An asset like Brucejack is a rarity today – high-grade, manageable capex and in a good location. We believe this will make Pretium of interest to existing mid/large-cap producers. The company also, however, seems to be preparing the way to build the project on its own. Financing would likely include a range of sources including equity, debt, and metal pre-sales and/or streams. We expect this to become clearer by year-end or the end of 1Q15 at the latest.

Where we HAVE changed our opinion is that we are now more comfortable with the geostatistically based approach for resource estimation. This comes from our direct observations of coarse electrum as streaks in narrow veinlets that are not part of the throughgoing structures which we focused on last year. Those structures ARE there and we expect that a large part of the gold to be mined will come from them, and that ultimately a mine plan will encompass both selective mining of such zones AND bulk mining of the type envisaged in the DFS. C$12.50 target price represents 0.66x our NAV10% of $16.97 at $1,350 gold. 

 

Eoin Treacy's view

Here is a link to the full report.

Photos such as that below, kindly forwarded by the same subscriber,  of heavy mineralisation in core samples within a wider high grade gold deposit are what miners’ dream of but it remains an expensive exercise to develop these resources. It will be two years before the mine reaches commercial operation according the above report.

However considering the quality of the resource the company could become a takeover candidate before that time. Pretium posted a large upside weekly key reversal almost a year ago and has held a progression of higher reaction lows since. It is currently testing the region of the 200-day MA and a sustained move below it would be required to question medium-term scope for continued higher to lateral ranging subject to the performance of gold bullion. 

The NYSE Arca Gold BUGS index also continues to steady in the region of the 200-day MA.