Pretium Resources Inc. (TSX/NYSE:PVG) (“Pretivm” or the “Company”)
announces an updated Mineral Reserve (the “2020 Mineral Reserve”),
Mineral Resource (the “2020 Mineral Resource”) and Life of Mine
(“LOM”) plan (the “2020 LOM Plan”, and together with the 2020
Mineral Reserve and 2020 Mineral Resource, the “2020 Updates”) for
the Brucejack Mine (“Brucejack”), which highlight the continued
robust economics of the long-life underground operation. The
effective date of the 2020 Mineral Reserve and 2020 Mineral
Resource is January 1, 2020.
The 2020 Updates will be detailed in a National
Instrument 43-101 – Standards of Disclosure for Mineral Projects
(“NI 43-101”) Technical Report (the “2020 Report”) prepared by
Tetra Tech Canada Inc. and co-authored by consultants listed under
“Independent Qualified Persons” below. The 2020 Report updates the
operating parameters contained in the “Technical Report on the
Brucejack Gold Mine, Northwest British Columbia” with an effective
date of April 4, 2019 (the “2019 Report”). The 2020 Report
will be filed in Canada under the Company’s profile on SEDAR at
www.sedar.com and in the United States on the EDGAR section of the
Securities and Exchange Commission (“SEC”) website at www.sec.gov,
within the coming weeks.
All dollar amounts are expressed in, and
references to “$” refer to United States dollars unless otherwise
noted. References to “C$” refer to Canadian dollars.
“Consistent with the preliminary production
outlook for post-2020 gold production in the Valley of the Kings
announced on February 12, our updated life of mine plan outlines
average annual gold production of 367,000 ounces for the first nine
years while mining primarily in the Valley of the Kings,” said
Joseph Ovsenek, President and CEO of Pretivm. “At a gold price of
$1,600, Brucejack now has an estimated after-tax net present value
at a 5% discount rate of $2.13 billion over the 13-year mine life.
Since achieving commercial production in July 2017, Brucejack has
generated over $500 million of cash flow and is expected to
generate strong cash flow well into the future.”
Summary of 2020 Updates
The 2020 LOM Plan is based on the 2020 Mineral
Reserve and the 2020 Mineral Resource estimates. The 2020
Mineral Resource was updated from the Mineral Resource estimate
reflected in the 2019 Report (the “2019 Mineral Resource”) only
within the Valley of the Kings Zone (the “Valley of the Kings”)
inside an area informed with new data from additional infill
drilling conducted in 2019, totaling 89,121 meters.
Furthermore, the Mineral Resource cut-off for the Valley of the
Kings Zone has been lowered to 3.5 g/t gold, as this cut-off better
resembles the recently mined grades. This has resulted in an
increase in the number of tonnes in the Measured and Indicated
Mineral Resource categories, albeit at a lower reported grade.
Approximately 50% of the tonnes comprising the
2020 Mineral Reserve are from the area of the Valley of the Kings
where the Mineral Resource was updated. A Mine Call Factor was
applied to the remaining tonnes (approximately 50%) comprising the
2020 Mineral Reserve (the area of the Mineral Reserve outside of
the Mineral Resource update area). The Mine Call Factor is a
reconciliation factor which is derived from operational experience.
The Mine Call Factor is determined by applying an upper limit to
the reserve stope grade, where the upper limit is determined by the
average diamond drill hole spacing of the reserve shape. Stopes
with a lower average diamond drill hole spacing (higher drill
density) have a lower resulting Mine Call Factor than stopes with
greater diamond drill hole spacing (lower drill density). The
2020 Mineral Reserve reflects a reduction in gold grade from the
2019 Mineral Reserve (defined below) grade due to updates to the
Mineral Resource and the application of the Mine Call Factor.
- 2020 Brucejack Mine Estimated Total Life of Mine Plan (Valley
of the Kings and West Zone)
- Average annual production of over 366,000 ounces of gold over
the first 5 years with average annual cash flow of $171 million
(post-tax) at $1,300/ounce gold.
- Average annual production of over 357,000 ounces of gold over
the first 10 years and average annual free cash flow of $181
million (post-tax) at $1,300/ounce gold.
- Average operating costs of $164/tonne milled over the first 10
years and average LOM operating costs of $163/tonne milled.
- At the mine level, average sustaining costs of $702/ounce of
gold sold over the first 10 years and average LOM sustaining costs
of $691/ounce.
- At the corporate level, average all-in sustaining costs
(“AISC”) of $747/ounce of gold sold over the first 10 years and
average LOM AISC of $743/ounce of gold sold.
- After tax net present value (“NPV”) at a 5% discount of $1.50
billion ($1.80 billion pre-tax) at $1,300/ounce gold, $16.90/ounce
silver and exchange rate of US$0.76/C$1.00.
