Pretium Resources (PVG) – Waiting on Brucejack
Pretium Resources engages in the acquisition, exploration, and development of precious metal resource properties in the Americas. The company currently holds a 100% interest in both the Brucejack Project, which is comprised of 4 mining leases and 6 mineral claims, and the Snowfield Project, which is comprised of 1 mineral claim.
Located in northern British Columbia, the company’s Brucejack project is being advanced as an underground gold mine with commercial production targeted and on schedule for 2017. All major federal and provincial regulatory permits required to begin development work towards commercial production were received in 2015. Construction at the project commenced on September 5th, 2015. The project is now fully funded, fully permitted, and construction is well under way. The primary focus of the Project is the Valley of the Kings deposit which is comprised of high-grade visible gold within a lower grade gold quartz stockwork system.
On December 15th, the company released an updated reserves estimate for its flagship Brucejack project. The company said, “Proven Mineral Reserves in the Valley of the Kings increased to 1.6 million ounces of 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).”
In addition, with the achievements the company has made so far to advance production, it announced it would be realigning it senior leadership talent to support the next phase of growth. Effective on January 1st, 2017, Joseph Ovsenek assumed the role of President and Chief Executive Officer. Mr. Ovsenek joined the company at its formation and has been managing the daily operations of the company since he was appointed President in May 2015. Roth Capital was out saying, “We view this transition as a logical step for the company as Mr. Ovsenek has a strong operational and management background.”
Wall Street currently has 2 Buy Ratings and 2 Hold Ratings on the stock with a consensus price target of $15. Here are some of the recent comments made:
Roth Capital | Buy | $14PT – In a December 15th report, analyst Joe Reagor wrote, “We believe the reserve update 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.”
H.C. Wainwright | Buy | $14.50PT – In a December 16th report, analyst Heiko Ihle wrote, “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.”
So far, this week, the stock has seen some small bullish activity:
• On Monday, there was a buyer of 850+ January 8 Calls for 0.95
• On Monday, there was a buyer of 900+ February 8 Calls for 1.30
• On Tuesday, there was a buyer of 500 January 8 Calls for 1.35
This activity, currently, does not look to be targeting the commercial production target. Rather, I presume that this is in anticipation of several events the company will be taking a part in over the next month. Per their Investor Relations page, here are the events:
• Meet & Greet in Moricetown, British Columbia on January 12th
• Vancouver Resource Investment Conference on January 22nd
• AME BC Round Up on January 23rd
• CIBC Whistler Institutional Investor Conference on January 25th
• BC Premier’s Natural Resources Forum on February 1st
