Pretivm Resources Inc. (PVG)

[tootalljones]

More 1st rate analysis from DaveG

Johnnyola1

September 21, 2017 - 09:10 AM 124 Reads
Post# 26724610

5 starsv
Grape562000: "even a blind man can see that Pretium is truly
......." I would add here more DaveG analysis which he wrote on August 7, 2017 as follows:

Spent part of the weekend re-reading parts the Feasibility Study for the Brucejack mine and subsequent developments. These are my takeaways:
1) An enormous amount of time, energy and money were spent over ten years on confirming the original discovery. Reserve and resource calculations were deliberate and out-sourced every step of the way, performed by different companies and a long list of independent geologists and mine engineers. Pretium insisted in taking the most conservative route in defining the orebody and how best to process and monetize it. Continuous efforts to eliminate bias were taken at critical stages.
2) The final table of Proven and Probable Reserves does not differ that much form the original 2007 Resource, indicating that the first theory of the geology and engineering was basically correct.
3) The all in cost per ounce of $446 includes future capital expense required to mine and process the 8.7 million tonne reserve. The $C167/tonne, resulting in $257 oz operating cost (not $147) mining and processing cost, is an astounding US$167/ oz. Future capital costs, G&A, make up the difference. Taxes are computed at 34% in the cash flow projections.
4) Any additional new gold zones found during the ten year period of intensive drilling were kept out of the mine plan for now.
5) Snowfield is in addition to three other deposits within 25 km of the minesite. Seabridge owns three of them, opening the door to jv's and custom milling in the distant future.
6) There are 3.1 million oz, of 21gr/tonne 'inferred' gold in addition to the 8.7 million reserves. If any is added to the mine plan over time, the value would be significant as all of the original capital costs would have been paid by then. In theory, years could be added to the mine life with this resource and/or the Seabridge custom milling.
7) The only major miscalculation, which has dogged the share price, is the 25% overrun on building the mine complex. The upside is the low operating cost of the mill. Stock charts indicate confidence was shattered, however, after this news was released. In reality, the additional cost represents 6 or 7 months of production.
8) IMO, One of two or both of these outcomes are likely, a) more gold will be found extending the life and value of PVG b) there will be a buyout somewhere north of $25 a share.
As I conclude, PVG is trading at its daily, weekly, monthly and near year to date low of US$8.67
Aug 7, 2017. 01:29 PMLink https://seekingalpha.com/user/10083921/comments

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