Pretivm Resources Inc. (PVG)

[silver100]

Pretium jacks up high-grade gold project in BC

In an updated scoping study Pretium projects tripling production to near seven million ounces gold at its Brucejack project.

http://www.mineweb.com/mineweb/view/mineweb/en/page103118?oid=145847&sn=Detail

Author: Kip Keen
Posted: Wednesday , 22 Feb 2012



HALIFAX, NS (MINEWEB) -


Like a powerful steroid, new high-grade gold resources enabled Pretium Resources (TSX, NSYE:PVG) to dramatically improve the mining outline of its Brucejack project in BC, Canada.

In a comparison of old and new scoping studies - the previous one was out mid last year - Pretium triples life of mine gold production. Instead of 2.2 million ounces gold @ 8.58 g/t gold and 14.72 million ounces silver @ 73.47 g/t, Pretium would now churn out 6.9 million ounces gold @ 18.9 g/t and 17 million ounces silver @ 59.2 g/t, life of mine.

The key here, more than anything else, is gold grade, which more than doubles thanks to a resource estimate that Pretium produced late last year. In it Pretium defined incredibly high grade gold from the Valley of the Kings area of the Brucejack project.

Indeed as previously noted on Mineweb the updated scoping study of the Brucejack project held steady on the 1,500 tonne per day rate of mining. While doing so, however, Pretium now estimates Brucejack would produce more than twice the amount of gold per year - 287,000 ounces versus 135,000 ounces over life of mine. That is the effect of higher grades.

Meantime, with overall life of mine tonnage growing about 40 percent to 11.8 million tonnes at the higher grade, Brucejack's minelife grows from 16 to 24 years.

The hike in gold grade and the addition of ounces has an equally staggering impact on project economics. Pretium had previously estimated a $662 million net present value (NPV), pre-tax and discounted at five percent. Pretium now forecasts NPV at $2.3 billion. Pretium's base case scenarios assumed precious metal prices of $1,100 per ounce gold and $21 per ounce silver.

As for capital costs, they climb 55 percent to $436 million. Pretium notes that two items are mainly behind the increase. First, it plans to pull forward underground access to higher grade resources in the production plan, meaning more costly pre-production mine development.

And second, whereas Pretium had envisioned using onsite diesel power, it now sees hooking up to the grid. This leads to higher up front costs - $42 million - but lower operating costs - C$0.33 per kilowatt hour for diesel versus C$0.06 for hydro-electricity.