Pretium Resources Inc. (TSX/NYSE:PVG) (“Pretivm” or the “Company”)
announces fourth quarter and full year 2020 production results and
a $160 million discretionary payment against its credit facility.
Pretivm also provides production and financial guidance for 2021.
The Company produced 347,743 ounces of gold in
2020, slightly above the midpoint of its guidance range of 325,000
ounces to 365,000 ounces. For 2021, the Company expects gold
production to be in the range of 325,000 to 365,000 ounces, with a
midpoint of 345,000 ounces.
“For the first time in the Company’s history we
have achieved our annual production guidance, demonstrating the
hard-work and perseverance of our team in light of the exceptional
challenges we faced this year. We would like to thank all of our
employees and contractors and the local communities for their
continued support over the course of 2020. At Pretivm, no year is
considered a success unless it is accomplished safely, and in the
third quarter we were given a tragic reminder of the importance of
keeping safety at the forefront of everything we do,” said Jacques
Perron, President and Chief Executive Officer of Pretivm.
“Our gold production along with the value
captured from the sale of the Snowfield Property has allowed us to
significantly reduce our long-term debt and maintain a robust cash
balance. We are now in a position to focus on further improving the
safety, predictability and stability of production, while also
prioritizing resource expansion and investing in the future of
Brucejack.”
2020 Annual and Fourth Quarter
Production
In 2020, 347,743 ounces of gold were produced at
the Brucejack Mine at an average grade of 8.5 grams per tonne and
an average gold recovery of 97%. In the fourth quarter of 2020,
Brucejack produced 88,299 ounces of gold at an average grade of 8.9
grams per tonne and average gold recovery of 97%. The Company
successfully ramped-up to an average processing rate of 3,800
tonnes per day in the month of December.
Prior to the end of 2020, a discretionary debt
payment of $160.0 million was applied to the revolving portion of
the Company’s credit facility, reducing the outstanding amount of
the revolving portion to $38.0 million as of year end. In total,
the company repaid $226.7 million of its credit facility in 2020.
Even with the discretionary debt payment, the year-end cash and
cash equivalents was $174.8 million, as compared to $175.0 million
at September 30, 2020.
2021
Guidance
Gold Production |
325,000 – 365,000 oz |
|
Average Grade |
7.5
– 8.5 g/t |
|
Recovery Rate |
~
97% |
|
Cash Cost |
$820 – 920 / oz sold |
|
Sustaining Capital |
$50
- $55 million |
|
All-in Sustaining Cost |
$1,060 - $1,190 / oz sold |
|
Expansion Capital |
$55
- $65 million |
|
Free Cash
Flow1 |
$120 – $170 million |
|
Abbreviations: g/t (grams per tonne) and oz
(ounces). |
|
1 Based on a gold price of $1,700 per ounce of
gold |
|
2021 Production Guidance
Gold production at the Brucejack Mine for 2021
is expected to be in the range of 325,000 to 365,000 ounces. The
processing rate is expected to average 3,800 tonnes per day with
average annual gold grade ranging between 7.5 grams per tonne to
8.5 grams per tonne at a targeted gold recovery of 97%.
2021 Financial Guidance
All-in sustaining cost1 (“AISC”) for 2021 is
expected to range from $1,060 to $1,190 per ounce of gold sold with
cash costs1 expected to range from $820 to $920 per ounce of gold
sold. The cash cost and AISC estimates in 2021 as compared to the
actual costs for the nine months ending September 30, 2020 reflect
the investments in the accelerated rate of underground development,
comprehensive drill programs and improvement‐oriented capital
expenditures.
Continuing to advance underground development at
an accelerated rate of 1,000 meters per month and potentially
increasing to 1,100 meters per month through 2021 will expand
access underground. The expanded access will provide more
flexibility to build drilled-off stope inventory, allow mining
operations to optimize production and provide additional platforms
for resource expansion drilling.
The 2021 Brucejack definition, sustaining and
resource expansion drill programs are anticipated to total
approximately 195,000 meters of diamond drilling at a cost of
approximately $23 million, comprised of in-resource definition
drilling (40%), in-resource and sustaining drilling (20%) and
resource expansion drilling (40%). An extensive in-fill definition
drill program is planned to increase the volume of grade
information and geological understanding to enhance mine planning.
