Pretium Resources Inc. (TSX:PVG)(NYSE:PVG) ("Pretivm") is pleased
to announce a positive National Instrument 43-101-compliant
Feasibility Study for the high-grade gold and silver resources
identified to date at its 100%-owned Brucejack Project ("Brucejack"
or the "Project") in northern British Columbia. The Feasibility
Study was prepared by Tetra Tech.
Highlights (base case using US$1,350/oz gold, US$20/oz silver
and exchange rate of US$/C$: 1)
-- Valley of the Kings Probable Mineral Reserves of 6.6 million ounces of
gold (15.1 million tonnes grading 13.6 grams of gold per tonne) and West
Zone Proven and Probable Mineral Reserves of 700,000 ounces of gold (3.8
million tonnes grading 5.8 grams of gold per tonne);
-- Average annual production of 425,700 ounces of gold over the first 10
years and 321,500 ounces of gold over the life of mine;
-- Base Case pre-tax Net Present Value (5% discount) of US$2.7 billion;
-- Base Case pre-tax Internal Rate of Return of 42.9%, with payback
estimated at 2.1 years;
-- Mine life of 22 years producing an estimated 7.1 million ounces of gold;
-- Estimated project capital cost, including contingencies, of US$663.5
million;
-- Average operating costs of C$156.46/tonne milled over mine life.
Table 1: Summary of Brucejack High-Grade Economic Results by Metal Price
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Alternative Base Case Spot Prices
Case (1) at June 06, 2013
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Gold Price
(US$/ounce) $ 800 $ 1,350 $ 1,415.70
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Silver Price
(US$/ounce) $ 15.00 $ 20.00 $ 22.70
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Net $ 1.41 billion $ 5.28 billion $ 5.90 billion
Cash Flow (pre-tax) (pre-tax) (pre-tax)
$ 964.1 million $ 3.50 billion $ 3.91 billion
(post-tax) (post-tax) (post-tax)
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Net Present $ 602.3 million $ 2.69 billion $ 3.01 billion
Value(2) (pre-tax) (pre-tax) (pre-tax)
(5.0% $ 383.7 million $ 1.76 billion $ 1.98 billion
discount) (post-tax) (post-tax) (post-tax)
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Internal Rate 16.6% (pre-tax) 42.9% (pre-tax) 47.0%(pre-tax)
of Return 13.7% (post-tax) 35.7% (post-tax) 39.2% (post-tax)
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Payback (from 4.7 years (pre-tax) 2.1 years (pre-tax) 1.9 years (pre-tax)
start of
production 4.8 years (post- 2.2 years (post- 2.0 years (post-
period) tax) tax) tax)
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Exchange Rate
(US$:C$) 1.00 1.00 0.98
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(1) Tetra Tech-adopted consensus forecast metal prices from the Energy
Metals Consensus Forecast (EMCF).
(2) NPV is discounted to the beginning of 2013.
Project Mineral Reserves
The Mineral Reserves resulting from the Feasibility Study for
the Brucejack Project are based on the November 2012 Mineral
Resource estimates for the Valley of the Kings and the West Zone
(see news release dated November 20, 2012). The Mineral Reserve
estimates by zone and Reserve category are summarized below.
Table 2: Valley of the Kings Mineral Reserve Estimate(3)(4) - May 16th,
2013
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Contained
--------------------------------
Tonnes Gold Silver Gold Silver
Category (millions) (g/t) (g/t) (million oz) (million oz)
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Probable 15.1 13.6 11.0 6.6 5.3
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(3) Rounding of some figures may lead to minor discrepancies in totals.
(4) Based on C$180/t cutoff grade, US$ 1350/oz Au price, US$ 22/oz Ag price,
C$/US$ exchange rate = 1.0
Table 3: West Zone Mineral Reserve Estimate(5) - May 16th, 2013
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Contained
--------------------------------
Tonnes Gold Silver Gold Silver
Category (millions) (g/t) (g/t) (million oz) (million oz)
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Proven 2.0 5.7 309 0.4 19.9
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Probable 1.8 5.8 172 0.3 10.1
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Total P&P 3.8 5.8 243 0.7 30.0
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(5) See notes (3) and (4) to Table 2 above.
Mining and Processing
Brucejack is planned as a high-grade underground mining
operation using a long-hole stoping mining method and cemented
paste backfill. The Valley of the Kings, the higher-grade, primary
targeted deposit, will be developed first; the lower-grade West
Zone will be developed in the second half of the Project's 22-year
mine life. The mine is planned to operate with a processing rate of
2,700 tonnes per day and mine a total of 9.6 million tonnes of ore
for the first 10 years at an average mill feed grade of 14.2 grams
gold per tonne.
