Brucejack Mine delivers profitability;
significant cash build
Pretium Resources Inc. (TSX/NYSE:PVG) (“Pretivm” or the “Company”)
is pleased to report financial and operating results for the third
quarter and first nine months of 2018.
All amounts are in US dollars unless otherwise
noted. This release should be read in conjunction with the
Company’s Financial Statements and Management’s Discussion and
Analysis (“MD&A”) available on the Company’s website and on
SEDAR and EDGAR.
“Brucejack delivered another profitable quarter
in a declining gold price environment, which speaks to the robust
economics of the mine,” said Joseph Ovsenek, President & CEO of
Pretivm. “We have generated significant earnings from mine
operations every quarter since achieving commercial production, and
have built a cash balance of over $190 million. We remain on track
to refinance our construction debt facility and repurchase the
precious metals stream by year-end without issuing equity.”
Third Quarter 2018 Summary
- Production of 92,641 ounces of gold
at a mill feed grade of 12.4 grams per tonne gold.
- Revenue of $110.1 million on 94,458
ounces of gold sold.
- Total cost of sales $72.5 million
or $767 per ounce of gold sold1.
- All-in Sustaining Cost (“AISC”)1 of
$709 per ounce of gold sold.
- Net earnings of $10.7 million
($0.06 per share).
- Adjusted earnings1 of $26.3 million
($0.14 per share).
- Generated $52.4 million cash from
operating activities.
- Cash and cash equivalents balance
of $190.3 million as at September 30, 2018.
- Notice was delivered to repurchase
100% of the gold and silver stream that was sold as part of the
construction financing package.
- Subsequent to the end of the
quarter, a commitment letter for a fully underwritten $480.0
million debt facility to refinance the existing construction credit
facility was executed.1 Refer to the “Non-IFRS Financial
Performance Measures” section at the end of this news release.
Third Quarter Production
Overview
- Production totaled 92,641 ounces of gold and 95,741 ounces of
silver compared to 82,203 ounces of gold and 83,233 ounces of
silver in the third quarter 2017. Year to date 2018 production
totaled 279,670 ounces of gold and 308,676 ounces of silver.
- Mill feed grade averaged 12.4 grams
per tonne gold compared to 10.5 grams per tonne gold in the third
quarter 2017. Year to date 2018 mill feed grade averaged 12.0 grams
per tonne gold.
- Gold recoveries averaged 97.4%
compared to 96.5% in the third quarter 2017. Year to date 2018
recoveries averaged 97.4%.
- Process plant throughput averaged
2,610 tonnes per day for a total of 240,122 tonnes of ore compared
to 2,840 tonnes per day for a total of 261,262 tonnes of ore in the
third quarter 2017. Year to date 2018 process plant throughput
averaged 2,705 tonnes per day for a total of 738,555 tonnes of
ore.
- Mine development remained at a rate
of approximately 700 meters per month during the quarter.
- The sequence of the mine plan and
the availability of stopes for optimal blending are the main
drivers of our gold production. We anticipate narrowing the range
of grade variability as development advances.
Operating Results
|
Three months ended September 30, |
Nine months ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017(1) |
|
|
|
|
|
|
|
|
|
Ore mined |
t |
255,227 |
|
271,534 |
|
772,072 |
|
271,534 |
Mining rate |
tpd |
2,774 |
|
2,951 |
|
2,828 |
|
2,951 |
|
|
|
|
|
|
|
|
|
Ore milled |
t |
240,122 |
|
261,262 |
|
738,555 |
|
261,262 |
Head grade |
g/t
Au |
12.4 |
|
10.5 |
|
12.0 |
|
10.5 |
Recovery |
% |
97.4 |
|
96.5 |
|
97.4 |
|
96.5 |
Mill throughput |
tpd |
2,610 |
|
2,840 |
|
2,705 |
|
2,840 |
|
|
|
|
|
|
|
|
|
Gold ounces
produced |
oz |
92,641 |
|
82,203 |
|
279,670 |
|
82,203 |
Silver ounces
produced |
oz |
95,741 |
|
83,233 |
|
308,676 |
|
83,233 |
|
|
|
|
|
|
|
|
|
Gold ounces sold |
oz |
94,458 |
|
55,413 |
|
278,417 |
|
55,413 |
Silver
ounces sold |
oz |
87,110 |
|
19,846 |
|
289,710 |
|
19,846 |
The following abbreviations were used above: t
(tonnes), tpd (tonnes per day), g/t (grams per tonne), Au (gold)
and oz (ounces).(1) Data for the nine months ended September
30, 2017 covers the period commencing from July 1, 2017, the date
the Brucejack Mine achieved commercial production, to September 30,
2017.
