70,000 represent exercisable share
 purchase options. Not reflected are 40,000 share purchase options which are
 subject to certain vesting requirements that have not yet been achieved and
 50,000 share purchase options which are subject to shareholder approval. 
|(9)  | Of these shares 160,000 represent exercisable share
 purchase options. Not reflected are 40,000 share purchase options which are
 subject to certain vesting requirements that have not yet been achieved and
 40,000 share purchase options which are subject to shareholder approval.
|(10) | See notes (1) through (9)                                                                                                                                                                                                                                                              

Percent of Class number is based on 37,386,185 shares
outstanding as of March 23, 2009 and exercisable stock options held by
each beneficial holder.

Based upon information provided by the Companys
transfer agent, as of March 23, 2009, approximately 10.7% of the Companys
common shares were held of record by US residents.

Item 7. Major Shareholders and
Related Party Transactions

7A.
Major Shareholders

As of March 23, 2009, Pan Atlantic Bank and Trust Ltd.
owned 8,001,232 shares of the Company representing 21.4% of the outstanding
shares of the Company and FCMI Financial Corporation, a corporation owned by
Albert D. Friedberg and members of his immediate family, owned 555,000 shares
representing 1.5% of the outstanding shares of the Company. In addition, as of
March 23, 2009, Albert D. Friedberg and his spouse owned 43,400 shares of the
Company representing 0.1% of the Company. Pan Atlantic Bank and Trust Ltd. is
ultimately beneficially owned and controlled by Albert D. Friedberg and members
of his immediate family. Albert D. Friedberg is the President and a director of
Friedberg Mercantile Group Ltd. The Company is not aware of any other
person/company who beneficially owns 5% or more of the Companys voting
securities.

No shareholders of the Company have different voting
rights from any other shareholder.

There are no arrangements known to the Company, the
operation of which as of a subsequent date, could result in a change of control
of the Company.

7B. Interest of Management in Certain Transactions

During the fiscal year ended December 31, 2008,
Mintec, Inc., a private company controlled by Fred Banfield, a Director of
Seabridge, was paid $14,800 (2007 - $33,300, 2006 - $33,900) 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.

57

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During the fiscal years ended December 31,
2008, 2007, and 2006, Suma Investments Inc., a private company controlled by
James Anthony, the Chairman and a director of Seabridge was paid $250,000,
$360,000, and $144,000, respectively, for corporate consulting services
rendered. The Company
negotiated the agreement at arms length, after the Company reviewed available
compensation data from comparable companies and determined that the agreement
negotiated with Suma Investments was reasonable.

During the fiscal years ended December 31,
2008, 2007, and 2006, Eliseo Gonzalez-Urien, a director of Seabridge was paid
$16,600, $17,300 and $18,000, respectively, for geological consulting services
rendered. The Company
negotiated the agreement at arms length, after the Company reviewed available
compensation data from comparable consulting firms and determined that the
agreement negotiated with Mr. Gonzalez-Urien was reasonable.

Pan Atlantic Bank and Trust Ltd. has been an investor
in two convertible debt offerings and two private placements of common shares
by Seabridge. Pan Atlantic Bank and Trust Ltd.s sole shareholder is FCMI
Financial Corporation.

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

7C. Interests of Experts and CounselNot applicable

Item 8. Financial Information

8A. Consolidated Financial Statements

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.

8B. Significant Changes

There have been no undisclosed significant changes of
financial condition since the most recent financial statements dated December
31, 2008.

58

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Item 9. The Offer and Listing

9A. Offer and Listing Details

The Companys common shares began trading on the
Vancouver Stock Exchange (now the TSX Venture Exchange) in Vancouver, British
Columbia, Canada in September 1979. On July 14, 2008 the Companys common
shares commenced trading on the Toronto Stock Exchange and ceased trading on
the TSX Venture Exchange. The current stock symbol is SEA, and the CUSIP
number is #811916105.

The Companys common shares began trading on the
American Stock Exchange in the United States in April 2004. In late 2008, the
American Stock Exchange was purchased by the New York Stock Exchange and since
that time, the Companys shares trade on the NYSE Amex stock exchange (formerly
NYSE Alternext Exchange). 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
and Toronto Stock Exchange for the Companys common shares over the disclosed
periods for the last 8 fiscal quarters, the most recent 8 months and the last
five fiscal years. The
corresponding trading information for the Companys trading on the American
Stock Exchange and NYSE Amex stock exchange is shown in Table No. 9.

59

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Table No. 9
Common Share Trading
Activity

|                         |  |                                                 |  |                                           |   |       |  |       |       |        |   |       |  |            |  |       |   |       |  |   |       |  |   |       | 
|------------------------ |  | ----------------------------------------------- |  | ----------------------------------------- | - | ----- |  | ----- | ----- | ------ | - | ----- |  | ---------- |  | ----- | - | ----- |  | - | ----- |  | - | ----- | 
|                         |  | TSX Venture and TSE (SEA)
 (Canadian Dollars) |  | NYSE Amex (SA)
 (United States Dollars) |  
|                         |  |                                                 |  |                                           |  
|                         |  | Volume                                          |  | High                                      |   | Low   |  | Close |       | Volume |   | High  |  | Low        |  | Close |  
|                         |  |                                                 |  |                                           |   |       |  |       |       |        |   |       |  |            |  |       |  
|                         |  |                                                 |  |                                           |   |       |  |       |       |        |   |       |  |            |  |       |   |       |  |   |       |  |   |       | 
|Annual Information       |  |                                                 |  |                                           |   |       |  |       |       |        |   |       |  |            |  |       |   |       |  |   |       |  |   |       | 
|                         |  |                                                 |  |                                           |   |       |  |       |       |        |   |       |  |            |  |       |   |       |  |   |       |  |   |       | 
|2008                     |  | 3,830,098                                       |  |                                           | $ | 33.09 |  | $     | 7.50  |        | $ | 15.76 |  | 76,676,567 |  |       | $ | 33.55 |  | $ | 6.19  |  | $ | 13.08 | 
|2007                     |  | 9,372,726                                       |  |                                           | $ | 39.00 |  | $     | 12.98 |        | $ | 29.29 |  | 95,565,460 |  |       | $ | 39.50 |  | $ | 11.02 |  | $ | 29.44 | 
|2006                     |  | 8,767,525                                       |  |                                           | $ | 17.25 |  | $     | 9.15  |        | $ | 16.55 |  | 48,816,200 |  |       | $ | 15.30 |  | $ | 8.13  |  | $ | 14.12 | 
|2005                     |  | 6,202,194                                       |  |                                           | $ | 12.00 |  | $     | 2.40  |        | $ | 11.01 |  | 26,737,194 |  |       | $ | 10.49 |  | $ | 1.91  |  | $ | 9.40  | 
|2004                     |  | 5,228,619                                       |  |                                           | $ | 6.00  |  | $     | 2.90  |        | $ | 4.30  |  | 4,596,350  |  |       | $ | 4.20  |  | $ | 2.12  |  | $ | 3.63  | 
|                         |  |                                                 |  |                                           |   |       |  |       |       |        |   |       |  |            |  |       |   |       |  |   |       |  |   |       | 
|Quarterly Information    |  |                                                 |  |                                           |   |       |  |       |       |        |   |       |  |            |  |       |   |       |  |   |       |  |   |       | 
|3 Months Ended 31-Dec-08 |  | 796,000                                         |  |                                           | $ | 18.51 |  | $     | 7.50  |        | $ | 15.76 |  | 21,350,954 |  |       | $ | 17.55 |  | $ | 6.19  |  | $ | 13.08 | 
|3 Months Ended 30-Sep-08 |  | 1,033,602                                       |  |                                           | $ | 23.39 |  | $     | 12.88 |        | $ | 18.77 |  | 16,011,186 |  |       | $ | 23.47 |  | $ | 12.00 |  | $ | 17.01 | 
|3 Months Ended 30-Jun-08 |  | 695,874                                         |  |                                           | $ | 24.70 |  | $     | 20.20 |        | $ | 22.50 |  | 12,541,794 |  |       | $ | 24.82 |  | $ | 19.89 |  | $ | 22.00 | 
|3 Months Ended 31-Mar-08 |  | 1,304,622                                       |  |                                           | $ | 33.09 |  | $     | 18.60 |        | $ | 24.31 |  | 26,772,633 |  |       | $ | 33.55 |  | $ | 17.75 |  | $ | 24.45 | 
|                         |  |                                                 |  |                                           |   |       |  |       |       |        |   |       |  |            |  |       |   |       |  |   |       |  |   |       | 
|3 Months Ended 31-Dec-07 |  | 1,775,750                                       |  |                                           | $ | 39.00 |  | $     | 23.09 |        | $ | 29.29 |  | 24,899,116 |  |       | $ | 39.50 |  | $ | 23.85 |  | $ | 29.44 | 
|3 Months Ended 30-Sep-07 |  | 2,008,758                                       |  |                                           | $ | 35.23 |  | $     | 22.01 |        | $ | 30.06 |  | 40,196,000 |  |       | $ | 33.49 |  | $ | 20.60 |  | $ | 30.18 | 
|3 Months Ended 30-Jun-07 |  | 4,049,104                                       |  |                                           | $ | 22.10 |  | $     | 15.50 |        | $ | 21.67 |  | 18,621,148 |  |       | $ | 20.94 |  | $ | 14.31 |  | $ | 20.51 | 
|3 Months Ended 31-Mar-07 |  | 1,539,114                                       |  |                                           | $ | 20.05 |  | $     | 12.98 |        | $ | 16.75 |  | 11,849,196 |  |       | $ | 17.31 |  | $ | 11.02 |  | $ | 14.60 | 
|                         |  |                                                 |  |                                           |   |       |  |       |       |        |   |       |  |            |  |       |   |       |  |   |       |  |   |       | 
|Monthly Information      |  |                                                 |  |                                           |   |       |  |       |       |        |   |       |  |            |  |       |   |       |  |   |       |  |   |       | 
|February 2009            |  | 376,300                                         |  |                                           | $ | 24.46 |  | $     | 15.53 |        | $ | 21.60 |  | 7,360,607  |  |       | $ | 19.63 |  | $ | 12.88 |  | $ | 16.93 | 
|January 2009             |  | 157,900                                         |  |                                           | $ | 18.71 |  | $     | 14.29 |        | $ | 16.97 |  | 7,888,587  |  |       | $ | 15.63 |  | $ | 11.36 |  | $ | 13.67 | 
|December 2008            |  | 225,500                                         |  |                                           | $ | 17.99 |  | $     | 10.16 |        | $ | 15.76 |  | 7,430,982  |  |       | $ | 15.72 |  | $ | 8.06  |  | $ | 13.08 | 
|November 2008            |  | 136,900                                         |  |                                           | $ | 14.39 |  | $     | 9.69  |        | $ | 13.80 |  | 4,833,331  |  |       | $ | 11.64 |  | $ | 7.41  |  | $ | 11.01 | 
|October 2008             |  | 433,600                                         |  |                                           | $ | 18.51 |  | $     | 7.50  |        | $ | 11.66 |  | 9,086,641  |  |       | $ | 17.55 |  | $ | 6.19  |  | $ | 9.78  | 
|September 2008           |  | 609,774                                         |  |                                           | $ | 20.28 |  | $     | 12.88 |        | $ | 18.17 |  | 7,792,296  |  |       | $ | 19.80 |  | $ | 12.00 |  | $ | 17.01 | 
|August 2008              |  | 213,100                                         |  |                                           | $ | 20.99 |  | $     | 15.33 |        | $ | 16.28 |  | 3,972,913  |  |       | $ | 20.79 |  | $ | 14.38 |  | $ | 15.27 | 
|July 2008                |  | 210,728                                         |  |                                           | $ | 23.29 |  | $     | 19.04 |        | $ | 20.46 |  | 4,245,977  |  |       | $ | 23.47 |  | $ | 18.75 |  | $ | 19.86 | 

American Depository
Receipts. Not applicable.Other Securities to be
Registered. Not applicable

9B. Plan and DistributionNot Applicable

9C. MarketsThe Companys common shares currently trade on the Toronto
Stock Exchange under the symbol SEA and on the NYSE Amex stock exchange under
the symbol SA.

9D. Selling ShareholdersNot Applicable

9E. DilutionNot Applicable

60

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9F. Expenses of the IssueNot Applicable

Item 10. Additional Information

10A. Share Capital

| |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Stock Option Plan
| |                   | During 2003, the Company adopted a formalized stock
 option plan, approved by its shareholders, for the granting of incentive
 stock options. The shareholders have approved a total of 4,050,000 options
 under the stock option plan. To assist the Company in compensating,
 attracting, retaining and motivating personnel, the Company grants stock
 options to directors, executive officers and employees. The plan provides for options to be granted
 at market prices for periods up to five years. For directors and senior
 management, certain option grants are subject to a two-tiered vesting policy
 designed to better align option compensation with the interests of
 shareholders. Grants to other employees and consultants do not have the
 two-tiered provision.
| |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                   | The two-tier option grants
 require a certain share price above the grant date price for 10 successive
 days for the first third to vest, a higher share price for the second third
 to vest and a further higher share price for the final third to vest. Once
 the share price has met the first test, the Companys share price performance
 must have exceeded the S&P/TSX Global Gold Index by more than 20% over
 the preceding six months or these options would be cancelled.                                                                                                                                                                                                                                                                                                   

10B. 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.

10C. 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;                                                    

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| |  |     |                                                                                                                                                                                           
| |  | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.                                                                                                     
| |  | 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.                                                                                            
| |  | 10. | Agreements between the
 Company, Minera Seabridge Gold, S.A DE C.V. and Minera El Bermejal, S. DE
 R.L. DE C.V. dated December 11, 2008 covering the sale of 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 and #10 which is filed with this Annual Report.

10D. Exchange Controls and Other Limitations Affecting
Security Holders

The Company is not aware of any Canadian federal or
provincial laws, decrees, or regulations that restrict the export or import of
capital, including foreign exchange controls, or that affect the remittance of
dividends, interest or other payments to non-Canadian holders of the common
shares. There are no limitations on the right of non-Canadian owners to hold or
vote the common shares imposed by Canadian federal or provincial law or by the
charter or other constituent documents of the Company.

The Investment Canada Act(the IC Act)
governs acquisitions of Canadian businesses by a non-Canadian person or entity.
The IC
Actrequires a non-Canadian (as defined in the IC Act) making an investment
to acquire control of a Canadian business, the gross assets of which exceed
certain defined threshold levels, to file an application for review with the
Investment Review Division of Industry Canada. The IC Actprovides, among other
things, for a review of an investment in the event of acquisition of control
in certain Canadian businesses in the following circumstances:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. If the investor is a non-Canadian and is a
 national of a country belonging to the North American Free Trade Agreement
 (NAFTA) and/or the World Trade Organization (WTO) (WTO National), any
 direct acquisition during 2009 having an asset value exceeding $312,000,000
 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 businesses (i.e. the publication,
 distribution or sale of books, magazines, periodicals newspapers (other than
 printing or typesetting businesses) or music in print or machine readable
 form, radio, television, cable and satellite broadcasting and satellite
 programming and broadcast network services; the publication, distribution,
 sale or exhibition of film or video products and audio or video music
 recordings), to which lower thresholds as prescribed in the IC Actare
 applicable.

