PVG – Pretium Provides Update on Bulk Sample and Strathcona Debacle and Market Tanks…Again

POSTED ON October 22, 2013 BY Travis McPherson
CATEGORY Companies, Gold, Pretium Resources,

Pretium's Robert Quartermain

Bob Quartermain’s battered Pretium Resources (PVG:TSX) has announced the initial processing results from the 10,000-tonne bulk sample program from the Valley of the Kings. The company received these first results from cross-cut 426585E which produced 281 total gold ounces in 2,167 dry milled tonnes of material (which would imply a grade of approximately 4g/t gold). The company anticipates a total of 4,000 ounces of gold from the 10,000-tonnes bulk sample (implying a grade of 13.5g/t gold). If it is going to achieve that goal, gold production will have to significantly increase over the next 8,000-tonnes of material. However, Pretium did warn of these initial stopes would be of lower grades. The company also provided an update on the fallout with Strathcona in their October 9^th announcement, which subsequently sent the stock plummeting over $2 per share.

In short, Strathcona and Snowden had a difference of opinions about how to complete a report which would compile the results of the bulk-sample as well as sample tower drilling data and other drilling to provide the most accurate grade prediction for a stope-sized tonnage sample that could be used for a resource calculation. Strathcona was of the opinion that using preliminary grades from drilling the sample tower (which represented only approximately 0.01% of the material excavated from 426585E cross-cut) would be sufficient as a representative grade of the entire area.

Alarmingly, Strathcona is of the opinion that not only is the sample tower drilling the best and most accurate way to estimate the grades at the Valley of the Kings, but they also advised Pretium that "there are no valid gold mineral resources for the VOK zone, and without mineral resources there can be no mineral reserves, and without mineral reserves there can be no basis for a feasibility study."

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Pretium and Snowden believed that completing the entire 10,000-tonne bulk sample would provide the most accurate grade representation of the deposit and would, therefore, be most suited to reconcile the 2012 resource estimate. Given that Strathcona predicted 145 ounces of gold from this first cross-cut sample based on assay results from preliminary sample tower drilling (given they assayed 2.08g/t gold) and 281 ounces were recovered; it would appear Snowden may have it right.

“Snowden has consistently and repeatedly advised in response to all comments from Strathcona that the true test of the resource estimate will only come from the reconciliation results between the ultimate grade of the bulk sample (as defined by produced metal and metal accounting) and the grade of the resource estimate for the same volume. Strathcona resigned before Snowden had an opportunity to formally respond to their assertions.”

The market remains concerned over grade dilution at the Valley of the Kings deposit given the extraordinary grades intercepted in super high-grade veins at the deposit which can lead to an overall overestimation of the true grade of the deposit. The goal of this bulk sample is to prove Pretium and their consultants can predict grades and production results from the deposit, accurately.

Travis McPherson

trav@ceo.ca

Travis McPherson

trav@ceo.ca

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