Pretium meets guidance, lowers production outlook

Pretium Resources (TSX: PVG) expects to produce between 325,000 oz. and 365,000 oz. gold per year in the Valley of the Kings zone, in contrast with the 525,000 oz. long-term output rate suggested in a technical report released in 2019. Last year’s gold production of 354,405 oz. from the Brucejack mine in B.C. at all-in sustaining costs (AISCs) of US$888 per oz. is in line with earlier forecasts.

Pretium indicates that the change in production outlook is due to lower estimated gold grades, according to the press release. It expects to provide an updated life of mine plan by the end of March, which will include a resource and reserve update for Brucejack.

The company’s board is searching for a new president and CEO: Joseph Ovsenek will remain at the helm in the meantime.

“Brucejack continues to be consistently profitable and a strong cash generator,” Ovsenek says in the release.

Last year, the mine generated US$184.2 million in free cash flow, allowing the company to reduce its total debt by US$180.4 million.

The processing plant at Pretium Resources’ Brucejack gold mine in northwest British Columbia. Credit: Pretium Resources.

This year, with 325,000 oz. to 365,000 oz. of gold forecast, AISCs are expected at US$910 to US$1,060 per oz., which includes costs related to ongoing lateral development and one-time sustaining capital items.

The 2019 technical report, completed by Tetra Tech, suggests an increased production rate of 3,800 t/d for Brucejack — Pretium expects to mine at this rate in 2020, after achieving 3,800 t/d mill throughputs in the fourth quarter. Gold grades for the year are expected in the range of 7.6 grams gold per tonne to 8.5 grams gold, below the Valley of the Kings reserve grade of 13.8 grams gold. Last year’s head grades were at 8.7 grams gold.

The NI 43-101 compliant report suggests average annual gold production of 525,000 oz. over the first 10 years of mine life at AISCs of US$535 per ounce. The associated reserve statement for Brucejack is at 16 million tonnes at 12.6 grams gold for a total of 6.4 million oz., primarily comprised of the 5.8-million oz. Valley of the Kings zone.

At press time in Toronto, Pretium was trading at $10.69 per share, down 16% over the prior day’s close. The company has 185.3 million shares outstanding for a $1.98-billion market capitalization.