- 2020 Brucejack Mine Total Proven and Probable Mineral Reserve
Estimate
- 4.2 million ounces of gold (15.7 million tonnes grading 8.4
grams of gold per tonne after application of the Mine Call
Factor).
- The West Zone Mineral Reserves was not updated.
- Excludes all Mineral Reserve material mined prior to January 1,
2020.
- 2020 Valley of the Kings Proven and Probable Mineral Reserve
Estimate
- 3.6 million ounces of gold (12.8 million tonnes grading 8.8
grams of gold per tonne after application of the Mine Call
Factor).
- Excludes all Mineral Reserve material mined prior to January 1,
2020.
2020 Brucejack Mine
Economics
Table 1: Summary of Brucejack Economic Results by Metal
Price
|
Base Case |
Spot Case |
High Case |
Gold Price ($/ounce) |
$1,300 |
$1,600 |
$1,900 |
Silver Price ($/ounce) |
$16.90 |
$20.80 |
$24.70 |
Net Cash Flow ($) |
$2.44 billion (pre-tax)$1.95 billion (post-tax) |
$3.70 billion (pre-tax)$2.75 billion (post-tax) |
$4.96 billion (pre-tax)$3.55 billion (post-tax) |
Net Present Value(1)(5.0% discount) ($) |
$1.80 billion (pre-tax)$1.50 billion (post-tax) |
$2.75 billion (pre-tax)$2.13 billion (post-tax) |
$3.70 billion (pre-tax)$2.76 billion (post-tax) |
Exchange Rate (US$:C$) |
0.76 |
0.76 |
0.76 |
(1) NPV is discounted to January 2020. |
|
Summary of 2020 Updates Compared to
2019
The 2020 Updates are based on the ten quarters
of mining operations at Brucejack since commercial production
commenced in July 2017. The Valley of the Kings Proven and
Probable Mineral Reserve gold grade has been reduced from 13.8
grams per tonne to 8.8 grams per tonne (a 36% decrease from the
2019 Mineral Reserve grade) due to an update of the Mineral
Resource and the application of a Mine Call Factor that has been
generated based on mining experience and reconciliations. All
estimated costs have been updated with actual costs from
2019. Areas of cost increase include labour, environmental
compliance and snow removal. The net present value decrease
of 42% is mainly attributable to an update of the Mineral Resource
and the application of a Mine Call Factor that resulted in
estimated sold ounces decreasing by 34%.
A comparison of the main parameters of the 2020
Report and the 2019 Report is summarized below in Table 2.
Table 2: Comparison of Main Parameters
of 2020 Report to 2019 Report
|
2019 Report(1) |
2020 Report |
Operating Rate (tonnes/day) |
3,800 |
3,800 |
Mine Life (years)(2) |
14 |
13 |
Proven and Probable Mineral Reserve Gold Grade
(g/t) |
12.6 |
8.4 |
Recoveries Gold/Silver (%) |
96.5/87.9 |
96.3/90.4 |
LOM Average Annual Gold Production (‘000
ounces) |
441 |
311 |
LOM Average Operating Costs ($/t) |
$168 |
$163 |
LOM Average Mine Site AISC(3) ($/ounce gold
sold) |
$502 |
$691 |
LOM Average AISC(3,4) ($/ounce gold
sold) |
$539 |
$743 |
US$:C$ Exchange Rate |
0.775 |
0.76 |
NPV5 Pre-Tax/Post-Tax ($’000) |
$3,602/$2,587 ($1,300 Au/$16.90 Ag) |
$1,799/$1,496 ($1,300 Au/$16.90 Ag) |
NPV5 Pre-Tax/Post-Tax ($’000) |
$4,537/$3,181 ($1,500 Au/$19.50 Ag) |
$2,752/$2,135 ($1,600 Au/$20.80 Ag) |
(1) The Mineral Reserves (the “2019 Mineral Reserves”) and LOM in
the 2019 Report were updated for the Valley of the Kings in April
2019 (see News Release April 4, 2019). |
(2) Mine life is based from start of year in which the report was
issued. 2019 Report begins January 1, 2019. 2020 Report begins
January 1, 2020. |
(3) AISC excludes 3,800 tpd expansion capital. |
(4) LOM AISC includes corporate general and administrative
(“G&A”) costs. |
2020 Brucejack Mineral
Reserve
Brucejack Mine Total Mineral Reserve
The updated Mineral Reserve estimates by zone and Mineral
Reserve category are summarized below in Table 3. The 2020
Updates include Mineral Reserve updates for the Valley of the
Kings. The West Zone Mineral Reserve was not updated as there was
no new information in 2019. The Mineral Reserve estimate for the
areas of the 2020 Mineral Resource for the Valley of the Kings that
were not updated in the 2020 Mineral Resource have had a Mine Call
Factor applied that was determined based on historic mining data
and reconciliations. The 2020 Mineral Reserve grade over the LOM
for the Valley of the Kings was reduced by approximately 18% as a
result of the application of the Mine Call Factor.