Third Quarter Financial
Overview
- Revenue of $110.1 million compared to revenue of $70.9 million
in the third quarter 2017. Revenue includes a loss on trade
receivables at fair value related to provisional pricing
adjustments of $1.6 million. The comparable period is the third
quarter 2017 which was the Company’s first quarter of production
after commercial production was achieved on July 1, 2017. Year to
date 2018, the Company generated revenue of $346.0 million.
- The Company sold 94,458 ounces of
gold at an average realized price of $1,169 per ounce generating
$110.4 million in revenue. Treatment costs and refining charges
associated with concentrate sales, in the amount of $4.3 million,
were included within concentrate revenue. The average London
Bullion Market Association AM and PM market price over the quarter
ended September 30, 2018 was $1,213 per ounce. In the comparable
period, the sale of 55,413 ounces of gold contributed $71.0 million
at an average realized price of $1,281 per ounce. Year to date
2018, the Company sold 278,417 ounces of gold generating $345.1
million in revenue.
- Total cost of sales was $72.5
million or $767 per ounce of gold sold. In the third quarter 2017,
total cost of sales was $44.9 million or $810 per ounce of gold
sold. Total cost of sales includes production costs, depreciation
and depletion, royalties and selling costs. Year to date 2018 total
cost of sales was $231.4 million or $831 per ounce.
- Total cash cost1 was $568 per ounce
of gold sold and AISC was $709 per ounce of gold sold. In the third
quarter 2017, total cash cost was $656 per ounce of gold sold and
AISC was $788 per ounce of gold sold. Year to date total cash cost
was $627 per ounce of gold sold and AISC was $758 per ounce of gold
sold.
- Sustaining capital expenditures
amounted to $5.2 million compared to $3.5 million in the third
quarter 2017. Year to date 2018 sustaining capital incurred was
$12.8 million.
- Earnings from mine operations1 were $37.6 million compared to
$26.0 million in the third quarter 2017. Year to date 2018 earnings
from mine operations were $114.5 million.
- Net earnings were $10.7 million compared to a net loss of $7.0
million in the third quarter 2017. Year to date 2018 net earnings
were $33.8 million.
- Adjusted earnings were $26.3 million compared to $14.0 million
in the third quarter 2017. Year to date 2018 adjusted earnings were
$79.2 million.
- Cash generated from operating activities was $52.4 million
compared to $47.5 million in the third quarter 2017. Year to date
2018 cash generated from operations was $154.4 million.
- Cash and cash equivalents were $190.3 million as at September
30, 2018 increasing $134.0 million from $56.3 million at December
31, 2017.
- On September 24, 2018, the Company provided notice of its
intention to repurchase 100% of the callable 8% precious metals
stream for $237.0 million. The stream was sold by Pretivm as part
of the construction financing package for the Brucejack Mine.
- Subsequent to September 30, 2018, the Company signed a
commitment letter for a fully underwritten $480.0 million debt
facility to be drawn to refinance the existing construction credit
facility of approximately $423.8 million due on December 31, 2018,
for the construction of the Brucejack Mine. The debt facility will
be available by way of a $250.0 million secured amortizing
non-revolving credit facility and a $230.0 million senior secured
revolving credit facility. Funds from the revolving facility will
also be available for general corporate purposes including, if
necessary, to support the repurchase of 100% of the precious metals
stream. (See news release dated October 4, 2018.)
- Upon completion of the debt settlement and refinancing
transactions in the fourth quarter of 2018, the Company expects
that future operating and debt settlement requirements will be
satisfied from operating cash flow.