62

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| |                                                                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. If the investor is a non-Canadian and is not a
 WTO National, any direct acquisition having an asset value exceeding
 $5,000,000 and any indirect acquisition having an asset value exceeding
 $50,000,000 is reviewable.                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                    
| | 3. If the investor is a non-Canadian and is NAFTA or
 WTO National, an indirect acquisition of control is reviewable if the value
 of the assets of the business located in Canada represents more than 50% of
 the asset value of the transaction or the business is involved in uranium,
 financial services, transportation services or cultural services (as set
 forth above).

Finally, certain transactions prescribed in the IC Actare
exempted from review altogether.

In the context of the Company, in essence, three
methods of acquiring control of a Canadian business are regulated by the IC Act:
(i) the acquisition of all or substantially all of the assets used in carrying
on business in Canada; (ii) the acquisition, directly or indirectly, of voting
shares of a Canadian corporation carrying on business in Canada; or (iii) the
acquisition of voting shares of an entity which controls, directly or
indirectly, another entity carrying on business in Canada.

An acquisition of a majority of the voting shares of a
Canadian entity, including a corporation, is deemed to be an acquisition of
control under the IC Act. However, under the IC Act, there is a
rebuttable presumption that control is acquired if one-third of the voting
shares of a Canadian corporation or an equivalent undivided interest in the
voting shares of such corporation are held by a non-Canadian person or entity.
An acquisition of less than one-third of the voting shares of a Canadian
corporation is deemed not to be an acquisition of control. An acquisition of
less than a majority, but one-third or more, of the voting shares of a Canadian
corporation is presumed to be an acquisition of control unless it can be
established that, on the acquisition, the Canadian corporation is not, in fact,
controlled by the acquirer through the ownership of voting shares. For
partnerships, trusts, joint ventures or other unincorporated Canadian entities,
an acquisition of less than a majority of the voting interests is deemed not to
be an acquisition of control.

In addition, if a Canadian corporation is controlled
by a non-Canadian, the acquisition of control of any other Canadian corporation
by such corporation may be subject to the prior approval of the Investment
Review Division, unless it can be established that the Canadian corporation is
not in fact controlled by the acquirer through the ownership of voting shares.

63

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Where an investment is reviewable under the IC Act,
the investment may not be implemented unless it is likely to be of net benefit
to Canada. If an applicant is unable to satisfy the Minister responsible for
Industry Canada that the investment is likely to be of net benefit to Canada,
the applicant may not proceed with the investment. Alternatively, an acquirer
may be required to divest control of the Canadian business that is the subject
of the investment.

In addition to the foregoing, the IC Actprovides for formal
notification under the IC Actof all other acquisitions of
control by Canadian businesses by non-Canadian investors. The notification
process consists of filing a notification within 30 days following the
implementation of an investment, which notification is for information, as
opposed to review, purposes.

10E. Taxation

The following summary of the
material Canadian federal income tax consequences generally applicable in
respect of the common stock reflects the Companys opinion. The tax
consequences to any particular holder of common stock will vary according to
the status of that holder as an individual, trust, corporation or member of a
partnership, the jurisdiction in which that holder is subject to taxation, the
place where that holder is resident and, generally, according to that holders
particular circumstances. This summary is applicable only to holders who are
resident in the United States, have never been resident in Canada, deal at
arms length with the Company, hold their common stock as capital property and
who will not use or hold the common stock in carrying on business in Canada.
Special rules, which are not discussed in this summary, may apply to a United
States holder that is an issuer that carries on business in Canada and
elsewhere.

This summary is based upon the
provisions of the Income Tax Act of Canada and the regulations there under
(collectively, the Tax Act or ITA) and the Canada-United States Tax
Convention (the Tax Convention) as at the date of the Annual Report and the
current administrative practices of Canada Revenue Agency. It has been assumed
that there will be no other relevant amendments of any governing law, although
no assurance can be given in this respect. This summary does not take into
account provincial income tax consequences.

Management urges each holder to
consult his/her own tax advisor with respect to the income tax consequences
applicable to him/her in his/her own particular circumstances.

CANADIAN INCOME TAX CONSEQUENCES

The summary below is restricted
to the case of a holder (a Holder) of one or more common shares (Common
Shares) who for the purposes of the Tax Act is a non-resident of Canada, holds
his Common Shares as capital property and deals at arms length with the
Company.

Dividends
A Holder will be subject to
Canadian withholding tax (Part XIII Tax) equal to 25%, or such lower rates as
may be available under an applicable tax treaty, of the gross amount of any
dividend paid or deemed to be paid on his Common Shares. Under the Tax
Convention, the rate of Part XIII Tax applicable to a dividend on Common Shares
paid to a Holder who is a resident of the United States is, if the Holder is a
company that beneficially owns at least 10% of the voting stock of the Company,
5% and, in any other case, 15% of the gross amount of the dividend. The Company
will be required to withhold the applicable amount of Part XIII Tax from each
dividend so paid and remit the withheld amount directly to the Receiver General
for Canada for the account of the Holder.

64

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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
constitutes 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 inventory or the
property was 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 property, 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 summary of the material U.S. federal income tax considerations
applicable to the ownership of common shares of the Company. Unless otherwise
stated, this summary deals only with shareholders that are U.S. Holders (as
defined below) who hold their common shares as capital assets.

This summary is based on
provisions of the U.S. Internal Revenue Code of 1986, as amended (the Code),
existing and proposed U.S. Treasury regulations promulgated there under by the
Internal Revenue Service (IRS), administrative and judicial interpretations
thereof, and the U.S.-Canada Tax Treaty, each as in effect as of the date of
this Annual Report. These sources may change, possibly with retroactive effect,
and are open to differing interpretations.

65

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As used in this section, the
term U.S. Holder means a beneficial owner of a common share who is:

| |   |                                                                                                                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an individual citizen or
 resident of the United States or an individual treated as a U.S. citizen or
 resident for U.S. federal income tax purposes;                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                 
| |  | a corporation or other entity
 taxable as a corporation for U.S. federal income tax purposes created or
 organized in or under the laws of the United States, any State or the
 District of Columbia;                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                 
| |  | an estate, the income of
 which is subject to U.S. federal income taxation regardless of its source; or                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                 
| |  | any trust if (A)(i) a
 court within the United States is able to exercise primary supervision over
 the administration of the trust and (ii) one or more United States persons
 have the authority to control all substantial decisions of the trust, or (B)
 such trust validly elects to be treated as a United States person.

The term Non-U.S. Holder
means a beneficial owner of a common share that is an individual, corporation,
estate or trust and is not a U.S. Holder. The tax consequences to a Non-U.S.
Holder may differ substantially from the tax consequences to a U.S. Holder.
Certain aspects of U.S. federal income tax relevant to a Non-U.S. Holder are
discussed below.

This summary does not
discuss all aspects of U.S. federal income taxation that may be applicable to
persons in light of their particular circumstances or to persons who are
subject to special treatment under U.S. federal income tax law, including:
insurance companies; dealers in stocks, securities or currencies; financial
institutions and financial services entities; regulated investment companies;
tax-exempt organizations; individual retirement and other tax-deferred
accounts; and persons liable for the alternative minimum tax. This summary also
does not consider the possible application of U.S. federal gift or estate tax
or alternative minimum tax, nor any state or local tax consequences.

If a partnership or an
entity treated as a partnership for U.S. federal income tax purposes owns
common shares, the U.S. federal income tax treatment of a partner in such a
partnership will generally depend upon the status of the partner and the
activities of the partnership. A partnership that owns common shares and the
partners in such partnership should consult their tax own advisors about the
U.S. federal income tax consequences of holding and disposing of common shares.

66

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All persons are urged to
consult their own tax advisors as to the particular tax consequences to them of
an investment in the Companys common shares, including the effect and
applicability of United States federal, state, local and foreign income and
other tax laws (including estate and gift tax laws) and tax treaties.

Distributions Paid on the Common Shares

Unless the Company is
treated as a Passive Foreign Investment Company, or PFIC, as discussed below,
a U.S. Holder generally will be required to include in its gross income as
ordinary dividend income the amount of any distributions paid on the common
shares, including the amount of any Canadian taxes withheld, to the extent that
those distributions are paid out of the Companys current or accumulated
earnings and profits, as determined for U.S. federal income tax purposes.
Subject to the discussion below under Passive Foreign Investment Company Considerations,
distributions in excess of the Companys earnings and profits will be applied
against and will reduce the U.S. Holders tax basis in its common shares and,
to the extent they exceed that tax basis, will be treated as gain from a sale
or exchange of those common shares. The Companys dividends will not qualify
for the dividends-received deduction applicable in some cases to U.S.
corporations.

Dividends that the
Company pays in Canadian dollars, including the amount of any Canadian taxes
withheld therefrom, will be included in the income of a U. S. Holder in a U.S.
dollar amount calculated by reference to the exchange rate in effect on the day
such dividends are received, regardless of whether the payment is in fact
converted into U.S. dollars. A U.S. Holder who receives payment in Canadian
dollars and converts them into U.S. dollars at an exchange rate other than the
rate in effect on such day will have a foreign currency exchange gain or loss
that would be treated as ordinary income or loss. U.S. Holders should consult
their own tax advisors concerning the U.S. tax consequences of acquiring,
holding and disposing of Canadian dollars.

Subject to certain
limitations, qualified dividend income received by a noncorporate U.S. Holder
in tax years beginning on or before December 31, 2010 will be subject to tax at
a reduced maximum tax rate of 15%. Distributions taxable as dividends paid on
the common shares should qualify for the 15% rate provided that the Company is
not a passive foreign investment company (as described below) for U.S. tax
purposes and that either: (i) the Company is entitled to benefits under the
income tax treaty between the United States and Canada, referred to as the
U.S.-Canada Tax Treaty, or (ii) the common shares are readily tradable on an
established securities market in the United States and certain other
requirements are met. The Company believes that it is entitled to benefits
under the U.S.-Canada Tax Treaty and that the common shares currently are
readily tradable on an established securities market. However, no assurance can
be given that the common shares will remain readily tradable. The rate
reduction does not apply unless certain holding period requirements are
satisfied. With respect to the common shares, the U.S. Holder must have held
such shares for at least 61 days during the 121-day period beginning 60 days
before the ex-dividend date. The rate reduction also does not apply to
dividends received from PFICs, see discussion below, or in respect of certain
hedged positions or in certain other situations. The legislation enacting the
reduced tax rate contains special rules for computing the foreign tax credit
limitation of a taxpayer who receives dividends subject to the reduced tax
rate.

67

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Subject to the discussion
below under Information Reporting and Back-up Withholding, a Non-U.S. Holder
generally will not be subject to U.S. federal income or withholding tax on
dividends received on the common shares unless that income is effectively
connected with the conduct by that Non-U.S. Holder of a trade or business in
the United States, in which case a corporate Non-U.S. Holder may also be
subject to the U.S. branch profits tax.

Foreign Tax Credit

Any dividend income
resulting from distributions the Company pays to a U.S. Holder with respect to
its common shares generally will be treated as foreign source income for U.S.
foreign tax credit limitation purposes. Subject to certain conditions and
limitations, Canadian tax withheld on dividends may be deducted from taxable
income or credited against a U.S. Holders U.S. federal income tax liability.
The limitation on foreign taxes eligible for credit is calculated separately
with respect to specific classes of income. For this purpose, any dividend that
the Company distributes generally will constitute passive category income,
or, in the case of certain U.S. Holders, general category income. The rules
relating to the determination of foreign source income and the foreign tax
credit are complex, and the availability of a foreign tax credit depends on
numerous factors. Each investor who is a U.S. Holder should consult with its
own tax advisor to determine whether its income with respect to the common
shares would be foreign source income and whether and to what extent that
investor would be entitled to a foreign tax credit.

Disposition of Common Shares

Unless the Company is
treated as a PFIC, upon the sale or other disposition of common shares a U.S.
Holder generally will recognize capital gain or loss equal to the difference
between the amount realized on the disposition and the holders adjusted tax
basis in the common shares.

Gain or loss upon the
disposition of the common shares will be treated as long-term if, at the time
of the sale or disposition, the common shares were held for more than one year.
The deductibility of capital losses by a U.S. Holder is subject to limitations.
In general, any gain or loss recognized by a U.S. Holder on the sale or other
disposition of common shares will be U.S. source income or loss for U.S.
foreign tax credit purposes.

Passive Foreign Investment Company
Considerations

As a foreign corporation
with U.S. Holders, the Company could potentially be treated as a passive
foreign investment company (PFIC), as defined in the Code, depending upon the
percentage of the Companys income which is passive, or the percentage of the
Companys assets which are held for the purpose of producing passive income.
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.

68

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The U.S. tax rules that apply to U.S.
shareholders in a PFIC continue to apply to such shareholders in subsequent
year in which the foreign corporation is not a PFIC unless the foreign
corporation is purged of its PFIC taint as to such shareholders (i.e. by a
deemed sale election or the investor makes a QEF election for the first year of
its holding period during which the foreign corporation is a PFIC.

PFIC status can have
significant adverse tax effects on U.S. shareholders of foreign corporations.
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.

Information Reporting and Backup
Withholding

Payments in respect of
common shares may be subject to information reporting to the IRS and to U.S.
backup withholding tax at a rate equal to the fourth lowest income tax rate
applicable to individuals (which, under current law, is 28%). Backup
withholding will not apply, however, if the holder (i) is a corporation or
comes within certain exempt categories, and demonstrates the fact when so
required, or (ii) furnishes a correct taxpayer identification number and makes
any other required certification. U.S. Holders who are required to establish
their exempt status generally must provide such certification on IRS Form W-9.

Backup withholding is not an
additional tax. Amounts withheld under the backup withholding rules may be
credited against a U.S. Holders U.S. tax liability, and a U.S. Holder may
obtain a refund of any excess amounts withheld under the backup withholding
rules by filing the appropriate claim for refund with the IRS.

Any U.S. holder who holds
10% or more in vote or value of the Companys common shares will be subject to
certain additional United States information reporting requirements.

10F. Dividends and Paying Agents
Not applicable

10G. Statements by Experts
Not applicable

69

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10H. 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).

Documents filed for Canadian
regulatory agencies may be viewed on SEDAR at www.sedar.com.

10I. Subsidiary Information
Not Applicable

Item 11. Quantitative and
Qualitative Disclosures about Market Risk

The Companys mineral properties are all currently at
the exploration stage and the Companys operations are limited to exploring
those properties. Therefore, Seabridges market risks are somewhat minimized.
The Company does, however, have future property payments due in United States
currency. As a Canadian Company, Seabridges cash balances are kept in Canadian
funds. Therefore, Seabridge is exposed to some exchange rate risks. 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                |  | 2009                |         | 2010 |   | 2011    | 
|                        |  |                     |         |      |   |         | 
|                        |  |                     |         |      |   |         |  |   |         | 
|Grassy Mountain         |  | $                   | 107,100 |      | $ | 107,100 |  | $ | 107,100 | 
|Quartz Mountain         |  | $                   | 10,000  |      | $ | 10,000  |  | $ | 10,000  | 
|Castle/Black Rock       |  | $                   | 41,700  |      | $ | 41,700  |  | $ | 41,700  | 
|Hog Ranch               |  | $                   | 57,700  |      | $ | 57,700  |  | $ | 57,700  | 
|Other Nevada Properties |  | $                   | 448,600 |      | $ | 458,600 |  | $ | 458,600 | 

The Company maintains a
significant amount of cash and cash equivalents as well as funds 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.

The Companys cash and
short-term deposits are invested in Canadian Schedule A banks.

70

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Competitive Environment

The Company competes with
other resource companies for exploration properties, joint venture agreements
and for the acquisition of attractive gold companies. There is a risk that this
competition could increase the difficulty of concluding a negotiation on terms
that Seabridge considers acceptable.

