Pretium CEO sees profitable future

Pretium Resources Inc. [PVG-TSX, NYSE] has released an updated reserves and mine plan for its Brucejack gold mine in the Golden Triangle region of northwestern British Columbia.

It outlines an expansion to higher throughput of 2,800 tonnes per day from 2,700 tonnes, in a move that will reduce the projected mine life to 14 years from the previous 18-year estimate.

However, life-of-mine average production is expected to increase to 441,000 ounces of gold annually from the previous 404,000 ounce target. Estimates include average production of 520,000 ounces annually in years one to five and an average of 525,000 ounces in years one to 10.

Life-of-mine all-in-sustaining costs are forecast to be US$502 an ounce, an increase from US$448 per ounce.

The Brucejack Mine is a high-grade underground mine located approximately 65 km north of Stewart. A year-round all-weather road connects the mine to Highway 37. Production commenced in the summer of 2017.

Total proven and probable reserves currently stand at 6.4 million ounces of gold (16.0 million tonnes, grading 12.6 g/t).

This year, Brucejack is expected to produce between 390,000 and 420,000 ounces of gold with an average grade of 10.4 g/t gold. Pretium has indicated that lower grade material is currently being mined (with 5.0 g/t gold cutoff) and that production targets will be met this year through the mining of higher grade material in the second half of 2019.

Pretium has indicated that testing of longitudinal long-hole stoping is currently underway that is expected to reduce the amount of internal waste within stopes and potentially increase the average stope grade to reduce the amount of underground development.

If this proves successful, an updated mineral reserve and life-of-mine plan will be prepared for year-end with longitudinal longhole stoping included in the mining method and incorporating the reserve expansion drilling from this year’s program.

“Since achieving production at Brucejack, we have processed over 1.5 million tonnes of ore and produced over 500,000 ounces of gold, providing us a solid foundation of operating experience and key metrics to update the life of mine plan and outlook for the mine,” said Pretium President and CEO Joseph Ovsenek.

“At $1,300 gold, Brucejack now has an estimated after-tax net present value at a 5% discount rate of $2.59 billion over a 14-year mine life,” Ovsenek said. “This is a significant increase from the 2017 estimated net present value at a 5% discount rate of $2.10 billion. With Brucjack as our foundation and with considerable growth profile, Pretium is well-positioned as a profitable gold producer,” he said.

On Friday, Pretium shares eased 1.6% or 19 cents to $11.63. The shares are trading in a 52-week range of $8.33 and $12.87.