Brucejack Generates Cash from Operations of $197 Million in 2018
VANCOUVER, British Columbia, Feb. 14, 2019 (GLOBE NEWSWIRE) -- Pretium Resources Inc. (TSX/NYSE:PVG) (“Pretivm” or the “Company”) reports financial and operating results for the fourth quarter and year-end 2018 and outlook for 2019.

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.

“In our first full year of production we generated almost $200 million in cash from operations, producing 376,012 ounces of gold with an average realized cash margin of $608 per ounce of gold sold,” said Joseph Ovsenek, President & CEO of Pretivm. “Our All-In Sustaining Cost for the second half of 2018 was $745, which was well within our financial guidance of $710 to $770 per ounce of gold sold. With fourth quarter adjusted earnings of over $20 million, this is our sixth consecutive quarter with positive adjusted earnings - every quarter since the start of commercial production.”

Full-Year 2018 Financial Summary
•Revenue of $454.6 million on 367,428 ounces of gold sold.
•Total cost of sales $303.9 million or $827 per ounce of gold sold1.
•All-in Sustaining Cost (“AISC”)1 of $764 per ounce of gold sold.
•Generated $197.2 million cash from operating activities.
•Achieved an average realized cash margin1 of $608 per ounce of gold sold.
•Earnings from mine operations1 of $150.6 million.
•Net earnings of $36.6 million ($0.20 per share).
•Adjusted earnings1 of $99.3 million ($0.54 per share1).
•Cash and cash equivalents balance of $45.4 million as at December 31, 2018.

Full-Year 2018 Milestones
•Production of 376,012 ounces of gold at a mill feed grade of 11.9 grams per tonne gold.
•Repurchased 100% of the 8% gold and silver stream that was sold as part of the construction financing package for $237 million.
•Closed a $480.0 million debt facility to refinance the existing construction credit facility.
•Reduced total debt by approximately $180 million with the repurchase of the stream and refinancing of the construction credit facility and substantially reduced our average financing cost.
•Received amended permits to increase production 40% to an annual rate of 1.387 million tonnes (daily average of 3,800 tonnes).
•Reconciliation to the Valley of the Kings global resource model for 2018 was improved to approximately 90% from 75-80% in 2017.

Fourth Quarter 2018 Summary
•Production of 96,342 ounces of gold at a mill feed grade of 11.5 grams per tonne gold.
•Revenue of $108.6 million on 89,011 ounces of gold sold.
•Total cost of sales $72.5 million or $814 per ounce of gold sold1.
•AISC of $784 per ounce of gold sold1.
•Earnings from mine operations1 of $36.1 million.
•Net earnings of $2.8 million ($0.01 per share).
•Adjusted earnings1 of $20.2 million ($0.11 per share1).
•Generated $42.9 million cash from operating activities.
•Achieved an average realized cash margin1 of $594 per ounce of gold sold.

___________
1 Refer to the “Non-IFRS Financial Performance Measures” section at the end of this news release for reconciliation.

2019 Outlook

“We are well-positioned to generate significant free cash flow in 2019. With our permit to increase production in hand, our focus in 2019 will be on building sustainable mining and milling operations at 3,800 tonnes per day. The variable nature of the Brucejack gold mineralization is well documented, and we are leveraging the experience gathered from mining over 1.5 million tonnes of ore to enable us to mine for maximum value.”

2019 production and financial guidance

Gold production at Brucejack for 2019 is expected in the range of 390,000 ounces to 420,000 ounces with gold production guidance accounting for the planned production ramp-up from 2,700 tonnes per day to 3,800 tonnes per day over the course of 2019. Production is expected to average 3,500 tonnes per day in 2019, with production starting the year off at roughly 3,000 tonnes per day and ramping up to 3,800 tonnes per day by year end. Gold grade is expected to average approximately 10.4 grams per tonne over the course of 2019. The lower grade in 2019 reflects the sequencing of stopes in the mine plan to achieve the development ramp up to the 3,800 tonnes per day production rate, working within geotechnical and ventilation constraints. The average gold grade is representative of the areas to be mined in 2019 and is not representative of the estimated life of mine grade, which will be provided in the second quarter (see Updated Mineral Resource and Mineral Reserve Estimates below). Guidance for 2019 is subject to change contingent on the success of production ramp-up, with grade and tonnes increasing through the second half of the year.

AISC for the 2019 fiscal year is expected to range from $775 per ounce gold sold to $875 per ounce gold sold. AISC includes $15 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 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 from 2,700 to 3,800 tonnes per day (an increase from 700 meters per month to 1,000 meters per month).

