Pretium Resources Inc. (TSX/NYSE:PVG) (“Pretivm” or the “Company”)
reports operating and financial results for the first quarter 2019,
Pretivm’s seventh consecutive quarter of positive adjusted
earnings.
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.
First Quarter 2019 Operating
Summary
- Production of 79,180 ounces of
gold.
- Mill feed grade of 8.7 grams per
tonne gold.
- Gold recovery rate of 96.8%.
- Ore milled 295,122 tonnes.
- Daily average ore milled 3,279
tonnes per day.
First Quarter 2019 Financial
Summary
- Revenue of $103.1 million on 81,434
ounces of gold sold.
- Total cost of sales $74.0 million
or $908 per ounce of gold sold1.
- Earnings from mine operations1 of
$29.2 million.
- Achieved an average realized cash
margin1 of $571 per ounce of gold sold, with a total cash cost of
$686 per ounce of gold sold1.
- All-in Sustaining Cost (“AISC”)1 of
$868 per ounce of gold sold within 2019 guidance.
- Generated $39.9 million in cash
from operating activities.
- Net earnings of $4.2 million ($0.02
per share).
- Adjusted earnings1 of $16.5 million
($0.09 per share1).
- Reduced debt by $20.0 million using
cash generated from operations.
- Cash and cash equivalents balance
of $50.9 million as at March 31, 2019.
1 Refer to the “Non-IFRS Financial Performance
Measures” section at the end of this news release.
“Brucejack delivered another profitable quarter
and generated free cash flow,” said Joseph Ovsenek, President &
CEO of Pretivm. “Our AISC for the quarter was within our annual
guidance, and we generated almost $40 million in cash from
operations, which enabled us to pay down $20 million of debt ahead
of schedule. We made significant progress in the quarter towards
achieving our 3,800 tonnes per day production rate target at
Brucejack and with increased accessibility from continued
underground development, we have established a solid foundation for
operating effectively at our higher target rate. Both grade and
tonnes are expected to be higher in the second half of the year and
we remain on track to achieve 2019 guidance.”
2019 Production and Financial
Guidance
The Company expects to achieve its 2019 gold
production guidance of 390,000 ounces to 420,000 ounces and the
planned production ramp-up from 2,700 tonnes per day to 3,800
tonnes per day over the course of the year. In support of the
ramp-up, the Company prioritized the increase in development rate
to 1,000 meters per month and the access to a greater number of
stopes to support a 3,800 tonnes per day mining rate by year end.
As the mine plan sequences through a lower grade area of the Valley
of the Kings, all stopes above cut-off grade of approximately 5.0
grams per tonne gold are being mined as they become available for
production. Accordingly, gold grade in the first quarter was 8.7
grams per tonne and the gold grade is expected to average
approximately 10.4 grams per tonne over the course of 2019; both
grade and tonnes are expected to be higher in the second half of
the year.
AISC for the year is expected to range from $775
per ounce gold sold to $875 per ounce gold sold. For the first
quarter, AISC was within guidance at $868 per ounce of gold sold.
AISC for the year includes $15.0 million for one-time sustaining
capital expenditures such as access road and camp upgrades, an
underground maintenance shop and a back-up underground paste
booster pump. AISC also includes approximately $23.0 million for
growth-oriented expenses such as resource expansion drilling and an
additional 300 meters per month of underground development
associated with the production ramp-up to 3,800 tonnes per day.
First Quarter 2019 Production
Overview
- Gold production totaled 79,180
ounces, a 5% increase compared to 75,689 ounces in the first
quarter 2018. The increase in production was the result of an
increase in ore milled due to the amended permits received in late
2018.
- A total of 295,122 tonnes of ore,
equivalent to a throughput rate of 3,279 tonnes per day, was
processed. This was an increase of 13% from the first quarter 2018,
in which a total of 261,443 tonnes of ore, equivalent to a
throughput rate of 2,905 tonnes per day, was processed. The tonnes
of ore processed increased in the period due to the planned
production ramp-up to 3,800 tonnes per day.
