Pretium plans Brucejack high-grade mine

Vancouver – Pretium Resources (PVG-T) has completed a preliminary economic assessment on its Brucejack gold-silver project in northern British Columbia a little more than six months after acquiring the project and listing itself on the Toronto stock exchange.

The study focuses on the high-grade portion of the project, concentrated in the West Zone and the recently discovered Valley of the Kings Zone. A February resource estimate, using a 5-grams-gold cut-off, outlined 3.7 million measured and indicated tonnes grading 7.66 grams gold per tonne and 185.84 grams silver per tonne, plus an inferred resource of 4.7 million tonnes grading 12.54 grams gold and 49.24 grams silver.

The actual mine plan is based on an underground mining inventory of 6.16 million tonnes with an average mill feed grade of 10.5 grams gold and 87.26 grams silver, and an open pit inventory of 2.26 million tonnes grading 3.35 grams gold and 35.95 grams silver.

The study calls for an underground operation to mine the high-grade resource for 13 years before incorporating a small open pit for 3 years. The company expects to process 1,500 tonnes per day.

The high-grade resource sits within an optimized open-pit shell resource that is largely left out of the study. Using a 0.3 gram gold cut-off, the bulk-tonnage resource stands at 297 million measured and indicated tonnes grading 0.86 gram gold and 12.17 grams silver, plus 542.5 million inferred tonnes grading 0.72 gram gold and 8.67 grams silver.

Focusing on the high-grade resource, the study estimates Pretium could produce 2.16 million oz. gold and 14.72 million oz. silver over the life of mine, averaging 173,200 oz. gold and 1.12 million oz. silver a year for the first 10 years.

Using US$1,100 per oz. gold and US$21 per oz. silver, the financials work out to a net present value of US$662 million with a 5% discount, an internal rate of return of 27.1% and net cash flow of US$1.08 billion.

Total capital costs are estimated at US$281.7 million, while total underground costs per tonne come in at US$158.36 per tonne and open pit costs at US$68.77 per tonne.

Pretium plans to process the materials with a combination of conventional bulk sulphide flotation, gravity concentration and cyanidation, using the Merrill-Crowe process for final gold and silver recovery. Recoveries are estimated at 93% for gold and 74% for silver.

The company also recently launched a 50,000-metre drill program at Brucejack designed mostly to upgrade inferred resources, but also to extend mineralization in the West Zone footwall and test high-grade structures in the Bridge and Gossan Hill zones. Pretium has already mobilized at least five of eight drill rigs at the site.

At its Snowfield project, little work is being beyond environmental studies in conjunction with Brucejack. Pretium has, however, signed a cooperation agreement with Seabridge Gold (SEA-T), which owns the adjacent Kerr-Sulphurets-Mitchell (KSM) gold-copper project.

The agreement establishes the terms where mining could encroach on the other’s boundaries, while a second agreement explores the potential for the joint development of the KSM and Snowfield projects. Pretium notes that combined, the two projects represent the largest undeveloped gold resource in North America.

The KSM project currently hosts 2.2 billion proven and probable tonnes grading 0.55 gram gold, 0.21% copper, 3.04 grams silver and 53.2 parts-per-million molybdenum for totals of 38.5 million oz. gold, 10 billion lbs. copper, 214 million oz. silver and 257 million lbs. molybdenum.

The Snowfield project hosts 1.37 billion measured and indicated tonnes grading 0.59 gram gold, 1.72 grams silver, 0.1% copper and 85.5 parts-per-million molybdenum and an inferred resource of 833 million inferred tonnes grading 0.34 gram gold, 1.9 grams silver and some copper and molybdenum.

Pretium acquired both the Snowfield and Brucejack projects from Silver Standard Resources in December for a total consideration of $450 million.

Pretium’s share price dropped 75¢ to $8.67 on the day the study was released but jumped back up to $9.36 the following day. The company started trading at $5.75 in December and has since traded as high as $14.19. Pretium has 85.5 million shares outstanding.