Mr. Joseph Ovsenek reports
PRETIVM REPORTS FIRST QUARTER 2019 OPERATING AND FINANCIAL RESULTS
Pretium Resources Inc. has released its operating and financial results for the first quarter 2019, Pretium's seventh consecutive quarter of positive adjusted earnings.
All amounts are in US dollars unless otherwise noted. This release should be read in conjunction with the Company's Financial Statements and Management's Discussion and Analysis ("MD&A") available on the Company's website and on SEDAR and EDGAR.
First Quarter 2019 Operating Summary
Production of 79,180 ounces of gold.
- Mill feed grade of 8.7 grams per tonne gold.
- Gold recovery rate of 96.8%.
- Ore milled 295,122 tonnes.
- Daily average ore milled 3,279 tonnes per day.
First Quarter 2019 Financial Summary
- Revenue of $103.1 million on 81,434 ounces of gold sold.
- Total cost of sales $74.0 million or $908 per ounce of gold sold1.
- Earnings from mine operations1 of $29.2 million.
- Achieved an average realized cash margin1 of $571 per ounce of gold sold, with a total cash cost of $686 per ounce of gold sold1.
- All-in Sustaining Cost ("AISC")1 of $868 per ounce of gold sold within 2019 guidance.
- Generated $39.9 million in cash from operating activities.
- Net earnings of $4.2 million ($0.02 per share).
- Adjusted earnings1 of $16.5 million ($0.09 per share1).
- Reduced debt by $20.0 million using cash generated from operations.
- Cash and cash equivalents balance of $50.9 million as at March 31, 2019.
1 Refer to the "Non-IFRS Financial Performance Measures" section at the end of this news release.
"Brucejack delivered another profitable quarter and generated free cash flow," said Joseph Ovsenek, President & CEO of Pretivm. "Our AISC for the quarter was within our annual guidance, and we generated almost $40 million in cash from operations, which enabled us to pay down $20 million of debt ahead of schedule. We made significant progress in the quarter towards achieving our 3,800 tonnes per day production rate target at Brucejack and with increased accessibility from continued underground development, we have established a solid foundation for operating effectively at our higher target rate. Both grade and tonnes are expected to be higher in the second half of the year and we remain on track to achieve 2019 guidance."
2019 Production and Financial Guidance
The Company expects to achieve its 2019 gold production guidance of 390,000 ounces to 420,000 ounces and the planned production ramp-up from 2,700 tonnes per day to 3,800 tonnes per day over the course of the year. In support of the ramp-up, the Company prioritized the increase in development rate to 1,000 meters per month and the access to a greater number of stopes to support a 3,800 tonnes per day mining rate by year end. As the mine plan sequences through a lower grade area of the Valley of the Kings, all stopes above cut-off grade of approximately 5.0 grams per tonne gold are being mined as they become available for production. Accordingly, gold grade in the first quarter was 8.7 grams per tonne and the gold grade is expected to average approximately 10.4 grams per tonne over the course of 2019; both grade and tonnes are expected to be higher in the second half of the year.
AISC for the year is expected to range from $775 per ounce gold sold to $875 per ounce gold sold. For the first quarter, AISC was within guidance at $868 per ounce of gold sold. AISC for the year includes $15.0 million for one-time sustaining capital expenditures such as access road and camp upgrades, an underground maintenance shop and a back-up underground paste booster pump. AISC also includes approximately $23.0 million for growth-oriented expenses such as resource expansion drilling and an additional 300 meters per month of underground development associated with the production ramp-up to 3,800 tonnes per day.
First Quarter 2019 Production Overview
Gold production totaled 79,180 ounces, a 5% increase compared to 75,689 ounces in the first quarter 2018. The increase in production was the result of an increase in ore milled due to the amended permits received in late 2018.
A total of 295,122 tonnes of ore, equivalent to a throughput rate of 3,279 tonnes per day, was processed. This was an increase of 13% from the first quarter 2018, in which a total of 261,443 tonnes of ore, equivalent to a throughput rate of 2,905 tonnes per day, was processed. The tonnes of ore processed increased in the period due to the planned production ramp-up to 3,800 tonnes per day.
The modifications and upgrades required to sustainably process ore at the upgraded production rate of 3,800 tonnes per day are on schedule and will continue during regularly scheduled shut-downs.
The mill feed grade averaged 8.7 grams per tonne gold for the quarter compared to 9.1 grams per tonne gold in the first quarter 2018. The decrease in mill feed grade was the result of the mine plan sequencing through a lower grade area and processing immediately available stopes that meet the grade cut-off. The mill feed grade is expected to increase in the second half of the year.
Gold recoveries averaged 96.8% for the quarter and the comparable quarter in 2018.
Mine development has been successfully accelerated throughout the first quarter. Mine development is approaching 1,000 meters per month and is expected to maintain that rate throughout the year to ensure development remains ahead of production requirements to ensure steady mining rates of 3,800 tonnes per day by year end.
First Quarter Financial Overview
The Company generated revenue of $103.1 million compared to revenue of $89.4 million in the first quarter 2018. Revenue includes a loss on trade receivables at fair value related to provisional pricing adjustments of $0.7 million (2018 - gain of $0.8 million).
Total cost of sales was $74.0 million or $908 per ounce of gold sold. For the first quarter 2018, total cost of sales was $72.6 million or $1,057 per ounce of gold sold. Total cost of sales includes production costs, depreciation and depletion, royalties and selling costs.
