Pretium Resources Inc. (TSX:PVG)(NYSE:PVG) ("Pretivm") is pleased
to report results from the National Instrument 43-101-compliant
Updated Preliminary Economic Assessment ("PEA") for the high-grade
gold and silver resources identified to date at its 100%-owned
Brucejack Project in northern British Columbia. The PEA was
prepared by Wardrop, a Tetra Tech Company (Tetra Tech).
Highlights (base case using US$1,100/oz gold, US$21/oz silver
and exchange rate of US$0.93:C$1.00)
-- Base Case pre-tax Net Present Value (5% discount) of US$2.262 billion;
-- Mine life of 24 years producing an estimated 6.9 million ounces of gold
and 17.0 million ounces of silver;
-- Average annual production of 325,000 ounces of gold over the first 12
years and 287,000 ounces of gold over the life of mine;
-- Base Case pre-tax Net Cash Flow over the proposed mine life of US$5.133
billion;
-- Base Case pre-tax Internal Rate of Return of 29.8%, with payback
estimated at 4.1 years;
-- Estimated initial capital cost, including contingencies, of US$436.3
million;
-- Average operating costs of C$170.90/tonne milled over mine life.
Table 1: Summary of Brucejack High-Grade Economic Results by Metal Price
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Spot Prices
Base Case(1) at February 17, 2012
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Gold price (US$/ounce) $1,100 $1,733.60
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Silver Price (US$/ounce) $21.00 $33.46
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Net Cash Flow $5.133 billion (pre-tax) $9.467 billion (pre-tax)
$3.357 billion (post-tax) $6.185 billion (post-tax)
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Net Present Value (5.0% $2.262 billion (pre-tax) $4.330 billion (pre-tax)
discount) $1.454 billion (post-tax) $2.808 billion (post-tax)
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Internal Rate of Return 29.8% (pre-tax) 43.4% (pre-tax)
25.0% (post-tax) 36.5% (post-tax)
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Payback 4.1 years (pre-tax) 3.2 years (pre-tax)
4.2 years (post-tax) 3.3 years (post-tax)
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Exchange Rate (US$:C$) $0.93 $0.997
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(1) Tetra Tech-adopted consensus forecast metal prices from the Energy
Metals Consensus Forecast (EMCF). The same base case metals prices were used
in the June 2011 Preliminary Economic Assessment of the Brucejack Project
(see news release dated June 2, 2011).
The Brucejack high-grade project is planned to be mined as an
underground operation with the Valley of the Kings and West Zone
the two targeted lodes. The underground mine is planned to operate
with a processing rate of 1,500 tonnes per day and mine a total of
11.8 million tonnes of mineralized material from the Valley of the
Kings and West Zone with an average mill feed grade of 18.9 grams
per tonne gold and 59.3 grams per tonne silver.
Gold-silver dore will be produced using a combination of
conventional bulk sulphide flotation, gravity concentration and
cyanidation, with gold and silver recovery by the Merrill-Crowe
process. A total of 6.9 million ounces of gold and 17.0 million
ounces of silver is estimated to be produced over the life of the
Brucejack Project.
The total estimated initial capital cost for the Brucejack
high-grade project is US$436.3 million, an increase of 55% over the
June 2011 PEA estimated capital cost. The increase in capital cost
is primarily due to two factors. Underground development has been
brought forward almost one year in order to access higher-grade ore
earlier in the production schedule. As a result, pre-production
mining costs have increased from US$52 million to US$128 million.
In addition, mine site power is now planned to be supplied by tying
into the electrical transmission grid at an estimated cost of US$42
million. The estimated operating cost of electrical power supplied
from the transmission line is C$0.06 per kilowatt hour versus
C$0.33 per kilowatt hour supplied from diesel as contemplated in
the previous PEA.
The PEA is preliminary in nature and includes inferred mineral
resources that are considered too speculative geologically to have
the economic considerations applied that would enable them to be
categorized as mineral reserves. Mineral resources that are not
mineral reserves do not have demonstrated economic viability. There
is no certainty that the PEA will be realized.
The Technical Report for the PEA for the high-grade gold and
silver resources at the Brucejack Project has been filed on SEDAR
and will also be available at www.pretivm.com.
Ian I Chang, M.A.Sc., P.Eng., Vice President, Project
Development, Pretium Resources Inc. is the Qualified Person (QP)
responsible for Brucejack Project development.