Financial Results
In
thousands of USD, |
Three months ended September 30, |
Nine months ended September 30, |
except
for per ounce data |
|
2018 |
|
2017 |
|
|
2018 |
|
2017(1) |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
110,060 |
|
70,875 |
|
|
345,960 |
|
70,875 |
|
Earnings from mine
operations (2) |
$ |
37,608 |
|
25,963 |
|
|
114,512 |
|
25,963 |
|
Net earnings (loss) for
the period |
$ |
10,734 |
|
(6,975 |
) |
|
33,773 |
|
(13,733 |
) |
Per share
- basic |
$/share |
0.06 |
|
(0.04 |
) |
|
0.19 |
|
(0.08 |
) |
Per share
- diluted |
$/share |
0.06 |
|
(0.04 |
) |
|
0.19 |
|
(0.08 |
) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
(2) |
$ |
26,327 |
|
13,951 |
|
|
79,172 |
|
4,684 |
|
Per share
- basic (2) |
$/share |
0.14 |
|
0.08 |
|
|
0.43 |
|
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
Total cash and
cash equivalents |
$ |
190,318 |
|
53,774 |
|
|
190,318 |
|
53,774 |
|
Cash generated from
operating activities |
|
52,364 |
|
47,470 |
|
|
154,358 |
|
39,913 |
|
Total assets |
$ |
1,771,543 |
|
1,673,601 |
|
|
1,771,543 |
|
1,673,601 |
|
Long-term debt (3) |
$ |
59,610 |
|
639,975 |
|
|
59,610 |
|
639,975 |
|
|
|
|
|
|
|
|
|
|
Total cash costs
(2) |
$/oz |
568 |
|
656 |
|
|
627 |
|
656 |
|
All-in sustaining costs
(2) |
$/oz |
709 |
|
788 |
|
|
758 |
|
- |
|
|
|
|
|
|
|
|
|
|
Average realized price
(2) |
$/oz |
1,169 |
|
1,281 |
|
|
1,239 |
|
1,281 |
|
Average
realized cash margin (2) |
$/oz |
601 |
|
625 |
|
|
612 |
|
625 |
|
|
|
(1) Data for the nine months ended
September 30, 2017 covers the period commencing from July 1, 2017,
the date the Brucejack Mine achieved commercial production, to
September 30, 2017.(2) Refer to the "Non-IFRS Financial
Performance Measures" section for a reconciliation of these
amounts.(3) Long-term debt does not include the current
portion of the Company’s senior secured Credit Facility and the
Stream Obligation in the amount of $641,468 as at September 30,
2018.
Second Half 2018 Outlook
H2 2018 production guidance
Gold production at the Brucejack Mine for the
second half of 2018 is expected in the range of 200,000 to 220,000
ounces, for total 2018 gold production of 387,000 to 407,000
ounces. With our production of 92,641 ounces of gold in the third
quarter, we are on track to meet the lower end of our H2 2018
production guidance.
H2 2018 financial guidance
All-in sustaining costs for the second half of
2018 are expected to range from $710 to $770 per ounce gold sold.
With our AISC of $709 per ounce gold sold in the
third quarter, we are on track to meet our H2 2018 AISC
guidance. As production has reached steady state at the Brucejack
Mine, an increased focus has been placed on operational efficiency
to reduce costs.
Stream Repurchase and Debt Refinancing
We remain on track to repurchase 100% of the
precious metals stream and refinance the existing construction
credit facility during the fourth quarter without issuing
equity.
Organic Growth
Opportunities
Application to increase production rate
On December 20, 2017, the Company submitted an
application to the BC Ministry of Energy, Mines and Petroleum
Resources and the BC Ministry of Environment and Climate Change
Strategy to increase the Brucejack Mine production rate to 3,800
tonnes per day. The increase would result in an annual average
production rate of 1.387 million tonnes, up from 0.99 million
tonnes (a daily average of 3,800 tonnes from 2,700 tonnes). Based
on preliminary engineering, the capital cost to increase the mill
capacity is estimated to be less than $25 million which is expected
to be incurred in 2019. The approval process is expected to be
completed by year end.
Lyle Morgenthaler, B.A.Sc., P.Eng., Chief Mine
Engineer, Pretium Resources Inc. is the Qualified Person (“QP”)
responsible for Brucejack Mine development. Warwick Board, Ph.D.,
P.Geo, Pr.Sci.Nat., Vice President, Geology and Chief Geologist,
Pretium Resources Inc. is the QP responsible for the Brucejack Mine
grade control program and the Brucejack Mine exploration
drilling.
Regional grass-roots exploration
The 2018 regional grass-roots exploration
program, which includes geophysical studies, continued regional
prospecting and mapping and diamond drilling on several high
priority gold targets with respect to the Bowser Claims, is
substantially complete. The 2018 program follows up on the
comprehensive regional exploration that has previously been
completed on the 1,250-square-kilometer, wholly-owned property. To
date, the program has resulted in the identification of several
distinct areas that have the potential to host mineralized zones
similar to the Valley of the Kings and Eskay Creek deposits. An
8,240 meter regional exploration drill program which comprised 24
drill holes on five high-priority targets was completed
through this year’s field season. The drilling was completed
on October 10, 2018. Assays and results from the program are
anticipated later this year.