Item 12. Description of Securities
Other than Equity Securities

Not
Applicable

Part II

Item 13. Defaults, Dividend
Arrearages and Delinquencies

None

Item 14. Material Modifications of
Rights of Security Holders and Use of Proceeds

None

Item 15.
Controls and Procedures

(a) Disclosure Controls and
Procedures

At the end of the period
covered by this report, an evaluation was carried out under the supervision of
and with the participation of the Companys management, including the Chief
Executive Officer (CEO) and Chief Financial Officer (CFO), of the
effectiveness of the design and operations of the Companys disclosure controls
and procedures (as defined in Rule 13a  15(e) and Rule 15d  15(e) under the
Exchange Act). Based on that evaluation the CEO and the CFO have concluded that
as of the end of the period covered by this report, the Companys disclosure
controls and procedures were adequately designed and effective in ensuring
that: (i) information required to be disclosed by the Company in reports that
it files or submits to the Securities and Exchange Commission under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in applicable rules and forms and (ii) material information
required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to our management, including our CEO and CFO, as
appropriate, to allow for accurate and timely decisions regarding required
disclosure.

(b) Managements Report on Internal
Control Over Financial Reporting

The Companys management is
responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act. Our internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation and fair presentation of financial statements for
external purposes in accordance with generally accepted accounting principles.

71

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Because of its inherent
limitations, internal control over financial reporting may not prevent or
detect misstatements. Projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

Management conducted an
evaluation of the design and operation of the Companys internal control over
financial reporting as of December 31, 2008, based on the criteria set forth in
Internal Control  Integrated Frameworkissued
by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation
included review of the documentation of controls, evaluation of the design
effectiveness of controls, testing of the operating effectiveness of controls
and a conclusion on this evaluation. Based on this evaluation, management has
concluded that the Companys internal control over financial reporting was
effective as of December 31, 2008 and no material weaknesses were discovered.

(c) Attestation Report of the
Registered Public Accounting Firm

As the Company is a foreign
private issuer as defined in Rule 3b-4 of the Exchange Act and the Company is
an accelerated filer, the Company is required to provide an auditors report
on the effectiveness of internal control over financial reporting. The
Companys auditor has provided an opinion on the effectiveness of internal
controls over financial reporting for the year ended December 31, 2008. The
auditors opinion is included with the financial statements in this Annual
Report.

(d) Changes in Internal Controls
Over Financial Statements

During the 2008 fiscal year,
there were no changes in the Companys internal controls over financial
reporting based upon the evaluation of such controls by management that have
materially affected, or are reasonably likely to materially affect the
Companys internal controls over financial reporting. Nor were there any
significant deficiencies or material weaknesses in the Companys internal
controls requiring corrective action. See Item 5B of this Annual Report.

Item 16A.
Audit Committee Financial Expert

The Companys Board of
Directors has determined that Mr. Thomas Dawson, Chairman of the Audit
Committee, is the audit committee financial expert and is an independent
director, as defined pursuant to Item 407(d)(5) of SEC Regulation S-K.. The
Securities and Exchange Commission has indicated that the designation of an
audit committee financial expert does not make that person an expert for any
purpose, impose any duties, obligations, or liability on that person that are
greater than those opposed on members of the audit committee and board of
directors who do not carry this designation, or affect the duties, obligations,
or liabilities of any other member of the audit committee.

72

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Item 16B.
Code of Business Ethics

The Code of Business Ethics
was approved in November 2007. The Code is available on the Companys website
at www.seabridgegold.net and from the Companys office.

During the most recently completed fiscal year, the
Company has not granted any waiver including an explicit waiver, from a
provision of the Code of Business Ethics to any executive officer or director.

Item 16C.
Principal Accountant Fees and Services

The aggregate fees billed
for each of the last two fiscal years for professional services rendered by
KPMG LLP, the Companys Auditors, are as follows:

|                   |  |      |         |      |   |         | 
|------------------ |  | ---- | ------- | ---- | - | ------- | 
|                   |  | 2008 |         | 2007 |  
|                   |  |      |         |      |  
|                   |  |      |         |      |   |         | 
|Audit fees         |  | $    | 130,000 |      | $ | 136,000 | 
|Audit related fees |  |      | 39,000  |      |   | 30,000  | 
|Tax Fees           |  |      | 13,500  |      |   | 3,500   | 
|All Other Fees     |  |      | 0       |      |   | 0       | 
|                   |  |      |         |      |   |         | 
|                   |  | $    | 182,500 |      | $ | 169,500 | 
|                   |  |      |         |      |   |         | 

Item 16D.
Exemptions from the Listing Standards for Audit Committees

Not Applicable

Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None

Item 16F.
Change in Registrants Certifying Accountants

Not Applicable

Item 16G.
Corporate Governance

The Company is subject to a
variety of corporate governance guidelines and requirements of the Toronto
Stock Exchange, the NYSE Amex exchange, the Canadian Securities Administrators
and the US Securities and Exchange Commission. The Company believes that it
meets or exceeds the applicable corporate governance requirements. Although the
Company is listed on the NYSE-Amex exchange, the Company is not required to
comply with all of that exchanges corporate governance rules which are
applicable to the U. S. companies. The significant ways in which the
NYSE-Amex corporate governance rules differ for the Company, as a foreign
company, are a reduced quorum requirement for shareholder
meetings, shareholder approval for issuance of common shares that
could result in a 20% increase in the number of outstanding common
shares, and shareholder approval for amendments to option plans.

73

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Part III

Item 17. Financial Statements

The Companys financial statements are stated in
Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally
Accepted Accounting Principles (GAAP), the application of which, in the case of
the Company, conforms in all material respects for the periods presented with
United States GAAP, except as disclosed in Note 11 to the 2008 audited
consolidated financial statements.

The financial statements as required under ITEM #17
are attached hereto and found immediately following the text of this Annual
Report. See Item #19 for a list of the reports.

Item 18. Financial Statements

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

Item 19. Exhibits

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

Audited Financial StatementsReport of Independent Registered Public Accounting Firm to
the Board of Directors dated March 20, 2009.

Consolidated Balance Sheets at December 31, 2008 and
2007

Consolidated Statements of Operations and Deficit for
the Years Ended December 31, 2008, 2007 and 2006.

Consolidated Statements of Comprehensive Income for
the Years Ended December 31, 2008, 2007 and 2006.

Consolidated Statements of Accumulated Other
Comprehensive Loss for the Years Ended December 31, 2008, 2007 and 2006.

74

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Consolidated Statements of Cash Flows for the Years
Ended December 31, 2008, 2007, and 2006.

Notes to Consolidated Financial Statements at December
31, 2008 and 2007 and for the Years Ended December 31, 2008, 2007 and 2006.

Internal Control Over Financial
Reporting

Report of Independent
Registered Public Accounting Firm to the Board of Directors dated March 20,
2009.

|   |                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                   
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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).                                                                   
|   | 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).                                                            

75

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| |        |                                                                                                                                                                                                          
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 8.     | Agreement between the Company, Newmont Canada and
 Total Resources covering the Courageous Lake project (incorporated by
 reference to Exhibit 4-8 in Initial Form 20-F).                                
| | 9.     | Agreement between the
 Company and Minera Hecla S.A. de C.V. covering the Noche Buena project
 (incorporated by reference to Exhibit 9 to the Companys Form 20-F for the
 year ended December 31, 2006).
| | 10.(*) | Agreements between the
 Company, Minera Seabridge Gold, S.A DE C.V. and Minera El Bermejal, S. DE
 R.L. DE C.V. dated December 11, 2008 covering the sale of 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 and which was sold in
 December 2008.   
|    |                                                                                                                                                                              |                                                                                                                        | 
|9.  | Statement pursuant to the
 instructions to Item 8.A.4, regarding the financial statements filed in
 registration statements for initial public offerings of securities  N/A
|    |                                                                                                                                                                              |                                                                                                                        | 
|10. | Rule 104 Notice  N/A                                                                                                                                                       
|    |                                                                                                                                                                              |                                                                                                                        | 
|11. | Code of Business Ethics 
 Revised on November 7, 2007(*)                                                                                                                   
|    |                                                                                                                                                                              |                                                                                                                        | 
|12. | Certifications                                                                                                                                                              
|    |                                                                                                                                                                              |                                                                                                                        | 
|    | 12.1(*) Rule13a-14(a)/Rule15d-14(a)
 Certification of Chief Executive Officer                                                                                               
|    |                                                                                                                                                                              |                                                                                                                        | 
|    | 12.2(*) Rule
 13a-14(a)/Rule 15d-14(a) Certification of Chief Financial Officer                                                                                             
|    |                                                                                                                                                                              |                                                                                                                        | 
|13. | Rule 13a-14(b)
 Certifications                                                                                                                                              
|    |                                                                                                                                                                              |                                                                                                                        | 
|    | 13.1(*) Certification of
 Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
 2002                                                                
|    |                                                                                                                                                                              |                                                                                                                        | 
|    | 13.2(*) Certification of
 Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
 2002                                                                
|    |                                                                                                                                                                              |                                                                                                                        | 
|14. | Opinion  N/A                                                                                                                                                               
|    |                                                                                                                                                                              |                                                                                                                        | 
|(*) | Filed herewith                                                                                                                                                              

76

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# REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of
Seabridge Gold Inc.

We have audited the accompanying
consolidated balance sheets of Seabridge Gold Inc. (the Company) as of
December 31, 2008 and December 31, 2007 and the related consolidated statements of
operations and deficit, comprehensive loss, accumulated other comprehensive income and
cash flows for each of the years in the three-year period ended December 31, 2008. These
consolidated financial statements are the responsibility of the Companys management.
Our responsibility is to express an opinion on these consolidated financial statements
based on our audits.

We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2008 and December 31, 2007 and the
results of its operations and its cash flows for each of the years in the three-year
period ended December 31, 2008 in conformity with Canadian generally accepted accounting
principles.

Canadian generally accepted
accounting principles vary in certain significant respects from US generally accepted
accounting principles. Information relating to the nature and effect of such differences
is presented in Note 11 to the  consolidated financial statements.

We also have audited, in accordance
with the standards of the Public Company Accounting Oversight Board (United States), the
Companys internal control over financial reporting as of December 31, 2008, based on
the criteria established in Internal Control-Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March
20, 2009 expressed an unqualified opinion on the effectiveness of the Companys
internal control over financial reporting.

|                |                                                   
|--------------- | --------------------------------------------------
|
|
|
|
|                | /s/ KPMG LLP                                      
|Toronto, Canada | Chartered Accountants, Licensed Public Accountants
|March 20, 2009 

F - 1

---

---



# REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of
Seabridge Gold Inc.

We have audited Seabridge Gold
Inc.s (the Company) internal control over financial reporting as of
December 31, 2008, based on the criteria established in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). The Companys management is responsible for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting included in the accompanying Managements Report on
Internal Control over Financial Reporting within Form 20-F. Our responsibility is to
express an opinion on the Companys internal control over financial reporting based
on our audit.

We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our
audit also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.

A companys internal control
over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A
companys internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3)
provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the companys assets that could have a material
effect on the financial statements.

F - 1A

---

---



Because of its inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.

In our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting
as of December 31, 2008, based on the criteria established in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).

We also have audited, in accordance
with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated balance sheets of the Companyas of December 31, 2008 and December 31,
2007, and the related consolidated statements of operations and deficit, comprehensive
loss, accumulated other comprehensive income and cash flows for each of the years in the
three-year period ended December 31, 2008, and our report dated March 20, 2009, expressed
an unqualified opinion on thoseconsolidatedfinancial statements.

|                |                                                   
|--------------- | --------------------------------------------------
|
|
|
|
|                | /s/ KPMG LLP                                      
|Toronto, Canada | Chartered Accountants, Licensed Public Accountants
|March 20, 2009 

F - 1B

---

---



SEABRIDGE GOLD INC.

|Consolidated Balance SheetsDecember 31, 2008 and 2007
    (in Canadian dollars)
|-------------------------------------------------------------------------------
|                                                                               
|                                                                               

|                                                   |  |  | 2008  |                 | 2007  |  
|-------------------------------------------------- |  |  | ----- | --------------- | ----- | -
|                                                   |  |  |       |                 |       |  
|                                                   |  |  |       |                 |       |  
|**ASSETS**                                        
|**Current Assets**                                 |  |  |       |                 |       |  
|Cash and cash equivalents (Note 3)                 |  |  | **$** | **8,098,982**   |       | $
|Short-term deposits (Note 3)                       |  |  |       | **30,895,622**  |       |  
|Amounts receivable and prepaid expenses            |  |  |       | **237,894**     |       |  
|Marketable securities                              |  |  |       | **90,758**      |       |  
|                                                   |  |  |       |                
|                                                   |  |  |       | **39,323,256**  |       |  
|                                                   |  |  |       |                 |       |  
|**Mineral Interests** (Note 4)                     |  |  |       | **69,028,974**  |       |  
|                                                   |  |  |       |                 |       |  
|**Reclamation Deposits** (Note 5)                  |  |  |       | **1,324,400**   |       |  
|                                                   |  |  |       |                 |       |  
|**Property and Equipment**                         |  |  |       | **124,930**     |       |  
|                                                   |  |  |       |                
|                                                   |  |  |       |                 |       |  
|                                                   |  |  | **$** | **109,801,560** |       | $
|                                                   |  |  |       |                
|                                                   |  |  |       |                 |       |  
|**LIABILITIES**                                   
|**Current liabilities**                            |  |  |       |                 |       |  
|Accounts payable and accruals                      |  |  | **$** | **3,368,963**   |       | $
|Income taxes payable (Note 4(i))                   |  |  |       | **5,326,034**   |       |  
|                                                   |  |  |       |                
|                                                   |  |  |       | **8,694,997**   |       |  
|                                                   |  |  |       |                 |       |  
|**Provision for Reclamation Liabilities** (Note 5) |  |  |       | **1,998,988**   |       |  
|**Future Income Tax Liabilities** (Notes 6 and 9)  |  |  |       | ****           |       |  
|                                                   |  |  |       |                
|                                                   |  |  |       | **10,693,985**  |       |  
|                                                   |  |  |       |                
|                                                   |  |  |       |                 |       |  
|**SHAREHOLDERS’ EQUITY** (Note 6)                 
|**Share Capital**                                  |  |  |       | **110,220,772** |       |  
|**Stock Options**                                  |  |  |       | **6,033,805**   |       |  
|**Contributed Surplus**                            |  |  |       | **19,500**      |       |  
|                                                   |  |  |       |                 |       |  
|**Deficit**                                        |  |  |       | **(17,061,209** | **)** |  
|**Accumulated Other Comprehensive Loss**           |  |  |       | **(105,293**    | **)** |  
|                                                   |  |  |       |                
|                                                   |  |  |       | **99,107,575**  |       |  
|                                                   |  |  |       |                
|                                                   |  |  |       |                 |       |  
|                                                   |  |  | **$** | **109,801,560** |       | $
|                                                   |  |  |       |                

|COMMITMENTS (Note 10)        
|-----------------------------
|SUBSEQUENT EVENTS (Note 4(d))

See accompanying notes to consolidated financial statements

|On Behalf of the Board of Directors |                 
|----------------------------------- | ----------------
|                                    |                 
|                                    |                 
|                                    |                 
|Rudi P. Fronk                       | James S. Anthony
|Director                            | Director        

