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Gold Miner Seeks Approval to Boost Mill Capacity, 'Pumping Up the Potential'

Source: Streetwise Reports


December 28, 2017 ( Newswire) Canaccord Genuity analyst Eric Zaunscherb discussed this precious metals company's recent request of the government of British Columbia.

In a Dec. 22 research note, Eric Zaunscherb, an analyst with Canaccord Genuity, reported that Pretium Resources Inc. (PVG:TSX; PVG:NYSE) applied for approval to increase capacity at its Brucejack mill to 3,800 tons per day (3,800 tpd) from the current 2,700 tpd. The company submitted the request to the British Columbia (B.C.) Ministry of Energy, Mines and Petroleum Resources and the B.C. Ministry of Environment and Climate Change Strategy. Pretium preliminarily estimated the expansion cost to be $25 million.

Canaccord expected that Brucejack production would peak at ~450,000 ounces per year (~450 Koz/year), Zaunscherb indicated. However, "with an expansion, we would theoretically see a move to nearly 640 Koz/year, for a 42% annual increase."

Were Canaccord to incorporate these numbers into its Pretium model, Zaunscherb explained, "in 2020 we would see an increase in price target by CA$2 to CA$20.50." However, the financial services firm is leaving the data out of its model for the time being because the project still requires further engineering work and provincial approval.

The analyst pointed out that the Brucejack mill, in the past, "demonstrated the ability to achieve above-expected recovery rates while operating above nameplate capacity." For instance, the mill "ran for 92 consecutive days at 2,840 tpd while achieving nearly 97% recoveries."

Perhaps Pretium is increasing milling capacity, Zaunscherb speculated, "not only to improve current project economics but [also] for future expansion." The company has discovered gold and silver epithermal targets, through its extensive exploration around the Brucejack mine. "Sample grades of up to 62.5 grams per ton gold demonstrate the potential of other high-grade systems within the company's 1,250 square kilometer land package," he added.

Zaunscherb reiterated Canaccord Genuity's Speculative Buy rating and CA$18.50 per share price target on Pretium Resources, whose stock is currently trading at around CA$14.57 per share. He wrote, "We expect potential volatility quarterly with possible fluctuations in head grade, not uncommon in high-grade deposits, but maintain our view that Pretium should be a core holding, with any weakness viewed as an opportunity to add to one's position."

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1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Pretium Resources. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Pretium Resources, a company mentioned in this article.

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