A private placement of 227,273 flow-through
common shares of the Company at a price of C$13.20 per flow-through
share was completed on July 25, 2018 for total gross proceeds
of approximately C$3.0 million. The proceeds of the private
placement of flow-through common shares were used to fund a portion
of the 2018 grass-roots exploration program.
Kenneth C. McNaughton, M.A.Sc., P.Eng., Chief
Exploration Officer, Pretium Resources Inc. is the QP responsible
for the regional grass-roots exploration program.
Our unaudited condensed consolidated interim
Financial Statements and Management’s Discussion and Analysis for
the three and nine months ended September 30, 2018 are filed on
SEDAR and EDGAR and are available on our website at
www.pretivm.com.
Webcast and Conference Call
The webcast and conference call to discuss the
third quarter 2018 operational and financial results will take
place Friday, November 9th, 2018 at 8:00 am PT (11:00 am ET).
Webcast and conference call details:
|
Friday, November 9, 2018 at 8:00 am PT (11:00 am
ET) |
|
Webcast |
www.pretivm.com |
|
Toll Free (North
America) |
1-800-319-4610 |
|
International and
Vancouver |
604-638-5340 |
A recorded playback will be available until
November 24, 2018:
|
Toll Free (North
America) |
1-800-319-6413 |
|
Access Code |
2560 |
About Pretivm
Pretivm is emerging as the premier low-cost
intermediate gold producer with production at the high-grade
underground Brucejack Mine in northern British Columbia now at
steady state.
For further information contact:
Joseph
Ovsenek President & CEO |
Troy
ShultzManager, Investor Relations &Corporate
Communications |
Pretium Resources Inc.Suite 2300, Four Bentall Centre, 1055
Dunsmuir StreetPO Box 49334 Vancouver, BC V7X 1L4(604)
558-1784invest@pretivm.com (SEDAR filings: Pretium Resources
Inc.)
Non-IFRS Financial Performance Measures
The Company has included certain non-IFRS
measures in this new release. Refer to the Company’s MD&A for
an explanation and discussion of non-IFRS measures. The Company
believes that these measures, in addition to measures prepared in
accordance with IFRS, provide investors an improved ability to
evaluate the underlying performance of the Company and to compare
it to information reported by other companies. The non-IFRS
measures are intended to provide additional information and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with International Financial
Reporting IFRS. These measures do not have any standardized meaning
prescribed under IFRS, and therefore may not be comparable to
similar measures presented by other issuers.
Total cost of sales and cash costs
Total cash costs is a common financial
performance measure in the gold mining industry but has no standard
meaning. The Company reports total cash costs on a gold ounce sold
basis. The Company believes that, in addition to measures prepared
in accordance with IFRS, such as revenue, certain investors can use
this information to evaluate the Company’s performance and ability
to generate operating earnings and cash flow from its mining
operations. Management uses this metric as an important tool to
monitor operating cost performance.
Total cash costs include cost of sales such as
mining, processing, maintenance and site administration, royalties
and selling costs and changes in inventories less non-cash
depreciation and depletion, site share-based compensation and
silver revenue divided by gold ounces sold to arrive at total cash
costs per ounce of gold sold. Other companies may calculate this
measure differently.
The following table reconciles these non-IFRS
measures to the most directly comparable IFRS measure disclosed in
the financial statements.
