Pretivm Reports Third Quarter 2019 Operating and Financial Results

Press Release

VANCOUVER, British Columbia, Oct. 30, 2019  — Pretium Resources Inc. (TSX/NYSE:PVG) (“Pretivm” or the “Company”) reports operating and financial results for the third quarter 2019, Pretivm’s 9^th consecutive quarter of positive adjusted earnings and record operating cash flow.

All amounts are in US dollars unless otherwise noted. This release should be read in conjunction with the Company’s Financial Statements and Management’s Discussion and Analysis (“MD&A”) for the three and nine months ended September 30, 2019 and 2018, available on the Company’s website and on SEDAR and EDGAR.

Third Quarter 2019 Operating Summary

• Production of 88,227 ounces of gold.
• Mill feed grade of 9.1 grams per tonne gold.
• Gold recovery rate of 97.0%.
• Ore milled 309,754 tonnes.
• Daily average ore milled 3,367 tonnes per day.

Third Quarter 2019 Financial Summary

• Revenue of $132.7 million on 90,713 ounces of gold sold.
• Total cost of sales of $86.2 million or $950 per ounce of gold sold¹.
• Earnings from mine operations of $46.6 million.
• Achieved an average realized cash margin¹ of $784 per ounce of gold sold, with a total cash cost of $640 per ounce of gold sold¹.
• All-in Sustaining Cost (“AISC”)¹ of $878 per ounce of gold sold.
• Generated $77.8 million in cash from operating activities.
• Net earnings of $6.3 million ($0.03 per share).
• Adjusted earnings¹ of $34.0 million ($0.18 per share¹).
• The Company paid $62.4 million (as first of two tranches of payments) to repurchase the offtake obligation, and repaid $16.7 million of the loan facility using cash generated from operations.
• The Company has now achieved and surpassed the initial debt repayment target of $140 million and is on track to repay $180 million of debt in 2019.

¹ Refer to the “Non-IFRS Financial Performance Measures” section at the end of this news release.

“Brucejack generated $77.8 million in cash from operating activities, our highest cash flow quarter yet,” said Joseph Ovsenek, President & CEO of Pretivm. “During the third quarter, we continued to focus on opening up the mine while increasing grade to the mill. Pursuing both objectives simultaneously while stope inventory was constrained proved to be more challenging than anticipated, and we ended the quarter with gold production below our own expectations. As a result of limited stope inventory, we now expect that the fourth quarter will be consistent with the third quarter and have adjusted our full-year 2019 production guidance to between 340,000 to 350,000 ounces of gold production, an approximate 15% decrease from the midpoint of our prior production guidance range of 390,000 to 420,000 ounces of gold sold.  We have adjusted our all-in sustaining cost guidance range to $900 to $950 per ounce of gold sold, reflecting the lower anticipated gold production and our spending, which is lower than previously guided. We do expect another quarter of robust cash flow in Q4, and with the repurchase of the offtake agreement we are on track to repay $180 million of debt in 2019, surpassing our initial target of $140 million.”

Third Quarter Production Ramp-up

A combination of limited stope inventory and operational issues resulted in lower-than-planned tonnes, grade and ounces in September, which impacted third quarter gold production.

Mining during the quarter focused on advancing development to open up the mine to provide sufficient stope access to operate at 3,800 tonnes per day on a steady state basis.  The additional focus for mining during the quarter was to increase grade to the mill by limiting internal dilution through the optimization of stope design – which reduces the amount of lower-grade tonnes processed.  However, the reduction in stope tonnage as the quarter closed reduced our overall tonnage available for processing. This also impacted our ability to maximize grade through limiting internal dilution.

In addition, as mining progressed through mid-September, operational issues with two stopes prevented expected higher grade ore from being mined as planned. There was a hang-up of a key production stope and complications with sequencing another stope.  As a result, readily available lower grade tonnage from operating stopes was substituted for the expected higher grade tonnage.

Due to limited stope inventory, production mining in the fourth quarter will focus on maximizing tonnes to the mill, and all stopes above cut-off grade of approximately 5.0 grams per tonne gold will be mined and processed as they become available.  The updated life of mine plan, which is planned to be released in the first quarter of 2020, will include a stope inventory plan for steady state production at a rate of 3,800 tonnes per day (see 2020 Updated Mineral Resource and Mineral Reserve Estimates and Life of Mine Plan below).

