Pretium Resources Inc. (TSX:PVG)(NYSE:PVG) ("Pretivm") is pleased
to report the following highlights from the second quarter of 2013
and updates for the Brucejack Project in northern British
Columbia.
Second Quarter 2013 Highlights and Significant Events
-- Completed a private placement on April 26, 2013 with Liberty Metals &
Mining Holdings, LLC, a subsidiary of Boston-based Liberty Mutual
Insurance, for 5,780,346 common shares at a price per share of $6.92 for
gross proceeds of approximately $40 million;
-- Announced on May 8, 2013 the completion of the ramp accessing the Valley
of the Kings underground from the historical West Zone underground
workings;
-- Also announced on May 8 the sample tower and related equipment for the
Bulk Sample Program had been transported to site along the recently
completed all-weather exploration road. The over 75 kilometer-long
exploration road with bridges has adequate load capacity for 85 tonne
class permit vehicles and is expected to be suitable, with minor
upgrades, for development and production.
-- Announced on June 11, 2013 a positive National Instrument 43-101-
compliant Feasibility Study for the high-grade gold and silver resources
identified to date at the Brucejack Project. Highlights (Base Case using
US$1,350/oz gold, US$20/oz silver and exchange rate of US$/C$: 1)
included:
-- 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;
-- 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.
-- On June 19, 2013, we provided an update on the progress of the Bulk
Sample Program at the Brucejack Project's Valley of the Kings with
underground development advance well underway, all infrastructure in
place, excavation of development drifts and cross-cuts on schedule and
visible gold encountered in areas of the wall rock along the 426600E
cross-cut and the 6258015N drill drift;
-- Ended the quarter with working capital of $37.9 million;
-- On July 23, 2013, we announced the discovery of the Cleopatra vein
within the Valley of the Kings, and drill results from the ongoing Bulk
Sample Program.
Bulk Sample Program
The Valley of the Kings Bulk Sample Program (the "Program")
consists of two elements: the excavation of a 10,000-tonne bulk
sample, which is expected to conclude in August, and an
approximately 15,000-meter underground drill program, which is also
expected to conclude in August. The Program has been designed to
test the full widths of two of the domains of mineralization used
to estimate the November 2012 Valley of the Kings Mineral Resource.
By testing the two domains of mineralization, the Program will
confirm that the resource model is accurately projecting the range
of the grade distribution in the 10-meter blocks that make up the
Mineral Resource estimate within the bulk sample area. As a result,
the Program will target the full range of the projected resource
block grades which span from zero grams of gold per tonne to in
excess of 60 grams of gold per tonne.
The 10,000-tonne bulk sample as originally planned is being
excavated from four cross-cuts (excavations perpendicular to the
two domains of mineralization, spaced at 30-meter centers) and one
lateral drift (an excavation extending along the strike length of
one of the domains of mineralization). Excavation of the 426585E
cross-cut has been completed and the excavation of the 426615E
cross-cut is nearing completion. Excavation of the 426645E
cross-cut has just commenced. Planning is underway with Strathcona
Mineral Services Ltd. ("Strathcona"), the independent Qualified
Person for the Program, to increase the portion of the bulk sample
tonnage testing the higher grade blocks in the Indicated Mineral
Resource estimate to the east of the 426600E cross-cut and decrease
the portion of the bulk sample tonnage to the west of the 426600E
cross-cut. Bulk sample material excavated to date, approximately
7,000 tonnes, has been processed through the sample tower and is
being transported offsite.
We have begun shipping the remainder of the 10,000-tonne bulk
sample to a mill for processing. The mill will use a similar
circuit, gravity and flotation, to extract gold and silver from the
bulk sample as contemplated in the feasibility study for the
Brucejack Project. The bulk sample remainder is expected to be
milled in the third and fourth quarters of this year.
Approximately 15,000 meters of underground drilling in 190 holes
is being completed as part of the Bulk Sample Program. Drilling is
being conducted at 7.5-meter and 15-meter centres along 120 meters
of strike length and at 15- meter centres vertically for 60 meters
above and 60 meters below the 1345-meter level of the Valley of the
Kings. The drill fan on section 426585E and the other drill fans
planned or underway to the west of the 426600E cross-cut are
targeting the lower grade populations in the bulk sample location.