F - 2

---

---

|                                                                                                                                 
|---------------------------------------------------------------------------------------------------------------------------------
|Consolidated Statements of Operations and DeficitFor the Years Ended December 31, 2008, 2007 and 2006
      (in Canadian dollars)
|                                                                                                                                 
|                                                                                                                                 

|                                                            |  |  | 2008  |                 | 2007  |   | 2006        |  
|----------------------------------------------------------- |  |  | ----- | --------------- | ----- | - | ----------- | -
|
|                                                            |  |  |       |                 |       |   |             |  
|**Expenditures**                                            |  |  |       |                 |       |   |             |  
|Corporate and general expenses                              |  |  | **$** | **(5,594,818**  | **)** | $ | (6,688,504  | )
|Gain on sale of Noche Buena project                         |  |  |       | **19,891,071**  |       |   |            |  
|Interest income                                             |  |  |       | **621,099**     |       |   | 822,563     |  
|Gain on sale of marketable securities                       |  |  |       | ****           |       |   |            |  
|Write-down of investment (Note 4(c))                        |  |  |       | ****           |       |   |            |  
|Foreign exchange (gains) losses                             |  |  |       | **378,325**     |       |   | (295,843    | )
|                                                            |  |  |       |                 |       |  
|                                                            |  |  |       |                 |       |   |             |  
|**Income (Loss) Before Income Taxes**                       |  |  |       | **15,295,677**  |       |   | (6,161,784  | )
|Income (taxes) recoveries (Notes 6(a)(ii) and 9)            |  |  |       | **(5,005,989**  | **)** |   | 620,000     |  
|                                                            |  |  |       |                 |       |  
|                                                            |  |  |       |                 |       |   |             |  
|**Net Profit (Loss) for Year**                              |  |  |       | **10,289,688**  |       |   | (5,541,784  | )
|**Deficit, Beginning of Year**                              |  |  |       | **(27,350,897** | **)** |   | (21,809,113 | )
|                                                            |  |  |       |                 |       |  
|                                                            |  |  |       |                 |       |   |             |  
|**Deficit, End of Year**                                    |  |  | **$** | **(17,061,209** | **)** | $ | (27,350,897 | )
|                                                            |  |  |       |                 |       |  
|                                                            |  |  |       |                 |       |   |             |  
|**Profit (Loss) per Share  basic**                         |  |  | **$** | **0.28**        |       | $ | (0.15       | )
|                                                            |  |  |       |                 |       |  
|**Profit (Loss) per Share  diluted (Note 2(k))**           |  |  | **$** | **0.27**        |       | $ | (0.15       | )
|                                                            |  |  |       |                 |       |  
|                                                            |  |  |       |                 |       |   |             |  
|**Weighted Average Number of Shares Outstanding - Basic**   |  |  |       | **37,327,201**  |       |   | 35,991,034  |  
|                                                            |  |  |       |                 |       |  
|                                                            |  |  |       |                 |       |   |             |  
|**Weighted Average Number of Shares Outstanding - Diluted** |  |  |       | **37,867,620**  |       |   | 35,991,034  |  
|                                                            |  |  |       |                 |       |  

|                                                                                                                             
|-----------------------------------------------------------------------------------------------------------------------------
|Consolidated Statements of Comprehensive IncomeFor the Years Ended December 31, 2008, 2007 and 2006
    (in Canadian dollars)
|                                                                                                                             
|                                                                                                                             

|                                      |  |  | 2008  |                | 2007  |   | 2006       |  
|------------------------------------- |  |  | ----- | -------------- | ----- | - | ---------- | -
|
|                                      |  |  |       |                |       |   |            |  
|**Net Profit (Loss) for Year**        |  |  | **$** | **10,289,688** |       | $ | (5,541,784 | )
|**Other Comprehensive (Loss) Income** |  |  |       | **(164,112**   | **)** |   | 58,819     |  
|                                      |  |  |       |                |       |  
|                                      |  |  |      
|                                      |  |  |       |                |       |   |            |  
|**Comprehensive Income (Loss)**       |  |  | **$** | **10,125,576** |       | $ | (5,482,965 | )
|                                      |  |  |       |                |       |  

|                                                                                                                                             
|---------------------------------------------------------------------------------------------------------------------------------------------
|Consolidated Statements of Accumulated Other Comprehensive LossFor the Years Ended December 31, 2008, 2007 and 2006
    (in Canadian dollars)
|                                                                                                                                             
|                                                                                                                                             

|                                      |  |  |       | 2008        |   |   | 2007    |   |   | 2006 | 
|------------------------------------- |  |  | ----- | ----------- | - | - | ------- | - | - | ---- | 
|
|                                      |  |  |       |             |   |   |         |   |   |      | 
|**Balance, Beginning of Year**        |  |  | **$** | **(58,819** | ) | $ |        |   | $ |     | 
|**Other Comprehensive Loss (Income)** |  |  |       | **164,112** |   |   | (58,819 | ) |   |     | 
|                                      |  |  |       |             |   |  
|**Balance, End of Year**              |  |  | **$** | **105,293** |   | $ | (58,819 | ) | $ |     | 
|                                      |  |  |       |             |   |  

See accompanying notes to consolidated financial statements

F - 3

---

---

|                                                                                                                 
|-----------------------------------------------------------------------------------------------------------------
|Consolidated Statements of Cash FlowsFor the Years Ended December, 2008, 2007 and 2006 
    (in Canadian dollars)
|                                                                                                                 
|                                                                                                                 

|                                                 |  |  | 2008  |                 | 2007  |   | 2006         |  
|------------------------------------------------ |  |  | ----- | --------------- | ----- | - | ------------ | -
|
|
|**Cash Used for Operations**                     |  |  |       |                 |       |   |              |  
|Net profit (loss) for year                       |  |  | **$** | **10,289,688**  |       | $ | (5,541,784   | )
|                                                 |  |  |       |                 |       |   |              |  
|Items not involving cash                         |  |  |       |                 |       |   |              |  
|Gain on sale of Noche Buena project              |  |  |       | **(19,891,071** | **)** |   |             |  
|Stock option compensation                        |  |  |       | **1,852,004**   |       |   | 2,830,270    |  
|Write-down of investment                         |  |  |       | ****           |       |   |             |  
|Unrealized foreign exchange gains                |  |  |       | **(266,524**    | **)** |   |             |  
|Accretion (Note 5)                               |  |  |       | **158,713**     |       |   | 145,665      |  
|Amortization                                     |  |  |       | **40,754**      |       |   | 24,761       |  
|Income tax recoveries                            |  |  |       | **(586,562**    | **)** |   | (620,000     | )
|Changes in non-cash working capital items        |  |  |       |                 |       |   |              |  
|Amounts receivable and prepaid expenses          |  |  |       | **182,175**     |       |   | (327,520     | )
|Accounts payable and accruals                    |  |  |       | **76,063**      |       |   | 138,540      |  
|Income taxes payable                             |  |  |       | **5,592,558**   |       |   |             |  
|                                                 |  |  |       |                 |       |  
|                                                 |  |  |       | **(2,552,202**  | **)** |   | (3,350,068   | )
|                                                 |  |  |       |                 |       |  
|                                                 |  |  |       |                 |       |   |              |  
|**Investing Activities**                         |  |  |       |                 |       |   |              |  
|Mineral interests                                |  |  |       | **(14,706,219** | **)** |   | (8,350,885   | )
|Proceeds on sale of Noche Buena project          |  |  |       | **30,842,488**  |       |   |             |  
|Short-term deposits                              |  |  |       | **(19,338,129** | **)** |   | (11, 557,493 | )
|Reclamation deposits                             |  |  |       | **(19,229**     | **)** |   | (200,000     | )
|Property and Equipment                           |  |  |       | **9,000**       |       |   | (174,339     | )
|                                                 |  |  |       |                 |       |  
|                                                 |  |  |       | **(3,212,089**  | **)** |   | (20, 282,717 | )
|                                                 |  |  |       |                 |       |  
|                                                 |  |  |       |                 |       |   |              |  
|**Financing Activities**                         |  |  |       |                 |       |   |              |  
|Issue of share capital and warrants              |  |  |       | **383,126**     |       |   | 31,327,426   |  
|                                                 |  |  |       |                 |       |  
|                                                 |  |  |       |                 |       |   |              |  
|**Net Cash (Used for) Provided**                 |  |  |       | **(5,381,165**  | **)** |   | 7,694,641    |  
|                                                 |  |  |       |                 |       |   |              |  
|**Cash and Cash Equivalents, Beginning of Year** |  |  |       | **13,480,147**  |       |   | 5,785,506    |  
|                                                 |  |  |       |                 |       |  
|                                                 |  |  |       |                 |       |   |              |  
|**Cash and Cash Equivalents, End of Year**       |  |  | **$** | **8,098,982**   |       | $ | 13,480,147   |  
|                                                 |  |  |       |                 |       |  
|                                                 |  |  |       |                 |       |   |              |  
|**Cash and Cash Equivalents, End of Year:**      |  |  |       |                 |       |   |              |  
|Cash and cash equivalents                        |  |  | **$** | **8,098,982**   |       | $ | 13,480,147   |  
|Cash held for exploration expenditures           |  |  |       | ****           |       |   |             |  
|                                                 |  |  |       |                 |       |  
|                                                 |  |  | **$** | **8,098,982**   |       | $ | 13,480,147   |  
|                                                 |  |  |       |                 |       |  
|                                                 |  |  |       |                 |       |   |              |  
|**Supplementary Non-cash Investing Activities**  |  |  |       |                 |       |   |              |  
|Changes in Liabilities in Mineral Interests      |  |  | **$** | **94,251**      |       | $ | 1,054,875    |  
|                                                 |  |  |       |                 |       |  
|Unpaid Commissions on Sale of Noche Buena        |  |  | **$** | **2,505,647**   |       | $ |             |  
|                                                 |  |  |       |                 |       |  

See accompanying notes to consolidated financial statements

F - 4

---

---

|                                                                                                                                                                        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Notes to Consolidated Financial StatementsAt December 31, 2008 and 2007 andFor the Years Ended December 31, 2008, 2007 and 2006(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 continue to secure
equity financings and/or the sale or joint venture of its properties.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                      

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------
|   |                                           

| | The consolidated financial statements of the Company have been prepared in accordance with generally
accepted accounting principles (GAAP) in Canada which, except as noted in Note 11, are
consistent in all material respects with GAAP in the United States of America.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                             
| | The consolidated financial statements have, in managements opinion, been properly prepared within
the framework of the significant accounting policies summarized below:                                                                                                   
| |                                                                                                                                                                                                                                                                             

| | a) | Principles of Consolidation
| | -- | ---------------------------
| |    |                            

| |  | These consolidated financial statements include the accounts of Seabridge Gold Inc. and its wholly-owned
subsidiaries, Seabridge Gold Corp., a company incorporated under the laws of the State of Nevada,
USA, 5073 N.W.T. Limited, a company incorporated under the laws of the Northwest Territories of Canada;
Pacific Intermountain Gold Inc. (PIGCO), a company incorporated under the laws of the
State of Nevada, USA and Minera Seabridge Gold SA de CV, a company incorporated in Mexico in 2006
to hold the Noche Buena project. The Mexican company and project were sold in December 2008. 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. In
February 2009, Draft EIC D78 was issued which proposes changes to EIC -126 to provide additional
guidance for mining exploration enterprises on when an impairment test is required.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| | c) | Asset Retirement Obligations
| | -- | ----------------------------
| |    |                             

| | The Company recognizes the fair value of liabilities for asset retirement obligations in the period
in which they occur and/or in which a reasonable estimate of such costs can be made using the total
undiscounted cash flows required to settle estimated obligations, estimated expected timing of cash
flow payments required to settle the obligations and estimated credit-adjusted risk-free discount
rates and inflation rates (see Note 5).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| | d) | Stock-based Compensation
| | -- | ------------------------
| |    |                         

| | The Company applies the fair value method for stock-based compensation and other stock-based payments.
Options are valued using the Black Scholes option-pricing model and other models for the two-tiered
options as may be appropriate. The resulting value is charged against income over the anticipated
vesting period of the option (see Note 6(b)). The Company reviews estimated forfeitures of options
on an ongoing basis.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 5

---

---

| |    |                       
| | -- | ----------------------
| | e) | Property and Equipment
| |    |                       

| |  | Property and Equipment are carried at cost less accumulated amortization. Amortization is provided
using the straight-line method at an annual rate of 20% from the date of acquisition.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                         

| | f) | Cash and Short-term Deposits
| | -- | ----------------------------
| |    |                             

| | Cash and short-term investments consist of balances with banks and investments in money market instruments.
These investments are carried at fair value. Cash and cash equivalents consist of investments with
maturities of up to 90 days at the date of purchase. Short-term deposits consist of investments with
maturities greater than 90 days at the date of purchase.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                             

| | g) | Marketable Securities
| | -- | ---------------------
| |    |                      

| | Short-term investments in marketable securities accounted for as available for sale securities are
recorded at market value. The market values of investments are determined based on the closing prices
reported on recognized securities exchanges and over-the-counter markets. Such individual market
values do not necessarily represent the realizable value of the total holding of any security, which
may be more or less than that indicated by market quotations. When there has been a loss in the value
of an investment in marketable securities that is determined to be other than a temporary decline,
the investment is written down to recognize the loss. The securities are recorded at market value
at December 31, 2008 and 2007.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| | h) | Flow-through Shares
| | -- | -------------------
| |    |                    

| | The Company financed a portion of its exploration and development activities through the issue of flow-through
shares. Under the terms of these share issues, the tax attributes of the related expenditures are
renounced to subscribers. When the renunciation is made, the tax value of the renunciation is recorded
as a liability and charged against share capital. Where the Company has a valuation allowance, which
reduces future income tax assets, the valuation allowance is reduced and an income tax recovery is
recorded in the statement of operations.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| | i) | Translation of Foreign Currencies
| | -- | ---------------------------------
| |    |                                  

| | The functional currency of the Company and its subsidiaries is considered to be the Canadian dollar.
Foreign currency transactions entered into by the Company and financial statements of integrated
foreign operations are translated using the temporal method. Under this method, monetary assets and
liabilities are translated at year-end rates of exchange, non-monetary assets and liabilities are
translated at historic rates of exchange and statement of operations items are translated at average
exchange rates prevailing during the year. Exchange gains and losses on foreign currency transactions
and foreign currency denominated balances are included in the statement of operations.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| | j) | Income Taxes
| | -- | ------------
| |    |             

| | The Company accounts for income taxes using the asset and liability method. Under this method of tax
allocation, future income tax assets and liabilities are determined based on differences between
the financial statement carrying values and their respective income tax bases (temporary differences).
Future income tax assets and liabilities are measured using the tax rates expected to be in effect
when the temporary differences are expected to reverse. The effect on future income tax assets and
liabilities of a change in tax rates enacted is included in operations in the period in which the
change is enacted or substantively enacted. The amount of future income tax assets recognized is
limited to the amount that is more likely than not to be realized.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| | k) | Loss Per Share
| | -- | --------------
| |    |               

| | Basic (profit) loss per share of common stock is computed based on the weighted average number of common
shares outstanding during the year. The Company uses the treasury stock method for calculating diluted
earnings per share which assumes that stock options with an exercise price lower than the average
quoted market price were exercised at the later of the beginning of the year, or time of issue. Stock
options with an exercise price greater than the average quoted market price of the common shares
are not included in the calculation of diluted profit per share as the effect is anti-dilutive. There
were 305,000 options which were not included in the diluted profit per share as they would be anti-dilutive.
As the Company incurred net losses for the years ended December 31, 2007 and 2006, all outstanding
options and warrants have been excluded from the calculation of diluted loss per share for those
years. The diluted weighted average number of common shares for the year ended December 31, 2008 was as follows:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| |                                                                            |  |  |  |            |  | 
| | -------------------------------------------------------------------------- |  |  |  | ---------- |  | 
| | Basic weighted average number of common shares outstanding for 2008        |  |  |  | 37,327,201 |  | 
| | Incremental number of common shares on assumed exercise of stock options   |  |  |  | 540,419    |  | 
| |                                                                            |  | 
| | Weighted average number of common shares used for diluted profit per share |  |  |  | 37,867,620 |  | 
| |                                                                            |  | 

| |    |                 
| | -- | ----------------
| | l) | Use of Estimates
| |    |                 

| | The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reported year. The most significant
estimates relate to the carrying values of exploration properties, accrued liabilities and contingencies,
valuation of stock options and calculations of future income tax assets. Actual results could be
materially different from those estimates.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| | m) | Changes in Accounting Policies
| | -- | ------------------------------
| |    |                               

| | The Company has adopted the following new accounting policies effective January 1, 2008 as issued by
the Canadian Institute of Chartered Accountants (CICA):
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 6