Resource expansion drilling will target adjacent and near-mine
zones with the potential to extend mineralization underground
towards the West Zone, Galena Hill Zone, Gossan Hill Zone, and
Bridge Zone, all less than one kilometer from current underground
development. Initially, six drills are planned to be deployed
underground, with an additional two surface drills to be added
during the summer.
Sustaining capital expenditures, a component of
AISC, are forecasted to be between approximately $50 million to $55
million, and include the capitalised portion of underground
development and drill programs as well as improvement-oriented
expenses, such as electric underground haul trucks to reduce costs
related to ventilation and maintenance and increase
productivity.
AISC and cash cost estimates also include costs
associated with enhanced COVID-19 protocols continuing throughout
2021, which are estimated to be approximately $5 million.
Corporate administrative costs, a component of
AISC, are forecasted to be between approximately $18 to $22
million, including share-based compensation.
2021 Free Cash Flow Forecast
Free cash flow1 for 2021 is expected in the
range of $120 million to $170 million at a gold price of $1,700 per
ounce. The 2021 free cash flow forecast includes expansion-oriented
capital expenditures which total approximately $55 million to $65
million. Expansion capital expenditures include expansion of
permanent Brucejack camps and projects to support growth and to
improve the efficiency of operations. The free cash flow
forecast also includes expenditures related to 2021 near-mine
exploration program. The near-mine exploration program will focus
on the new discovery at Hanging Glacier (see news release dated
December 16, 2020), which is just four kilometers north of the
Brucejack Mine and is easily accessible using existing exploration
trails.
Management believes that 2021 guidance is
achievable assuming there is no new significant impact on
operations at the Brucejack Mine, including due to the novel
coronavirus (“COVID-19”) pandemic. We have taken precautions to
mitigate the risk of COVID-19. However, the COVID-19 pandemic and
any future emergence and spread of similar pathogens could have a
material adverse impact on Pretivm’s business, operations and
operating results, financial condition, liquidity and market for
our securities.
Impact of COVID-19
The Company’s primary commitment is the safety
and health of its workforce and neighbouring communities in
northwest British Columbia. Throughout the COVID-19 pandemic, the
Brucejack Mine has operated continuously under the guidance and
directives provided by Ministry of Energy, Mines and Low Carbon
Innovation Guidance to Mining and Smelting Operations during
COVID-19; BC Ministry of Health, BC Centre for Disease Control:
Protecting Industrial Camp Workers, Contractors, and Employers
Working in the Agricultural, Forestry, and Natural Resource Sectors
During the COVID-19 Pandemic (July 28, 2020); and all applicable
orders issued by the Provincial Health Officer. The Company has
developed management plans to mitigate the spread of COVID-19 and
protect the well-being of its employees, communities and other
stakeholders.
Qualified Persons
Patrick Godin, P.Eng., Vice President and Chief
Operating Officer, Pretium Resources Inc. is a Qualified Person
(“QP”) as defined in National Instrument 43-101 Standards of
Disclosure for Mineral Projects, and has reviewed and approved the
scientific and technical information contained in this news
release.
Webcast and Conference
Call
Pretivm plans to release its fourth quarter and
year-end 2020 operational and financial results after market close
on Thursday, February 25, 2021. The webcast and conference call to
discuss these results will take place Friday, February 26,
2021 at 8:00 am PT (11:00 am ET).
Webcast and conference call details:
Friday, February 26, 2021 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 |
About Pretivm
Pretivm is an intermediate gold producer and
owns 100% of the high-grade underground Brucejack Mine in northern
British Columbia, Canada.
For further information contact:Troy ShultzManager, Investor
Relations & Corporate Communications
Pretium Resources Inc.Suite 2300, Four Bentall Centre, 1055
Dunsmuir StreetPO Box 49334 Vancouver, BC V7X 1L4(604)
558-1784invest@pretivm.com(SEDAR filings: Pretium Resources
Inc.)