The drill fan on section 426615E and the other drill fans to the
east of the 426600E cross-cut are targeting the higher grade and
extreme grade populations in the bulk sample location. Drill fans
on sections 426615E, 426600E and 426585E have been completed and
assays have been received. Underground drilling for the Program is
on schedule, with a total of 124 drill holes now completed or in
progress comprising approximately 10,300 meters.
Strathcona Mineral Services Ltd. of Toronto has been engaged as
the independent Qualified Person to oversee and report on the
10,000-tonne bulk sample from the Valley of the Kings.
Assay results for completed fans from the underground drilling
will be reported as they are received. Strathcona's report on the
Program is expected later in the year after compilation of all
data. The amount of gold and silver produced by the mill will be
reported following the completion of the milling of the bulk
sample.
Additional Exploration
The Cleopatra Vein was first discovered while excavating the
6258015N east drill drift in an area of projected extreme grade
mineralization by the November 2012 Valley of the Kings Mineral
Resource estimate. Cleopatra intersects the 6258015N drill drift at
the 426630E cross-section and trends to the south-west where it
intersects the 426615E cross-cut and then trends south along
section 426615E. Following the discovery of the Cleopatra Vein, 22
drill holes in five vertical fans were drilled to test Cleopatra's
vertical and horizontal continuity and extent. Highlights from this
drilling include hole VU-032, which intersected 4,030 grams of gold
per tonne uncut over 0.5 meters, and hole VU-053, which intersected
27,000 grams of gold per tonne uncut over 0.5 meters. The Cleopatra
Vein has now been defined for approximately 85 meters along strike,
50 meters above the 1345-meter level, 50 meters below the
1345-level and remains open in all directions. (See news release
dated July 23, 2013).
With the discovery of the Cleopatra Vein, further underground
drilling will be carried out targeting similar feeder structures.
In addition, planning is underway for a surface drill program,
following completion of the Bulk Sample Program, to expand the
Valley of the Kings resources and test the Cleopatra Vein to
surface and for similar feeder structures.
Feasibility Study
On June 11, 2013, we announced a positive National Instrument
43-101-compliant Feasibility Study for the high-grade gold and
silver resources identified to date at the Brucejack Project. (See
news release dated June 11, 2013 and the "Feasibility Study and
Technical Report on the Brucejack Project" dated June 21, 2013.)
Probable Mineral Reserves in the Valley of the Kings total 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
total 700,000 ounces of gold (3.8 million tonnes grading 5.8 grams
of gold per tonne). Using US$1,350/oz gold, US$20/oz silver and an
exchange rate of US$/C$: 1 the base case estimated pre-tax Net
Present Value (5% discount) for the Project is US$2.7 billion, with
an internal rate of return of 42.9%. The Feasibility Study
contemplates average annual production for the first 10 years of
425,700 ounces of gold and for the 22 year life of mine 321,500
ounces of gold, an estimated capital cost, including contingencies,
of US$663.5 million and an average processing rate of 2,700
tonnes/day with operating costs of C$156.46 per tonne milled.
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.
Kenneth C. McNaughton, M.A.Sc., P.Eng., Chief Exploration
Officer, Pretium Resources Inc. is the Qualified Person (QP)
responsible for the Brucejack Project exploration program. 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.
Pretivm's working capital as at June 30, 2013 was $37.9 million,
which we believe to be sufficient to complete the 10,000-tonne bulk
sample and underground drilling program at the Valley of the Kings,
and continue ongoing permitting activities to advance the
high-grade gold Valley of the Kings into development.
Pretivm's unaudited interim consolidated financial statements
and Management Discussion and Analysis for the three months ended
June 30, 2013 will be available on SEDAR and Pretivm's website
www.pretivm.com.
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 425,700 ounces of gold produced annually
for the first 10 years and an average of 321,500 ounces of gold
produced annually over the Project's 22-year mine life. Commercial
production is targeted to commence in 2016.
(SEDAR filings: Pretium Resources Inc.)
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 reserves
and resources, realization of mineral reserve and 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 reserve and 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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