What happened

Beginning 2021 on a less-than-glittering note, shares of Seabridge Gold (SA -2.69%) dropped 8% in January, and shareholders evidently didn't find much reason in February to send the stock back up. While the S&P 500 rose more than 2.6% last month, shares of Seabridge Gold dropped 12.2%, according to data provided by S&P Global Market Intelligence.

With no company news or notable analyst rating changes last month, investors can attribute the stock's decline to the overall dip in the market price of gold.

Rows of gold bars.

Image source: Getty Images.

So what

With projects in the United States and Canada, Seabridge Gold is a development-stage company with a noteworthy reserve and resource base of gold, copper, and silver. Among the core assets in the company's portfolio is the KSM project in British Columbia. The KSM project has proven and probable reserves of 38.8 million ounces of gold and 10.2 billion pounds of copper. In terms of measure and indicated gold resources, the KSM project has over 88 million ounces; therefore, it's no wonder management characterizes the project as "one of the largest undeveloped gold projects in the world measured by reserves."

While the company's projects provide it with exposure to other metals, like silver and molybdenum, it's gold that surely gleams most brightly in investors' eyes. So with the average price of gold having dropped more than 3% from January to February, it's unsurprising that investors decided to exit their positions. They are clearly fretful that the price of gold will not rebound or will even continue descending, a situation that could make its projects' economics less attractive, thereby leading potential suitors to eschew them and seek other acquisition opportunities.

Now what

Through the first week of March, Seabridge's stock has continued its slide, falling 3.6%, unsurprising considering the price of gold has also dipped 2.7%. Looking ahead, investors can expect Seabridge to sink even further if the price of gold also continues its decline. Investors committed to Seabridge, therefore, must be willing to weather some turbulence and recognize that it may be some time before shares reverse course and head higher.