In a research note dated Aug. 12, analyst Joe Reagor with ROTH Capital Partners reported that Pretium Resources Inc.'s (PVG:TSX; PVG:NYSE) Q2/18 financials were "in line with expectations" and highlighted the quality of the company's Brucejack mine.
Pretium's Q2/18 revenue of $146.5 million ($146.5M) and earnings per share of $0.17 were higher than ROTH's estimates of $141.2M and $0.16, respectively. "The slight beat," Reagor noted, "can be attributed to gold sales exceeding production slightly, in our view."
Reagor pointed out that the day after the mining firm reported its Q2/18 results, on Aug. 10, its share price "increased significantly." This was due to the market acknowledging the company "is putting its startup issues in the rear view" and showcasing the high caliber of Brucejack. During the quarter, the mine generated $72M in cash, and its all-in sustaining cost was $648 per ounce.
"We note that some investors have continued to question the company's ability to generate enough cash to buy out its gold stream by year-end; we believe this quarter's financial results have gone a long way to answer that question," wrote Reagor.
ROTH has a Buy rating and a US$19 per share price target on Pretium; the stock is currently trading at around US$8.81 per share. "We continue to believe the company trades at a significant discount to its discounted cash flow value due to historic resource questions, and we believe that continued strong performance will result in a significant increase in valuation," concluded Reagor.
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Disclosures from ROTH Capital Partners, Pretium Resources Inc., Company Note, August 12, 2018
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.
ROTH makes a market in shares of Pretium Resources Inc. and as such, buys and sells from customers on a principal basis.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.
