New gold explorer Pretium Resources debuts on TSX
VANCOUVER — Pretium Resources, a new gold exploration company helmed by ex-Silver Standard CEO Robert Quartermain, raised $265 million in its TSX debut on Tuesday.
“Pretium” is Latin for “value”, and that’s what Canada’s newest gold explorer plans to unlock on its properties in northwestern B.C.
IPO proceeds will fund the purchase of the adjacent Snowfield and Brucejack gold-copper-silver properties from Silver Standard Resources, as well as a pre-feasibility study and further work on some promising gold intercepts drilled in 2009 and 2010 at Brucejack, Quartermain said. The latter zones hold the possibility of a high-grade underground mine with a small environmental footprint and lower capital costs.
“We’ve got a high-grade opportunity here that hasn’t been fully recognized, and it’s sitting in an area where there have been high-grade mines,” Quartermain said, citing Barrick’s nearby Eskay Creek mine and Cominco’s Snip mine. Snowfield and Brucejack are located about 65 kilometres north of Stewart, beside the Alaska panhandle.
Shares traded as high as $6.49 before closing at $6.05, up a dime, on volume of 2.2 million shares.
Pretium bought the two properties from Silver Standard for $215 million in cash, a promissory note of $39.8 million and 32.5 million common shares — a 38-per-cent stake in the company. Underwriters have the option to purchase a further $39.8 million worth of shares in the next 30 days, with proceeds going to pay the promissory note. If Pretium issues common shares to pay the promissory note instead, that would boost Silver Standard’s ownership stake in Pretium to 45.8 per cent.
According to Pretium’s prospectus, the combined Snowfield and Brucejack deposits rank among the five largest gold-copper mineral systems in North America. Pretium’s preliminary economic assessment pegs average annual mine production at 700,000 ounces of gold, 4.2 million ounces of silver and 44.6 million pounds of copper over a 27-year mine life.
Pretium will spend at least $12 million next year to further delineate the high-grade Brucejack zone and fund a pre-feasibility study on a larger bulk-tonnage project encompassing both properties, Quartermain said in a phone interview. A new resource calculation should be ready by March or April.
“In light of these record-high gold and silver prices we’re seeing, we certainly want to take advantage of that,” said Quartermain, who describes himself as a “long-term precious metal bull.”
A year ago, as Silver Standard transitioned from an explorer to a producer, Quartermain stepped down as CEO after 25 years with the company: “The board and I determined that bringing in a new set of eyes could help advance it going forward.”
Pretium has more than $45 million to fund operations for the next two years, he said.
jkwantes@vancouversun.com
