VANCOUVER — Pretium Resources (TSX: PVG; NYSE: PVG) is proceeding on schedule and US$50 million under budget at its Brucejack gold project in northwestern B.C., moving steadily towards its goal of first production in next year’s third quarter.
Even as surface crews prepare the ground for the 2,700 tonne-per-day mine — which could deliver 504,000 oz. gold annually for the first eight years — drill teams continue to define the resource from underground.
Pretium president Joseph J. Ovsenek tells The Northern Miner during a phone interview that the 64,000 metres of infill drilling aims to upgrade probable reserves into the proven category to cover the first three years of production.
When completed, 200 vertical metres of the resource over a 250-metre strike length would be drilled at 7.5- to 10-metre centres, and so far, Ovsenek says the results have been “all positive.”
Exploration drill pads at Pretium Resources’ Brucejack gold project in northwestern British Columbia. Credit: Pretium Resources.
He says that “we’ve got a fair bit of drilling left to do, but so far it’s confirming what we expected, and we’re quite comfortable with the resource and block model.” He notes that “if it all goes smoothly,” updates on the resource and mine plan are expected in this year’s third and fourth quarter.
“There are some inferred resources around the stopes we’ll mine, so I wouldn’t be surprised if we see a little upside on our estimate, but that’s not our intent. Our intent is to increase our confidence from probable to proven,” he says.
As of June 2014, the Valley of the Kings (VOK) deposit has 2.1 million proven tonnes grading 15.6 grams gold per tonne and 11.5 million probable tonnes of 15.7 grams gold.
Installation of services at Pretium Resources’ Brucejack gold project in northwestern British Columbia. Credit: Pretium Resources.
Combined, the reserves hold 6.9 million oz. gold, assuming a cut-off grade of 5 equivalent grams gold, US$1,100 per oz. gold and US$17 per oz. silver.
Inferred resources stand at 5.9 million tonnes of 25.6 grams gold for another 4.9 million oz. gold.
Most gold at Brucejack is located within the VOK — a corridor of stockwork vein mineralization that trends for 600 by 1,200 metres long and 650 metres deep.
According to a company report, the epithermal deposit likely branched its way up from a porphyry that stewed beneath a chain of once-active volcanoes, similar to the modern-day Sunda volcanic arc in Indonesia.
But mineralization at the VOK isn’t a single, planar vein explorers can place their finger on and trace for its whole extent.
Instead, the zones bulked up when the flow of hot, gold-rich magmatic fluids hit an impenetrable wall of intense silica alteration alongside a weak stratigraphic contact. As a result, building pressures exerted by fluids repeatedly fractured the strata, triggering space for gold precipitation.
This snapshot in Earth’s history created a deposit that could deliver Pretium 7.3 million oz. gold over an 18-year underground mine life.
Examining the terrain at Pretium Resources’ Brucejack gold project in northwestern British Columbia. Credit: Pretium Resources.
The operation would have an after-tax net present value (NPV) of US$1.6 billion at a 5% discount rate, and a 27.4% after-tax internal rate of return (IRR), assuming a US$1,100 per oz. gold price, a US$14 per oz. silver price and a US/CAD rate of US75¢, according to revised metrics reported in February.
Earlier estimates, based on US/CAD US92¢, and US$1,100 per oz. gold and US$17 per oz. silver, returned an after-tax NPV of US$1.5 billion and a 28.5% IRR.
The drop in value of the Canadian dollar also drove expected capital expenses down from US$746.9 million to US$697 million.
Ovsenek adds that the project is fully funded to completion, after another US$130-million equity financing in March, which then prompted Orion Mine Finance and Zijin Mining Group to inject US$16 million to keep their proportionate interest in the company.
Prospecting the ridge at Pretium Resources’ Brucejack gold project in northwestern British Columbia. Credit: Pretium Resources.
“We’ve completed the camp foundations and are laying the foundation for the mill, along with the transmission line work now … [by mid-year] we’ll be ready to put the mill infrastructure up,” he says. “A lot of the activity is kicking off now, and come [mid-year], you’ll really see that there’s a mine going in.”
Meanwhile, Ovsenek says that exploration crews will be on the hunt this year for volcanogenic massive sulphide deposits across its 1,030 sq. km property, charged to find a deposit similar in calibre to Barrick Gold’s (TSX: ABX; NYSE: ABX) exhausted Eskay Creek gold-silver mine, 21 km southeast.
Barrick closed the once highly profitable operation in 2008, after having produced 3.27 million oz. gold and 180 million oz. silver at grades of 49 grams gold and 2,406 grams silver over its mine life.
“The rocks that that host Eskay comes through our property, and they haven’t been looked at closely, because everyone has focused on the western margin — where the VOK is,” he says. “Our focus will be on that area … and we’ll look for another Eskay Creek.”
Nice to see a project running under budget and on schedule – that is as rare as the deposit itself!