As planned at the outset of 2019, production ramp-up is expected to supply the mill at 3,800 tonnes per day on a consistent basis by year end, with steady state production at 3,800 tonnes per day slated for 2020.

Adjusted 2019 Production and Financial Guidance

Gold production in the first nine months of the year was 258,168 ounces. As a result of limited stope availability, gold production in the fourth quarter is expected to be in-line with third quarter production. Accordingly, we have adjusted our full year 2019 production guidance to between 340,000 ounces to 350,000 ounces of gold.

AISC in the first nine months of the year was $896 per ounce of gold sold.  As a result of the lower production, annual AISC guidance has also been modified and now ranges from $900 to $950 per ounce of gold sold. AISC guidance for the year includes approximately $25.0 million for sustaining capital, of which approximately $19.6 million has been spent to date.

Third Quarter 2019 Ramp-up Production Overview

• Gold production totaled 88,227 ounces in the third quarter, compared to 90,761 ounces in the second quarter and 79,180 ounces in the first quarter of 2019.
• The mill feed grade average improved slightly to 9.1 grams per tonne gold for the quarter compared to 8.9 grams per tonne gold in the previous quarter.
• A total of 309,754 tonnes of ore, equivalent to a throughput rate of 3,367 tonnes per day, was processed. This represents a decrease of 4% from the previous quarter, when a total of 324,171 tonnes of ore, equivalent to a throughput rate of 3,562 tonnes per day, was processed.
• All critical modifications and upgrades required to sustain processing at the increased production rate of 3,800 tonnes per day are completed. The concentrate filter press upgrade is now complete, as are all process-related pump upgrades. Modifications to the flotation circuit and flocculent systems continue and will be completed during regularly scheduled shutdowns as the final components are delivered.
• Gold recoveries averaged 97.0% for the quarter, a slight improvement over 96.9% in the previous quarter.

Third Quarter 2019 Financial Overview

• The Company generated revenue of $132.7 million compared to revenue of $113.2 million in the second quarter 2019. Revenue includes a gain on trade receivables at fair value related to provisional pricing adjustments of $1.8 million (Q2 2019 – $4.1 million).
• During the quarter the Company sold 90,713 ounces of gold at an average realized price¹ of $1,486 per ounce. In the previous quarter 85,953 ounces of gold were sold at an average realized price of $1,319 per ounce.
• Total cost of sales was $86.2 million or $950 per ounce of gold sold. For the previous quarter, total cost of sales was $83.4 million or $970 per ounce of gold sold.
• Production costs for the third quarter were $56.1 million or $181 per tonne of ore milled, compared to $56.0 million or $173 per tonne of ore milled in the previous quarter.
• Total cash cost was $640 per ounce of gold sold resulting in an average realized cash margin of $784 per ounce of gold sold. In the second quarter 2019, total cash cost was $702 per ounce of gold sold resulting in an average realized cash margin of $550 per ounce of gold sold.
• AISC was $878 per ounce of gold sold in the quarter compared to $940 per ounce of gold sold in the previous quarter.
• Earnings from mine operations were $46.6 million compared to $29.8 million in the previous quarter.
• Net earnings were $6.3 million compared to earnings of $10.4 million in the previous quarter. Adjusted earnings were $34.0 million compared to $17.0 million in the previous quarter.
• Cash generated by operations was $77.8 million compared to $41.2 million in the previous quarter.
• The Company repaid $16.7 million of the $480.0 million loan facility with cash generated from operations this quarter, for a total of $81.3 million this year ($398.7 million outstanding). The Company also paid $62.4 million to repurchase of the Offtake Obligation using cash generated from operations. The Company has now achieved and surpassed the initial debt repayment target of $140 million and is on track to repay $180 million of debt in 2019.

2020 Updated Mineral Resource and Mineral Reserve Estimates and Life of Mine Plan

The Company plans to release updated Mineral Resource and Mineral Reserve estimates in the first quarter of 2020, as well as an updated life of mine plan.  The Mineral Resource will be updated with the results from underground drilling completed by the end of the third quarter which includes 89,380 meters from 1,483 holes.

The updated life of mine plan will incorporate longitudinal longhole stoping (mining along the direction of the corridors of high-grade gold mineralization) as the mining method in areas of the mine where corridors of high-grade gold mineralization are defined.  The mine plan, which will be based on a production rate of 3,800 tonnes per day, will include a plan for stope inventory.  The availability of stopes representing a range of grades, including multiple higher-grade stopes, allows mining operations to optimize stope blending and provides alternative stopes for mining if required.

