VANCOUVER — Pretium Resources’ (TSX: PVG; NYSE: PVG) new 8.7 million oz. Brucejack gold mine in northwestern B.C.’s Golden Triangle district is “well on its way” to becoming a 500,000 oz. per year gold producer, president and CEO Joseph Ovsenek says.
During the third quarter, the company produced 82,203 oz. gold from 261,262 tonnes grading 10.52 grams gold per tonne. News of the results drove company shares up 28% to peak at $15.48, before settling to $14.98 at press time.
“I’m fairly confident that our quarterly results beat the expectations on the street,” Ovsenek tells The Northern Miner during a phone interview. “There’s also a Credit Suisse research note that talked about a large short position on Pretium, and how this is forcing some of those to cover. So I expect that’s a big part of our recent share price gain as well.”
In July, at the onset of the quarter, 16,882 oz. gold was produced largely from low-grade stockpiles and development muck. As the ramp-up progressed into August, the mill processed stope ore at grades of 12.36 grams gold, which led to 65,321 oz. gold production.
The underground operation surpassed the mill’s nameplate 2,700-tonne-per-day capacity, having processed 2,840 tonnes per day during the quarter.
“We’re really pleased with the way things are going and we’ll continue to ramp up at a measured pace through the quarter. We expect to be steady state at the end of the year,” Ovsenek says.
During initial start-up, Pretium experienced problems with gold recoveries, largely at the mill’s gravity circuit and gold room. Ovsenek says the issues have since been resolved, and recoveries for the quarter stood at 96.5%, just shy of the 96.7% recovery stated in the company’s 2014 feasibility study.
“We knew that once we got the bugs worked out of the mill, and started mining stope ore, the grades and recoveries would increase,” he says. “By the end of this year, we expect to be in a position to give guidance that is within the range of 14.5 grams gold — our proven reserve grade — plus or minus 10–20%.”
Brucejack’s Valley of the Kings (VOK) deposit contains 8.1 million oz. gold in 15.6 million proven and probable tonnes of 16.1 grams gold. The West Zone deposit, which is located north of the VOK and is part of the current mine plan, contains 2.9 million proven and probable tonnes of 6.9 grams gold for 600,000 oz. gold.
Pretium expects to produce 504,000 oz. gold annually for the first eight years of the mine’s 18-year mine life, at an all-in sustaining cash cost of US$446 per oz. gold.
A feasibility study estimated Brucejack would have a US$1.53-billion after-tax net present value and a 28.5% after-tax internal rate of return, assuming US$1,100 per oz. gold.
Much of Pretium’s attention is on mining, but exploration across the company’s 1,210 sq. km property is still on the company’s agenda, Ovsenek says.
Results of a reconnaissance program are expected by year-end, he adds.
“We had a late snowmelt in the areas where we wanted to work, so we didn’t get on the ground until July, and never got the chance to drill. So we’ll go back to those areas next year,” he says. “We have a huge piece of land so the best thing we can do is put more time into exploring it. We have some nice prospects, but it’s still very early days.”
Pretium shares have traded within a 52-week range of $9.17 to $16.48 per share, and at $14.98 at press time. The company has 181.5 million shares outstanding for a $2.7-billion market capitalization.