- The modifications and upgrades
required to sustainably process ore at the upgraded production rate
of 3,800 tonnes per day are on schedule and will continue during
regularly scheduled shut-downs.
- The mill feed grade averaged 8.7
grams per tonne gold for the quarter compared to 9.1 grams per
tonne gold in the first quarter 2018. The decrease in mill feed
grade was the result of the mine plan sequencing through a lower
grade area and processing immediately available stopes that meet
the grade cut-off. The mill feed grade is expected to increase in
the second half of the year.
- Gold recoveries averaged 96.8% for
the quarter and the comparable quarter in 2018.
- Mine development has been
successfully accelerated throughout the first quarter. Mine
development is approaching 1,000 meters per month and is expected
to maintain that rate throughout the year to ensure development
remains ahead of production requirements to ensure steady mining
rates of 3,800 tonnes per day by year end.
First Quarter Financial
Overview
- The Company generated revenue of
$103.1 million compared to revenue of $89.4 million in the first
quarter 2018. Revenue includes a loss on trade receivables at fair
value related to provisional pricing adjustments of $0.7 million
(2018 – gain of $0.8 million).
- Total cost of sales was $74.0
million or $908 per ounce of gold sold. For the first quarter 2018,
total cost of sales was $72.6 million or $1,057 per ounce of gold
sold. Total cost of sales includes production costs, depreciation
and depletion, royalties and selling costs.
- Total cash cost was $686 per
ounce of gold sold resulting in an average realized cash margin of
$571 per ounce of gold sold. In the first quarter 2018, total cash
cost was $841 per ounce of gold sold resulting in an average
realized cash margin of $430 per ounce of gold sold.
- AISC was $868 per ounce of gold
sold and within our 2019 financial guidance of $775 to $875 per
ounce of gold sold. In the first quarter 2018, AISC was $1,009 per
ounce of gold sold.
- Earnings from mine operations were
$29.2 million compared to $16.8 million in the first quarter
2018.
- Net earnings were $4.2 million
compared to a net loss of $8.1 million in the first quarter 2018.
Adjusted earnings were $16.5 million compared to $5.8 million in
the first quarter 2018.
- Cash generated by operations was
$39.9 million compared to $24.7 million in the first quarter
2018.
- The Company repaid $20.0 million of
the $480.0 million senior secured loan facility with cash generated
from operations ahead of the scheduled payment due date.
Updated Mineral Resource Estimate,
Mineral Reserve Estimates and Life of Mine Plan
The Company announced the updated Mineral
Reserve, Mineral Resource and Life of Mine Plan for the Brucejack
Mine, which highlight the continued robust economics of the
low-cost, long-life operation (see news release dated April 4,
2019).
2019 Brucejack Mine Estimated Total Life of Mine
Plan (Valley of the Kings and West Zone)
- Average annual production of over
520,000 ounces of gold over the first 5 years with average annual
cash flow of $350.0 million (post tax).
- Average annual production of over
525,000 ounces of gold over the first 10 years and over 440,000
ounces of gold over 14-year mine life.
- Average AISC of $535 per ounce of
gold sold over the first 10 years and average life of mine AISC of
$539 per ounce.
- After tax net present value of
$2.59 billion ($3.6 billion pre-tax).
2019 Brucejack Mine Total Proven and Probable
Mineral Reserve Estimate
- 6.4 million ounces of gold (16.0 million tonnes grading 12.6
grams of gold per tonne).
The information in this “Updated Mineral
Resource Estimate, Mineral Reserve Estimate and Life of Mine Plan”
section has been extracted from our news release dated April 4,
2019. For additional information (including QPs that have reviewed,
approved and verified) see news release dated April 4,
2019.
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
reserve definition and exploration drilling, and has reviewed and
approved the scientific and technical information contained in this
news release relating thereto.
Lyle Morgenthaler, B.A.Sc., P.Eng., Chief Mine
Engineer, Pretium Resources Inc. is the QP responsible for
Brucejack Mine development, and has reviewed and approved the
scientific and technical information contained in this news release
relating thereto.
