Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
Shares in Pretium Resources Inc (NYSE:PVG) tanked on Tuesday after the company announced disappointing production and cost forecasts from its Brucejack gold-silver mine in British Columbia.
During lunchtime trading, the Vancouver-based producer was changing hands for $7.95 a share, down 26.3% on the New York Stock Exchange, in massive volumes of more than 10m shares traded. Pretium is now worth $1.9 billion, down 37% from its year high hit early February.
In a statement, Pretium said after six months of ramp-up at the Brucejack mine in the northwest of the Canadian province, production totaled 152,484 ounces of gold, but fourth quarter output was nearly 12,000 ounces below the prior quarter. Gold recoveries declined to 95.8% in the quarter compared to the previous three months.
Pretium said it expects steady state gold production at Brucejack, its only operating mine, to be achieved in mid-to-late 2018. Gold production at Brucejack for the first half of 2018 is expected in the range of 150,000 – 200,000 ounces, for total first year ramp-up gold production of 302,000 – 352,000 ounces.
The all-in sustaining costs for H1 2018 are expected to range from $700 -$900 per ounce gold sold according to the company. That compares to $788 an ounce during the third quarter when the company predicted costs to decline.
With 14.1 g/t of gold in reserves, the Brucejack mine, is one of the highest grade gold projects to enter production in recent years. Final construction costs are expected to be in the region of $1 billion with a mine life of 18 years.
7 Comments
D-Carter
Of course, on day 1 of the disappointment all the day trading guys pile in short and take down the stock 2 to 3x as much as would be in any way reasonable. Like clockwork its sure to spring back most of the way tomorrow, especially with gold price surging. A good time to buy more today.
what will the economics of brucejack be if gold surges past $1400 soon? and if the average price is $1450 for 2018?
Chris Rinta
One of the best management teams in the business. Rick Rule says go with the best of the best and Mr. Quartermain is in that club.
stonecarverca
Hmm, I saw it as a bargain basement fire sale and bought in at the bottom. Someone probably dumped a large block on the market, which triggered sell stops all the way down.
SkyWatch
At various points in EVERY stock’s life cycle, it is subject to the PUMP and DUMP.
Why you ask ?
Stick around this “investing” thing. You’ll figure it out.
D-Carter
good comments below, thanks.
Also lets say we might have just passed a minor bottom in a long PM bull (several years) that’s just getting started (strong technical and fundamental arguments) seem to indicate this. It would then be of major interest for the banking cartel and the elite families connected to them to quickly gain possession of as much real in the ground resource now as possible.
If they can’t do whole sector at once, how about shorting individual mid-size companies one at a time and buying in at new manufactured lows, shaking out “weak hands” (hate that term, not weak really just small investors who have to worry about losing their stake). Why would they NOT do this?
torontom
you can say 100 different reasons, but without chinese workers, you just cannot keep cost down and hit your production target, period. Overall, mining is a big hole on the ground, sooner or later, your portfolio will get hit by such a big decline, no surprise..shareholders should feel lucky that the stock has not declared bankruptcy or been delisted like many others…’stay away from mining’ is my advice..
Kaboom67
Yup this company is currently in a tailspin…just laid off their entire night shift