Pretium - everything is great

Good news, Pretium at the BMO Conference is telling us that everything is great (link), no need to worry. Production at Brucejack is swell, and everything is going to be super-good after the mill expansion. For fun, they are looking for the source porphyry, because, why not.

We also got the Brucejack ramp up production figures, you know, the ones where grade and ounces produced went down. We actually get to see the 'official' head-grades, and they were worse than Otto calculated (link).

Tonnes up, production down - Pretium going for the win!

They also included a nice long section of the Brucejack block model, which was interesting.



The reserves aren't nice and consistent, there are distinct area of high and low mineralization, but there is an awful lot of the Proven Reserve blocks that are green and yellow (i.e. 5-10 g/t Au).

This isn't uncommon, but if Pretium want to maintain consistent production level, they'll need to be very good at balancing the production from high and low grade areas (mine scheduling), and for me, the erratic nature of the mineralization is the reason why Pretium gave such a huge range for the H1, 2018 production. They just can't quite nail down the grades.

TL:DR version - it is going to be hard to consistently maintain a head-grade at 14.5 g/t Au.

I apologize for the next section, it contains a very naughty word. If you are sensitive, please go here (link)
It would have been interesting to have seen a a slide on reconciliation to see why they had missed their targets, was it due to:

• Poor reconciliation - mined graded not equaling reserve grade
• Slow development - unable to access proposed 2017 production areas and forced to mine peripheral, low grade zones.

We all know it is grade reconciliation, hence the reason they are doing a new grade control program and drilling the stopes on 5-7m centers. However, the slide that concerned me the most was this one (slide 17)

According to Paths, Pretium are retards, and are actually using the Reserve figures in their own technical reports (who the feck does that?!?), and are projecting that after the mill is expanded, the 2019 production will be:

• ~580,000 oz Au per year 
• A head grade at the Reserve Grade - 14.5 g/t Au*
• AISC @ ~$570/ounce

*if you plug the numbers into excel you get a recoverable grade of 13.2 g/t Au or a recovery rate of 91%
So, to do this, all they need to do is solve the grade control issues, improve mine scheduling, improve recovery, and increase the underground development. Nice and easy.
If they don't manage this, at 3,800 tonnes per day each 1 g/t decrease in head-grade means a drop in production by 44,000 ounces, or $57M decrease in revenues. That is a lot of money, especially if you want to do this:

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