---

---

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Capital Disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | In December 2006, the CICA issued Handbook Section 1535, Capital Disclosures, which establishes standards
for disclosing information about an entitys capital and how it is managed. The entitys
disclosure should include information about its objectives, policies and processes for managing capital
and disclose whether or not it has complied and the consequences of non-compliance with any capital
requirements to which it is subject. The Company has included disclosures recommended by the new
Handbook section in Note 6 to the consolidated financial statements for the year ended December 31, 2008.                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Financial Instruments  Disclosures and Financial Instruments - Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | In December 2006, the CICA issued Handbook Section 3862 Financial Instruments  Disclosures and
Section 3863 Financial Instruments  Presentation. Section 3862 modifies the disclosure requirements
of Section 3861 Financial Instruments - Disclosures and Presentation including required disclosure
of the assessment of the significance of financial instruments for an entitys financial position
and performance; and of the extent of risks arising from financial instruments to which the Company
is exposed and how the Company manages those risks. Section 3863 carries forward the presentation
related requirements of Section 3861. The Company has included disclosures recommended by the new
handbook section in Note 8 to the consolidated financial statements for the year ended December 31, 2008.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

| | n) | Changes in Accounting Policies Not Yet Adopted
| | -- | ----------------------------------------------
| |    |                                               

| | Goodwill and Intangible Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | In February 2008, the CICA issued Handbook Section 3064 Goodwill and Intangible Assets which is required to be adopted for fiscal years beginning on or after October 1, 2008. This section
establishes standards for the recognition, measurement, presentation and disclosure of goodwill and
intangible assets subsequent to their initial recognition by profit-oriented enterprises. The Company
is currently evaluating the impact of this new standard.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | International Financial Reporting Standards (IFRS)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | In 2006, the Canadian Accounting Standards Board (AcSB) published a new strategic plan
that will significantly affect financial reporting requirements for Canadian companies. The AcSB
strategic plan outlines the convergence of Canadian GAAP with IFRS over an expected five year transitional
period. In February 2008, the AcSB announced that 2011 is the changeover date for public accountable
companies to use IFRS, replacing Canadas own GAAP. The transition date is for interim and annual
financial statements relating to fiscal years beginning on or after January 1, 2011. The transition
date of January 1, 2011 will require the restatement for comparative purposes of amounts reported
by the Company for the year ended December 31, 2010. The Company has begun assessing the adoption
of IFRS for 2011, and the identification of the new standards and their impact on financial reporting.
At this time, the Company has not determined the impact of the transition to IFRS.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Business Combinations, Consolidated Financial Statements, Non-controlling Interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The CICA issued Handbook Sections 1582 Business Combinations, 1601 Consolidated Financial Statements
and 1602 Non-controlling Interests and are effective for years beginning on or after January 1, 2011.
These Handbook Sections replace 1581 Business Combinations and 1600 Consolidated Financial Statements
and establish a new Section for accounting for non-controlling interest in a subsidiary. The Company
is currently evaluating the impact of these new standards.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| | 3. | CASH AND CASH EQUIVALENTS AND SHORT-TERM DEPOSITS
| | -- | -------------------------------------------------
| |    |                                                  

| |                                |  |  | 2008 |             | 2007 |   |            
| | ------------------------------ |  |  | ---- | ----------- | ---- | - | -----------
|
|
| | Cash                           |  |  | $    | 8,098,982   |      | $ | 1,416,376  
| | Canadian bank guaranteed notes |  |  |      | 30,895,622  |      |   | 23,621,264 
| |                                |  |  |      |             |      |   |            
| |                                |  |  |      | 38,994,604  |      |   | 25,037,640 
| | Short-term deposits            |  |  |      | (30,895,622 | )    |   | (11,557,493
| |                                |  |  |      |             |      |   |            
| | Cash and cash equivalents      |  |  | $    | 8,098,982   |      | $ | 13,480,147 
| |                                |  |  |      |             |      |   |            

| |                                                                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Short-term deposits consist of Canadian Schedule A bank guaranteed notes with a term of one year to
December 2009. The short-term deposits amounting to $30,895,622 held at December 31, 2008 were issued
for a one year period in December 2008 but are cashable in whole or in part with interest at any
time to maturity. All of the cash is held in a Canadian Schedule A bank.

F - 7

---

---

|   |                  
|-- | -----------------
|4. | MINERAL INTERESTS
|   |                  

| | Expenditures made on account of mineral interests by the Company were as follows:
| | ---------------------------------------------------------------------------------
| |                                                                                  

|                                     |  |  |       |                |  | 2008  |                |  |       |               
|------------------------------------ |  |  | ----- | -------------- |  | ----- | -------------- |  | ----- | --------------
|
|
|                                     |  |  |       |                |  |       |                |  |       |               
|                                     |  |  |       |                |  |       |                |  |       |               
|**Courageous Lake**                  |  |  |       |                |  |       |                |  |       |               
|Acquisition costs                    |  |  | $     | 8,402,305      |  | $     | 100,000        |  | $     |              
|Deferred exploration                 |  |  |       | 12,688,309     |  |       | 717,532        |  |       |              
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **21,090,614** |  |       | **817,532**    |  |       | ****         
|                                     |  |  |       |                |  |       |                | 
|**Castle Black Rock**                |  |  |       |                |  |       |                |  |       |               
|Acquisition costs                    |  |  |       | 140,426        |  |       |               |  |       |              
|Deferred exploration                 |  |  |       | 332,135        |  |       | 43,534         |  |       |              
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **472,561**    |  |       | **43,534**     |  |       | ****         
|                                     |  |  |       |                |  |       |                | 
|**Grassy Mountain**                  |  |  |       |                |  |       |                |  |       |               
|Acquisition costs                    |  |  |       | 2,261,299      |  |       |               |  |       |              
|Deferred exploration                 |  |  |       | 1,100,279      |  |       | 107,221        |  |       |              
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **3,361,578**  |  |       | **107,221**    |  |       | ****         
|                                     |  |  |       |                |  |       |                | 
|**Hog Ranch**                        |  |  |       |                |  |       |                |  |       |               
|Acquisition costs                    |  |  |       | 443,838        |  |       |               |  |       |              
|Deferred exploration                 |  |  |       | 762,498        |  |       | 70,982         |  |       |              
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **1,206,336**  |  |       | **70,982**     |  |       | ****         
|                                     |  |  |       |                |  |       |                | 
|**KSM**                              |  |  |       |                |  |       |                |  |       |               
|Acquisition costs                    |  |  |       | 15,306,546     |  |       |               |  |       |              
|Deferred exploration                 |  |  |       | 10,008,860     |  |       | 10,824,843     |  |       |              
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **25,315,406** |  |       | **10,824,843** |  |       | ****         
|                                     |  |  |       |                |  |       |                | 
|**Quartz Mountain**                  |  |  |       |                |  |       |                |  |       |               
|Acquisition costs                    |  |  |       | 357,139        |  |       |               |  |       |              
|Deferred exploration                 |  |  |       | 94,258         |  |       |               |  |       |              
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **451,397**    |  |       | ****          |  |       | ****         
|                                     |  |  |       |                |  |       |                | 
|**Red Mountain**                     |  |  |       |                |  |       |                |  |       |               
|Acquisition costs                    |  |  |       | 82,090         |  |       |               |  |       |              
|Deferred exploration                 |  |  |       | 1,028,530      |  |       | 296,160        |  |       |              
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **1,110,620**  |  |       | **296,160**    |  |       | ****         
|                                     |  |  |       |                |  |       |                | 
|**Pacific Intermountain Gold Corp.** |  |  |       |                |  |       |                |  |       |               
|Acquisition costs                    |  |  |       |               |  |       |               |  |       |              
|Deferred exploration                 |  |  |       | 3,000,032      |  |       | 462,223        |  |       | (14,175       
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **3,000,032**  |  |       | **462,223**    |  |       | **(14,175**   
|                                     |  |  |       |                |  |       |                | 
|**Other Nevada Projects**            |  |  |       |                |  |       |                |  |       |               
|Acquisition costs                    |  |  |       | 20,000         |  |       |               |  |       |              
|Deferred exploration                 |  |  |       | 322,925        |  |       | 69,185         |  |       |              
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **342,925**    |  |       | **69,185**     |  |       | ****         
|                                     |  |  |       |                |  |       |                | 
|**Noche Buena, Mexico**              |  |  |       |                |  |       |                |  |       |               
|Acquisition costs                    |  |  |       | 4,888,270      |  |       | 1,820,609      |  |       | (6,708,879    
|Deferred exploration                 |  |  |       | 1,428,111      |  |       | 276,482        |  |       | (1,704,593    
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **6,316,381**  |  |       | **2,097,091**  |  |       | **(8,413,472**
|                                     |  |  |       |                |  |       |                | 
|**Total**                            |  |  |       |                |  |       |                |  |       |               
|                                     |  |  |       |                |  |       |                | 
|Acquisition costs                    |  |  |       | 31,901,913     |  |       | 1,920,609      |  |       | (6,708,879    
|                                     |  |  |       |                |  |       |                | 
|Deferred exploration                 |  |  |       | 30,765,937     |  |       | 12,868,162     |  |       | (1,718,768    
|                                     |  |  |       |                |  |       |                | 
|**Total Mineral Interests**          |  |  | **$** | **62,667,850** |  | **$** | **14,788,771** |  | **$** | **(8,427,647**
|                                     |  |  |       |                |  |       |                | 

F - 8

---

---

|                                     |  |  |       |                |  |       |               |  |       |             |      
|------------------------------------ |  |  | ----- | -------------- |  | ----- | ------------- |  | ----- | ----------- | -----
|
|
|
|                                     |  |  |       |                |  |       |               |  |       |            
|                                     |  |  |       |                |  |       |               |  |       |             |      
|**Courageous Lake**                  |  |  |       |                |  |       |               |  |       |             |      
|Acquisition costs                    |  |  | $     | 8,302,305      |  | $     | 100,000       |  | $     |            |      
|Deferred exploration                 |  |  |       | 12,072,797     |  |       | 615,512       |  |       |            |      
|                                     |  |  |       |                |  |       |               | 
|                                     |  |  |       | **20,375,102** |  |       | **715,512**   |  |       | ****       |      
|                                     |  |  |       |                |  |       |               | 
|**Castle Black Rock**                |  |  |       |                |  |       |               |  |       |             |      
|Acquisition costs                    |  |  |       | 140,426        |  |       |              |  |       |            |      
|Deferred exploration                 |  |  |       | 289,198        |  |       | 42,937        |  |       |            |      
|                                     |  |  |       |                |  |       |               | 
|                                     |  |  |       | **429,624**    |  |       | **42,937**    |  |       | ****       |      
|                                     |  |  |       |                |  |       |               | 
|**Grassy Mountain**                  |  |  |       |                |  |       |               |  |       |             |      
|Acquisition costs                    |  |  |       | 2,261,299      |  |       |              |  |       |            |      
|Deferred exploration                 |  |  |       | 986,741        |  |       | 113,538       |  |       |            |      
|                                     |  |  |       |                |  |       |               | 
|                                     |  |  |       | **3,248,040**  |  |       | **113,538**   |  |       | ****       |      
|                                     |  |  |       |                |  |       |               | 
|**Hog Ranch**                        |  |  |       |                |  |       |               |  |       |             |      
|Acquisition costs                    |  |  |       | 443,838        |  |       |              |  |       |            |      
|Deferred exploration                 |  |  |       | 700,888        |  |       | 61,610        |  |       |            |      
|                                     |  |  |       |                |  |       |               | 
|                                     |  |  |       | **1,144,726**  |  |       | **61,610**    |  |       | ****       |      
|                                     |  |  |       |                |  |       |               | 
|**KSM (Kerr-Sulphurets-Mitchell)**   |  |  |       |                |  |       |               |  |       |             |      
|Acquisition costs                    |  |  |       | 15,061,208     |  |       | 245,338       |  |       |            |      
|Deferred exploration                 |  |  |       | 3,717,826      |  |       | 6,291,034     |  |       |            |      
|                                     |  |  |       |                |  |       |               | 
|                                     |  |  |       | **18,779,034** |  |       | **6,536,372** |  |       | ****       |      
|                                     |  |  |       |                |  |       |               | 
|**Quartz Mountain**                  |  |  |       |                |  |       |               |  |       |             |      
|Acquisition costs                    |  |  |       | 357,139        |  |       |              |  |       |            |      
|Deferred exploration                 |  |  |       | 85,348         |  |       | 8,910         |  |       |            |      
|                                     |  |  |       |                |  |       |               | 
|                                     |  |  |       | **442,487**    |  |       | **8,910**     |  |       | ****       |      
|                                     |  |  |       |                |  |       |               | 
|**Red Mountain**                     |  |  |       |                |  |       |               |  |       |             |      
|Acquisition costs                    |  |  |       | 82,090         |  |       |              |  |       |            |      
|Deferred exploration                 |  |  |       | 859,180        |  |       | 169,350       |  |       |            |      
|                                     |  |  |       |                |  |       |               | 
|                                     |  |  |       | **941,270**    |  |       | **169,350**   |  |       | ****       |      
|                                     |  |  |       |                |  |       |               | 
|**Pacific Intermountain Gold Corp.** |  |  |       |                |  |       |               |  |       |             |      
|Acquisition costs                    |  |  |       |               |  |       |              |  |       |            |      
|Deferred exploration                 |  |  |       | 2,488,602      |  |       | 556,261       |  |       | (44,831     | )    
|                                     |  |  |       |                |  |       |               | 
|                                     |  |  |       | **2,488,602**  |  |       | **556,261**   |  |       | **(44,831** | **)**
|                                     |  |  |       |                |  |       |               | 
|**Other Nevada Projects**            |  |  |       |                |  |       |               |  |       |             |      
|Acquisition costs                    |  |  |       | 20,000         |  |       |              |  |       |            |      
|Deferred exploration                 |  |  |       | 254,602        |  |       | 68,323        |  |       |            |      
|                                     |  |  |       |                |  |       |               | 
|                                     |  |  |       | **274,602**    |  |       | **68,323**    |  |       | ****       |      
|                                     |  |  |       |                |  |       |               | 
|**Noche Buena, Mexico**              |  |  |       |                |  |       |               |  |       |             |      
|Acquisition costs                    |  |  |       | 4,888,270      |  |       |              |  |       |            |      
|Deferred exploration                 |  |  |       | 250,423        |  |       | 1,177,688     |  |       |            |      
|                                     |  |  |       |                |  |       |               | 
|                                     |  |  |       | **5,138,693**  |  |       | **1,177,688** |  |       | ****       |      
|                                     |  |  |       |                |  |       |               | 
|**Total**                            |  |  |       |                |  |       |               |  |       |             |      
|                                     |  |  |       |                |  |       |               | 
|Acquisition costs                    |  |  |       | 31,556,575     |  |       | 345,338       |  |       |            |      
|                                     |  |  |       |                |  |       |               | 
|Deferred exploration                 |  |  |       | 21,705,605     |  |       | 9,105,163     |  |       | (44,831     | )    
|                                     |  |  |       |                |  |       |               | 
|**Total Mineral Interests**          |  |  | **$** | **53,262,180** |  | **$** | **9,450,501** |  | **$** | **(44,831** | **)**
|                                     |  |  |       |                |  |       |               | 

