Pretium Resources Inc. (PVG, Financial) soared 5.8% to $8.42 per share on the New York Stock Exchange on Thursday, Oct. 4 following the announcement of the agreement that the miner has reached with The Bank of Nova Scotia, Societe Generale and ING Capital LLC for the refinancing of its construction credit facility. The company has secured a $480 million signed commitment letter from the banks.
The credit facility will be used for the construction of the Brucejack Mine, a high-grade gold deposit in British Columbia.
At this mine, the company is hoping to produce 404,000 ounces of refined gold from proven and probable reserves of 8.7 million ounces over a mine life of 18 years. Pretium is also projecting an annual production of 504,000 ounces of gold over the first five years of operations.
In the first half of 2018, Brucejack Mine produced 187,000 ounces of gold.
- Insiders Sell Newmont Mining Corp
- Pretium Resources Unlocks Future Gold Production of $710 Million
- Insiders Acquire Shares of Freeport-McMoRan
For the second half of 2018, Pretium Resources is forecasting 7-17.5% growth in gold production of 200,000 to 220,000 ounces. That is the catalyst for the remainder of 2018. The agreement with the banks corroborates the following expectation on the market value of the stock. Wall Street is guiding for a 62.3% stock appreciation from the share price at market close on Oct. 4. Analysts estimate the stock should hit the target sometime within the next 52 weeks, commodity permitting.
Following Thursday’s jump, the share price is now above the 200-, 100- and 50-day simple moving average lines. The stock has lost 14% for the 52 weeks through Oct. 4. The market capitalization is approximately $1.52 billion.
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The 52-week range is $6.17 to $12.44 per share. The price-book ratio is 1.75 versus an industry median of 1.74 and the EV-to-EBITDA is 14.63 versus an industry median of 9.3.
The recommendation rating is 2 out of 5.
Disclosure: I have no positions in any securities mentioned in this article.
