Pretium Resources (PVG:TSX) – Bob Quartermain’s Pretium Resources is developing one of the highest-grade gold projects in the world. News this morning included stunning high-grade drill results from the fifth batch of underground infill drill holes.
Assays included several hits over 1,000 grams per tonne – including 0.5m of 20,287 g/t gold – and Canaccord analyst Eric Zaunscherb had an interesting take on it in his morning note.
“To put the bonanza grade intersection into context, 20,287 g/t equates to US$712K per tonne rock (at spot) or 270 Rolex President watches (at 75g gold per Rolex watch),” Zaunscherb wrote.
Drill highlights included:
- Hole VU-545 intersected 494.91 grams per tonne gold uncut over 21.00 metres, including 20,287 g/t Au uncut over 0.50 m.
- Hole VU-539 intersected 477.29 g/t Au uncut over 14.22 m, including 10,700 g/t Au uncut over 0.50 m and 2,710 g/t Au uncut over 0.50 m.
- Hole VU-537 intersected 98.52 g/t Au uncut over 18.99 m, including 3,200 g/t Au uncut over 0.50 m.
- Hole VU-553 intersected 31.17 g/t Au uncut over 29.00 m, including 1,535 g/t Au uncut over 0.50 m.
- Hole VU-555 intersected 60.13 g/t Au uncut over 28.00 m, including 1,250 g/t Au uncut over 0.50 m, and 2,090 g/t Au uncut over 0.50 m.
Pretium continues to prove up the deposit model with tighter infill drilling.
Assays for about 26,833 metres of drilling have been released from the 2015 program, with an additional 26,000m expected by the end of the first quarter. When completed, roughly 200 vertical metres over a strike length of 250m will have been drilled at 7.5- to 10-metre centres.
Construction of Canada’s next high-grade gold mine continues during the infill drilling. Pretium is targeting 2017 for commercial production.
The high-grade 6.9-million-ounce deposit (P+P) at 15.7 grams per tonne has attractive economics: an after-tax IRR of 28.5% at US$1,100 gold. Initial capex is projected at $746.9 million, but a revised capex is expected later this month.
Pretium has a $540-million financing deal in hand that will cover about 70% of capex, but the company will need to raise more money down the road. That makes the revised capex number a key one for investors.
Canaccord has a target price of $9.50 on the stock, which is currently trading at $7.25. If you buy several thousand shares and Canaccord is right, you might be able to get your very own Rolex!
Contact your local Canaccord representative for a copy.
Visit the Pretium room at CEO Terminal to read and discuss the latest news on $PVG. CEO chat regular Alan Barry Laboucan is a big fan of high-grade gold and mentioned Pretium in his 2016 outlook video yesterday.
This is not investment advice. Please do your own due diligence. Author holds no position in Pretium Resources at this time.