F - 9

---

---

|                                     |  |  |       |                |  |       |                |  |      
|------------------------------------ |  |  | ----- | -------------- |  | ----- | -------------- |  | -----
|
|
|
|                                     |  |  |       |                |  |       |                |  |      
|                                     |  |  |       |                |  |       |                |  |      
|**Courageous Lake**                  |  |  |       |                |  |       |                |  |      
|Acquisition costs                    |  |  | $     | 8,252,305      |  | $     | 50,000         |  | $    
|Deferred exploration                 |  |  |       | 7,519,488      |  |       | 4,553,309      |  |      
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **15,771,793** |  |       | **4,603,309**  |  |      
|                                     |  |  |       |                |  |       |                | 
|**Castle Black Rock**                |  |  |       |                |  |       |                |  |      
|Acquisition costs                    |  |  |       | 140,426        |  |       |               |  |      
|Deferred exploration                 |  |  |       | 243,642        |  |       | 45,556         |  |      
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **384,068**    |  |       | **45,556**     |  |      
|                                     |  |  |       |                |  |       |                | 
|**Grassy Mountain**                  |  |  |       |                |  |       |                |  |      
|Acquisition costs                    |  |  |       | 2,261,299      |  |       |               |  |      
|Deferred exploration                 |  |  |       | 844,548        |  |       | 142,193        |  |      
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **3,105,847**  |  |       | **142,193**    |  |      
|                                     |  |  |       |                |  |       |                | 
|**Hog Ranch**                        |  |  |       |                |  |       |                |  |      
|Acquisition costs                    |  |  |       | 443,838        |  |       |               |  |      
|Deferred exploration                 |  |  |       | 629,850        |  |       | 71,038         |  |      
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **1,073,688**  |  |       | **71,038**     |  |      
|                                     |  |  |       |                |  |       |                | 
|**KSM**                              |  |  |       |                |  |       |                |  |      
|Acquisition costs                    |  |  |       | 465,542        |  |       | 14,595,666     |  |      
|Deferred exploration                 |  |  |       | 61,382         |  |       | 3,656,444      |  |      
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **526,924**    |  |       | **18,252,110** |  |      
|                                     |  |  |       |                |  |       |                | 
|**Quartz Mountain**                  |  |  |       |                |  |       |                |  |      
|Acquisition costs                    |  |  |       | 357,139        |  |       |               |  |      
|Deferred exploration                 |  |  |       | 85,348         |  |       |               |  |      
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **442,487**    |  |       | ****          |  |      
|                                     |  |  |       |                |  |       |                | 
|**Red Mountain**                     |  |  |       |                |  |       |                |  |      
|Acquisition costs                    |  |  |       | 82,090         |  |       |               |  |      
|Deferred exploration                 |  |  |       | 690,720        |  |       | 168,460        |  |      
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **772,810**    |  |       | **168,460**    |  |      
|                                     |  |  |       |                |  |       |                | 
|**Pacific Intermountain Gold Corp.** |  |  |       |                |  |       |                |  |      
|Acquisition costs                    |  |  |       | 14,860         |  |       |               |  |      
|Deferred exploration                 |  |  |       | 2,060,644      |  |       | 472,568        |  |      
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **2,075,504**  |  |       | **472,568**    |  |      
|                                     |  |  |       |                |  |       |                | 
|**Other Nevada Projects**            |  |  |       |                |  |       |                |  |      
|Acquisition costs                    |  |  |       | 20,000         |  |       |               |  |      
|Deferred exploration                 |  |  |       | 193,416        |  |       | 61,186         |  |      
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **213,416**    |  |       | **61,186**     |  |      
|                                     |  |  |       |                |  |       |                | 
|**Noche Buena, Mexico**              |  |  |       |                |  |       |                |  |      
|Acquisition costs                    |  |  |       | 28,901         |  |       | 4,859,369      |  |      
|Deferred exploration                 |  |  |       |               |  |       | 250,423        |  |      
|                                     |  |  |       |                |  |       |                | 
|                                     |  |  |       | **28,901**     |  |       | **5,109,792**  |  |      
|                                     |  |  |       |                |  |       |                | 
|**Total**                            |  |  |       |                |  |       |                |  |      
|                                     |  |  |       |                |  |       |                | 
|Acquisition costs                    |  |  |       | 12,066,400     |  |       | 19,505,035     |  |      
|                                     |  |  |       |                |  |       |                | 
|Deferred exploration                 |  |  |       | 12,329,038     |  |       | 9,421,177      |  |      
|                                     |  |  |       |                |  |       |                | 
|**Total Mineral Interests**          |  |  | **$** | **24,395,438** |  | **$** | **28,926,212** |  | **$**
|                                     |  |  |       |                |  |       |                | 

| |                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Continued exploration of the Companys mineral properties is subject to certain lease payments,
project holding costs, rental fees and filing fees.                                                                                            
| |                                                                                                                                                                                                                                                
| | The Companys business plan is to increase its gold ounces in the ground but not to go into production
on its own. The Company intends to either sell projects or participate in joint ventures towards
production with major mining companies.
| |                                                                                                                                                                                                                                                

| | a) | Courageous Lake
| | -- | ---------------
| |    |                

| | In 2002, the Company purchased a 100% interest in the Courageous Lake gold project from Newmont Canada
Limited and Total Resources (Canada) Limited (the Vendors) for US$2.5 million. The Courageous
Lake gold project consists of mining leases located in Northwest Territories of Canada.                                                                                                                                                                         
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | The Vendors were granted a 2% net smelter royalty interest in the project. In addition, the Company
agreed to pay the Vendors US$1.5 million when the spot price of gold closed at or above US$360 per
ounce for 10 consecutive days (paid in March 2003), and pay the Vendors US$1.5 million when the spot
price of gold closed at or above US$400 per ounce or a production decision was made at Courageous
Lake, whichever occurred 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 all option payments being credited against the purchase price.                                                           

F - 10

---

---

| |    |                  
| | -- | -----------------
| | b) | Castle Black Rock
| |    |                  

| | The Company entered into a mining lease agreement dated August 15, 2000, and amended on August 1, 2001,
with respect to mineral claims located in Esmeralda County, Nevada, USA. In 2002, the Company paid
US$17,500 and in 2003, US$25,000 in advance royalties and is required to pay further advance royalties
of US$25,000 each August 15 thereafter and to pay a production royalty, varying with the price of
gold, of 3% to 5%, and a 3.5% royalty on gross proceeds from other metals produced. The Company has
the right to purchase 50% of the production royalty for US$1.8 million.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

| | c) | Grassy Mountain
| | -- | ---------------
| |    |                

| | In 2000, the Company acquired an option on a 100% interest in mineral claims located in Malheur County,
Oregon, USA. During 2002, the Company paid US$50,000 in option payments. On December 23, 2002, the
agreement was amended and the Company made a further option payment of US$300,000 and in March 2003
acquired the property for a payment of US$600,000. As part of the acquisition of the Grassy Mountain
property, the Company acquired one million shares of a U.S. based private exploration company at
US$0.50 per share which represented approximately 6.9% of the private companys issued and outstanding
shares. Subsequently, the private company was merged with Atlas Precious Metals Inc. (APMI).
On the merger, the Companys one million shares of the private company were converted into 1,200,000
common shares of APMI representing approximately 5.7% of APMIs issued and outstanding shares.
At December 31, 2006, the Company wrote off the value of its investment, as APMI had 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 were established at US$15,000 payable on November 15, 2006; US$17,500 on
November 15, 2007; and 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%, plus a 3.5% royalty on
the gross proceeds from other metals. 40% of the production royalty may be purchased by the Company
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 as investments included in marketable
securities on the balance sheet. In February 2005, Romarco terminated its option on the Hog Ranch
property.                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | In February 2009, the Company optioned the property to Icon Industries Ltd. (ICON). The
terms of the agreement require ICON to issue 1 million common shares and pay $500,000 on closing
and issue a further 1 million common shares and pay a further $525,000 within 12 months of the agreement
being accepted by the TSX Venture Exchange.                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| | e) | KSM (Kerr-Sulphurets-Mitchell)
| | -- | ------------------------------
| |    |                               

| | In 2001, the Company purchased a 100% interest in contiguous claim blocks in the Skeena Mining Division,
British Columbia. The vendor maintains a 1% net smelter royalty interest on the project, subject
to maximum aggregate royalty payments of $4.5 million. The Company is obligated to purchase the net
smelter royalty interest for the price of $4.5 million in the event that a positive feasibility study
demonstrates a 10% or higher internal rate of return after tax and financing costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | In 2002, the Company optioned the property to Noranda Inc. (which subsequently became Falconbridge
Limited and then Xstrata plc.) which could earn up to a 65% interest by incurring exploration expenditures
and funding the cost of a feasibility study.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | In April 2006, the Company reacquired the exploration rights to the KSM property in British Columbia,
Canada from Falconbridge Limited. On closing of the formal agreement in August 2006, the Company
issued Falconbridge 200,000 common shares of the Company with a deemed value of $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 were to become exercisable five years from the date each new ounce of
gold resources was 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, using a volatility of 60%,
interest rate of 4% and expected life of 1.5 years. Falconbridge also had a right of first refusal
should the Company desire to sell all or any portion of its interest therein. On February 20, 2007,
the Company announced a new mineral resource at the Mitchell zone of the property based on the 2006
drilling program and consequently the above 2 million warrants became exercisable. The 2,000,000
warrants were exercised in May and June 2007 and proceeds of $27,000,000 were received by the Company.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| | f) | Quartz Mountain
| | -- | ---------------
| |    |                

| | In 2001, the Company purchased a 100% interest in mineral claims in Lake County, Oregon. The vendor
retained a 1% net smelter royalty interest on unpatented claims acquired and a 0.5% net smelter royalty
interest was granted to an unrelated 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 was excluded from the agreement.
The terms of the agreement required Quincy to incur US$1.5 million in exploration and issue 250,000
of its shares in stages by October 2008. Quincy did not satisfy its obligations under the agreement
and the option has been terminated.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| | 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.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 11

---

---

| |                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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
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 by forgiving debt of approximately $65,000
and agreeing to pay 10% of the proceeds of any sale of projects to third parties. The minority interest
liability value amounting to $207,369 was eliminated and the amount reduced PIGCO deferred exploration
expenses on the balance sheet.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | In April 2006, the Company acquired 100% interest in the Noche Buena gold project in the Sonora district
of Mexico for US$4,350,000 in cash. In January 2008, the Company reported increased NI-43-101 mineral
resources resulting from the 2007 drilling program.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| | In February 2008, the Company acquired the surface rights encompassing the Noche Buena property in
Mexico for US$1,780,000. The agreement was in the form of a lease but by virtue of the terms of the
acquisition, the lease has been determined to be a capital lease.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                         

| | In December 2008, the Company sold the project for US$25 million ($30,842,000) in cash less a commission
to the Companys agent of $2,538,000. A further US$5 million is payable by the purchaser upon
commencement of commercial production from the property and a 1.5% net smelter royalty is payable
on all production of gold sold for US$800 per ounce or greater. In connection with the sale, the
Company accrued income taxes payable amounting to $5,326,000 (approximately 60 million Mexican pesos)
to the government of Mexico as at December 31, 2008.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| | 5. | RECLAMATION DEPOSITS AND PROVISIONS FOR RECLAMATION LIABILITIES
| | -- | ---------------------------------------------------------------
| |    |                                                                

| | The reclamation deposits consist of short-term investments or cash deposits held as security for either
the governments in Canada or the USA to cover estimated reclamation liabilities on various exploration
properties.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                           
| | The balance in the provision for reclamation liabilities is as follows:                                                                                                                                                   
| |                                                                                                                                                                                                                           

| |                                          |  |  | Amount |               |  
| | ---------------------------------------- |  |  | ------ | ------------- | -
|
|
| | Balance at December 31, 2006             |  |  | $      | 1,529,948     |  
| | Additional reclamation liability         |  |  |        | 173,862       |  
| | Accretion                                |  |  |        | 145,665       |  
| |                                          |  | 
| | Balance at December 31, 2007             |  |  |        | 1,849,475     |  
| | Reduction of reclamation liability - net |  |  |        | (9,200        | )
| | Accretion                                |  |  |        | 158,713       |  
| |                                          |  | 
| | **Balance at December 31, 2008**         |  |  | **$**  | **1,998,988** |  
| |                                          |  | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The fair value of the asset retirement obligations was calculated using the total undiscounted cash
flows required to settle estimated obligations (estimated to be $4,997,000), expected timing of cash
flow payments required to settle the obligations between 2009 and 2020, credit-adjusted risk-free
discount rates of 7.9% to 8.76% and an inflation rate of 2.0%. During 2007, a liability was set up
for the KSM project amounting to $149,862 and a deposit of $200,000 was given as security.

