Gold Project Flashing Takeover Signs
The only thing that would prevent this gold miner from profiting handsomely on its surprisingly large new discovery is another company buying them out, which is a distinct possibility, writes Lawrence Roulston of Resource Opportunities.
Pretium Resources (PVG) is rapidly advancing its high-grade Brucejack gold project in British Columbia. The Valley of the Kings zone hosts a measured and indicated resource of 8.5 million ounces of gold in ore grading 16.4 grams per ton. The inferred resource adds another 2.9 million ounces at similar grade.
Pretium was set up, and acquired the Brucejack and adjacent Snowfield projects late in 2010, thought to be large, low-grade deposits. President Robert Quartermain saw the high-grade potential at Brucejack and moved aggressively to outline a resource that could be mined in the near term as a high-grade underground operation.
Pretium conducted nearly 100,000 meters of drilling to outline the resource—undoubtedly one of the largest drilling programs worldwide last year. Quartermain headed the highly successful Silver Standard, creating $1 billion of shareholder value. Much of that highly successful team is now at Pretium.
A feasibility study is underway and due in the second quarter. A preliminary economic assessment last year was based on a mine that would produce 325,000 ounces of gold annually for the first 12 years, with capital expenditure of $436 million. Using a long term gold price of $1,100 per ounce, the study estimated a net present value (5%) of $2.2 billion.
Last year, the historic underground access ramp in the West Zone was widened to bring it to a size suitable for large-scale mining, and is now being extended toward the Valley of the Kings.