Pretium Resources Inc. (TSX/NYSE:PVG) (“Pretivm” or the “Company”)
has reached an agreement (the “Offtake Repurchase Agreement”) to
repurchase 100% of its gold offtake (the “Offtake Agreement”), on
September 30, 2019. With the repurchase of the Offtake Agreement,
all components of the 2015 construction financing package will be
extinguished.
“Brucejack’s robust cash flow has enabled us to
pay down the construction financing package quickly. In 2018,
the first year after the start of commercial production, we
repurchased 100% of the precious metals stream for $237 million and
refinanced the construction credit facility with a $480 million
bank debt facility. Now, we are repurchasing 100% of the offtake
agreement for roughly $80 million. With the construction
financing package cleaned up, we have set our sights on paying off
the bank debt facility as rapidly as possible,” said Joseph
Ovsenek, President and CEO of Pretivm.
Repurchase of Offtake
Agreement
The Offtake Agreement, dated September 15, 2015,
was entered into by Pretivm as part of the construction financing
package for the Brucejack Mine. The Offtake Agreement applied to
sales from the first 7,067,000 ounces of refined gold, which were
to be sold to the offtake purchasers, in each case, at a price
based on a market referenced gold price in U.S. dollars per ounce
during a defined pricing period before and
after the date of each sale. Pursuant
to the terms of the Offtake Agreement, Pretivm had the option to
reduce its offtake obligation on December 31, 2019 to 25% in
exchange for a payment equal to US$13 per ounce of refined gold for
75% of the ounces of refined gold remaining to be delivered under
the agreement. Under the terms of the Offtake Repurchase Agreement,
Pretivm will eliminate 100% of the offtake obligation.
Under the Offtake Repurchase Agreement, the
Offtake Agreement and Pretivm’s obligations thereunder will
terminate on September 30, 2019. In exchange, Pretivm will pay the
offtake purchasers, Triple Flag Mining Finance Bermuda Ltd. and
Osisko Bermuda Limited, an aggregate amount of approximately US$80
million, representing US$13 per ounce for 100% of the refined gold
remaining to be delivered under the Offtake Agreement. The purchase
price will be paid in two tranches, with approximately US$60
million payable on September 30, 2019 and approximately US$20
million payable in the fourth quarter.
Exploration Drilling for Porphyry
Source
Results from 2019 deep underground exploration
drilling at Brucejack continue to confirm potential for a porphyry
deposit at depth.
A deep hole with a length of 1,677 meters was
drilled northeast under the Valley of the Kings deposit, following
up on the underground exploration drilling completed earlier this
year (see news release dated June 5, 2019). Hole VU-2019, drilled
at a -85 degree angle from the 1130-meter level in the Valley of
the Kings underground development, intersected two zones of
anomalous copper and molybdenum mineralization at depth, indicative
of porphyry-style mineralization and similar to that encountered
during the 2018 deep exploration drilling (see news releases dated
June 18, 2018 and June 5, 2019). The first intersection,
between 1,130 meters to 1,330 meters down hole, corresponds to a
zone of propylitic alteration with sporadic intersections of
tourmaline, porphyry-style veinlets, and intermediate dikes.
The second intersection, between 1,400 meters to 1,675 meters down
hole, corresponds to a zone of variable phyllic, propylitic, and
sodic-calcic alteration. Geological observations noted in
VU-2019 indicate an increased proximity to porphyry-style
mineralization compared to the previous deep drilling.
Based on a review of the results of Hole VU-2019
in conjunction with results from previous deep underground
exploration drilling and geophysical data, a fourth drill hole was
recently initiated to target the porphyry potential to the
northwest of drill hole VU-2019.
An update will be provided following the receipt
of assay results and further evaluation.
Extension of Brucejack-style Gold
Mineralization
Hole VU-2019 intersected several zones of
Brucejack-style veining and alteration from the collar to a depth
of 980 meters down hole. Of particular note were two zones of
mineralized carbonate stockwork that contained visible gold at 270
meters and 694 meters downhole, including 6.21 grams of gold per
tonne intersected over 2.5 meters. (See Table 1 below for
assays.)
The hole was drilled in an area uninformed by
previous drilling, suggesting the potential extension of
Brucejack-style mineralization at depth below the Brucejack
Mine.
