Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The outlook has improved for Pretium Resources, (TSE: PVG). The miner’s shares climbed nearly 9% Thursday, after announcing “robust economics” and plans to ramp-up production, exploration, and resource numbers at its Brucejack gold-silver mine in British Columbia.
The Brucejack mine is increasing throughput to 3,800 tonnes per day, up from 2,700 tonnes per day over the course of the year — a 40.7% increase in production. To supply the increased ore tonnage, mine development has been increasing to allow access to a greater number of stopes.
The Brucejack mine is increasing throughput to 3,800 tonnes per day, up from 2,700 tonnes per day over the course of the year — a 40.7% increase in throughput
Pretium also has 24,000 metres of underground exploration drilling planned for Q1 2019.
Figures at Brucejack have been volatile, and 2018 gold output fell short of Pretium’s estimates. In the last three months of 2018, the Vancouver miner generated 96,342 ounces of gold, resulting in the mine producing nearly 189,000 ounces of the precious metal for the second half of the year, or 95% of Pretium’s expected 200,000 ounces. For the full year, gold production from Brucejack totalled 376,000 ounces or 97% of production guidance of 387,000 ounces.
Also in 2018, Pretium closed on the previously announced $480 million debt to refinance its construction credit facility. The company also repurchased 100% of the 8% gold and silver stream that was sold as part of the construction financing package for the development of Brucejack.
Pretium’s updated life of mine plan for the Valley of the Kings and the West zone calls for annual production of over 525,000 oz. of gold over 10 years and more than 440,000 oz. annually over the remainder of a 14-year life. The company expects to produce an average of over 525,000 ounces of gold annually over first 10 years at all-in sustaining cost of $535 per ounce.
“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 Joseph Ovsenek, president and CEO of Pretium.
The total proven and probable reserves at Brucejack are 16.0 million tonnes grading 12.6 g/t gold and 59.3 g/t silver, containing 6.4 million oz. of gold and 30.5 million oz. of silver. Including reserves, the mine has measured and indicated resources of 18.6 million tonnes grading 14.2 g/t gold and 81.6 g/t silver, containing 8.5 million oz. of gold and 48.7 million oz. of silver. The total inferred resource is 7.8 million tonnes at 12.0 g/t gold and 51.3 g/t silver, containing an additional 3.0 million oz. of gold and 13.0 million oz. of silver.
At market close Thursday, Pretium’s shares were trading on the TSX at C$11.82, up 8.84% on the day. The company has a $2.18 billion market capitalization.