Total cash cost was $686 per ounce of gold sold resulting in an average realized cash margin of $571 per ounce of gold sold. In the first quarter 2018, total cash cost was $841 per ounce of gold sold resulting in an average realized cash margin of $430 per ounce of gold sold.
AISC was $868 per ounce of gold sold and within our 2019 financial guidance of $775 to $875 per ounce of gold sold. In the first quarter 2018, AISC was $1,009 per ounce of gold sold.
Earnings from mine operations were $29.2 million compared to $16.8 million in the first quarter 2018.
Net earnings were $4.2 million compared to a net loss of $8.1 million in the first quarter 2018. Adjusted earnings were $16.5 million compared to $5.8 million in the first quarter 2018.
Cash generated by operations was $39.9 million compared to $24.7 million in the first quarter 2018.
The Company repaid $20.0 million of the $480.0 million senior secured loan facility with cash generated from operations ahead of the scheduled payment due date.
Updated Mineral Resource Estimate, Mineral Reserve Estimates and Life of Mine Plan
The Company announced the updated Mineral Reserve, Mineral Resource and Life of Mine Plan for the Brucejack Mine, which highlight the continued robust economics of the low-cost, long-life operation (see news release dated April 4, 2019).
2019 Brucejack Mine Estimated Total Life of Mine Plan (Valley of the Kings and West Zone)
Average annual production of over 520,000 ounces of gold over the first 5 years with average annual cash flow of $350.0 million (post tax).
Average annual production of over 525,000 ounces of gold over the first 10 years and over 440,000 ounces of gold over 14-year mine life.
Average AISC of $535 per ounce of gold sold over the first 10 years and average life of mine AISC of $539 per ounce.
After tax net present value of $2.59 billion ($3.6 billion pre-tax).
2019 Brucejack Mine Total Proven and Probable Mineral Reserve Estimate
6.4 million ounces of gold (16.0 million tonnes grading 12.6 grams of gold per tonne).
The information in this "Updated Mineral Resource Estimate, Mineral Reserve Estimate and Life of Mine Plan" section has been extracted from our news release dated April 4, 2019. For additional information (including QPs that have reviewed, approved and verified) see news release dated April 4, 2019.
Warwick Board, Ph.D., P.Geo, Pr.Sci.Nat., Vice President, Geology and Chief Geologist, Pretium Resources Inc. is the Qualified Person ("QP") responsible for the Brucejack Mine reserve definition and exploration drilling, and has reviewed and approved the scientific and technical information contained in this news release relating thereto.
Lyle Morgenthaler, B.A.Sc., P.Eng., Chief Mine Engineer, Pretium Resources Inc. is the QP responsible for Brucejack Mine development, and has reviewed and approved the scientific and technical information contained in this news release relating thereto.
Our unaudited condensed consolidated interim Financial Statements and MD&A for the three months ended March 31, 2019 are filed on SEDAR and EDGAR and are available on our website at www.pretivm.com.
Webcast and Conference Call
The webcast and conference call to discuss the first quarter 2019 operating and financial results will take place Friday, May 3, 2019 at 8:00 am PT (11:00 am ET).
Webcast and conference call details:
Friday, May 3, 2019 at 8:00 am PT (11:00 am ET)
Webcast See company's website
Toll Free (North America) 1-800-319-4610
nternational and Vancouver 604-638-5340
A recorded playback will be available until May 18, 2019:
Toll Free (North America) 1-800-319-6413
Access Code 2988
Pretivm is a low-cost intermediate gold producer with the high-grade gold underground Brucejack Mine.
Three months ended March 31,
Ore mined (wet tonnes) t 308,387 268,339
Mining rate tpd 3,427 2,982
Ore milled (dry tonnes) t 295,122 261,443
Head grade g/t Au 8.7 9.1
Recovery % 96.8 96.8
Mill throughput tpd 3,279 2,905
Gold ounces produced oz 79,180 75,689
Silver ounces produced oz 108,234 94,730
Gold ounces sold oz 81,434 68,651
Silver ounces sold oz 96,974 84,234
The following abbreviations were used above: t (tonnes), tpd
(tonnes per day), g/t (grams per tonne), Au (gold) and oz (ounces).
In thousands of USD, Three months ended March 31,
except for per ounce data 2019 2018
Revenue $ 103,119 89,422
Earnings from mine operations (1) $ 29,152 16,834
Net earnings (loss) for the period $ 4,166 (8,058)
Per share - basic $/share 0.02 (0.04)
Per share - diluted $/share 0.02 (0.04)
Adjusted earnings (1) $ 16,527 5,797
Per share - basic (1) $/share 0.09 0.03
Total cash and cash equivalents $ 50,868 70,540
Cash generated from operating activities 39,944 24,719
Total assets $ 1,625,855 1,678,657
Long-term debt (2) $ 444,830 292,906
Total cash costs (1) $/oz 686 841
All-in sustaining costs (1) $/oz 868 1,009
Average realized price (1) $/oz 1,257 1,271
Average realized cash margin (1) $/oz 571 430
(1) Refer to the "Non-IFRS Financial Performance Measures" section at the end of this
(2) Long-term debt does not include the current portions of the Company's Loan Facility
and Offtake Obligation (each as defined in the MD&A) in the amount of $84,375 as at
March 31, 2019. For the comparable period in 2018, long-term debt does not include
the current portions of the Company's Construction Credit Facility (as defined in
the MD&A) and Offtake Obligation in the amount of $388,068.
We seek Safe Harbor.
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