In a June 5 research note, BMO Capital Markets analyst Andrew Kaip reported that Pretium Resources Inc.'s (PVG:TSX; PVG:NYSE) recent drill results lead one to ask whether the company "should accelerate exploration to begin outlining the eastern resource potential of the Valley of the Kings (VOK) deposit."
The two drill holes targeting the Flow Dome zone at Brucejack, east of the VOK deposit, demonstrated continuity of VOK-style mineralization for 240 meters to the east, Kaip indicated.
Drill hole 1787, for example, intercepted a broad zone of gold mineralization averaging 5.6 grams per ton (5.6 g/t) gold and measuring 107.5 meters (107.5m) downhole. In that intercept were numerous occurrences of visible gold related to intervals with higher grades, such as 185.5 g/t over 1.5m and 72.8 g/t gold over 1.50m.
Kaip commented it is probable the 107.5m interval does not reflect the accurate width of the zone due to hole 1787 potentially being drilled obliquely to the zone. The actual zone width is likely that of the VOK deposit, which spans tens of meters.
Should Pretium be "devoting more resources to constructing an exploration drift to the east to provide an exploration platform and accelerate the systematic drill-out of the VOK deposit east towards the Flow Dome deposit?" Kaip queried.
BMO has an Outperform rating and a CA$17.50 per share price target on Pretium, whose stock is currently trading at around CA$12.38 per share.
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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, June 5, 2019
We, 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 our 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 16: A research analyst has extensively viewed the material operations of Pretium Resources.
Disclosure 17: Pretium Resources has paid or reimbursed some or all of the research analyst's travel expenses.
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