Mineral processing will involve conventional sulphide flotation
and gravity concentration, producing gold-silver dore and
gold-silver flotation concentrate. Metallurgical recoveries for the
Valley of the Kings are 96.7% for gold and 84.8% for silver, and
for the West Zone 94.7% for gold and 90.4% for silver. A total of
7.1 million ounces of gold and 31.6 million ounces of silver is
estimated to be produced over the life of the Brucejack Project,
including the gold and silver recovered into the flotation
concentrate. The Project's projected production and processing is
summarized in Table 4 below.
Table 4: Brucejack Project Total Mine Projected Production and Processing
Summary(6)
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Gold Silver
Gold Silver Production, Production,
Tonnage, grade, grade, ('000 ('000
Year (t) (g/t) (g/t) ounces) ounces)
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1 811,000(7) 15.4 12 388 271
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2 937,000 13.8 11 403 284
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3 979,000 13.1 11 400 294
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4 981,000 15.8 12 483 314
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5 983,000 17.1 14 523 364
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6 986,000 12.7 9 389 235
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7 985,000 15.5 11 474 306
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8 985,000 14.0 10 427 265
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9 980,000 14.0 11 427 303
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10 991,000 11.2 18 343 490
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Years 1-10 9,618,000 14.2 12 4,257 3,126
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Years 11-22 9,368,000 9.7 105 2,816 28,515
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Life of Mine
(Years 1-22) 18,986,000 12.0 57.9 7,073 31,641
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(6) Rounding of some figures may lead to minor discrepancies in totals.
(7) Tonnage includes pre-production ore.
Capital and Operating Costs
The capital cost for the Brucejack high-grade project is
estimated at US$663.5 million, including a contingency of US$ 64.4
million. Capital costs are summarized in Table 5 below.
Table 5: Capital Costs Summary
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(US$ million)
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Mine underground 174.5
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Mine site(8) 208.2
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Offsite Infrastructure 69.1
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Total Direct Costs 451.8
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Indirect Costs 125.0
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Owner's Costs 22.3
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Contingencies 64.4
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Total Capital Cost 663.5
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(8) Includes mine site, mine site process, mine site utilities,
mine site facilities, tailings facilities, mine site temporary
facilities and surface mobile equipment.
Average operating cost is estimated at C$156.46 per tonne
milled. Operating costs are summarized in Table 6 below.
Table 6: Operating Costs Summary
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(C$/tonne)
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Mining 93.18(9)
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Processing 18.16
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General & Administrative 25.47
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Surface Services and Others 19.65
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Total Operating Cost 156.46
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(9) LOM ore milled; if excluding the ore mined during
preproduction, the estimated cost is C$94.40/t.
All-In sustaining cash costs, which include by-product cash
costs, sustaining capital, exploration expense and reclamation cost
accretion are summarized in Table 7 below.
Table 7: All-In Sustaining Cash Costs Life of Mine
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(US$ million)
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Total Cash Costs(10) $3,253
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Reclamation Cost Accretion $25.7
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Sustaining Capital Expenditure $328.5
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All-in Sustaining Cash Costs $3,607.2
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Gold Sales 7.1 million ounces
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All-in Sustaining Cash Costs per Ounce $508/ounce
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(10) Net of silver credits at Base Case silver price of $20/ounce.
For a view of the figures illustrating the sensitivity analyses
for the Project's Net Present Value, Internal Rate of Return and
Payback using the parameters of metals prices, exchange rate,
capital costs and operating costs please see the following link:
http://media3.marketwire.com/docs/pvg611_F1-3.pdf.
Opportunities for Enhanced Economics
The capital cost includes $49.9 million for a 50 kilometer-long
transmission line. An evaluation of the cost benefits of
alternatively entering into a build-own-maintain agreement for the
construction and operation of the transmission line is now
underway.
The capital cost associated with the plant site construction is
also being evaluated for potential savings in optimizing the site
layout.
The Project timeline is being reviewed for opportunities to
accelerate underground development.
Next Steps
The results of the 10,000-tonne Bulk Sample Program currently
underway at Brucejack's Valley of the Kings are expected later in
the year.
Pretivm will continue to advance engineering at the Brucejack
Project in support of the ongoing permitting process, and
anticipates filing its application for an Environmental Assessment
Certificate later this year.
After obtaining permits, and subject to a production decision,
Pretivm anticipates commencing construction of the mine in the
second half of 2014.
The Technical Report for the Brucejack Project Feasibility Study
is expected to be filed on SEDAR this month and will also be
available at www.pretivm.com.
Ian I Chang, M.A.Sc., P.Eng., Vice President, Project
Development, Pretium Resources Inc. is the Qualified Person (QP)
responsible for Brucejack Project development.