Table 3: 2020 Brucejack Mine Total Mineral
Reserve(1,2,3,4)
Zone |
Ore Tonnes (Mt) |
Grade |
Contained Ounces |
|
Au (g/t) |
Ag (g/t) |
Au (Moz) |
Ag (Moz) |
|
|
Valley of the Kings Zone(5) |
Proven |
1.4 |
8.9 |
11.1 |
0.4 |
0.5 |
|
Probable |
11.3 |
8.7 |
9.8 |
3.2 |
3.6 |
|
Total |
12.8 |
8.8 |
10.0 |
3.6 |
4.1 |
|
West Zone(6) |
Proven |
1.4 |
7.2 |
383.0 |
0.3 |
17.4 |
|
Probable |
1.5 |
6.5 |
181.0 |
0.3 |
8.6 |
|
Total |
2.9 |
6.8 |
278.5 |
0.6 |
26.0 |
|
Total Mine |
Proven |
2.8 |
8.1 |
195.1 |
0.7 |
17.9 |
|
Probable |
12.8 |
8.5 |
29.8 |
3.5 |
12.2 |
|
Total |
15.7 |
8.4 |
59.6 |
4.2 |
30.1 |
|
(1) Mineral Reserves exclude all Mineral Reserve
material mined prior to January 1, 2020. |
(2) Valley of the Kings Mineral Reserves based on
$180/t net smelter return (“NSR”) cut-off grade, $1,250/oz gold,
$15.60/oz silver, C$1:US$0.78 exchange rate. |
(3) Rounding of some figures may lead to minor
discrepancies in totals. |
(4) Values are inclusive of mining recovery and
dilution. Values are determined as of delivery to the mill and
therefore not inclusive of milling recoveries. |
(5) Mineral Reserve Grade for the Valley of the
Kings is inclusive of the Mine Call Factor. |
(6) The West Zone Mineral Reserve was not updated
and the Mine Call Factor was not applied. |
2019 Mineral Reserve
Reconciliation
The 2019 Mineral Reserve reconciliation was
completed by evaluating the 2019 Mineral Reserve shapes against the
results from 2019 milling and mining (the “2019 Mined Actuals”).
Reserve shapes that are spatially proximal with the 2019 actual
stopes and development ore positions were compared to the 2019
Mined Actuals. Applicable Reserve shapes were determined by the use
of Cavity Monitoring Systems (“CMS”) scans of the mined material
for all material mined in 2019. In 2019, ore was mined from 67
stopes over 10 levels from the 1170-meter level to the 1410-meter
level across a distance ranging 290 meters east to west and 155
meters north to south. Late in 2019, material was also mined from
one stope on the 1110-meter level. Table 4 below summarizes the
comparison.
Table 4: Reconciliation of 2019 Mineral
Reserve to 2019 Mined Actuals
|
Tonnes (000’s) |
Gold Grade (g/t) |
Contained Gold Ounces (000’s) |
Mined 2019 Mineral Reserve Material |
1,023 |
|
12.1 |
|
396 |
|
Grade Control Depleted 2019 Reserves |
60 |
|
12.9 |
|
25 |
|
2019 Mineral Reserve Material in
Reconciliation |
1,083 |
|
12.1 |
|
421 |
|
2019 Mined Actuals |
1,303 |
|
8.7 |
|
366 |
|
Reconciliation |
120 |
% |
72 |
% |
87 |
% |
The 2019 Mineral Reserve material is inclusive
of Mineral Reserve material that was subsequently identified as
uneconomic by grade control with no possibility of future mining.
This material amounted to 60,000 tonnes of 2019 Mineral Reserve
material. The 2019 Mined Actuals contained 20% more tonnage than
planned primarily due to the identification of out-of-reserve
material that was determined to be economic as a result of the
grade control program. All material sent to the mill was determined
to be economic by the grade control program.
The 2019 grade control program identified
approximately 570,000 tonnes of material located outside of reserve
shapes as economic that the 2019 Mineral Resource model identified
as sub-economic. This material was either mined or added to drilled
inventory throughout 2019. These additional tonnes were not
accounted for in the LOM plan reflected in the 2019 Report and are
not accounted for in the 2020 Mineral Reserve and 2020 LOM
Plan.
Mining and Processing
Brucejack is a high-grade underground mining
operation using the long-hole stoping mining method (both
transverse and longitudinal) and cemented paste backfill. The
Valley of the Kings, the higher-grade, primary targeted deposit,
has been developed first; the lower-grade West Zone will be mined
in the second half of Brucejack’s 13-year mine life. The 2020
LOM plan is based on a processing rate of 3,800 tonne per day until
2029 when the rate is reduced to manage the grade distribution
between the West Zone and remaining Valley of the Kings Mineral
Reserves. Brucejack is planned to mine a total of 15.6 Mt at an
average grade of 8.4 g/t gold after the application of the Mine
Call Factor.
