Pretivm announces 3Q21 results
Published by Jessica Casey,
Global Mining Review,
Pretium Resources Inc. has announced its operating and financial results for 3Q21.
The company’s first priority is the health and safety of its employees, contractors and neighbouring communities in northwest British Columbia (BC). As of 19 September 2021, direct Pretivm employees achieved one year of work with no lost-time injuries, which is equivalent to approximately 1.75 million hours. This is a significant achievement in the company’s commitment to health and safety. Additionally, its employees and contractors worked over 780 000 hours with no lost-time injuries during 3Q21.
Newcrest Mining Ltd is to acquire Pretivm for CAN$18.50 in cash or shares, subject to proration. The acquisition will require the approval of Pretivm shareholders and is subject to regulatory approvals. The acquisition is expected to be completed in 1Q22. Pretivm’s Board of Directors have determined the acquisition is in the best interest of the company and unanimously recommend that shareholders vote in favour of the acquisition.
Production was 90 673 oz of gold (Au) in 3Q21, compared with 86 136 oz in the 3Q20. Higher production reflects the increased tonnes milled in the period and the reduction in gold remaining in-circuit from 7718 oz at 30 June 2021 to 1677 oz at 30 September 2021, partially offset by lower head grade.
Revenue of US$146.8 million from the sale of 81 626 oz Au. Revenue in 3Q21 represents a 5.2% decrease from the 3Q20 driven primarily by a 7% decrease in the average realised price of gold to US$1799/oz, partially offset by a 0.7% increase in gold ounces sold. Gold sold in the quarter was lower than production due to mining of higher-grade stopes at the end of the quarter and timing of gold sales.
Another profitable quarter, with US$0.12 in net earnings per share and US$0.13 in adjusted earnings per share. Net earnings were US$22 million and adjusted earnings were US$24.3 million for the quarter, compared to net earnings of US$31.2 million and adjusted earnings of US$32 million in 3Q20. The decrease in net earnings was primarily due to lower realised gold prices and higher production costs as well as higher relative deferred income tax expenses, partially offset by decreases in corporate and administrative, exploration and evaluation and interest and finance expenses.
EBITDA of US$67 million and free cash flow of US$23.6 million. EBITDA and free cash flow in 3Q2121 decreased compared to 3Q20 (US$77.9 million and US$66.8 million, respectively) due to substantial investment in expansion capital expenditures over the summer construction period at the Brucejack Mine, lower revenues and higher production costs reflecting higher levels of throughput and increased drilling.
AISC of US$1071/oz Au sold is within annual guidance. AISC in 3Q21 was higher than AISC of US$1016/oz Au sold in the 3Q20 due to the strengthening Canadian dollar and higher production costs.
Pretivm remains on track to achieve its 2021 guidance of 325 000 – 365 000 oz Au produced at an AISC between US$1060 – US$1190/oz Au sold with US$40 – US$45 million of sustaining capital expenditures and US$65 – US$75 million of expansion capital expenditures.
Cash and cash equivalents increased to US$213.4 million as at 30 September 2021 from US$174.8 million as at 31 December 2020 and included the repayment of US$5.9 million in debt in the quarter. As at 30 September 2021, the company had long term debt of US$189.8 million and available liquidity of US$461.8 million including cash and cash equivalents and the undrawn revolving portion of its amended loan facility.
On 9 August 2021, the company completed a refinancing of its loan facility. The amended loan facility consists of a US$100 million amortising, non-revolving term credit facility, and a US$250 million revolving credit facility, further increasing our liquidity as well as reducing its quarterly repayments under the term facility.
Underground resource expansion drilling continues to confirm the opportunity to add to the mine life at Brucejack, while a high-grade gold exploration discovery affirms the district scale potential of Brucejack. Resource expansion drilling intercepted high-grade gold mineralisation in the North Block, directly adjacent to existing infrastructure, demonstrating the potential to extend the Valley of the Kings deposit to the north. Near-mine exploration has led to the discovery of a new mineralised zone at Golden Marmot which demonstrates the district-scale potential of Brucejack. Additional results from the resource expansion and near-mine exploration drill programmes are expected to continue to be released through 4Q21 and 1Q22.
The company’s 2020 Sustainability Report highlighting its progress in health and safety, contributions to the local communities and our environmental management performance was released in 3Q21. It strives to be a leader in environmental, social and governance (ESG) performance and are proud of the sustainable operations it has been able to achieve at the Brucejack Mine.