For a section view of the reported drilling
please see the following
link: http://ml.globenewswire.com/Resource/Download/726b5d00-cf13-46d4-912d-0be25c423030
Warwick Board, Ph.D., P.Geo, Pr.Sci.Nat., Vice
President, Geology and Chief Geologist, Pretium Resources Inc. is
the Qualified Person (“QP”) responsible for the Brucejack Mine
exploration drilling and has reviewed and approved the scientific
and technical information in this news release relating
thereto.
Regional Grassroots
Exploration
The 2019 regional grassroots exploration program
is well underway on the Bowser Claims to the east of the Brucejack
Mine with four drills turning. Two drills are targeting a
volcanogenic massive sulphide (“VMS”) system at the A6 Zone, a
third drill is targeting a VMS system at the Canoe Zone, and a
fourth drill is targeting an intrusion related gold system at the
Koopa Zone. Drilling earlier this summer also focused on the
Tuck and Lilliane zones, both epithermal gold system targets.
To date, approximately 15,300 meters have been drilled, with
drilling expected to continue through the end of September.
At the A6 Zone, approximately 14 kilometers
northeast of the Brucejack Mine, drilling is testing an area in the
Iskut River Formation that hosts the same stratigraphy as the Eskay
Creek Mine, with primitive pillow and massive basalt flows
overlying mudstones overlying a rhyolite dome, which is up to 150
meters thick. The rhyolite is moderately to intensely sericite and
sericite plus chlorite altered. Felsic volcaniclastics along the
periphery of the dome are sericite altered, depleted in copper and
enriched in sodium and barium.
Of assays received to date for the A6 Zone, hole
BR-038 intersected high-grade silver plus copper mineralization
within the overlying mudstones. (See Table 2 below for assays.)
Selected drill highlights from Hole BR-038
include:
- 1,010 grams per tonne silver and 0.28% copper over 1.5 meters,
153 meters downhole
- 2,890 grams per tonne silver and 1.81% copper over 1.5 meters,
187.5 meters downhole
Additional drilling and down hole geophysics are
being undertaken to locate the core of the system and the
associated polymetallic mineralization. Assay results will
continue to be reported as they are received.
Kenneth C. McNaughton, M.A.Sc., P.Eng., Chief
Exploration Officer, Pretium Resources Inc. is the QP responsible
for the regional grassroots exploration program and has reviewed
and approved the scientific and technical information in this news
release relating thereto.
Table 1: Selected Exploration Drill Results, September
2019 (VU-2019)(1,2)
HoleNo. |
Dip/ Azimuth |
From(meters) |
To(meters) |
Interval (meters) |
Gold (g/t) |
Silver (g/t) |
Comments |
VU-2019 |
-85/040 |
62.0 |
63.5 |
1.5 |
1.22 |
70.5 |
|
|
|
208.5 |
210.0 |
1.5 |
1.87 |
6.0 |
|
|
|
273.5 |
276.0 |
2.5 |
6.21 |
6.4 |
Visible Gold |
|
|
408.0 |
409.5 |
1.5 |
1.10 |
3.8 |
|
|
|
436.5 |
438.0 |
1.5 |
5.66 |
81.3 |
|
|
|
478.5 |
480.0 |
1.5 |
8.08 |
6.8 |
|
|
|
498.0 |
499.5 |
1.5 |
1.26 |
2.8 |
|
|
|
621.0 |
622.5 |
1.5 |
3.12 |
1.9 |
|
|
|
693.0 |
694.5 |
1.5 |
0.42 |
0.51 |
Small flecks of visible gold in half core |
(1)True thickness to be
determined.
(2)All samples were submitted for preparation and analysis by ALS
Chemex at its facilities in Terrace, B.C., and North Vancouver,
B.C. All samples were analyzed using multi-digestion with ICP
finish and fire assay with AA finish for gold. Samples with over 10
ppm gold were fire assayed with a gravimetric finish. Samples over
100 ppm silver were reanalyzed using four acid digestion with an
ore grade AA finish. Samples over 1,500 ppm silver were fire
assayed with a gravimetric finish. One in 20 samples was a blank
control sample, one in 20 samples was a standard control sample,
and one in 20 samples was a half-core field duplicate. Half HQ core
was assayed and the remainder stored on-site. ALS Chemex is
independent of Pretivm.