Mineral processing at the current operation uses
conventional gravity concentration and sulphide flotation,
producing gold-silver doré and gold-silver flotation concentrate.
Predicted metallurgical recoveries over the LOM average 96.3% and
90.4% for gold and silver, respectively. A total of 4.0
million ounces of gold and 27.1 million ounces of silver are
estimated to be produced over the remaining mine life of Brucejack
after application of the Mine Call Factor. Projected production and
processing is summarized in Table 5 below.
Table 5: Life of Mine Projected
Production and Processing Summary(1)
Years |
Tonnage(2)(t) |
Lateral Development Meters(2) (m) |
Gold Grade (g/t)(3) |
Silver Grade (g/t) |
Gold Production ('000 ounces) |
Silver Production ('000 ounces) |
1 |
1,387,000 |
12,000 |
8.3 |
13.7 |
358 |
517 |
2 |
1,387,000 |
12,000 |
8.6 |
9.3 |
371 |
371 |
3 |
1,387,000 |
10,800 |
8.6 |
10.7 |
371 |
417 |
4 |
1,387,000 |
10,800 |
8.6 |
11.4 |
370 |
441 |
5 |
1,387,000 |
4,320 |
8.4 |
14.0 |
363 |
550 |
6 |
1,387,000 |
4,650 |
8.6 |
51.8 |
368 |
2,072 |
7 |
1,387,000 |
3,890 |
8.4 |
98.1 |
362 |
3,939 |
8 |
1,387,000 |
1,020 |
8.6 |
88.5 |
369 |
3,577 |
9 |
1,387,000 |
960 |
8.6 |
57.4 |
369 |
2,290 |
10 |
1,040,000 |
770 |
8.4 |
110.1 |
270 |
3,357 |
11 |
1,040,000 |
560 |
7.4 |
122.1 |
238 |
3,722 |
12 |
693,000 |
400 |
7.2 |
159.3 |
155 |
3,238 |
13 |
380,000 |
150 |
7.0 |
231.0 |
82 |
2,604 |
Life of Mine |
15,636,000 |
62,320 |
8.4 |
59.6 |
4,046 |
27,095 |
(1) LOM begins on January 1, 2020. The 2020 Mineral
Reserve excludes all Mineral Reserve material mined prior to
January 1, 2020. |
(2) Tonnes are rounded to nearest thousands.
Development meters are rounded to the nearest tens. |
(3) Gold grade is adjusted using a Mine Call Factor
applied to the Mineral Reserves located in the non-updated portions
of the 2020 Mineral Resource model. |
Capital and Operating Costs
The remaining capital cost for the mine
throughput upgrade to 3,800 tonnes per day is estimated at $14.8
million over five quarters of 2020 and 2021, including a
contingency of $2.5 million. Capital costs are summarized in
Table 6 below.
Table 6: 3,800 tpd Expansion Capital Costs Summary
(1)
|
($ million) |
|
Mine Underground |
3.8 |
|
Process and Infrastructure |
6.9 |
|
Total Direct Costs |
10.7 |
|
Indirect Costs (2) |
1.6 |
|
Contingency (2) |
2.5 |
|
Total Expansion Capital Cost |
14.8 |
|
(1) Year 2020-2021
capital cost expenditure for expansion of mine, process and
infrastructure, including mine throughput expansion related
costs. |
(2) Mill expansion
related indirect costs and contingency only. |
|
The total sustaining capital cost for the
remainder of the LOM at Brucejack is estimated at $161.9
million. Sustaining capital costs are summarized in the Table
7 below.
Table 7: Sustaining Capital Costs
Summary
|
($ million) |
|
Mining |
66.6 |
|
Processing |
3.5 |
|
Site Services and Surface Maintenance |
91.8 |
|
Total Sustaining Capital Cost |
161.9 |
|
|
|
|
Average LOM operating cost is estimated at $163
per tonne milled. Operating costs are summarized in Table 8
below.
Table 8: Operating Costs
Summary
|
($/tonne) |
|
Mining |
71 |
|
Processing |
21 |
|
Mine General and Administrative |
35 |
|
Surface Services and Others |
36 |
|
Total Operating Cost |
163 |
|
|
|
|
All-in sustaining costs, which include by-product cash costs,
sustaining capital, exploration expense and reclamation cost
accretion are summarized in Table 9 below.