Mining, processing and production
During the three months ended 30 September 2021, a total of 348 026 t of ore, equivalent to a throughput rate of 3783 tpd, were processed. This was a 6.9% increase from the comparable period in 2020, in which a total of 325 420 t of ore, equivalent to a throughput rate of 3537 tpd, were processed.
The mill feed grade averaged 7.8 g/t Au for 3Q21, which was 9.3% lower than the 8.6 g/t in the comparable period in 2020. Gold recovery for the 3Q21 was 97.1% compared to 97.6% in the comparable period in 2020.
For the nine months ended 30 September 2021 a total of 1 019 563 t of ore, equivalent to a throughput rate of 3735 tpd, were processed at a mill feed grade of 8.4 g/t. The tonnes processed were 2% higher for the first nine months of 2021 compared to the prior year period, while mill feed grade and gold recovery were consistent with the comparable period in 2020.
The company continued our lateral development at an advanced rate during the three months ended 30 September 2021, achieving approximately 1140 m/month (2020: 1029 m/month) for a total of 3420 m completed during 3Q21 (2020: 3086 m).
Diamond drilling activity continued to progress during the 3Q21, with nine diamond drills on site conducting infill and resource expansion drilling. Infill diamond drilling targeted mineral reserves proximal to mine infrastructure to build stope inventory and provide flexibility for near term mining. A total of 53 193 m of diamond drilling was completed for the three months ended 30 September 2021.
The company expects to continue to focus on advancing underground development to expand mine access at depth and to the west. The increased development should provide sufficient access to build the stope inventory required to allow mining operations to optimise gold production and additional platforms for resource expansion drilling. As of 30 September 2021, the company had 292 202 drilled t of stope inventory.
During the three months ended 30 September 2021, the Brucejack Mine produced 90 673 oz Au and 112 051 oz of silver (Ag). For the comparable period in 2020, the company produced 86 136 oz Au and 130 975 oz Ag. The increase in gold production was primarily due to increased mill throughput and the reduction in gold remaining in-circuit from 7718 oz at 30 June 2021 to 1677 oz at 30 September 2021, partially offset by lower head grade.
For the nine months ended 30 September 2021, the Brucejack Mine produced 259 551 oz Au and 347 956 oz Ag compared to 259 443 oz Au and 364 223 oz Ag in the comparable period of 2020.
3Q21 financial overview
Gold sales and revenue
The gold price rose over the course of 2020 amid economic uncertainty that was exacerbated by the COVID-19 pandemic starting in March 2020. The gold price declined in 1Q21 before increasing during 2Q21 and then decreasing in 3Q21. The gold price in the 3Q21 was lower than in the comparative 2020 period while the price for the nine months ended 30 September 2021 was higher than in the comparative period. The average London Bullion Market Association AM and PM market price over the three and nine months ended 30 September 2021 was US$1790 (2020: US$1909) and US$1800 (2020: US$1736), respectively per ounce of gold.
For the three months ended 30 September 2021, the company sold 81 626 oz Au, a 0.7% increase from 81 068 oz Au sold in the comparable period in 2020. The increase in gold ounces sold was due to higher production mostly offset by changes in inventory due to the timing of sales relative to production and the processing of higher-grade stopes late in the quarter. The average realised gold price was US$1799, a 7% decrease from the average realised gold price in the comparable period in 2020.
Revenue of US$146 825 for 3Q21 decreased by 5.2% from US$154 876 in 3Q20. The decrease in revenue was primarily the result of a decrease in the average realised gold price.
For the nine months ended 30 September 2021 the company sold 247 951 oz Au, a 3.7% decrease from 257 576 oz Au sold in the comparable period in 2020. The reduction in gold ounces sold was due to changes in inventory due to the timing of sales relative to production, the processing of higher-grade stopes late in the quarter. The average realised gold price was US$1802, a 2.5% increase from the average realised gold price in the comparable period in 2020.
Revenue of US$441 561 for the nine months ended 30 September 2021 was 1.4% lower than the US$448 003 in the comparable period of 2020 as the increase in the average realised gold price was more than offset by the impact of lower ounces of gold sold.
Read the article online at: https://www.globalminingreview.com/finance-business/12112021/pretivm-announces-3q21-results/
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