Table 2: Selected Grassroots Exploration Drill Results,
September 2019 (BR-038)(1,2)
HoleNo. |
Dip/ Azimuth |
From(meters) |
To(meters) |
Interval (meters) |
Gold (g/t) |
Silver (g/t) |
Cu % |
BR-038 |
-50/090 |
153.0 |
154.5 |
1.5 |
0.01 |
1010 |
0.283 |
|
|
187.5 |
189.0 |
1.5 |
0.95 |
2890 |
1.81 |
(1)True thickness to be
determined.
(2)All samples were submitted for preparation and analysis by ALS
Chemex at its facilities in Terrace, B.C., and North Vancouver,
B.C. All samples were analyzed using multi-digestion with ICP
finish and fire assay with AA finish for gold. All samples were
submitted for preparation and analysis by ALS Chemex at its
facilities in Terrace, B.C. All samples were analyzed using
multi-digestion with ICP finish and fire assay with AA finish for
gold. Samples over 100 ppm silver were reanalyzed using four acid
digestion with an ore grade AA finish. Samples over 1,500 ppm
silver were fire assayed with a gravimetric finish. Samples with
over 10 ppm gold were fire assayed with a gravimetric finish. One
in 20 samples was blank, one in 20 was a standard sample, and one
in 20 samples had a sample cut from assay rejects assayed as a
field duplicate at ALS Chemex in North Vancouver, B.C. Whole core
(core not split) is being assayed as part of the underground infill
drill program. ALS Chemex is independent of Pretivm.
About Pretivm
Pretivm is a low-cost intermediate gold producer
with the high-grade underground Brucejack Mine in northern British
Columbia.
For further information contact:
Joseph Ovsenek President &
CEO
Troy ShultzManager, Investor Relations &
Corporate Communications
Pretium Resources Inc. Suite 2300, Four Bentall Centre, 1055
Dunsmuir Street PO Box 49334 Vancouver, BC V7X 1L4 (604) 558-1784
invest@pretivm.com (SEDAR filings: Pretium Resources Inc.)
Forward-Looking Information
This news release contains “forward-looking
information” and “forward looking statements” within the meaning of
applicable Canadian and United States securities legislation
(collectively herein referred to as “forward-looking
information”). Wherever possible, words such as “plans”,
“expects”, “guidance”, “projects”, “assumes”, “budget”, “strategy”,
“scheduled”, “estimates”, “forecasts”, “anticipates”, “believes”,
“intends”, “modeled”, “targets” and similar expressions or
statements that certain actions, events or results “may”, “could”,
“would”, “might” or “will” be taken, occur or be achieved, or the
negative forms of any of these terms and similar expressions, have
been used to identify forward-looking information. Any
statements that express or involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions or future events or performance are not statements of
historical fact and may be forward-looking statements.
Forward-looking information may include, but is not limited to,
information with respect to: the termination of the Company’s
Offtake Agreement and its obligations thereunder, including the
amounts payable in connection therewith and the effective date of
termination; production and cost guidance and the Company’s
expectations around achieving such guidance; our future operational
and financial results, including estimated cash flows, and the
timing thereof; the expected grade of gold and silver production;
the Brucejack Mine production rate and the ramp-up to 3,800 tonnes
per day production rate; capital modifications and upgrades,
underground development, and estimated expenditures and timelines
in connection therewith, including with respect to the ramp-up to
3,800 tonnes per day production rate; payment of debt, operating
and other obligations and requirements, including timing and
source of funds; our mining (including mining methods), expansion,
exploration and development activities, including our infill,
expansion and underground exploration drill programs and our
grassroots exploration program, and the results, costs and timing
thereof; our operational grade control program, including plans
with respect to our infill drill program and our local grade
control model; grade reconciliation, updated geological
interpretation and mining initiatives with respect to the Brucejack
Mine; our operational strategy; capital, sustaining and operating
cost estimates and timing thereof; the future price of gold and
silver; our liquidity and the adequacy of our financial resources;
our intentions with respect to our capital resources; capital
allocation plans; our financing activities, including plans for the
use of proceeds thereof; the estimation of Mineral Reserves and
Resources including any updates thereto; realization of Mineral
Reserve and Resource estimates; our estimated life of mine and life
of mine plan for the Brucejack Mine; production and processing
estimates; estimated economic results of the Brucejack Mine,
including net cash flow and net present value; predicted
metallurgical recoveries for gold and silver; geological and
mineralization interpretations; development of our Brucejack Mine
and timing thereof; results, analyses and interpretations of
exploration and drilling programs; timelines and similar statements
relating to the economic viability of the Brucejack Mine, including
mine life, total tonnes mined and processed and mining operations;
updates to our Mineral Reserves and Resources and life of mine plan
for the Brucejack Mine, and the timing thereof; timing,
receipt, and anticipated effects of, and anticipated capital costs