Table 9: All-In Sustaining Costs Life of
Mine
|
($ million, except for cost per ounce and gold sales) |
|
Total Cash Costs(1,2) |
$2,581 |
|
Reclamation Cost Accretion |
$21 |
|
Sustaining Capital Expenditure |
$162 |
|
Mine Site Sustaining Costs(3) |
$2,764 |
|
Gold Sales (M ounces) |
4.0 M ounces |
|
Mine Site Sustaining Cost per ounce(1,2,3) |
$691/ounce |
|
Corporate G&A Costs |
$52/ounce |
|
All-in Sustaining Costs |
$743/ounce |
|
(1) Net of silver
credits at a silver price of $16.90/ounce. |
|
(2) Includes offsite
shipping, treatment, refining charges and royalties. |
|
(3) Excludes 3,800
tpd Expansion Capital. |
|
2020 Mineral Resource
Brucejack Mineral Resource
The 2020 Mineral Resource incorporates an
additional 89,121 meters of resource drilling in 555 drill holes
and 7,606 meters of mapped underground development completed in the
Valley of the Kings Zone since the 2019 Mineral Resource. The
2020 Mineral Resource reported by zone and confidence category is
summarized in Table 11 below. The Valley of the Kings Mineral
Resource was updated for 2020, but only in an area where new data
was available; the West Zone Mineral Resource was not updated as
there was no new information in 2019.
Table 11: Brucejack Mineral Resource
(1,2,3,4,5,6)
Zone |
Confidence Category |
Ore Tonnes (Mt) |
Grade |
Contained Metal |
|
Au (g/t) |
Ag (g/t) |
Au (Moz) |
Ag (Moz) |
|
|
Valley of the Kings Zone |
Measured |
2.3 |
10.5 |
12.6 |
0.8 |
0.9 |
|
Indicated |
16.1 |
11.4 |
12.2 |
5.9 |
6.3 |
|
Total M+I |
18.4 |
11.3 |
12.2 |
6.7 |
7.2 |
|
Inferred |
5.4 |
13.3 |
15.9 |
2.3 |
2.8 |
|
West Zone |
Measured |
2.4 |
5.9 |
347 |
0.5 |
26.8 |
|
Indicated |
2.5 |
5.9 |
190 |
0.5 |
15.1 |
|
Total M+I |
4.9 |
5.9 |
267 |
0.9 |
41.9 |
|
Inferred |
4.0 |
6.4 |
82 |
0.8 |
10.6 |
|
Total Mine |
Measured |
4.7 |
8.4 |
183.3 |
1.3 |
27.7 |
|
Indicated |
18.6 |
10.7 |
35.8 |
6.4 |
21.4 |
|
Total M+I |
23.2 |
10.1 |
65.5 |
7.6 |
49.1 |
|
Inferred |
9.4 |
10.3 |
44.3 |
3.1 |
13.4 |
|
(1) Mineral
Resources are reported inclusive of Mineral Reserves. |
|
(2) Mineral
Resources which are not Mineral Reserves do not have demonstrated
economic viability. The estimate of Mineral Resources may be
materially affected by environmental, permitting, legal, marketing,
or other relevant issues. The Mineral Resources in this news
release were estimated in accordance with the Canadian Institute of
Mining, Metallurgy and Petroleum (“CIM”), CIM Standards on Mineral
Resources and Reserves, Definitions and Guidelines prepared by the
CIM Standing Committee on Reserve Definitions and adopted by CIM
Council. |
|
(3) The quantity
and grade of reported Inferred Mineral Resources in this estimation
are uncertain in nature and there has been insufficient exploration
to define these Inferred Mineral Resources as an Indicated or
Measured Mineral Resource. It is uncertain if further
exploration will result in upgrading Inferred Mineral Resources to
an Indicated or Measured Mineral Resource category. |
|
(4) Tonnes, grade,
and contained metal figures in totals may differ due to
rounding. |
|
(5) The Brucejack Mineral Resource is reported at 3.5
g/t gold cut-off for the Valley of the Kings Zone and 5 g/t gold
equivalent cut-off for the West Zone (AuEq = Au +
Ag/53). |
|
(6) Mineral
Resources exclude all Mineral Resource material mined prior to
January 1, 2020. |
|
The 2020 Mineral Resource for the Valley of the
Kings Zone differs from the 2019 Mineral Resource in that there are
significantly more drill holes used in the estimation of the model,
the classification has been updated to allow for the change in
confidence resulting from the new information, the estimation
parameters have been adjusted to allow greater local accuracy of
the grade estimates (based on validation of the model estimates
against production information), and all production prior to
January 1, 2020 as well as volumes deemed non-minable have been
removed.
Furthermore, the Mineral Resource cut-off for
the Valley of the Kings Zone has been lowered to 3.5 g/t gold, as
this cut-off better resembles the recently mined grades. This
has resulted in an increase in the number of tonnes in the Measured
and Indicated Mineral Resource categories, albeit at a lower
reported grade. The 2020 Measured and Indicated Mineral
Resource for the Valley of the Kings Zone is 18.4 million tonnes at
11.3 g/t gold compared to 13.7 million tonnes at
17.2 g/t gold in 2019.
