Pretium Resources Inc. (PVG, Financial) announced the completion of exploration activities at its Canadian Brucejack Project. The company's stock jumped 4.46% to $7.50 per share on the heels of the announcement at the end of regular trading on Monday, June 18.
The Brucejack mine is situated north of Stewart City in northwestern British Columbia. The company's mining activities are taking place about one kilometer west of the Flow Dome Zone.
The exploration team was looking for continuity of mineralization in the underground area, which is between the Valley of the Kings and the Flow Dome Zone. The drilling results also provide the company with a good assessment for a future exploitation of a porphyry source at depth beneath the Flow Dome Zone.
The results of the last two drilling holes indicate extension of mineralization to the east of Brucejack.
The drillings are labeled VU-820 and VU-911. The exploration team has explored an underground length of more than 1,500 meters.
With the drilling hole number VU-820, the team crossed a 90.21 meters subspace of valuable metal grading 1.71 grams of gold per ton of ore. Results also include peaks of 6.43 grams per ton and 6.06 grams per ton over subspaces of four and one meters. The hole VU-820 also revealed an amazing 46 grams per ton metal concentration grade over an interval of one meter.
With the drilling hole number VU-911, the team crossed three 0.5 meters subspaces of valuable metal grading 157, 76.3 and 33.6 grams of gold per ton of ore. The hole also returned an amazing concentration peak of 142 grams of gold hosted in one ton of ore over a 1.5 meters interval.
The share price is now over the 100 and 50-SMA lines but is still below the 200-SMA line.
The stock has fallen 16% for the 52 weeks through June 18 and the 52-week range is $6.17 to $12.44 per share. The company is almost on par with the industry concerning the earnings before interest taxes depreciation and amortization (Ebitda) margin with a ratio of 25.3%. The margin has been calculated over a trailing 12-month period.
At Brucejack, Pretium Resources produced 75,689 ounces of gold in the first trimester of 2018 and guides a 150,000 to 200,000 ounces ranging gold production for the first half of 2018. The metal will be produced and sold at an all-in sustaining cost of $700 to $900 per ounce.
Investors who may want to get exposure to Pretium Resources must know that Brucejack is in a ramp-up operating phase. Since the company is expecting output to reach a steady rate in the second half of 2018, a significant improvement in the production of the yellow metal from the Canadian mine is expected for the second quarter of the year. That’s the catalyst.
For a more convenient entry point, I would wait for a significant weakness.
(Disclosure: I have no positions in Pretium Resources.)