Table 2: Projected Production and Processing Summary
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Mine Type Underground
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Total Production 11.8 million tonnes
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Processing Rate 1,500 tonnes per day
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Gold Silver
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Average Mill Feed Grade 18.9 grams per tonne 59.3 grams per tonne
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Average Metal Recoveries 95.7% 75.5%
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Average Annual Production (ounces):
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Years 1-12 325,000 444,000
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Life of Mine (24 years) 287,000 710,000
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Total Production (ounces):
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Years 1-12 3.899 million 5.333 million
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Life of Mine (24 years) 6.878 million 17.030 million
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Table 3: Capital Costs Summary
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Capital Costs (US$ million)
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Direct Costs 328.3
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Indirect Costs 58.2
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Owner's Costs 11.9
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Contingencies 37.8
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Total Capital Cost 436.3
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Table 4: Operating Costs Summary
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Operating Costs (C$/t milled)
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Mining 103.6
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Processing 37.7
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General & Administrative 19.26
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Plant Services 10.29
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Total Operating Cost 170.9
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Independent Qualified Persons
The following Qualified Persons as defined by National
Instrument 43-101 are independent of Pretivm and responsible for
the Updated PEA of the Brucejack Project:
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Qualified Person Scope of Responsibility
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Hassan Ghaffari, P.Eng. Capital cost estimate, project
Tetra Tech execution plan
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Sabry Abdel Hafez, Ph.D.,P.Eng. Economic Analysis
Tetra Tech
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John Huang, P.Eng. Mineral processing and metallurgical
Tetra Tech testing, infrastructure, process
operating cost estimate
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Pierre Pelletier, P.Eng. Environmental considerations
Rescan Environmental Services Ltd
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Tracy Armstrong, P.Geo. Geology, property: description,
P&E Mining Consultants Inc. history, geological setting, deposit
types, mineralization, exploration,
physiography, drilling, sampling,
adjacent properties
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Caroline Vallat, P.Geo. Data verification
GeoSpark Consulting Inc.
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Fred H. Brown, CPG, Pr.Sci.Nat. Site visit and mineral resource
P&E Mining Consultants Inc. estimate
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H. Warren Newcomen, P.Eng. Preliminary geotechnical design for
BGC Engineering Inc. underground workings
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Hamish Weatherly, P. Geo. Water management
BGC Engineering Inc.
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Lori-Ann Wilchek, P.Eng. Waste management and leach plant
BGC Engineering Inc. tailings storage facility design
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Peter Mokos, MAusIMM (CP) Mining, including capital and
AMC Mining Consultants (Canada) Ltd. operating costs estimates
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About Pretivm
Pretivm is creating value through gold at its advanced-staged
exploration projects Brucejack and Snowfield, located in northern
British Columbia. Pretivm is advancing the high-grade, underground
gold opportunity at Brucejack, which hosts a significant
undeveloped high-grade gold resource.
Forward-Looking Statement
This Press Release contains "forward-looking information" within
the meaning of applicable Canadian securities legislation.
Forward-looking information may include, but is not limited to,
information with respect to our plans, costs and timing for future
exploration (including updated resource estimates) and development
activities, results of future exploration, timing and receipt of
approvals, consents and permits under applicable legislation,
production and developments in our operations in future periods and
adequacy of financial resources. Wherever possible, words such as
"plans", "expects" or "does not expect", "budget", "scheduled",
"estimates", "forecasts", "anticipate" or "does not anticipate",
"believe", "intend" and similar expressions or statements that
certain actions, events or results "may", "could", "would", "might"
or "will" be taken, occur or be achieved, have been used to
identify forward-looking information. Statements concerning mineral
resource estimates may also be deemed to constitute forward-looking
information to the extent that they involve estimates of the
mineralization that will be encountered if the property is
developed. Any statements that express or involve discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions or future events or performance (often, but
not always, using words or phrases such as "expects",
"anticipates", "plans", "projects", "estimates", "assumes",
"intends", "strategy", "goals", "objectives", "potential" or
variations thereof, or stating that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur
or be achieved, or the negative of any of these terms and similar
expressions) are not statements of historical fact and may be
forward-looking information. Forward-looking information is subject
to a variety of known and unknown risks, uncertainties and other
factors that could cause actual events or results to differ from
those expressed or implied by the forward-looking information,
including, without limitation, those risks identified in Pretivm's
final short-form prospectus dated April 4, 2011 filed on SEDAR at
www.sedar.com. Forward-looking information is based on the
expectations and opinions of Pretivm's management on the date the
statements are made. The assumptions used in the preparation of
such statements, although considered reasonable at the time of
preparation, may prove to be imprecise. We do not assume any
obligation to update forward-looking information, whether as a
result of new information, future events or otherwise, other than
as required by applicable law. For the reasons set forth above,
prospective investors should not place undue reliance on
forward-looking information.
The TSX has neither approved nor disapproved of the information
contained herein.
Contacts: Pretium Resources Inc. Robert Quartermain President
and Chief Executive Officer (604) 558-1784 Pretium Resources Inc.
Michelle Romero Corporate Relations Director (604)
558-1784invest@pretivm.com www.pretivm.com
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