2019 Mineral Resource Reconciliation
The 2019 Mineral Resource reconciliation
compares ounces predicted in the 2019 global resource model in the
areas mined over a given period to the actual ounces delivered to
the mill from mining those same areas in that period.
Reconciliation of the 2019 global resource model for the period
January 1, 2019 to December 31, 2019 was approximately 101% on
ounces. The modeled ounces for the areas mined during 2019 were
predicted to be 361,739 ounces (delivered to the mill) at 8.3 grams
per tonne and 1,355,769 tonnes; while the actual ounces for the
areas mined were determined to be 365,585 ounces (delivered to the
mill) at 8.7 grams per tonne and 1,303,001 tonnes. Reconciliation
improved in 2019 compared to the comparable period in 2018 when
reconciliation to the global resource model was approximately 90%
on ounces.
Independent Qualified
Persons
The following “Qualified Persons” as defined by
NI 43-101 are independent of Pretivm and responsible for the 2020
Report, and each has reviewed, approved and verified the scientific
and technical information contained in this news release relating
to his or her respective scope of responsibility, as
applicable:
Qualified Person |
Scope of Responsibility |
Ivor W.O. Jones, M.Sc., P.Geo., FAusIMM Ivor Jones Pty Ltd. |
Geology and Mineral Resources |
Maurie Phifer, P.Eng.Tetra Tech Canada Inc. |
Mineral Reserves, Mining Methods; Underground Infrastructure; Paste
Backfill Distribution; Mining Operating Cost Estimate; Financial
Analysis |
John Huang, Ph.D, P.Eng.Tetra Tech Canada Inc. |
Metallurgy and Recovery Methods; Market Studies; Process, G&A
and Site Services Operating Cost Estimates |
Hassan Ghaffari, P.Eng., M.A.Sc. Tetra Tech Canada Inc. |
Surface Infrastructure; Capital Cost Estimate |
Calvin Boese, P.Eng., M.Sc.SRK Consulting (Canada) Inc. |
Waste Rock and Tailings Storage Facility |
Rolf Schmitt, M.Sc., P.Geo.Environmental Resources Management
Ltd. |
Aspects of environmental, social, community studies, and
permitting |
Alison Shaw, Ph.D., P.Geo.Lorax Environmental Services Ltd. |
Geochemistry, Water Quality |
Mauricio Herrera, PhD, P.Eng.SRK Consulting (Canada) Inc. |
Water Management |
Laura-Lee Findlater, P.Geo.Lorax Environmental Services Ltd. |
Hydrogeology |
Tim Coleman, P.Eng., ACSM, M.Sc. DICSRK Consulting (Canada)
Inc. |
Underground Mine Geotechnical |
|
|
Improved Local Data Density Through
Reverse Circulation Drilling
A high-density reverse circulation (“RC”) drill
program to increase the data density necessary to enhance mine
planning and optimize gold production is scheduled to commence in
the second quarter 2020. Under the main part of the program,
360-degree RC drill fans comprised of approximately 40 holes are
planned to be drilled at 10-meter centers nominally west to east
along the 1140-meter level of the mine over approximately 320
meters. Each drill hole will be approximately 48 meters long and
assayed using 1.5 meter sample lengths. The high-density RC drill
program is expected to improve the information available for mine
planning and in turn reduce the Mine Call Factor.
Production and Cash Flows
Over the next three years, estimated gold
production of over 1.1 million ounces of gold is expected to
generate cash flows of $700 million at $1,600 gold, which is more
than sufficient to pay down the scheduled debt maturities of
approximately $480 million.
Scientific and technical information in this
news release not set out in the 2020 Report has been reviewed,
approved and verified by Barry McDonough, P.Geo, Manager of
Geological Operations for the mine geology section, Lyle
Morgenthaler, P.Eng., Chief Mining Engineer for the mine
development and Nicolas Scarcelli-Casciola, B.A.Sc., P.Eng.,
Pretivm’s Mine Planning Manager for mine reserves, each of whom is
a Qualified Person as defined in NI 43-101.
2020 Update Webcast and Conference
Call
Webcast and conference call details:
Thursday, March 12, 2020 at 8:00 am EDT (5:00 am PDT) |
Webcast |
|
www.pretivm.com |
Toll Free (North America) |
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1-800-319-4610 |
International and Vancouver |
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604-638-5340 |
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About Pretivm
Pretivm is an intermediate gold producer with
the high-grade gold underground Brucejack Mine in northern British
Columbia.
For further information contact:
Joseph OvsenekPresident & 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”, “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
information”), including the “safe harbour” provisions of Canadian
provincial securities legislation and the U.S. Private Securities
Litigation Reform Act of 1995, Section 21E of the U.S. Securities
Exchange Act of 1934, as amended, and Section 27A of the U.S.
