Pretium Resources Camp

Bruce Jack project (Image: Pretium Resources)

Arguably Canada's richest gold development project got a big vote of confidence this morning from a prominent Chinese mining investor.

Pretium Resources (PVG.T) has announced a new financing of $80.87 million with Zijin Mining Group. The placement will consist of 12.83 million shares at $6.30 per share giving Zijin a 9.9% stake in Pretium.

Zijin Mining (2899.HK) is the largest gold producer in China as well as a significant producer of copper, zinc, lead, and iron ore. The $80.87 million investment is expected to close in January and will give Zijin one Pretium board seat.

Pretium has one of the highest grade undeveloped gold projects in the world. The Bruce Jack project is located in British Columbia and the Valley of Kings reserve estimate is 6.9 million ounces of gold at 15.7 grams per tonne gold.

The remarkable grade of the project gives Pretium one of the most economical gold projects in the world. In February this year a Feasibility Study was released showing robust after -tax economics of a $1.45 billion dollar NPV(5%), 28.5% IRR, and a 2.8 year payback period at $1100 gold an $17 silver.

The proceeds will be used to finance capital expenditures which includes ordering long lead items needed for production as well as camp infrastructure.

"Zijin's investment positions us well at a critical stage in our advance to production," said Pretium's chief executive officer Robert Quartermain. "Zijin is a well-capitalized shareholder, and as fellow shareholders, we value their long-term outlook and commitment to gold and to the successful development of our Brucejack project as a high-grade gold mine."

PVG1yrchart

Pretium stock has had a strong year after after much controversy over the Valley of the Kings resource estimate this time last year.

Pretium has a unique asset that combines grade and size and in my opinion is a legitimate takeover candidate.

As of now the management team led by the well respected CEO Robert Quartermain is moving the project forward and expecting commercial production in 2017. Permits are expected before mid 2015 with an official production decision expected shortly after.

Share price: $6.64
Shares outstanding: 116.83 M
Market cap: $759. 3 M

Read: Zijin Mining Group C$81 Million Strategic Investment in Pretium

I have no position in any of the stocks mentioned. This is not investment advice. As always please do your own due diligence.