|
For the three months ended |
For the nine months ended |
In
thousands of USD,except for per ounce data |
September 30,2018 |
|
September 30,2017 |
|
September 30,2018 |
|
September 30,2017(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold ounces sold |
|
94,458 |
|
|
55,413 |
|
|
278,417 |
|
|
55,413 |
|
|
|
|
|
|
|
|
|
|
Cost of sales
per ounce sold reconciliation |
|
|
|
|
|
|
|
|
|
Cost of sales |
$ |
72,452 |
|
$ |
44,912 |
|
$ |
231,448 |
|
$ |
44,912 |
|
Cost of sales per ounce of
gold sold |
$ |
767 |
|
$ |
810 |
|
$ |
831 |
|
$ |
810 |
|
|
|
|
|
|
|
|
|
|
Total cash
costs reconciliation |
|
|
|
|
|
|
|
|
Cost of sales |
$ |
72,452 |
|
$ |
44,912 |
|
$ |
231,448 |
|
$ |
44,912 |
|
Less: Depreciation and
depletion |
|
(16,949 |
) |
|
(8,106 |
) |
|
(50,816 |
) |
|
(8,106 |
) |
Less: Site share-based
compensation |
|
(569 |
) |
|
(124 |
) |
|
(1,809 |
) |
|
(124 |
) |
Less: Silver
revenue |
|
(1,251 |
) |
|
(324 |
) |
|
(4,212 |
) |
|
(324 |
) |
Total cash
costs |
$ |
53,683 |
|
$ |
36,358 |
|
$ |
174,611 |
|
$ |
36,358 |
|
Total cash costs per
ounce of gold sold |
$ |
568 |
|
$ |
656 |
|
$ |
627 |
|
$ |
656 |
|
(1) Data for the nine months ended
September 30, 2017 covers the period commencing from July 1, 2017,
the date the Brucejack Mine achieved commercial production, to
September 30, 2017.
All-in sustaining costs
The Company believes that AISC more fully
defines the total costs associated with producing gold. The Company
calculates AISC as the sum of total cash costs (as described
above), sustaining capital expenditures (excluding expansion
capital related to the 3,800 tonne per day expansion project),
accretion on decommissioning and restoration provision, treatment
and refinery charges netted against concentrate revenue, site
share-based compensation, and corporate administrative costs, all
divided by the gold ounces sold to arrive at a per ounce
amount.
Other companies may calculate this measure
differently as a result of differences in underlying principles and
policies applied. Differences may also arise due to a different
definition of sustaining versus non-sustaining capital.
The following table reconciles these non-IFRS
measures to the most directly comparable IFRS measures disclosed in
the financial statements.
|
For the three months ended |
For the nine months ended |
In
thousands of USD, except for per ounce data |
September 30,2018 |
|
September 30,2017 |
|
September 30,2018 |
|
September 30,2017(1) |
Gold ounces sold |
|
94,458 |
|
55,413 |
|
278,417 |
|
- |
All-in
sustaining costs reconciliation |
|
|
|
|
|
|
|
|
Total cash costs |
$ |
53,683 |
$ |
36,358 |
$ |
174,611 |
$ |
- |
Sustaining capital
expenditures(2) |
|
5,189 |
|
3,526 |
|
12,813 |
|
- |
Accretion on
decommissioning and restoration provision |
|
136 |
|
146 |
|
432 |
|
- |
Treatment and refinery charges |
|
4,267 |
|
1,044 |
|
12,387 |
|
- |
Site share-based compensation |
|
569 |
|
124 |
|
1,809 |
|
- |
Corporate
administrative costs(3) |
|
3,110 |
|
2,484 |
|
8,934 |
|
- |
Total all-in sustaining
costs |
$ |
66,954 |
$ |
43,682 |
$ |
210,986 |
$ |
- |
All-in sustaining
costs per ounce of gold sold |
$ |
709 |
$ |
788 |
$ |
758 |
$ |
- |
(1) AISC for the nine-months ended
September 30, 2017 was not disclosed as commercial production
results only commenced on July 1,
2017. (2) Sustaining capital expenditures includes
deferred development costs. (3) Includes the sum of
corporate administrative costs per the statement of earnings (loss)
and comprehensive earnings (loss), excluding depreciation within
those figures.
Total cash costs and AISC reconciliation
Total cash costs and AISC are calculated based
on the definitions published by the World Gold Council (“WGC”) (a
market development organization for the gold industry comprised of
and funded by 18 gold mining companies from around the world). The
WGC is not a regulatory organization.
Average realized price and average realized cash
margin
Average realized price and average realized cash
margin per ounce sold are used by management and investors to
better understand the gold price and cash margin realized
throughout a period.
Average realized price is calculated as revenue
from contracts with customers less silver revenue divided by gold
ounces sold. Average realized cash margin represents average
realized price per gold ounce sold less total cash costs per ounce
sold.
The following table reconciles these non-IFRS
measures to the most directly comparable IFRS measures disclosed in
the financial statements.