F - 12

---

---

|   |                     
|-- | --------------------
|6. | SHAREHOLDERS EQUITY
|   |                     

| | a) | Share Capital
| | -- | -------------
| |    |              

| |                                                           |  |  | Shares |            | Amount |  
| | --------------------------------------------------------- |  |  | ------ | ---------- | ------ | -
|
| |                                                           |  |  |        |            |        |  
| | Authorized                                                |  |  |        |            |        |  
| | Unlimited number of common shares without par value       |  |  |        |            |        |  
| | Unlimited number of preference shares (none issued)       |  |  |        |            |        |  
| |                                                           |  |  |       
| | Issued  Common shares                                    |  |  |        |            |        |  
| |                                                           |  |  |       
| | Balance, December 31, 2005                                |  |  |        | 32,106,685 |        | $
| | Issued during year                                        |  |  |        |            |        |  
| | For cash, exercise of stock options                       |  |  |        | 584,000    |        |  
| | For cash, private placements                              |  |  |        | 1,200,000  |        |  
| | Acquisition of mineral interest (Note 4(e))               |  |  |        | 200,000    |        |  
| | Value of stock options exercised                          |  |  |        |           |        |  
| | Renunciation of flow-through share value (ii)             |  |  |        |           |        |  
| |                                                           |  |  |       
| |                                                           |  |  |        | 1,984,000  |        |  
| |                                                           |  |  |       
| | Balance, December 31, 2006                                |  |  |        | 34,090,685 |        |  
| | Issued during year                                        |  |  |        |            |        |  
| | For cash, exercise of stock options                       |  |  |        | 1,207,200  |        |  
| | For cash, exercise of share purchase warrants (Note 4(e)) |  |  |        | 2,000,000  |        |  
| | Value of warrants and stock options exercised             |  |  |        |           |        |  
| | Renunciation of flow-through share value (ii)             |  |  |        |           |        |  
| |                                                           |  |  |       
| |                                                           |  |  |        | 3,207,200  |        |  
| |                                                           |  |  |       
| | Balance, December 31, 2007                                |  |  |        | 37,297,885 |        |  
| | Issued during year                                        |  |  |        |            |        |  
| | For cash, exercise of stock options                       |  |  |        | 50,800     |        |  
| | Value of stock options exercised                          |  |  |        |           |        |  
| |                                                           |  |  |       
| |                                                           |  |  |        | 50,800     |        |  
| |                                                           |  |  |       
| | Balance, December 31, 2008                                |  |  |        | 37,348,685 |        | $
| |                                                           |  |  |       

| |     |                                                                                                                               
| | --- | ------------------------------------------------------------------------------------------------------------------------------
| | (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.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                             

| | (ii) | In January 2007, the Company renounced $3,656,250 (2006 - $5,278,750, 2005 - $2,272,500) in Canadian
Exploration Expenses to investors of flow-through shares in 2006, 2005 and 2004, respectively. The
tax value of these renunciations has been recorded as a future tax liability and charged against
share capital.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                        

| |  | Capital Management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | The Company manages its capital structure and makes adjustments to it, based on the funds available
to the Company, in order to support the acquisition, exploration and development of mineral properties.
The Board of Directors does not establish quantitative return on capital criteria for management,
but rather relies on the expertise of the Companys management to sustain future development
of the business.                                                                                              
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | The properties in which the Company currently has an interest are in the exploration stage; as such
the Company is dependent on external financing to fund its activities. In order to carry out the
planned exploration and pay for administrative costs, the Company will spend its existing working
capital and raise additional amounts as needed. The Company will continue to assess new properties
and seek to acquire an interest in additional properties that would be accretive and meaningful to
the Company.
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | Management reviews its capital management approach on an ongoing basis and believes that this approach,
given the relative size of the Company, is reasonable.                                                                                                                                                                                                                                                                                                                                                           
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | There were no changes in the Companys approach to capital management during the year ended December
31, 2008.                                                                                                                                                                                                                                                                                                                                                                                                           
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | The Company is not subject to externally imposed capital requirements.                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| | b) | Stock Options Outstanding
| | -- | -------------------------
| |    |                          

| |  | The Company provides compensation to directors, employees and consultants in the form of stock options.
Certain option grants to directors and senior management are subject to a two-tiered vesting policy
designed to better align option compensation with the interests of shareholders. Grants to other
employees and consultants do not have the two-tiered provision.                                                                                                   
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | The two-tier option grants require a certain share price above the grant date price for 10 successive
days for the first third to vest, a higher share price for the second third to vest and a further
higher share price for the final third to vest. Once the share price has met the first test, the
Companys share price performance must have exceeded the S&P/TSX Global Gold Index by more
than 20% over the preceding six months or these options would be cancelled.

F - 13

---

---

| |  |                                                        
| |  | -------------------------------------------------------
| |  | The Board has granted the following two-tiered options:
| |  |                                                        

| | Date of Grant |  | Number |         | Exercise Price |   | Share Price Vesting |  | Year Vested |             
| | ------------- |  | ------ | ------- | -------------- | - | ------------------- |  | ----------- | ------------
|
| |               |  |        |         |                |   |                     |  |             |             
| | August 2002   |  |        | 600,000 |                | $ | 2.20                |  | $           | 6, $9, $12  
| | August 2004   |  |        | 100,000 |                | $ | 3.37                |  | $           | 6, $9, $12  
| | January 2005  |  |        | 50,000  |                | $ | 4.00                |  | $           | 6, $9, $12  
| | January 2006  |  |        | 875,000 |                | $ | 10.56               |  | $           | 15, $18, $21
| | August 2007   |  |        | 120,000 |                | $ | 29.60               |  | $           | 34, $37, $40
| |               |  |        |        

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The weighted average grant date fair value of the 180,000 options granted during 2008 which were not
subject to the two-tiered vesting policy described above was $15.07 (2007 - $9.73, 2006 - $2.70).
The grant of these 180,000 options resulted in compensation costs totaling $1,165,710 compared to
200,000 options resulting in compensation of $1,945,640 during 2007 and 15,000 options resulting
in compensation costs totaling $40,485 during 2006. 150,000 of the 2008 options will vest over the
period March 2009 to December 2009 and consequently $436,463 was expensed in 2008 and $729,247 will
be expensed in 2009. 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:
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| |                          | **2008** |           | **2007** |  | **2006**  |  | 
| | ------------------------ | -------- | --------- | -------- |  | --------- |  | 
| |                          |          |           |          |  |           |  | 
| |                          |          |           |          |  |           |  | 
| | Dividend yield           |          | Nil       |          |  | Nil       |  | 
| | Expected volatility      |          | 64%       |          |  | 55%       |  | 
| | Risk free rate of return |          | 2.2%      |          |  | 4.3%      |  | 
| | Expected life of options |          | 4.3 years |          |  | 2.7 years |  | 

| |  |                                                                                                                                                                                                                                                                                                                                                                                  
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The weighted average grant date fair value of the 120,000 two-tiered options granted during 2007 and
approved by shareholders in June 2008 was $7.63. 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           |  | Nil       |  | 
| | ------------------------ |  | --------- |  | 
| | Expected volatility      |  | 61%       |  | 
| | Risk free rate of return |  | 3.4%      |  | 
| | Expected life of options |  | 4.1 years |  | 

| |  |                                                                                                                                                                                                                                                                                                                                       
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The estimated fair value of the 120,000 two-tiered options granted in 2007 amounted to $915,160. In
2008, after the options were approved by shareholders, the $34 per share vesting requirement had
been met. During 2008, $418,084 of this amount was expensed and the balance of $497,076 will be expensed
over the vesting period.
| |  |                                                                                                                                                                                                                                                                                                                                       

| |  | A summary of the status of the plans at December 31, 2008 and changes during the years
are presented below:
| |  | -----------------------------------------------------------------------------------------------------------
| |  |                                                                                                            

| |                                    |  |  | Shares        |   | Weighted 
      Average 
      Exercise Price |           | Amount |       |              
| | ---------------------------------- |  |  | ------------- | - | --------------------------------------------- | --------- | ------ | ----- | -------------
|
| |                                    |  |  |               |   |                                               |           |        |       |              
| | Outstanding, December 31, 2005     |  |  | 1,879,500     |   |                                               | 2.21      |        |       | 959,543      
| | Granted                            |  |  | 890,000       |   |                                               | 10.55     |        |       | 1,681,995    
| | Exercised                          |  |  | (584,000      | ) |                                               | (1.00     | )      |       | (80,674      
| | Value of 2002-2005 options vested  |  |  |              |   |                                               |          |        |       | 296,812      
| |                                    |  |  |               |   |                                               |          
| | Outstanding, December 31, 2006     |  |  | 2,185,500     |   |                                               | 5.93      |        |       | 2,857,676    
| | Granted                            |  |  | 200,000       |   |                                               | 25.29     |        |       | 948,448      
| | Exercised                          |  |  | (1,207,200    | ) |                                               | (3.58     | )      |       | (1,404,973   
| | Value of 2006 options vested       |  |  |              |   |                                               |          |        |       | 1,881,823    
| |                                    |  |  |               |   |                                               |          
| | Outstanding, December 31, 2007     |  |  | 1,178,300     |   |                                               | 11.62     |        |       | 4,282,974    
| | Granted                            |  |  | 300,000       |   |                                               | 20.88     |        |       | 854,547      
| | Exercised                          |  |  | (50,800       | ) |                                               | (7.54     | )      |       | (101,173     
| | Value of 2007 options vested       |  |  |              |   |                                               |          |        |       | 997,457      
| |                                    |  |  |               |   |                                               |          
| | **Outstanding, December 31, 2008** |  |  | **1,427,500** |   | **$**                                         | **13.71** |        | **$** | **6,033,805**
| |                                    |  |  |               |   |                                               |          

| |               |  |  |               |  |  |       |           |  |  |  |                   | 
| | ------------- |  |  | ------------- |  |  | ----- | --------- |  |  |  | ----------------- | 
|
|
| |               |  |  |               |  |  |       |           |  |  |  |                   | 
| | 37,500        |  |  | 37,500        |  |  | $     | 5.65      |  |  |  | January 13, 2009  | 
| | 100,000       |  |  | 100,000       |  |  | $     | 3.37      |  |  |  | August 13, 2009   | 
| | 65,000        |  |  | 65,000        |  |  | $     | 4.00      |  |  |  | January 11, 2010  | 
| | 30,000        |  |  | 30,000        |  |  | $     | 9.50      |  |  |  | December 20, 2010 | 
| | 725,000       |  |  | 725,000       |  |  | $     | 10.56     |  |  |  | January 4, 2011   | 
| | 30,000        |  |  | 30,000        |  |  | $     | 13.77     |  |  |  | January 17, 2012  | 
| | 260,000       |  |  | 180,000       |  |  | $     | 29.60     |  |  |  | August 8, 2012    | 
| | 15,000        |  |  | 15,000        |  |  | $     | 28.58     |  |  |  | January 14, 2009  | 
| | 30,000        |  |  |              |  |  | $     | 26.64     |  |  |  | March 3, 2013     | 
| | 15,000        |  |  | 15,000        |  |  | $     | 14.65     |  |  |  | September 3, 2009 | 
| | 120,000       |  |  |              |  |  | $     | 10.54     |  |  |  | December 4, 2013  | 
| |               |  |  |               |  |  |       |          
| | **1,427,500** |  |  | **1,197,500** |  |  | **$** | **13.71** |  |  |  |                   | 
| |               |  |  |               |  |  |       |          

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In addition to the 1,427,500 options outstanding there were 515,000 options granted to officers and
directors in December 2008, subject to amendments in the share option plan and the approval of shareholders
at the next meeting of shareholders. In addition, there were 10,000 one-year options granted to a
consultant in September 2008, which vest only after certain services have been rendered. The terms
of the services have not been completed at December 31, 2008 and consequently no value has been determined
for these options.

F - 14

---

---

| |    |                        
| | -- | -----------------------
| | c) | Share Purchase Warrants
| |    |                        

| |  | The Companys movement in share purchase warrants is as follows:
| |  | ----------------------------------------------------------------
| |  |                                                                 

| |                                           |  |  | Number of Warrants |            | Amount |       |            
| | ----------------------------------------- |  |  | ------------------ | ---------- | ------ | ----- | -----------
|
| |                                           |  |  |                    |            |        |       |            
| | 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 
| |                                          
| | Exercised                                 |  |  |                    | (2,000,000 | )      |       | (11,436,000
| |                                           |  |  |                    |           
| | **Balance at December 31, 2007 and 2008** |  |  |                    |           |        | **$** |           
| |                                           |  |  |                    |           

| | 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            |  | Nil       |  | 
| | ------------------------- |  | --------- |  | 
| | Expected volatility       |  | 60%       |  | 
| | Risk free rate of return  |  | 4%        |  | 
| | Expected life of warrants |  | 1.5 years |  | 

|   |                           
|-- | --------------------------
|7. | RELATED PARTY TRANSACTIONS
|   |                           

| | a) | During the year, a private company controlled by a director of the Company was paid $14,800 (2007 -
$33,300, 2006 - $33,900) 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 $250,000 (2007 - $360,000,
2006 - $144,000) for consulting services rendered.                                                     
| |    |                                                                                                                                                                                                               
| | c) | During the year, a third director was paid $16,600 (2007 - $17,300, 2006 - $18,000) for geological
consulting services.                                                                                       
| |    |                                                                                                                                                                                                               

| | These transactions were in the normal course of operations and were measured at the exchange amount,
which is the amount of consideration established and agreed to by the related parties.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                            

|8. | FINANCIAL INSTRUMENTS
|-- | ---------------------
|   |                      

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys financial risk exposures and the impact on the Companys financial instruments
are summarized below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | The Companys credit risk is primarily attributable to short-term investments included in cash
and cash equivalents and receivables included in amounts receivable and prepaid expenses. The Company
has no significant concentration of credit risk arising from operations. Short-term deposits consist
of Canadian Schedule A bank guaranteed notes, with terms up to one year but are cashable in whole
or in part with interest at any time to maturity, for which management believes the risk of loss
to be remote. Financial instruments included in amounts receivable and prepaid expenses consist of
goods and services tax due from the Federal Government of Canada. Management believes that the risk
of loss with respect to financial instruments included in amounts receivable and prepaid expenses
to be remote. The Company also has investments in other publicly listed exploration companies which
are included in marketable securities. These shares were received as part of option payments on certain
exploration properties the Company owns. The credit risk on these investments is significant due
to the nature of the business but the amounts are not significant to the Company.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Liquidity Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | The Companys approach to managing liquidity risk is to ensure that it will have sufficient liquidity
to meet liabilities when due. As at December 31, 2008, the Company had cash balances of $8,099,000
(December 31, 2007 - $1,416,000) to settle current liabilities of $8,695,000 (December 31, 2007 -
$679,000). At December 31, 2008, the Company also had bank-guaranteed short-term deposits of $30,896,000
which mature in December 2008, but are cashable in whole or in part with interest at any time to
maturity. All of the Companys financial liabilities have contractual maturities of 30 days
and are subject to normal trade terms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Market Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (a) Interest Rate Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | The Company has cash balances and no interest-bearing debt. The Companys current policy is to
invest excess cash in Canadian bank guaranteed notes. The Company periodically monitors the investments
it makes and is satisfied with the credit ratings of its banks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (b) Foreign Currency Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | The Companys functional currency is the Canadian dollar and major purchases are transacted in
Canadian, US dollars and Mexican pesos. The Company funds certain operations, exploration and administrative
expenses in the United States on a cash call basis using US dollar currency converted from its Canadian
dollar bank accounts held in Canada. In December 2008, the Company sold the Mexican property Noche
Buena at a profit which attracted income taxes payable in Mexican pesos. The income taxes were paid
in January 2009 and there is no further exposure to the Mexican peso currency. Management believes
the foreign exchange risk derived from currency conversions is not significant to its operations
and therefore does not hedge its foreign exchange risk.                                                                                                                                                                                                                                                                                                                                                                                                                              