Our unaudited condensed consolidated interim
Financial Statements and MD&A for the three months ended March
31, 2019 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
first quarter 2019 operating and financial results will take place
Friday, May 3, 2019 at 8:00 am PT (11:00 am
ET).
Webcast and conference call details:
|
Friday, May 3, 2019 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 May 18, 2019:
|
Toll Free (North America) |
1-800-319-6413 |
|
Access Code |
2988 |
About Pretivm
Pretivm is a low-cost intermediate gold producer
with the high-grade gold underground Brucejack Mine.
For further information contact:
Joseph Ovsenek
Troy Shultz President
&
CEO
Manager, 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.)
Operating Results
|
Three months ended March 31, |
|
2019 |
|
2018 |
|
|
|
|
|
Ore mined (wet tonnes) |
t |
308,387 |
|
268,339 |
Mining rate |
tpd |
3,427 |
|
2,982 |
|
|
|
|
|
Ore milled (dry
tonnes) |
t |
295,122 |
|
261,443 |
Head grade |
g/t
Au |
8.7 |
|
9.1 |
Recovery |
% |
96.8 |
|
96.8 |
Mill throughput |
tpd |
3,279 |
|
2,905 |
|
|
|
|
|
Gold ounces
produced |
oz |
79,180 |
|
75,689 |
Silver ounces
produced |
oz |
108,234 |
|
94,730 |
|
|
|
|
|
Gold ounces sold |
oz |
81,434 |
|
68,651 |
Silver
ounces sold |
oz |
96,974 |
|
84,234 |
The following abbreviations were used
above: t (tonnes), tpd (tonnes per day), g/t (grams per tonne), Au
(gold) and oz (ounces). |
Financial Results
In thousands of USD, |
Three months ended March 31, |
|
except for
per ounce data |
2019 |
|
2018 |
|
|
|
|
|
|
Revenue |
$ |
103,119 |
|
89,422 |
|
Earnings from mine operations (1) |
$ |
29,152 |
|
16,834 |
|
Net earnings (loss) for the period |
$ |
4,166 |
|
(8,058 |
) |
Per share - basic |
$/share |
0.02 |
|
(0.04 |
) |
Per share - diluted |
$/share |
0.02 |
|
(0.04 |
) |
|
|
|
|
|
Adjusted earnings (1) |
$ |
16,527 |
|
5,797 |
|
Per share - basic (1) |
$/share |
0.09 |
|
0.03 |
|
|
|
|
|
|
Total cash and cash equivalents |
$ |
50,868 |
|
70,540 |
|
Cash generated from operating activities |
|
39,944 |
|
24,719 |
|
Total assets |
$ |
1,625,855 |
|
1,678,657 |
|
Long-term debt (2) |
$ |
444,830 |
|
292,906 |
|
|
|
|
|
|
Total cash costs (1) |
$/oz |
686 |
|
841 |
|
All-in sustaining costs (1) |
$/oz |
868 |
|
1,009 |
|
|
|
|
|
|
Average realized price (1) |
$/oz |
1,257 |
|
1,271 |
|
Average realized cash
margin (1) |
$/oz |
571 |
|
430 |
|
(1) Refer to the
"Non-IFRS Financial Performance Measures" section at the end of
this news release.(2) Long-term debt does not include the current
portions of the Company’s Loan Facility and Offtake Obligation
(each as defined in the MD&A) in the amount of $84,375 as at
March 31, 2019. For the comparable period in 2018, long-term debt
does not include the current portions of the Company’s Construction
Credit Facility (as defined in the MD&A) and Offtake Obligation
in the amount of $388,068. |
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, discussion and reconciliation of non-IFRS measures.
The Company believes that these measures, in addition to measures
prepared in accordance with IFRS, provide readers 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 Standards (“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.
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 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
operating and debt obligations, including timing thereof and source
of funds; our planned mining, expansion, exploration and
development activities, including our infill, expansion and
exploration drill programs, 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; 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 2019 updated 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 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 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 methods
of adoption and 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. 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,
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 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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