For the three months ended |
For the nine months ended |
In thousands of USD, except for per ounce data |
September 30,2018 |
|
September 30,2017 |
|
September 30,2018 |
|
September 30,2017(1) |
Revenue from
contracts with customers(2) |
$ |
111,658 |
|
$ |
71,323 |
|
$ |
349,304 |
|
$ |
71,323 |
|
Less: Silver revenue |
|
(1,251 |
) |
|
(324 |
) |
|
(4,212 |
) |
|
(324 |
) |
Gold revenue(3) |
$ |
110,407 |
|
$ |
70,999 |
|
$ |
345,092 |
|
$ |
70,999 |
|
Gold ounces sold |
|
94,458 |
|
|
55,413 |
|
|
278,417 |
|
|
55,413 |
|
Average realized price |
$ |
1,169 |
|
$ |
1,281 |
|
$ |
1,239 |
|
$ |
1,281 |
|
Less: Total cash costs per ounce of sold |
|
(568 |
) |
|
(656 |
) |
|
(627 |
) |
|
(656 |
) |
Average realized cash margin per ounce of gold
sold |
$ |
601 |
|
$ |
625 |
|
$ |
612 |
|
$ |
625 |
|
(1) Data for the nine months ended September 30,
2017 covers the period commencing from July 1, 2017, the date the
Brucejack Mine achieved commercial production, to September 30,
2017.(2) Revenue from contracts with customers is recognized net of
treatment costs and refinery charges on revenue generated from
concentrate sales in the amount of $4,327 (2017 – $1,044) and
$12,600 (2017 – $1,044) for the three and nine months ended
September 30, 2018, respectively. The portion of these treatment
costs and refinery charges related to gold concentrate sales were
$4,267 (2017 – $1,026) and $12,387 (2017 - $1,026) for the three
and nine months ended September 30, 2018, respectively.(3) Gold
revenue excludes the loss on trade receivables at fair value
related to provisional pricing adjustments in the amount of $1,598
(2017 - $448) and $3,344 (2017 - $448) for the three and nine
months ended September 30, 2018, respectively.
Adjusted earnings and adjusted basic earnings
per share
Adjusted earnings and adjusted basic earnings
per share are used by management and investors to measure the
underlying operating performance of the Company. Presenting these
measures helps management and investors evaluate earning trends
more readily in comparison with results from prior periods.
Adjusted earnings is defined as net earnings
adjusted to exclude specific items that are significant, but not
reflective of the underlying operations of the Company, including:
(gain) loss on financial instruments at fair value, amortization of
discount on senior secured term credit facility, accretion on
convertible notes, impairment provisions and reversals and deferred
income tax expense (recovery). Adjusted basic earnings per share is
calculated using the weighted average number of shares outstanding
under the basic method of earnings per share as determined under
IFRS.
The following table reconciles these non-IFRS
measures to the most directly comparable IFRS measures disclosed in
the financial statements.
|
For the three months ended |
For the nine months ended |
In
thousands of USD, except for per ounce data |
September 30,2018 |
|
September 30,2017 |
|
September 30,2018 |
September 30,2017 |
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average
shares outstanding |
|
183,069,568 |
|
|
181,317,140 |
|
|
182,634,260 |
|
180,943,434 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings and adjusted basic earnings
per share reconciliation |
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) for
the period |
$ |
10,734 |
|
$ |
(6,975 |
) |
$ |
33,773 |
$ |
(13,733 |
) |
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
Loss on
financial instruments at fair value |
|
7,321 |
|
|
14,210 |
|
|
6,377 |
|
17,970 |
|
Amortization of discount on senior secured term credit
facility |
|
7,143 |
|
|
5,657 |
|
|
20,051 |
|
5,657 |
|
Accretion
on convertible notes |
|
1,404 |
|
|
1,404 |
|
|
4,165 |
|
1,404 |
|
Deferred
income tax expense (recovery) |
|
(275 |
) |
|
(345 |
) |
|
14,806 |
|
(6,614 |
) |
Adjusted earnings |
$ |
26,327 |
|
$ |
13,951 |
|
$ |
79,172 |
$ |
4,684 |
|
Adjusted basic earnings per share |
$ |
0.14 |
|
$ |
0.08 |
|
$ |
0.43 |
$ |
0.03 |
|
Earnings from mine operations
Earnings from mine operations provides useful
information to management and investors as an indication of the
Company’s principal business activities before consideration of how
those activities are financed, sustaining capital expenditures,
corporate administrative costs, foreign exchange gains (losses),
gains (losses) on financial instruments at fair value, interest and
finance income and expense and taxation.