in connection with approvals, consents and permits under applicable
legislation; our executive compensation policy, approach and
practice; our relationship with community stakeholders; litigation
matters; environmental matters; our effective tax rate and the
recognition of our previously unrecognized income tax attributes;
new accounting standards applicable to the Company, including
methods of adoption and the effects of adoption of such standards;
statements regarding United States dollar cash flows, currency
fluctuations and the recurrence of foreign currency translation
adjustments; and management and board of directors succession
plans. Forward-looking information is subject to a variety of
known and unknown risks, uncertainties and other factors that could
cause actual results, actions, events conditions, performance or
achievements to materially differ from those expressed or implied
by the forward-looking information, including, without limitation,
those related to: uncertainty as to the outcome of legal
proceedings; the effect of indebtedness on cash flow and business
operations; the effect of restrictive covenants in our agreements;
assumptions regarding expected capital costs, operating costs and
expenditures, production schedules, economic returns and other
projections; our production and production cost estimates,
including the accuracy thereof; commodity price fluctuations,
including gold price volatility; the accuracy of our Mineral
Resource and Reserve estimates (including with respect to size,
grade and recoverability) and the geological, operational and price
assumptions on which they are based; uncertainties relating to
Inferred Mineral Resources being converted into Measured or
Indicated Mineral Resources; our ability to maintain or increase
our annual production of gold at the Brucejack Mine or discover,
develop or acquire Mineral Reserves for production; dependency on
the Brucejack Mine for our future operating revenue; the
development of our properties; general economic conditions; the
inherent risk in the mining industry; significant governmental
regulations, including environmental regulations; currency
fluctuations, and such other risks, uncertainties and other factors
as are identified in Pretivm’s Annual Information Form dated March
28, 2019, Form 40-F dated March 28, 2019, MD&A and other
disclosure documents as filed in Canada on SEDAR at www.sedar.com
and in the United States through EDGAR at the SEC’s website at
www.sec.gov (collectively, the “Pretivm Disclosure Documents”). Our
forward-looking information is based on the assumptions, beliefs,
expectations and opinions of management on the date the statements
are made, many of which may be difficult to predict and beyond our
control. In connection with the forward-looking information
contained in this news release, we have made certain
assumptions about, among other things: our business and that no
significant event will occur outside of our normal course of
business; planned exploration and development activities and
the costs and timing thereof; future prices of gold and silver and
other metal prices; the accuracy of our Mineral Resources and
Mineral Reserve estimates; the geology and mineralization of the
Brucejack Project; operating conditions; capital and operating cost
estimates; production and process estimates; the results,
costs and timing of future exploration and drilling; timelines and
similar statements relating to the economic viability of the
Brucejack Project; timing and receipt of governmental, regulatory
and third party approvals, consents, licenses and permits;
obtaining required renewals for existing approvals, consents,
licenses and permits; the geopolitical, economic, permitting and
legal climate that we operate in; the adequacy of our financial
resources and our ability to raise any necessary additional capital
on reasonable terms; our ability to satisfy the terms and
conditions of our debt obligations; commodity prices; currency
exchange rates and interest rates; political and regulatory
stability; requirements under applicable laws; market competition;
sustained labour stability and availability of equipment; positive
relations with local groups; favourable equity and debt capital
markets; stability in financial and capital markets, and such other
factors and assumptions as are identified in the other Pretivm
Disclosure Documents. Although we believe that the assumptions
inherent in the forward-looking information are reasonable as of
the date of this news release, they are subject to significant
business, social, economic, political, regulatory, competitive and
other risks and uncertainties, contingencies and other factors that
could cause actual actions, events, conditions, results,
performance or achievements to be materially different from those
projected in the forward-looking information. Forward-looking
information is not a guarantee of future performance. There can be
no assurance that forward-looking information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information. We do not
assume any obligation to update forward-looking information,
whether as a result of new information, future events or otherwise,
other than as required by applicable law. For the reasons set forth
above, readers should not place undue reliance on forward-looking
information. Neither the TSX nor the NYSE has approved or
disapproved of the information contained herein.
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