Securities Act of 1933, as amended. 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 information.
Forward-looking information may include, but is not limited to,
information with respect to: the estimation of Mineral Reserves and
Mineral Resources, including the 2020 Updates; parameters and
assumptions used to estimate Mineral Reserves and Mineral
Resources; realization of Mineral Reserve and Mineral Resource
estimates; our estimated life of mine and life of mine plan for the
Brucejack Mine; production and processing estimates and estimated
rates; production and gold recovery rates; capital, sustaining and
operating cost estimates and timing thereof; estimated economic
results of the Brucejack Mine, including net cash flow and net
present value; expectations around grade of gold and silver
production; predicted metallurgical recoveries for gold and silver;
geological and mineralization interpretations; capital
modifications and upgrades, underground development and anticipated
benefits thereof, and estimated expenditures and timelines in
connection therewith, including with respect to maintaining a
steady state production rate of 3,800 tonnes per day; our mining
(including mining methods), expansion, exploration and development
activities, including the reverse circulation drill program, our
infill, expansion and underground exploration drill programs and
our grassroots exploration program, and the results, costs and
timing thereof; timelines and similar statements relating to the
economic viability of the Brucejack Mine, including mine life,
total tonnes mined and processed and mining operations; production
and cost guidance and our expectations around achieving such
guidance; our grade control program and 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
plans and strategy; our future operational and financial results,
including estimated cash flows and the timing thereof; payment of
our debt, operating and other obligations and commitments,
including the source of funds 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;
results, analyses and interpretations of explorations and drilling
programs; timing, receipt, and anticipated effects of, and
anticipated capital costs in connection with approvals, consents
and permits under applicable legislation; litigation matters;
environmental matters; our effective tax rate and the recognition
of our previously unrecognized income tax attributes statements
regarding United States dollar cash flows, currency fluctuations
and the recurrence of foreign currency translation adjustments; and
the 2020 Report and its filing date. 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 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: the accuracy of our Mineral
Resource and Mineral 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, including environmental regulations; currency exchange
rate fluctuations; 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 loan
documents; assumptions regarding expected capital costs, operating
costs and expenditures, production schedules, economic returns and
other projections; our production, grade of gold and silver, cash
flow and cost estimates, including the accuracy thereof; our
ability to maintain or increase our annual production of gold at
Brucejack or discover, develop or acquire Mineral Reserves for
production; dependency on Brucejack for our future operating
revenue; the development of our properties and expansion of our
operations; our need or ability to raise enough capital to mine,
develop, expand or complete further exploration programs on our
mineral properties; our ability to generate operating revenues and
cash flow in the future; failure of counterparties to perform their
contractual obligations; the commercial viability of our current
and any acquired mineral rights; availability of suitable
infrastructure or damage to existing infrastructure; transportation
and refining risks; maintaining satisfactory labour relations
with employees and contractors; non-compliance with permits that
are obtained or delay in obtaining or renewing, or failure to
obtain or renew permits required in the future; increased costs and
restrictions on operations due to compliance with health, safety
and environmental laws and regulations; compliance with emerging
climate change regulation and the detrimental effects of climate
change; adequate internal control over financial reporting; various
tax-related matters; potential opposition from non-governmental
organizations; uncertainty regarding unsettled First Nations rights
and title in British Columbia; uncertainties related to title to
our mineral properties and surface rights; land reclamation and
mine closure requirements; our ability to identify and successfully
integrate any material properties we acquire; competition in the
mining industry for properties, qualified personnel and management;
our ability to attract and retain qualified management and
personnel; disruption from changes in management team or failure to
successfully transition new hires or promoted employees into their
roles; some of our directors’ and officers’ involvement with other
natural resource companies; potential inability to attract
development partners or our ability to identify attractive
acquisitions; compliance with foreign corrupt practices regulations
and anti-bribery laws; changes to rules and regulations, including
accounting practices; limitations in our insurance coverage and the
ability to insure against certain risks; risks related to ensuring
the security and safety of information systems, including cyber
security risks; our anti-takeover provisions could discourage
potentially beneficial third-party takeover offers; significant
growth could place a strain on our management systems; share
ownership by our significant shareholders and their ability to
influence our operations and governance and, in case of sales of
our shares by such significant shareholders, our share price;
failure to comply with certain terms of the convertible notes;
reputational risks; future sales or issuances of our debt or equity
securities; the trading price of our common shares is subject to
volatility due to market conditions; we are limited in our ability
to, and may not, pay dividends in the foreseeable future; and
certain actions under United States federal securities laws may be
unenforceable. This list is not exhaustive of the factors that may
affect any of our forward-looking information. Although we have
attempted to identify important factors that could cause actual
results, actions, events, conditions, performance or achievements
to differ materially from those contained in forward-looking
information, there may be other factors that cause results,
actions, events, conditions, performance or achievements to differ
from those anticipated, estimated or intended.