Independent Qualified Persons
The following Qualified Persons as defined by National
Instrument 43-101 are independent of Pretivm and responsible for
the Technical Report and Feasibility Study of the Brucejack
Project:
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Qualified Person Scope of Responsibility
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David Ireland, C.Eng., P.Eng. Site Infrastructure and Project
Tetra Tech Execution
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Ivor W.O. Jones, M.Sc., CP, FAusIMM Geology and Mineral Resources
Snowden Mining Industry Consultants
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Colm Keogh, P.Eng. Mineral Reserves and Methods
AMC Mining Consultants (Canada) Ltd.
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John Huang, Ph.D, P.Eng. Metallurgy and Recovery Methods
Tetra Tech
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Brian Gould, P.Eng. Avalanche Hazard Assessment
Alpine Solutions Avalanche Services
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Mike Wise, P.Eng. Transmission Line
Valard
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Paul Greisman, Ph.D., P.Eng. Tailings delivery system and
Rescan aspects of Brucejack Creek
suspended solids control
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Pierre Pelletier, P.Eng. Aspects of environmental, social,
Rescan community studies, and permitting
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Wayne Stoyko, P.Eng. Capital Cost Estimate
Tetra Tech
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Sabry Abdel Hafez, Ph.D, P.Eng. Financial Analysis
Tetra Tech
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Cathy Schmid, P.Eng. Underground Mine Geotechnical
BGC Engineering Inc.
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Virginia Cullen, M.Eng., P.Eng. Hydrogeological / Groundwater
BGC Engineering Inc.
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Hamish Weatherly, P.Geo. Water Management
BGC Engineering Inc.
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Jan Gertis, Ph.D. Water Quality
BGC Engineering Inc.
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Mo Molavi, P.Eng. Underground Infrastructure
AMC Mining Consultants (Canada) Ltd.
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Maureen McGuinness, P.Eng Paste Backfill Distribution
Paterson & Cooke Canada Inc.
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Brent McAfee, P.Eng. Site Geotechnical
BGC Engineering Inc.
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Mike Chin, P.Eng. Earthworks, roads, and drainage at
Tetra Tech the mine site and at Knipple
Transfer Station
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About Pretivm
Pretivm is creating value through gold at its high-grade gold
Brucejack Project, located in northern British Columbia. Brucejack
hosts a major undeveloped high-grade gold resource, with Probable
Mineral Reserves in the Valley of the Kings totalling 6.6 million
ounces of gold (15.1 million tonnes grading 13.6 grams of gold per
tonne). Brucejack is being advanced as a high-grade underground
mine with an average of 426,000 ounces of gold produced annually
for the first 10 years and an average of 321,500 million ounces of
gold produced annually over the Project's 22-year mine life.
Commercial production is targeted to commence in 2016.
Forward-Looking Statements
This News Release contains "forward-looking information" and
"forward-looking statements" within the meaning of applicable
Canadian and United States securities legislation. Forward-looking
information may include, but is not limited to, risks related to
our planned exploration and development activities, the adequacy of
Pretivm's financial resources, the estimation of mineral resources,
realization of mineral resource estimates, timing of development of
Pretivm's Brucejack Project, costs and timing of future
exploration, results of future exploration and drilling, production
and processing estimates, capital and operating cost estimates,
timelines and similar statements relating to the economic viability
of the Brucejack Project, timing and receipt of approvals, consents
and permits under applicable legislation, Pretivm's executive
compensation approach and practice, and adequacy of financial
resources. Wherever possible, words such as "plans", "expects",
"projects", "assumes", "budget", "strategy", "scheduled",
"estimates", "forecasts", "anticipates", "believes", "intends" 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. Statements concerning mineral resource
estimates may also be deemed to constitute forward-looking
information to the extent that they involve estimates of the
mineralization that will be encountered if the property is
developed. 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
information. Forward-looking information is subject to a variety of
known and unknown risks, uncertainties and other factors that could
cause actual events or results to differ from those expressed or
implied by the forward-looking information, including, without
limitation, those risks identified in Pretivm's prospectus
supplement to the short form base shelf prospectus dated March 19,
2012 filed on SEDAR at www.sedar.com and in the United States
through EDGAR at the SEC's website at www.sec.gov. Forward-looking
information is based on the expectations and opinions of Pretivm's
management on the date the statements are made. The assumptions
used in the preparation of such statements, although considered
reasonable at the time of preparation, may prove to be imprecise.
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, prospective investors should not place
undue reliance on forward-looking information.
The TSX has neither approved nor disapproved of the information
contained herein.
Contacts: Pretium Resources Inc. Robert Quartermain President
and Chief Executive Officer (604) 558-1784 Pretium Resources Inc.
Michelle Romero Corporate Relations Director (604)
558-1784invest@pretivm.com www.pretivm.com
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