F - 15

---

---

| |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Sensitivity Analysis                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | The Company has designated its cash and cash equivalents and short term deposits as held-for-trading,
which are measured at fair value. Financial instruments included in amounts receivable and prepaid
expenses are classified as loans and receivables, which are measured at amortized cost. Accounts
payable and accrued liabilities are classified as other financial liabilities, which are measured
at amortized cost.
| |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | As at December 31, 2008, the carrying and fair value amounts of the Companys financial instruments
are the same.                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Based on managements knowledge and experience of the financial markets, the Company believes
the following movements are reasonably possible over a year:                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (i) Short term deposits are re-invested each 30 days to one year. The investments held at December
31, 2008 are one-year notes but are cashable in whole or in part with interest at any time to maturity.
Sensitivity to a plus or minus 1% change in rates would affect net loss by $309,000 on an annualized
basis.                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (ii) At December 31, 2008, the Company had net current liabilities in US dollars of $154,000, which
with a 10% change in exchange rates, would affect net income by $15,000. At December 31, 2008, the
Company had income taxes and other payables of 60,841,000 Mexican pesos ($5,386,000) which were satisfied
in January 2009 for $5,354,000.                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (iii) Price risk is remote since the Company is not a producing entity.                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                               

|9. | INCOME TAXES
|-- | ------------
|   |             

| |  | Income (taxes) recoveries varies from the amounts that would be computed by applying the basic federal
and provincial income tax rates aggregating to 33.5% (2007  36.12%, 2006  36.12%) as
follows:
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                       

| |                                                    |  |  | 2008 |            | 2007 |   | 2006       |   |  
| | -------------------------------------------------- |  |  | ---- | ---------- | ---- | - | ---------- | - | -
|
|
| | Statutory rate applied to (profit) loss for year   |  |  | $    | (5,124,052 | )    | $ | 2,225,636  |   | $
| | Non deductible items                               |  |  |      | (700,000   | )    |   | (1,026,000 | ) |  
| | Non taxable portion of gain on sale of Noche Buena |  |  |      | 3,331,754  |      |   |           |   |  
| | Difference in foreign tax rate                     |  |  |      | (2,260,445 | )    |   |           |   |  
| | Loss not tax benefited                             |  |  |      | (253,246   | )    |   |           |   |  
| | Valuation allowance                                |  |  |      |           |      |   | (1,199,636 | ) |  
| | Reduction in valuation allowance                   |  |  |      |           |      |   | 620,000    |   |  
| |                                                    |  |  |      |            |      |   |           
| |                                                    |  |  | $    | (5,005,989 | )    | $ | 620,000    |   | $
| |                                                    |  |  |      |            |      |   |           
| |                                                    |  | 

| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Significant components of the Companys future tax assets and liabilities are as follows:
| |                                                                                          

| |                                        |  |  | 2008 |            | 2007 |   |           
| | -------------------------------------- |  |  | ---- | ---------- | ---- | - | ----------
|
|
| | Future income tax assets (liabilities) |  |  |      |            |      |   |           
| | Mineral interests                      |  |  | $    | (3,068,000 | )    | $ | (2,754,000
| | Property and equipment                 |  |  |      | 36,000     |      |   | 21,000    
| | Share issue costs                      |  |  |      | 32,000     |      |   | 68,000    
| | Non capital losses                     |  |  |      | 3,637,000  |      |   | 2,783,000 
| | Provision for reclamation liabilities  |  |  |      | 565,000    |      |   | 220,000   
| | Unrealized capital losses              |  |  |      | 31,000     |      |   | 293,000   
| |                                        |  |  |      |           
| |                                        |  |  |      | 1,233,000  |      |   | 631,000   
| | Valuation allowance                    |  |  |      | (1,233,000 | )    |   | (1,218,000
| |                                        |  |  |      |           
| | Future income tax liabilities, net     |  |  | $    |           |      | $ | (587,000  
| |                                        |  |  |      |           
| |                                        | 

| |                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A future tax asset of approximately $3,218,000 (2007 - $3,128,000) 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 $11,523,000
which expire in various years to 2027 as follows:                                                                                                       
| |                                                                                                                                                                                                                                                               

| |      |  |  |       |                |  | 
| | ---- |  |  | ----- | -------------- |  | 
| | 2009 |  |  | $     | 735,000        |  | 
| | 2010 |  |  |       | 707,000        |  | 
| | 2014 |  |  |       | 943,000        |  | 
| | 2015 |  |  |       | 1,092,000      |  | 
| | 2026 |  |  |       | 2,140,000      |  | 
| | 2027 |  |  |       | 3,160,000      |  | 
| | 2028 |  |  |       | 2,746,000      |  | 
| |      |  | 
| |      |  |  | **$** | **11,523,000** |  | 
| |      |  | 

| |                                                                                    
| | -----------------------------------------------------------------------------------
| | The tax value of the non-capital losses is included in the future tax assets above.
| |                                                                                    

|10. | COMMITMENTS                                                                                  
|--- | ---------------------------------------------------------------------------------------------
|    |                                                                                              
|    | The Company is committed to payments for an operating lease for business premises as follows:

| |      |  |  |   |         |  | 
| | ---- |  |  | - | ------- |  | 
| | 2009 |  |  | $ | 113,000 |  | 
| | 2010 |  |  | $ | 113,000 |  | 
| | 2011 |  |  | $ | 113,000 |  | 
| | 2012 |  |  | $ | 38,000  |  | 

F - 16

---

---

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11. | RECONCILIATION TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | These financial statements have been prepared in accordance with generally accepted accounting
principles (GAAP) in Canada. Except as set out below, these consolidated financial statements
also comply, in all material aspects, with accounting principles generally accepted in the United
States and the rules and regulations of the U.S. Securities and Exchange Commission. The following
tables reconcile results as reported under Canadian GAAP with those that would have been reported
under United States GAAP:
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Consolidated statements of operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

| |                                                                                                             |  |  | 2008 |             | 2007 |   | 2006        |  
| | ----------------------------------------------------------------------------------------------------------- |  |  | ---- | ----------- | ---- | - | ----------- | -
|
|
| | Net profit (loss) for year  Canadian GAAP                                                                  |  |  | $    | 10,289,688  |      | $ | (5,541,784  | )
| | Mineral interest expenditures incurred prior to the establishment of
      proven and probable reserves (a) |  |  |      | (11,149,394 | )    |   | (9,060,332  | )
| | Flow-through share renunciation                                                                             |  |  |      |            |      |   | (1,206,562  | )
| | Flow-through share value                                                                                    |  |  |      |            |      |   | 393,250     |  
| |                                                                                                             |  |  |      |             |     
| | Net loss for the year - U.S. GAAP                                                                           |  |  |      | (859,706    | )    |   | (15,415,428 | )
| | Other comprehensive (losses) income:                                                                        |  |  |      |             |      |   |             |  
| | Unrealized (losses) gains on marketable securities (c)                                                      |  |  |      | (164,112    | )    |   | 5,258       |  
| |                                                                                                             |  |  |      |             |     
| | Comprehensive loss  U.S. GAAP                                                                              |  |  | $    | (1,023,818  | )    | $ | (15,410,170 | )
| |                                                                                                             |  |  |      |             |      |  
| |                                                                                                             |  | 
| |                                                                                                             |  |  |      |             |      |   |             |  
| | Net Loss per share  U.S. GAAP, Basic and Diluted                                                           |  |  | $    | (0.02       | )    | $ | (0.43       | )
| |                                                                                                             |  |  |      |             |      |  
| |                                                                                                             |  | 

| |                                                            
| | -----------------------------------------------------------
| | Accumulated other comprehensive (losses) income  U.S. GAAP
| |                                                            

| |                                                                                |  |  | 2008 |          | 2007 |   | 2006   | 
| | ------------------------------------------------------------------------------ |  |  | ---- | -------- | ---- | - | ------ | 
|
|
| | Accumulated other comprehensive (losses)
    income  Canadian GAAP            |  |  | $    | (105,293 | )    | $ | 58,819 | 
| | Unrealized (losses) gains on marketable 
    securities  U.S. GAAP adjustment |  |  |      |         |      |   |       | 
| |                                                                                |  |  |      |          |      |   |        | 
| | Accumulated other comprehensive (losses) 
    income  U.S. GAAP               |  |  | $    | (105,293 | )    | $ | 58,819 | 
| |                                                                                |  |  |      |          |      |   |        | 

| |                                       
| | --------------------------------------
| | Consolidated statements of cash flows:
| |                                       

| |                                                        |  | Canadian GAAP |            | U.S. GAAP |  
| | ------------------------------------------------------ |  | ------------- | ---------- | --------- | -
|
|
|
|
| | Cash used in operating activities                      |  | $             | (2,552,202 | )         | $
| | Cash provided by (used for)
      investing activities |  | $             | (3,212,089 | )         | $
| |                                                        |  |               |            |           |  

| |                             
| | ----------------------------
| | Consolidated balance sheets:
| |                             

| |                                  |  |  | Canadian GAAP |            | U.S. GAAP |  
| | -------------------------------- |  |  | ------------- | ---------- | --------- | -
|
|
|
| |                                  |  |  |               |            |           |  
| | Mineral interests  unproven (a) |  |  | $             | 69,028,974 |           | $
| | Liabilities                      |  |  | $             |           |           | $
| | Shareholders’ equity             |  |  | $             | 99,107,575 |           | $
| |                                  |  |  |               |            |           |  

| |    |                  
| | -- | -----------------
| | a) | Mineral interests
| |    |                  

| | Under United States GAAP, acquisition costs associated with mining interests are classified according
to the land tenure position and the existence of proven and probable reserves as defined under Industry
Guide 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Under United States GAAP, through to March 31, 2004, costs associated with owned mineral claims and
mining leases were classified as definite life intangible assets and amortized over the period of
intended use or until proven and probable reserves are established ranging from four to eleven years.
Effective April 1, 2004, pursuant to EITF 04-2, the Company classified its mineral rights as tangible
assets and stopped amortizing them. This change was accounted for prospectively. These assets are
tested for recoverability whenever events or changes in circumstances indicate that its carrying
value may not be recoverable. Under Canadian GAAP the unit of production basis of amortization is
acceptable prior to the establishment of proven and probable reserves resulting in no amortization
during the exploration and development phase.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Under United States GAAP, costs associated with options to acquire mineral claims and mining leases
are regarded as having a finite life expiring over the term of the option agreement and are not a
component of the acquisition cost. Under Canadian GAAP the option payments are regarded as part of
the acquisition cost and are deferred until the option is exercised when they are reclassified depending
on the ownership position acquired or charged to operations if the option is not exercised.                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Under United States GAAP, exploration expenditures relating to mining interests prior to the completion
of a definitive feasibility study, which establishes proven and probable reserves must be expensed
as incurred. Under Canadian GAAP these costs may be deferred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| | b) | Flow-through shares
| | -- | -------------------
| |    |                    

| | Under United States GAAP when flow-through shares are issued, the proceeds are allocated between the
issue of shares and the sale of tax benefits. The allocation is made based on the difference between
the quoted price of the existing shares and the amount that the investor pays for the shares. The
shareholders equity is reduced and a liability is recognized for this difference which amounted
to $393,250 for the flow-through shares issued in 2006 (2005 - 421,800). The liability is reversed
when the tax benefits are renounced and a deferred tax liability recognized at that time. Income
tax expense is the difference between the amount of the deferred tax liability and the liability
recognized on issuance.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 17

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c)   Comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Under Canadian GAAP short-term investments were recorded at the lower of cost and quoted market value
until December 31, 2006 and in 2007 and 2008 at fair value and were considered as available for sale
since January 1, 2007. Under United States GAAP, unrealized gains and losses on short-term investments
classified as available for sale securities are recorded in comprehensive income until realized for
all periods presented.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | d)   Impact of recent United States accounting pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | In September 2006, the FASB issued FASB Statement No. 157, Fair Market Measurements (FAS 157)
that provides enhanced guidance for using fair value to measure assets and liabilities. FAS 157 is
meant to remedy the diversity and inconsistency within generally accepted accounting principles in
measuring fair value, especially for items that are not actively traded. FAS 157 also responds to
investors requests for expanded information about the extent to which companies measure assets
and liabilities at fair value, the information used to measure fair value, and the effect of fair
value measurements on earnings. FAS 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. The provisions of FAS 157 are effective for fiscal years beginning after November
15, 2007 except that the standard has been deferred to fiscal years beginning after November 15,
2008 for non-financial assets and liabilities. As a result of implementing the required portions
of FAS 157 in 2008, the Company determined that there was no impact on the consolidated financial
statements under US GAAP.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | In February 2007, the FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets
and Liabilities  Including Amendment of FASB Statement No. 115 (FAS 159) which
offers an irrevocable option to carry eligible financial assets and liabilities at fair value, with
the election to be made on an instrument by instrument basis, with changes in fair value recorded
in earnings. FAS 159 is effective for the 2008 fiscal year. The Company has not adopted the fair
value option for any of its eligible financial instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | In March 2008, the FASB issued FASB Statement No. 161,  Disclosures about Derivative Instruments
and Hedging Activities  an amendment of SFAS No. 133 (FAS 161) which will require
entities to provide enhanced disclosures about (a) how and why the entity uses derivative instruments,
(b) how derivative instruments and related hedged items are accounted for under FAS 133 and its related
interpretations, and (c) how derivative instruments and related hedged items affect the entitys
financial position, financial performance and cash flows. FAS 161 is effective for fiscal years and
interim periods beginning after November 15, 2008, with early application encouraged. The Company
is in the process of evaluating the impact of adopting FAS 161 on our note disclosures related to
derivative instruments and hedging activities.                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | In December 2007, the FASB issued FASB Statement No. 141(R), Business Combinations (FAS 141(R))
which replaces FAS 141. FAS 141(R)  replaces FAS 141 prospectively for business combinations
consummated after the effective date of December 15, 2008. Under FAS 141(R) business acquisitions
are accounted for under the acquisition method compared to the purchase method
mandated by FAS 141.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| | The more significant changes that will result from applying the acquisition method include: (i) the
definition of a business is broadened to include development stage entities, and therefore more acquisitions
will be accounted for as business combinations rather than asset acquisitions; (ii) the measurement
date for equity interests issued by the acquirer is the acquisition date instead of a few days before
and after terms are agreed to and announced, which may significantly change the amount recorded for
the acquired business if share prices differ from the agreement and announcement date to the acquisition
date; (iii) all future adjustments to income tax estimates are recorded to income tax expense, whereas
under FAS 141 certain changes in income tax estimates were recorded to goodwill; (iv) acquisition
related costs of the acquirer, including investment banking fees, valuation fees, and other professional
or consulting fees are expensed as incurred, whereas under FAS 141 these costs are capitalized  as
part of the cost of the business combination; (v) the assets acquired and liabilities assumed are
recorded at 100% of fair value even if less than 100% is obtained, whereas under FAS 141 only the
controlling interests portion is recorded at fair value; and (vi) the non-controlling interest
is recorded at its share of fair value of net assets acquired, including its share of goodwill, whereas
under FAS 141 the non-controlling interest is recorded as its share of carrying value of net assets
acquired with no goodwill being allocated.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | In December 2007, the FASB issued FAS Statement No. 160, Non-controlling Interests in Consolidated
Financial Instruments  an amendment of Accounting Research Bulletin No. 51 (FAS 160)
which is effective for fiscal years beginning after December 15, 2008. Under FAS 160, non-controlling
interests are measured at 100% of the fair value of assets acquired and liabilities assumed. Under
current standards, the non-controlling interest is measured at book value. For presentation and disclosure
purposes, non-controlling interests are classified as a separate component of shareholders
equity. In addition, FAS 160 changes the manner in which increases/decreases in ownership percentages
are accounted for. Changes in ownership percentages are recorded as equity transactions and no gain
or loss is recognized as long as parent retains control of the subsidiary. When a parent company
deconsolidates a subsidiary but retains a non-controlling interest, the non-controlling interest
is re-measured at fair value on the date control is lost and a gain or loss is recognized at that
time. Under FAS 160, accumulated losses attributable to the non-controlling interests are no longer
limited to the original carrying amount, and therefore non-controlling interests could have a negative
carrying balance. The provisions of FAS 160 are to be applied prospectively with the exception of
the presentation and disclosure provisions, which are to be applied for all prior periods presented
in the financial statements. Early adoption is not permitted.                

F - 18

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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.

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Registrant


|                      |  |                      |               
|--------------------- |  | -------------------- | --------------
|Dated: March 31, 2009 |  | Signed:              | /s/ Rudi Fronk
|                      |  |                     
|                      |  | Rudi Fronk          
|                      |  | President and C.E.O.

77

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