The following table reconciles this non-IFRS
measure to the most directly comparable IFRS measures disclosed in
the financial statements.
|
For the three months ended |
For the nine months ended |
In thousands of USD |
September 30,2018 |
September 30,2017 |
September 30,2018 |
September 30,2017(1) |
Revenue |
$ |
110,160 |
|
70,875 |
|
345,960 |
|
70,875 |
Cost of sales |
|
72,452 |
$ |
44,912 |
$ |
231,448 |
$ |
44,912 |
Earnings from mine operations |
$ |
37,608 |
$ |
25,963 |
$ |
114,512 |
$ |
25,963 |
(1) Data for the nine months ended September 30,
2017 covers the period commencing from July 1, 2017, the date the
Brucejack Mine achieved commercial production, to September 30,
2017.
Forward-Looking Statements
This news release contains “forward-looking
information”, “forward looking statements”, “future oriented
financial information” and/or “financial outlooks” within the
meaning of applicable Canadian and United States securities
legislation (collectively herein referred to as “forward-looking
statements” or “forward-looking information”). The purpose of
disclosing future oriented financial information and financial
outlooks is to provide a general overview of management’s
expectations regarding the anticipated results of operations and
costs thereof and readers are cautioned that future oriented
financial information and financial outlook may not be appropriate
for other purposes. 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 statements and
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:
production and cost guidance; the refinancing of the Company’s
construction debt facility, including the terms of such
refinancing, the intended use of proceeds and the timing thereof;
the repurchase of the Company’s precious metals stream, including
the timing thereof and the source of funds; anticipated
results of our operations; source of funds for future operating and
debt settlement requirements; our planned mining, exploration and
development activities; our operational grade control program,
including plans with respect to our infill drill program and our
local grade control model; capital and operating cost estimates;
production and processing estimates; the future price of gold and
silver; our liquidity and the adequacy of our financial resources;
our intentions with respect to our capital resources; our financing
activities, including plans for the use of proceeds thereof; the
estimation of mineral reserves and resources including the 2016
Valley of the Kings Mineral Resource estimate and the Brucejack
Mineral Reserve estimate; realization of mineral reserve and
resource estimates; timing of further development of our Brucejack
Mine; costs and timing of future exploration and development;
results of future exploration and drilling; timelines and similar
statements relating to the economic viability of the Brucejack
Mine, including mine life, total tonnes mined and processed and
mining operations; timing, receipt, and anticipated effects of, and
anticipated capital costs in connection with approvals, consents
and permits under applicable legislation; our executive
compensation 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 the effects of adoption of
such standards; and statements regarding USD cash flows, currency
fluctuations and the recurrence of foreign currency translation
adjustments. Statements concerning mineral resource estimates
may also be deemed to constitute forward-looking statements to the
extent that they involve estimates of the mineralization that will
be encountered if the property is developed. Forward-looking
statements are subject to a variety of known and unknown risks,
uncertainties and other factors that could cause actual events or
results to materially differ from those expressed or implied by the
forward-looking statements, including, without limitation, those
related to: 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; commodity price fluctuations,
including gold price volatility; general economic conditions; the
inherent risk in the mining industry; significant governmental
regulations; currency fluctuations, and such other risks as are
identified in Pretivm’s Annual Information Form dated March 28,
2018, Form 40-F dated March 28, 2018, 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 statements are 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 statements
contained in this news release, we have made certain assumptions
about our business, including about our exploration, development
and production activities, and the results, costs and timing
thereof; timing and receipt of approvals, consents and permits
under applicable legislation; the geopolitical, economic,
permitting and legal climate that we operate in; the price of gold
and other commodities; exchange rates; market competition; the
adequacy of our financial resources, and such other material
assumptions as are identified in the other Pretivm Disclosure
Documents. We have also assumed that no significant events will
occur outside of our normal course of business. Although we believe
that the assumptions inherent in the forward-looking statements are
reasonable as of the date of this news release, forward-looking
statements are not guarantees of future performance and,
accordingly, undue reliance should not be put on such statements
due to the inherent uncertainty therein. We do not assume any
obligation to update forward-looking statements, whether as a
result of new information, future events or otherwise, other than
as required by applicable law. For the reasons set forth above,
prospective investors should not place undue reliance on
forward-looking statements. Neither the TSX nor the NYSE has
approved or disapproved of the information contained herein.
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