With the expected increase in the confidence level resulting from the Mineral Resource update and the transition to longitudinal longhole stoping in certain areas, we anticipate improved grade predictability and management of internal dilution, which will in turn allow for improved production forecasting.

Warwick Board, Ph.D., P.Geo, Pr.Sci.Nat., Vice President, Geology and Chief Geologist, Pretium Resources Inc. is the Qualified Person (“QP”) responsible for the Brucejack Mine reserve definition, expansion and exploration drilling, and has reviewed and approved the scientific and technical information contained in this news release relating thereto.

Lyle Morgenthaler, B.A.Sc., P.Eng., Chief Mine Engineer, Pretium Resources Inc. is the QP responsible for Brucejack Mine development, and has reviewed and approved the scientific and technical information contained in this news release relating thereto.

Our unaudited condensed consolidated interim Financial Statements and MD&A for the three and nine months ended September 30, 2019 and 2018 are filed on SEDAR and EDGAR and are available on our website at www.pretivm.com.

Webcast and Conference Call

The webcast and conference call to discuss the third quarter 2019 operating and financial results will take place Thursday, October 31, 2019 at 8:00 am PT (11:00 am ET).

Webcast and conference call details:

Thursday, October 31, 2019 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

A recorded playback will be available until November 14, 2019:

Toll Free (North America)	1-800-319-6413
Access Code	3558

About Pretivm

Pretivm is a low-cost intermediate gold producer with the high-grade underground Brucejack Mine in northern British Columbia.

For further information contact:

Joseph Ovsenek President & CEO		Troy Shultz Manager, 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.)

Operating Results

	Three months ended September 30,				Nine months ended September 30,
		2019		2018		2019		2018
Ore mined (wet tonnes)	t	325,228		255,227		970,659		772,072
Mining rate	tpd	3,535		2,774		3,556		2,828
Ore milled (dry tonnes)	t	309,754		240,122		929,047		738,555
Head grade	g/t Au	9.1		12.4		8.9		12.0
Recovery	%	97.0		97.4		96.9		97.4
Mill throughput	tpd	3,367		2,610		3,403		2,705
Gold ounces produced	oz	88,227		92,641		258,168		279,670
Silver ounces produced	oz	124,958		95,741		368,989		308,676
Gold ounces sold	oz	90,713		94,458		258,100		278,417
Silver ounces sold	oz	108,250		87,110		309,666		289,710
The following abbreviations were used above: t (tonnes), tpd (tonnes per day), g/t (grams per tonne), Au (gold) and oz (ounces).

Financial Results

	Three months ended September 30,				Nine months ended September 30,
In thousands of USD, except for per ounce data		2019		2018		2019		2018
Revenue	$	132,735		110,060		349,056		345,960
Earnings from mine operations	$	46,585		37,608		105,526		114,512
Net earnings for the period	$	6,259		10,734		20,868		33,773
Per share – basic	$/share	0.03		0.06		0.11		0.19
Per share – diluted	$/share	0.03		0.06		0.11		0.19
Adjusted earnings(1)	$	34,024		26,327		67,564		79,172
Per share – basic(1)	$/share	0.18		0.14		0.37		0.43
Total cash and  cash equivalents	$	16,583		190,318		16,583		190,318
Cash generated from operating activities		77,813		52,364		158,940		154,358
Total assets	$	1,579,105		1,771,543		1,579,105		1,771,543
Long-term debt(2)	$	413,222		140,357		413,222		140,357
Production costs (milled)	$/t	181		207		178		211
Total cash costs(1)	$/oz	640		568		675		627
All-in sustaining costs(1)	$/oz	878		709		896		758
Average realized price(1)	$/oz	1,486		1,214		1,378		1,284
Average realized cash margin(1)	$/oz	784		601		639		612
(1) Refer to the “Non-IFRS Financial Performance Measures” section at the end of this news release. (2) Long-term debt does not include the current portions of the Company’s loan facility in the amount of $64,423 as at September 30, 2019. For the comparable period in 2018, long-term debt does not include the current portions of the Company’s then-outstanding credit facility and stream obligation in the amount of $641,468.

IBF4