Photo by: Pretium Resources
TORONTO (miningweekly.com) – British Columbia-focused Pretium Resources on Friday reported that an updated feasibility study for its Brucejack project had proven that the project could still provide high margins despite the uncertain gold price environment.
The TSX- and NYSE-listed project developer had used a lower gold price of $1 100/oz of gold for its base case scenario, as opposed to $1 350/oz in the June 2013 study.
The Canadian National Instrument 43-101-compliant report, prepared by Tetra Tech, also used $17/oz of silver, compared with $20/oz in the previous report.
This had resulted in the net present value (NPV) falling by $450-million to $2.25-billion, down from $2.7-billion, and the pre-tax internal rate of return (IRR) falling to 34.7% from 42.9%.
Pretium said the payback period was estimated at 2.7 years.
Further, the capital cost for the project rose to $746.9-million from $663.5-million, while average operating costs rose to C$163.05/t milled over the life of the mine, from C$156.46/t previously.
Pretium is advancing its 100%-owned Brucejack project, in Northern British Columbia, to production as a high-grade gold underground mine.
Based on the latest feasibility study, Brucejack is expected to produce 504 000 oz/y of gold for the first eight years and 324 000 oz/y gold for the remainder of its total 18-year mine life. The mine is planned to operate with a processing rate of 2 700 t/d, mining a total of 16.5-million tonnes of ore at an average mill feed grade of 14.1 g/t.
Brucejack's Valley of the Kings deposit hosts compliant proven and probable reserves totalling 6.9-million ounces of gold, contained in 13.6-million tonnes grading 15.7 g/t. Commercial production at Brucejack is targeted for 2017.
When using a gold price of $1 400/oz, the project economics gets more bullish, placing the pre-tax NPV at $3.54-billion, with an IRR of 47%.
The company said it expected to file its environmental assessment certificate application with the British Columbia environmental regulatory authorities by the end of June. Pretium would also submit its environmental-impact statement to federal authorities in July.
Pretium said that it planned to start evaluating financing options in the fall.
The company’s TSX-listed stock initially gained as much as C$0.19 a share in the morning session, before falling back about $2 to C$7.95 apiece in afternoon trading. The stock had gained 53% in value since the start of the year.