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Photo: Pretivm Resources’ Brucejack Project (Company)
Pretivm Resources (NYSE:PVG, TSX:PVG) shares fell over 30% in early trading on Wednesday with the announcement that Strathcona Minerals Services, a hero in the $6 billion Bre-X Minerals fraud 16 years ago, resigned from their part of overseeing a 10,000-tonne bulk sample test at Pretivm’s Brucejack project.
The bulk sample program is highly anticipated in Canadian mining circles. Pretivm’s sampling will address grade continuity at its 100 percent-owned Brucejack project.
The “Valley of the Kings” zone at Brucejack has produced a jaw-dropping 6.6 million ounce resource, averaging 13.6 grams per tonne gold.
Pretivm has been one of the few Canadian listed gold exploration and development companies to maintain a strong valuation (approx. $500 million to $1 billion) over the past year.
Pretivm’s Quartermain
While Pretivm’s news release did not say why Strathcona quit, we were able to reach CEO Robert Quartermain by telephone for a few minutes at approx. 9:45am PST this morning.
Quartermain said Strathcona resigned because of a disagreement with Snowden Mining Industry Consultants, the firm that had authored Pretivm’s 43-101 resource statement, over milling of the 100-tonne bulk sample test. According to Quartermain, Snowden insisted on milling and testing the entire bulk sample for resource validation, while Strathcona believes the smaller metallurgical assay sample from the 100 tonne rounds passed thru the sample tower would be representative.
Our conversation with Quartermain should calm concerns over the Bre-X comparison. Still, to be safe we called Strathcona founder Graham Farquharson. Mr. Farquharson, a Canadian Mining Hall of Fame inductee, has yet to get back to us.
During our quick conversation with Quartermain, we asked about a rumour circulating in Canadian financial circles that Pretivm had moved its bulk sample area during excavation. Did they not like what they saw?
“That is entirely untrue,” said Quartermain, noting that the bulk sample area is perfectly consistent with the company’s original plan communicated in March, and that the only difference was blasting had produced excess material, so one lateral had to be eliminated to accommodate the bulk sample’s 10,000 tonne size specification.
One Pretivm investor we spoke to Wednesday morning was concerned with the company’s cash position, saying that vulture investors were selling Pretivm’s shares in hopes of picking them up in an upcoming financing, with sweeteners like warrants attached.
Quartermain said the company has more than enough working capital for the time being: $38 million at the end of June, with approximately $25 million raised through financings since. He was unable to comment on specific current cash levels and said that numbers from the quarter ending September 31 will be released shortly.
The challenge for Pretivm, according to Quartermain, has been people’s understanding of the style of mineralization at Brucejack. He said the company is moving forward with the bulk sample, which will validate Snowden’s resource model.
Results from the bulk sample test will be staggered over the coming Quarter, says Quartermain, as data from “cross cuts” gets processed and released to the market.
The Pretivm CEO also reminds me to hold judgment on the bulk sample until all of the data gets released, sometime in the fourth quarter.
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