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 made in this news release, we have made
certain assumptions about, among other things: our business and
operations and that no significant event will occur outside of our
normal course of business and operations (other than as expressly
set out herein); planned exploration, development and production
activities and the results, costs and timing thereof; future price
of gold and silver and other metal prices; the accuracy of our
Mineral Resource and Mineral Reserve estimates and related
information, analyses and interpretations (including with respect
to any updates or anticipated updates); the geology and
mineralization of the Brucejack deposit; operating conditions;
capital and operating cost estimates; production and processing
estimates; the results, costs and timing of future exploration and
drilling; timelines and similar statements relating to the economic
viability of the Brucejack Mine; 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; and stability in financial capital
markets. Although we believe that the assumptions inherent in
forward-looking information are reasonable as of the date of this
news release, these assumptions 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. The Company cautions
that the foregoing list of assumptions is not exhaustive. Other
events or circumstances could cause actual results to differ
materially from those estimated or projected and expressed in, or
implied by, the forward-looking information contained in this news
release.
Additional information about the risks and
uncertainties concerning forward-looking information and material
factors or assumptions on which such forward-looking information is
based is provided in our Annual Information Form and From 40-F,
each dated February 21, 2020, for the year ended December 31, 2019,
our MD&A for the years ended December 31, 2019 and 2018, and
our 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”).
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. Forward-looking information
involves statements about the future and is inherently uncertain,
and our actual achievements or other future events or conditions
may differ materially from those reflected in the forward-looking
information due to a variety of risks, uncertainties and other
factors, including, without limitation, those referred to in this
news release and the Pretivm Disclosure Documents. 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.
Scientific and Technical
Information
This news release uses the terms “Measured
Resources”, “Indicated Resources” (together “M+I”) and “Inferred
Resources”. Although these terms are recognized and required by
Canadian regulations (under NI 43-101), the SEC does not recognize
such terms. Mineral Resources which are not Mineral Reserves do not
have demonstrated economic viability. The estimate of Mineral
Resources may be materially affected by environmental, permitting,
legal, title, taxation, socio-political, marketing, or other
relevant issues. There is no guarantee that all or any part
of the Mineral Resource will be converted into Mineral Reserves. In
addition, “Inferred Mineral Resources” have a great amount of
uncertainty as to their existence, and economic and legal
feasibility. It cannot be assumed that all or any part of an
Inferred Mineral Resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of Inferred Mineral
Resources may not form the basis of feasibility or pre-feasibility
studies, or economic studies, except for a Preliminary Assessment
as defined under NI 43-101. Investors are cautioned not to assume
that part or all of an Inferred Mineral Resource exists or is
economically or legally mineable.
Details regarding data verification undertaken
with respect to the scientific and technical information included
in this news release will be set out in the 2020 Report.
Cautionary Note to United States
Investors
Disclosure regarding our mineral properties,
including with respect to Mineral Reserve and Mineral Resource
estimates, in this news release was prepared in accordance with NI
43-101. NI 43-101 is a rule developed by the Canadian Securities
Administrators that establishes standards for all public disclosure
an issuer makes of scientific and technical information concerning
mineral projects. NI 43-101 differs significantly from the
disclosure requirements of the SEC generally applicable to United
States companies. For example, the terms “mineral reserve”, “proven
mineral reserve”, “probable mineral reserve”, “mineral resource”,
“measured mineral resource”, “indicated mineral resource” and
“inferred mineral resource” are defined in NI 43-101. These
definitions differ from the definitions in the disclosure
requirements promulgated by the SEC. Accordingly, information
contained in this news release will not be comparable to similar
information made public by United States companies reporting
pursuant to SEC disclosure requirements.
Non-IFRS Financial Performance
Measures
The Company has included certain non-IFRS
measures in this news release. Refer to the Company’s Management’s
Discussion and Analysis for the years ended December 31, 2019 and
2018 (the “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 International Financial
Reporting Standards (“IFRS”), provide investors an improved ability
to evaluate the underlying performance of the Company and to
compare it to information reported by other companies. Management
uses these measures for internal valuation for the period and to
assist with planning and forecasting of future operations. 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 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. The presentation of non-IFRS measures
is not meant to be a substitute for the information presented in
accordance with IFRS. The non-IFRS financial measures included in
this news release include: total cash costs, AISC and AISC per
ounce of gold sold. Please refer to the “Non-IFRS Financial
Performance Measures” section of the Company’s MD&A filed on
SEDAR at www.sedar.com and in the United States through EDGAR at
the SEC’s website at www.sec.gov for a detailed discussion and
reconciliation of the non-IFRS measures to the most directly
comparable IFRS measures.
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