Seabridge Gold Inc. — financial distress indicators
Financial-health summary
Seabridge Gold Inc.'s reported numbers place it in the 'Weak' financial-health band (distress score 62/100). The main indicators are operating profit does not cover interest, cash runway under 12 months and losses in each of the last 3 years. Independently, the Ohlson accounting model puts its 1-year failure probability at 22% and the market-implied (Merton) default probability is 0.0%. In its favour: strong current ratio (6.71).
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Interest coverage (EBIT / interest) is -40.00×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
At the current free-cash-flow burn, cash covers ~9 months.
Going-concern standard: management must assess ability to continue for 12 months (ASC 205-40). Runway below that horizon forces dilution, asset sales or default.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Debt is 31% of assets while EBITDA is not positive.
With no operating earnings, repayment depends entirely on asset sales or fresh capital.
Operating cash flow negative in 3 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Strong current ratio (6.71).
📰 Recent news scan
- Seabridge Gold Flags KSM JV Progress, 72-Year Mine Potential at Denver Gold ForumYahoo Finance · 2026-09-29
- Seabridge Gold (TSX:SEA) Moves Ahead In KSM Regulatory ReviewYahoo Finance · 2026-09-25
- Substantially Started Designation Review on Seabridge Gold's KSM Project Being Progressed by BC's EAO OfficeYahoo Finance · 2026-09-22
- Seabridge Gold Announces Successful Energization of KSM Project's Treaty Creek TerminalYahoo Finance · 2026-09-08
- Seabridge Gold Reports Gitxsan Government Has Called for Meaningful Consultation and Collaboration with Tsetsaut Skii km La HaxYahoo Finance · 2026-08-20
- Gitxsan Huwilp Government Withdraws Support for KSM Mine in Solidarity with Tsetsaut Skii km Lax Ha Nation: Calls on B.C. Government and Seabridge for True ConsultationYahoo Finance · 2026-08-20
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do Seabridge Gold Inc.'s financial-health indicators show?
As of 2026-10-08, Seabridge Gold Inc.'s public financial data places it in the 'Weak' band with a distress score of 62/100, driven by operating profit does not cover interest, cash runway under 12 months and losses in each of the last 3 years. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is Seabridge Gold Inc.'s financial distress score?
62/100 ('Weak'). Ohlson O-score -1.24 (model 1-year failure probability 22%). Merton distance-to-default 3.7 σ (model default probability 0.0%).
What works in Seabridge Gold Inc.'s favour?
Strong current ratio (6.71).
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
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Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.