Pretium Resources Inc: Continued Robust Economics of Brucejack Mine Confirmed with Updated Mineral Reserve and Resource, 14-Year Mine Plan
Press Release
VANCOUVER, British Columbia, April 04, 2019 — Pretium Resources Inc. (TSX/NYSE:PVG) (“Pretivm” or the “Company”) announces an updated Mineral Reserve (the “2019 Mineral Reserve”) and Mineral Resource (the “2019 Mineral Resource”) and Life of Mine Plan (collectively, the “2019 Updates”) for the Brucejack Mine (“Brucejack”), which highlight the continued robust economics of the low-cost, long-life operation.
The 2019 Updates will be detailed in a National Instrument 43-101 Technical Report (the “2019 Report”) prepared by Tetra Tech. The 2019 Report updates the operating parameters contemplated in the Brucejack Feasibility Study entitled “Feasibility Study and Technical Report Update on the Brucejack Project, Stewart, BC” with an effective date of June 19, 2014 (the “2014 Report”) before the mine was constructed and operating, and confirms Brucejack as a low-cost, high-grade gold producer. The 2019 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.
“Since achieving production at Brucejack we have processed over 1.5 million tonnes of ore and produced over 500,000 ounces of gold, providing us a solid foundation of operating experience and key metrics to update the life of mine plan and outlook for the mine,” said Joseph Ovsenek, President and CEO of Pretivm. “At $1,300 gold, Brucejack now has an estimated after-tax net present value at a 5% discount rate of $2.59 billion over a 14-year mine life. This is a significant increase from the 2017 estimated net present value at a 5% discount rate of $2.10 billion. With Brucejack as our foundation and with our considerable growth profile, Pretivm is well-positioned as a profitable gold producer.”
Summary of 2019 Updates
The updated Life of Mine (“LOM”) plan highlights Brucejack’s low-cost, long life, with the Brucejack Mineral Reserve grade more accurately accounting for internal dilution from transverse longhole stoping.
- 2019 Brucejack Mine Estimated Total Life of Mine Plan (Valley of the Kings and West Zone)
• Average annual production of over 520,000 ounces of gold over the first 5 years with average annual cash flow of $350 million (post tax).
• Average annual production of over 525,000 ounces of gold over the first 10 years and over 440,000 ounces of gold over 14-year mine life.
• Average operating costs of $166/tonne milled over the first 10 years and average LOM operating costs of $168/tonne milled.
• At the mine level, average sustaining costs of $502/ounce of gold sold over the first 10 years and average LOM sustaining costs of $502/ounce.
• At the corporate level, average All-in Sustaining Costs (“AISC”) of $535/ounce of gold sold over the first 10 years and average LOM AISC of $539/ounce.
• After tax net present value (“NPV”) at a 5% discount of $2.59 billion ($3.6 billion pre-tax) at $1,300/ounce gold, $16.9/ounce silver and exchange rate of US$0.775/C$1.00. - 2019 Brucejack Mine Total Proven and Probable Mineral Reserve Estimate
• 6.4 million ounces of gold (16.0 million tonnes grading 12.6 grams of gold per tonne).
• The West Zone Mineral Reserves were not updated.
• Excludes all Mineral Reserve material mined prior to January 1, 2019. - 2019 Valley of the Kings Proven and Probable Mineral Reserve Estimate
• 5.8 million ounces of gold (13.1 million tonnes grading 13.8 grams of gold per tonne).
• Proven Mineral Reserves of 700,000 ounces of gold (2.0 million tonnes grading 11.2 grams of gold per tonne).
• Probable Mineral Reserves of 5.1 million ounces of gold (11.1 million tonnes grading 14.3 grams of gold per tonne).
• Excludes all Mineral Reserve material mined prior to January 1, 2019.
2019 Brucejack Mine Economics
Table 1: Summary of Brucejack Economic Results by Metal Price
| Low Case | Base Case | High Case | ||||
| Gold Price ($/ounce) | $1,100 | $1,300 | $1,500 | |||
| Silver Price ($/ounce) | $14.30 | $16.90 | $19.50 | |||
| Net Cash Flow ($) | $3.62 billion (pre-tax) $2.63 billion (post-tax) |
$4.87 billion (pre-tax) $3.43 billion (post-tax) |
$6.13 billion (pre-tax) $4.22 billion (post-tax) |
|||
| Net Present Value (1) (5.0% discount) ($) |
$2.67 billion (pre-tax) $1.98 billion (post-tax) |
$3.60 billion (pre-tax) $2.59 billion (post-tax) |
$4.54 billion (pre-tax) $3.18 billion (post-tax) |
|||
| Exchange Rate (US$:C$) | 0.775 | 0.775 | 0.775 | |||
(1) NPV is discounted to January 2019.
Summary of 2019 Updates Compared to Prior
The 2019 Updates are based on the six 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 decreased from 16.1 grams per tonne to 13.8 grams per tonne (a 14% decrease) to account for more internal waste than was anticipated in the Company’s 2016 Mineral Reserve update (see News Release dated December 15, 2016). All estimated costs have been updated with actual costs from 2018. Areas of cost increase include labour, environmental compliance and snow removal. The Net Present Value increase of 23% is attributable to the increase in production from 2,700 tonnes per day to 3,800 tonnes per day.
A comparison of the main parameters of the 2019 Report and prior information is summarized below in Table 2.
IBF4