Non-IFRS Financial Performance
Measures
The Company has included certain non-IFRS
measures in this new release. Refer to the Company’s management’s
discussion and analysis for an explanation, discussion and
reconciliation of non-IFRS measures. The Company believes that
these measures, in addition to measures prepared in accordance with
International Financial Reporting Standards (“IFRS”), provide
readers with 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 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
Information
This news release contains “forward-looking
information”, “forward looking statements”, “future oriented
financial information” and “financial outlook” 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 outlook is to provide a general
overview of management’s expectations regarding the anticipated
results of operations including cash generated therefrom 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, statements with
respect to: the effects of the COVID-19 outbreak as a global
pandemic, including anticipated operational and financial impacts
and our response and contingency plans; production and financial
guidance, and our expectations around achieving such guidance; our
future operational and financial results, including estimated cash
flows (including free cash flow forecasts) and the timing thereof;
expectations around grade of gold and silver production; the
Brucejack Mine processing rate and gold recovery rate; capital
modifications and upgrades, and underground development, and the
anticipated benefits thereof, and estimated expenditures and
timelines in connection therewith; our mining (including mining
methods), expansion, exploration and development activities,
including the reverse circulation drill program, and our
definition, sustaining, expansion and underground exploration drill
programs and our grassroots exploration program, and the results,
benefits, 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 management, operational plans and strategy;
capital, sustaining, operating and general and administrative cost
estimates and timing and anticipated benefits thereof; the future
price of gold and silver; our liquidity and the adequacy of our
financial resources (including capital resources); our intentions
with respect to our capital resources; capital allocation plans;
production and processing estimates and estimated rates; estimated
economic results of the Brucejack Mine, including net 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, analyses and
interpretations of exploration and drilling programs; payment of
taxes, our effective tax rate and the recognition of our previously
unrecognized income tax attributes; and the fatal incident at the
Brucejack Mine, the investigation(s) of such incident and the
findings and outcomes of such investigation(s). 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: uncertainty as to the outcome
of legal proceedings; the effect of indebtedness on cash flow and
business operations; the effect of a pandemic and particularly the
COVID-19 outbreak as a global pandemic on the Company’s business,
financial condition and results of operations and the impact of the
COVID-19 outbreak on our workforce, suppliers and other essential
resources and what effect those impacts, if they occur, would have
on our business, financial condition and results of operations; the
effect of restrictive covenants pursuant to the Company’s credit
facility; assumptions regarding expected capital costs, operating
costs and expenditures, production schedules, economic returns and
other projections; our production, grade of gold, milling recovery,
cash flow and cost estimates, including the accuracy thereof;
commodity price fluctuations, including gold and silver price
volatility; the accuracy of our Mineral Resource and Reserve
estimates (including with respect to size, grade and mining and
milling recoverability) and the geological, operational costs and
price assumptions on which they are based; uncertainties relating
to inferred Mineral Resources being converted into Measured or
Indicated Mineral Resources; our ability to maintain or increase
our annual production of gold at the Brucejack Mine or discover,
develop or acquire Mineral Reserves for production; dependency on
the Brucejack Mine 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; general economic conditions; the inherent risks in the
mining industry; the commercial viability of our current and any
acquired mineral rights; availability of suitable infrastructure or
damage to existing infrastructure; transportation, processing and
refining risks; maintaining satisfactory labour relations
with employees and contractors; significant governmental
regulations, including environmental regulations; non-compliance
with permits that are obtained or delay in obtaining or renewing,
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; maintaining our social license to operate; 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;
currency exchange rate fluctuations; 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; the ability of our new executives to successfully transition
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; our ability to 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 contained 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 Project; 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; stability in financial capital markets;
and the impact of the COVID-19 outbreak. 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 other disclosure documents as filed in
Canada on SEDAR at www.sedar.com and in the United States through
EDGAR at the Security and Exchange Commission’s (the “SEC”) 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. For the reasons
set forth above, readers should not place undue reliance on
forward-looking information.
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. Neither the TSX nor the NYSE has approved or
disapproved of the information contained herein.
___________________________1 Refer to the
“Non-IFRS Financial Performance Measures” section at the end of
this news release.
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