In an April 11 research note, BMO Capital Markets analyst Andrew Kaip reported that Pretium Resources Inc. (PVG:TSX; PVG:NYSE), at its Brucejack project in northern British Columbia, "achieved better-than-expected production following signaling that production was anticipated to be similar quarter over quarter."
Q1/18 production came in at 75,700 ounces (75.7 Koz), which is higher than BMO's expected 67.9 Koz. Milling rates of 2,900 tons per day, also above estimates, were primarily responsible for the beat. Gold production should continue to increase in Q2/18 since Pretium's "grade control program has now been fully integrated into its mining process," Kaip noted. By mid- to late 2018, the company aims to achieve steady-state production.
Grades improved in Q1/18, with the average gold grade being 9.1 grams per ton, above the anticipated 9 grams per ton. The recovery rate also exceeded estimates, coming in at 96.8%, versus 96.7%.
Considering its Q1/18 results, Pretium is on track to meet its H1/18 production guidance of 150–200 Koz at an all-in sustaining cost of $700–900 per ounce, Kaip wrote. It will deliver guidance for H2/18 mid-year.
Throughout 2018 Pretium will continue building up its stope inventory by maintaining an average development rate of 700 meters per month. Around Q3/18, the company plans to update its mineral resources and reserves.
Pretium is scheduled to release its Q1/18 operational and financial results on May 10 after the market close and hold a conference call the next day.
BMO has an Outperform rating and a CA$17.50 per share target price on Pretium, whose stock is now trading at around CA$9.54 per share.
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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from BMO Capital Markets, Pretium Resources, April 11, 2018
Analyst's Certification: I, Andrew Kaip, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Company Specific Disclosures
Disclosure 5: BMO Capital Markets or an affiliate received compensation for products or services other than investment banking services within the past 12 months from Pretium Resources.
Disclosure 6C: Pretium Resources is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: C) Non-Securities Related Services.
Disclosure 8A: BMO Capital Markets or an affiliate has a financial interest in 1% or more of any class of the equity securities of Pretium Resources.
Disclosure 8C: BMO Capital Markets or an affiliate has a financial interest in 0.5% or more in the issued share capital of Pretium Resources.
Disclosure 16: A BMO Nesbitt Burns Inc. research analyst has extensively viewed the material operations of Pretium Resources.
Disclosure 17: Pretium Resources has paid or reimbursed some or all of the BMO Nesbitt Burns Inc. analysts travel expenses.
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