Shares in Pretium Resources Inc (NYSE:PVG) tanked on Tuesday after the company announced disappointing production and cost forecasts from its Brucejack gold-silver mine in British Columbia.
During lunchtime trading, the Vancouver-based producer was changing hands for $7.95 a share, down 26.3% on the New York Stock Exchange, in massive volumes of more than 10m shares traded. Pretium is now worth $1.9 billion, down 37% from its year high hit early February.
In a statement, Pretium said after six months of ramp-up at the Brucejack mine in the northwest of the Canadian province, production totaled 152,484 ounces of gold, but fourth quarter output was nearly 12,000 ounces below the prior quarter. Gold recoveries declined to 95.8% in the quarter compared to the previous three months.
Pretium said it expects steady state gold production at Brucejack, its only operating mine, to be achieved in mid-to-late 2018. Gold production at Brucejack for the first half of 2018 is expected in the range of 150,000 – 200,000 ounces, for total first year ramp-up gold production of 302,000 – 352,000 ounces.
The all-in sustaining costs for H1 2018 are expected to range from $700 -$900 per ounce gold sold according to the company. That compares to $788 an ounce during the third quarter when the company predicted costs to decline.
With 14.1 g/t of gold in reserves, the Brucejack mine, is one of the highest grade gold projects to enter production in recent years. Final construction costs are expected to be in the region of $1 billion with a mine life of 18 years.