Pretivm Reports First Quarter 2018 Results

by pmnationtalk on May 11, 2018456 Views

Steady-state gold production expected by mid-to-late 2018

VANCOUVER, British Columbia, May 10, 2018 — Pretium Resources Inc. (TSX:PVG) (NYSE:PVG) (“Pretivm” or the “Company”) is pleased to report financial and operating results for the first quarter ended March 31, 2018.

In the news release all quoted figures are in USD$ unless otherwise noted. The Company uses the following non-IFRS measures: total cash costs, all-in sustaining costs (“AISC”), average realized gold price, average realized margin, adjusted earnings (loss), and adjusted earnings (loss) per basic share. Refer to the Company’s Management Discussion and Analysis and the “Non-IFRS Financial Performance Measures” section at the end of this news release for an explanation and discussion of these non-IFRS measures.

“The implementation of operational grade control has had a positive impact on our ability to consistently deliver high-grade ore to the mill as we ramp-up production,” said Pretivm President & CEO Joseph Ovsenek. The Brucejack Mine is generating free cash flow, and we are on track to achieving H1 2018 guidance of $900 to $700 per ounce of gold sold. We remain confident that we will deliver on our H1 2018 AISC guidance, as well as our production guidance of 150,000 to 200,000 ounces of gold and expect to achieve steady-state production by mid-to-late 2018.”

First Quarter Production Overview

Production totaled 75,689 ounces of gold and 94,730 ounces of silver.
10.9 grams per tonne gold mill feed grade for March; average 9.1 grams per tonne gold mill feed grade for the quarter.
Gold recoveries averaged 96.8%.
Process plant throughput averaged 2,905 tonnes per day for a total of 261,443 tonnes.

Q1 2018 Monthly Production:

	Gold Production (oz)	Gold Grade (g/t)	Recovery (%)	Ore Milled(t)
March	32,910	10.9	96.7	92,580
February	27,636	11.4	97.1	77,763
January	15,143	5.4	96.7	91,100
Q1 2018	75,689	9.1	96.8	261,443

Mine development averaged over 800 meters per month during the quarter to prepare additional stopes which will allow for management of ore grades feeding the mill.

First Quarter Financial Summary

Revenue of $89.4 million was generated on sale of 68,651 ounces of gold and 84,234 ounces of silver.
Total cost of sales was $72.6 million or $1,057 per ounce of gold sold. Total cash cost was $841 per ounce of gold sold and AISC was $1,009 per ounce of gold sold. Total AISC for the first quarter was directly impacted by low gold production during ramp-up in January, which resulted in low gold sales recorded during the quarter and consequently higher total AISC per ounce of gold sold. (Refer to table “Q1 2018 Monthly Production” above.)

Production spending for the first quarter was in-line with H1 2018 guidance. The Company is on track to achieving H1 2018 guidance of $900 to $700 per ounce of gold sold. When steady-state production is achieved, any fluctuations between produced ounces and sold ounces should minimize and reduce the timing discrepancy in AISC.

As at March 31, 2018, there were 8,854 ounces of gold doré and 13,823 ounces of gold in concentrate in finished goods inventory recorded at cost of $849 per ounce which includes depreciation and depletion.
Earnings from mine operations were $16.8 million.
Net loss was $8.1 million or $0.04 per share. Adjusted earnings were $5.8 million or $0.03 per share.
Cash and cash equivalents were $70.5 million at March 31, 2018. The Company has working capital of $63.4 million excluding the current portion of long-term debt as at March 31, 2018 compared to $40.6 million December 31, 2017.
Cash generated by operations was $24.7 million.

Operating Results

	Three months ended March 31,
		2018	2017⁽¹⁾

Ore mined	t	268,339	–
Mining rate	tpd	2,982	–

Ore milled	t	261,443	–
Head grade	g/t Au	9.1	–
Recovery	%	96.8	–
Mill throughput	tpd	2,905	–

Gold ounces produced	oz	75,689	–
Silver ounces produced	oz	94,730	–

Gold ounces sold	oz	68,651	–
Silver ounces sold	oz	84,234	–
⁽¹⁾ No comparative data as the mine commenced commercial production as of July 1, 2017.
The following abbreviations were used above: t (tonnes), tpd (tonnes per day), g/t (grams per tonne), Au (gold) and oz (ounces).

Gold and silver production

During the three months ended March 31, 2018, the Brucejack Mine produced 75,689 ounces of gold and 94,730 ounces of silver with gold production improving steadily through the first quarter. There is no comparable information as the Brucejack Mine achieved commercial production on July 1, 2017.

During the quarter, the Company sold 68,651 ounces of gold and 84,234 ounces of silver. As a result of our production profile over the course of the first quarter of 2018, there was a corresponding timing impact on our sales ounces. As at March 31, 2018, there were 8,854 ounces of gold doré and 13,823 ounces of gold in concentrate in finished goods inventory recorded at cost of $849 per ounce which includes depreciation and depletion.

Processing

During the three months ended March 31, 2018, a total of 261,443 tonnes of ore, equivalent to a throughput rate of 2,905 tonnes per day, was processed.

The mill feed grade averaged 9.1 grams per tonne gold for the quarter and 10.9 grams per tonne for the month of March (refer to the “Operational Grade Control” section below). Gold recovery for the quarter was 96.8%. We continue to review the mill process to optimize recoveries.

On December 20, 2017, the Company submitted an application to the BC Ministry of Energy, Mines and Petroleum Resources and the BC Ministry of Environment and Climate Change Strategy to increase the Brucejack Mine production rate to 3,800 tonnes per day. The increase would result in an annual average production rate of 1.387 million tonnes, up from 0.99 million tonnes (a daily average of 3,800 tonnes from 2,700 tonnes). The approval process is expected to take approximately six to twelve months. Engineering is underway to assess the mill capacity upgrades required to increase the production rate. Based on preliminary engineering, the capital cost to increase the mill capacity is estimated to be less than $25.0 million. The estimate will be updated when the engineering process is complete.

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