Debt and Debt Reduction

On December 18, 2018, the Company completed a $480.0 million senior secured loan facility with a syndicate of financial institutions to refinance the existing construction credit facility. The loan facility is comprised of a $250.0 million senior secured amortizing non-revolving credit facility and a $230.0 million senior secured revolving credit facility.

In December 2018 we reduced our total debt by approximately $180 million and substantially reduced our cost of debt.

The Company is targeting debt reduction of approximately $140 million from operating cash flow during 2019, based on a gold price of $1,250 per ounce and a USD:CAD exchange rate of 0.78.

Under the senior secured loan facility, up to $40 million is available annually, commencing in 2020, to repurchase shares or pay dividends, subject to compliance with certain financial covenants.

Updated Mineral Resource and Mineral Reserve Estimates

Updated Mineral Resource and Mineral Reserve estimates for the Valley of the Kings and an updated life of mine plan for the Brucejack Mine will be provided early in the second quarter of 2019.

A webcast technical session with management is planned to coincide with the release of these updates and will also provide an overview of grade reconciliation, updated geological interpretation and mining initiatives among other things.

2018 Reconciliation

Reconciliation to the Valley of the Kings global resource model for the period January 1, 2018 to December 31, 2018 was approximately 90%. The modeled ounces for the areas mined during 2018 were predicted to be 424,760 ounces (delivered to the mill) at 13.23 grams per tonne and 998,854 tonnes; while the actual ounces for the areas mined were determined to be 384,889 ounces (delivered to the mill) at 11.90 grams per tonne and 1,005,603 tonnes. The reconciliation to the resource model for the period April 1, 2018 to December 31, 2018 improved to approximately 92% when the grade control program became fully operational. The modeled gold ounces for the areas mined for this nine month period were predicted to be 331,672 ounces (delivered to the mill) at 13.08 grams per tonne and 788,480 tonnes; while the actual gold ounces for the areas mined were determined to be 308,073 ounces (delivered to the mill) at 12.88 grams per tonne and 744,160 tonnes. Reconciliation improved in 2018 compared to the period August 1, 2017 to December 31, 2017 when reconciliation to the resource model was approximately 75% to 80%. In 2018, ore was mined from 47 stopes over eight levels from the 1200-meter to the 1410-meter level across a distance ranging 290 meters east to west and 155 meters north to south.

Fourth Quarter and Full-Year 2018 Production Overview
•Production totaled 96,342 ounces of gold and 113,886 ounces of silver in the fourth quarter 2018. Gold production increased 37% to the comparable period in 2017 when 70,281 ounces of gold were produced. Annual 2018 production totaled 376,012 ounces of gold and 422,562 ounces of silver. There is no comparable data for 2017 as the mine operations only include production for the six months in 2017 after commercial production was achieved on July 1, 2017.
•Process plant throughput averaged 2,903 tonnes per day for a total of 267,048 tonnes of ore in the fourth quarter 2018 compared to 2,951 tonnes per day for a total of 271,501 tonnes of ore in the fourth quarter 2017. The 2018 process plant throughput averaged 2,755 tonnes per day for a total of 1,005,603 tonnes of ore.
•Mill feed grade averaged 11.5 grams per tonne gold in the fourth quarter 2018 compared to 8.2 grams per tonne gold in the fourth quarter 2017. The increase in mill feed grade was the result of the improved stope availability and an operational grade control system. The mill feed grade averaged 11.9 grams per tonne gold in 2018.
•Gold recoveries increased to 97.0% in the fourth quarter 2018 from 95.8% in the fourth quarter 2017 as a result of mill optimization. Annual 2018 recoveries averaged 97.3%.
•Mining rate averaged 3,078 tonnes per day for a total of 283,136 tonnes of ore mined in the fourth quarter 2018 compared to 3,051 tonnes per day for a total of 280,671 tonnes of ore mined in the fourth quarter 2017. The 2018 mining rate averaged 2,891 tonnes per day for a total of 1,055,208 tonnes of ore mined.
•On December 14, 2018, the Company received the amended permits to increase the Brucejack Mine production rate to 3,800 tonnes per day. The amended permits allow for a production increase to an annual rate of 1.387 million tonnes from 0.99 million tonnes (daily average of 3,800 tonnes from 2,700 tonnes).
•Mine development advanced at a rate of approximately 820 meters per month during the quarter. Mine development will increase to approximately 1,000 meters per month to support the ramp-up to a 3,800 tonnes per day production rate by year end.
•Minor mill upgrades to support the production rate increase will be completed during regularly scheduled mill shutdowns in 2019 with a corresponding ramp-up to 3,800 tonnes per day production rate by year end. These upgrades are estimated to cost less than $15 million.

see & read more on
https://www.pretivm.com/news/news-details/2019/Pretivm-Reports-2018-Results-and-2019-Outlook/default.aspx