On Dec. 15, Pretium Resources Inc. (PVG:TSX; PVG:NYSE) released an updated reserves estimate for its flagship Brucejack project in northern British Columbia. "Proven Mineral Reserves in the Valley of the Kings increased to 1.6 million ounces gold (3.3 million tonnes grading 14.5 grams per tonne gold), which is sufficient for the first three years of mine life. Proven and Probable Mineral Reserves in the Valley of the Kings increased to 8.1 million ounces gold (15.6 million tonnes grading 16.1 grams per tonne gold)," the company reported.
Pretium also noted that it was on schedule for mill and mine commissioning in mid-2017; the company expects to begin commercial gold production in 2017.
In addition, Pretium has "realigned its senior leadership talent to support the next phase in the company's growth," installing Joseph Ovsenek as president and chief executive officer, with Robert Quartermain assuming the role of executive chair.
In a Dec. 15 research report, analyst Joe Reagor of ROTH Capital Partners wrote, "We believe the reserve updated was an anticipated positive. . .We believe the increased reserve estimate, as well as the inclusion of additional stopes into the mine plan, demonstrate the potential for the company to add ounces to the resource base over time through continued underground drilling."
With regard to the management moves, Reagor noted, "We view this transition as a logical step for the company as Mr. Ovsenek has a strong operational and management background."
Analyst Heiko Ihle, writing for Rodman & Renshaw on Dec. 16, observed, "Brucejack has been de-risked from a financial point of view, as all of the required capital necessary to reach production has been secured. Further, construction has continued to progress without major hiccups—an impressive accomplishment on management's part. Due to this, we continue to believe commissioning should occur towards the middle of 2017, with 2018 serving as the first full year of production at the large-scale high-grade gold project."
In a Dec. 15 research report, Eric Zaunscherb of Canaccord Genuity wrote that, "At the current share price, Pretivm is trading at a 0.62x P/NAV (5%). This is a premium to the mean of peer covered exploration and development companies of 0.35x but a significant discount to the mean of covered small- to mid-cap producers of 0.74x. Given Pretivm's premium gold project situated in a low sovereign risk jurisdiction, we expect the company to trade toward and beyond the 0.74x multiple as it comes into production and demonstrates profitability."
CIBC analyst Jeff Killeen, in a Dec. 15 research report, acknowledged both the increase in reserves as well as a decrease in grade, noting, "The reserve update implies our life-of-mine model will increase by >2 years. That being said, investors may put some focus on the updated Proven Mineral Reserve grade, which was lowered by ~7% from 15.6 g/t to 14.5 g/t. This would imply that the grades over the first three years of the mine life are reduced, lowering our production estimates."
Commenting on the management changes, Killeen wrote, "We view this as a natural change with the company focused on transitioning Brucejack into production in 2017."
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1) Tracy Salcedo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
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ROTH Capital Partners, Pretium Resources Inc., Dec. 15, 2016
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Within the last twelve months, ROTH has received compensation for investment banking services from Pretium Resources Inc..
ROTH makes a market in shares of Pretium Resources Inc. and as such, buys and sells from customers on a principal basis.
Within the last twelve months, ROTH has managed or co-managed a public offering for Pretium Resources Inc.
Rodman & Renshaw, Pretium Resources Inc., Dec. 16, 2016
I, Heiko F. Ihle, CFA and Jake Sekelsky , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of (including, without limitation, any option, right, warrant, future, long or short position).
As of November 30, 2016 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Pretium Resources, Inc..
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did receive compensation from Pretium Resources, Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within
three months following publication of the research report.
The Firm does not make a market in Pretium Resources, Inc. as of the date of this research report.
Canaccord Genuity, Pretium Resources Inc., Dec. 15, 2016
Analyst Certification: Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research.
Pretium Resources Inc. currently is, or in the past 12 months was, a client of Canaccord Genuity or its affiliated companies. During this period, Canaccord Genuity or its affiliated companies provided investment banking services to Pretium Resources Inc..
In the past 12 months, Canaccord Genuity or its affiliated companies have received compensation for Investment Banking services from Pretium Resources Inc.
Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from Pretium Resources Inc. in the next three months.
CIBC, Pretium Resources Inc., Dec. 15, 2016
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Potential Conflicts of Interest: Equity research analysts employed by CIBC World Markets Corp./Inc. are compensated from revenues generated by various CIBC World Markets Corp./Inc. businesses, including the CIBC World Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. CIBC World Markets Corp./Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets Corp./Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers.
Pretivm Resources Inc. is a client for which a CIBC World Markets company has performed investment banking services in the past 12 months.
CIBC World Markets Inc. has managed or co-managed a public offering of securities for Pretivm Resources Inc. in the past 12 months.
CIBC World Markets Inc. has received compensation for investment banking services from Pretivm Resources Inc. in the past 12 months.
CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from Pretivm Resources Inc. in the next 3 months.