Pretium achieves commercial production at Brucejack

Northwestern B.C.’s Golden Triangle just got a little more golden. On July 3, Vancouver-based Pretium Resources (TSX: PVG; NYSE: PVG) achieved first production at its 9.1 million oz. Brucejack gold mine, 65 km north of Stewart, having reached 87% of the mine’s nameplate capacity.

Pretium president and CEO Joseph Ovsenek tells The Northern Miner during a phone interview that the underground operation is “coming along nicely.”

“I just got back from site yesterday. The weather was beautiful. The team is doing an excellent job, and we’re really pleased with the way things have gone with the ramp up,” Ovsenek says. “We’ve been pushing hard ever since the discovery of the deposit in 2009, so this is another milestone we’ve checked off.”

During June, Brucejack’s process plant churned through 70,805 tonnes of ore for an average throughput of 2,360 tonnes per day. Ovsenek expects the operation to reach full capacity of 2,700 tonnes per day sometime next year.

“Right now we’re running on lower-grade ore just to work out the bugs at the mill, and we’re focusing on optimizing recoveries with our gravity and floatation circuits,” he says. “Our goal is to ramp up the mill to nameplate capacity as quickly as we can, and we’re getting close to that now. At that point, we’ll start introducing the higher grade ore to the mill and become a half million oz. per year gold producer.”

Pretium Resources poured its first gold bar at its underground Brucejack  gold mine on July 20. The mine is expected to produce over 500,000 oz. gold annually in the first 8 years of its 18-year mine life. Credit: Pretium Resources.

According to the company’s 2014 feasibility study, Pretium expects to produce 504,000 oz. gold per year in the first eight years of the operation, and average 404,000 oz. gold per year over an 18-year mine life. Based on US$1,100 per oz. gold and US$14 per oz. silver, the project has a net present value of US$1.5 billion at a 5% discount, and an anticipated 28.5% internal rate of return.

Capital costs of the project, which stood initially at US$697 million, increased 16% to US$811 million in February.

Ovsenek says that the cost overrun is due largely to fast-tracking the mine’s commissioning, which added US$68.8 million of working capital into the estimate.

“We commissioned the mine a few months ahead of schedule so there were significant costs associated with that,” he says. “We also saw a fair bit of snow at Brucejack, so clearing the snow for the construction added costs.”

A gold doré pour in June 2017 at the Brucejack gold mine. Credit: Pretium Resources.

Pretium hasn’t yet provided guidance for gold production in 2017.

“We’ve had a lot of inquiries about that, but we’re just going to announce what we’ve produced every quarter, and in 2018 we’ll start providing a guidance. We want to focus on startup and making sure the mill works optimally. We don’t want to get bogged down with having to meet our guidance.”

Pretium has left little room to question the quantity of gold at Brucejack’s Valley of the Kings epithermal gold deposit. The company spent much of 2015 and 2016 drilling 367 holes totalling 63,740 metres as part of an infill program to upgrade resources in areas to be mined in the next three years.

The program increased drill density to 7.5- to 10-metre centres and added 400,000 oz. gold to the company’s 2013 estimate, for a total of 9.1 million oz. in 16.4 million measured and indicated tonnes of 17.2 grams gold per tonne.

Shares of Pretium have traded in a 52-week range of $9.17 to $16.48, and closed at $12.39 at the time of writing. The company has 180.8 million shares outstanding for a $2.3-billion market capitalization.