Pretium - PVG

[Strawboss]

One of my new favorites - recommended to me by State of Jefferson back when it was in the 9's. If you do a bit of due diligence and see who is running it - I think you will agree with me that it is a winner.

[Lore]

Agreed - I followed the president, Bob Quartermain, when he changed hats.

JP interviewed him recently (link).

Pretium is one to put away in a safe place. Those drill results are absolutely amazing. That's going to be a $50 stock in a few years.

[Strawboss]

A quote from Stephen Leeb:

So I think if you really want to make it big in gold, you want to make three or four times what you are going to make in the metal itself, you want to look at these mines. Things like Nova Gold, things like Pretium, which is run by Bob Quartermaine, he’s as good as you get and he could be sitting on an absolutely explosive situation. These are the kinds of stocks that could go from $10 to $100 in 24 months, you just have to be there for that period. These are going to be bull markets that most investors have never seen in their lifetimes.”

[Fiat Metaler]

pretium came out at 6 and i sold at 13. it then went back down to 6 and its impressive to be up so high.

yes, its a lot of metal but its in the middle of no where. they don't even have power.

before buying pretium at this price, you should compare SA and NAK which i would expect are cheaper and/or have more metal.

[Strawboss]

Yeah - Seabridge is another that I like a lot. It is looking pretty cheap too at less than $20.

[Anakin]

NAK is one of my favorite based on valuations.

[Fiat Metaler]

Yeah - Seabridge is another that I like a lot. It is looking pretty cheap too at less than $20.

look at a chart comparing SA and PVG. they are right next door to each other. SA used to be valued 2X PVG; now its probably the other way around.

PVG does have some higher grade zones which are more economic, but ultimately the knock on both is they are billions of dollars of infrastructure from becoming mines. roads, electric, tunnel, etc.

SA probably has more metal and is probably 3 years ahead in getting it drilled and classified into bankable categories. PVG was on a back burner when it was owned by SSRI.

to be clear, i like both companies but the valuations relative to each other are getting out of whack.

[Strawboss]

I think there is some reason to believe that Pretium will be the next Allied Nevada. Not sure who Allied Nevada is? It was a spin off of Vista Gold a few years ago and is run by the former management team at Kinross.

From a low of $3.85 to a recent higher of $45.90 (over 1200% in less than 3 years) there are some similarities between the 2 companies, including a proven management team that has come on board from a previously successful operation (Allied Nevada has the former Kinross management team - Pretium has the former Silver Standard management team).

Both have very solid development projects in the pipeline, both are in politically safe jurisdictions (ANV - Nevada and PVG - Canada), both have proven management teams. Yes, there are some differences as PVG is in need of more infrastructure and ANV was able to reopen a pre-existing mine initially.

I think the roadmap that ANV has set could be similar to Pretium's potential growth.

Here is a weekly chart of ANV so you can see what I am saying.

[Strawboss]

Here is an updated chart of Pretium showing a 100% increase in a bit over 2 months. Notice the similarity to Allied Nevada? Is it possible it will continue to act/perform in a similar fashion? I think so.

[AgAuGal]

Whatever happened to Vista after the spin off, it has gone nowhere. Use to be this one would run up when gold went up but seems the last few years it just hangs around $3. Thought about selling it and buying a few shrs of PVG.


What do you think about MUX?

[Weatherman]

The recent run up looks even more impressive on a semi log chart.



A small pullback to fill the gap just below $15 could be a great place to buy some of this. Do you know what the news was that caused the sharp gap up from $8 to $9 the end of November?

[Strawboss]

Whatever happened to Vista after the spin off, it has gone nowhere. Use to be this one would run up when gold went up but seems the last few years it just hangs around $3. Thought about selling it and buying a few shrs of PVG.


What do you think about MUX?

McEwen is another that definitely fits the mold. These are junior explorers with very respected and proven senior management. McEwen is BIG DADDY in the gold sector - no question.

[Strawboss]

The recent run up looks even more impressive on a semi log chart.



A small pullback to fill the gap just below $15 could be a great place to buy some of this. Do you know what the news was that caused the sharp gap up from $8 to $9 the end of November?

Check out this news release and digest the high-grade drill results they have been getting.


http://www.pretivm.com/News/News-Det...8/default.aspx

Here is a snippet from someone that did a very good job of succinctly describing the opportunity.

Massive gold resources aren't always given the respect due in the marketplace because they are very expensive to build out, many years away from construction, and often low-grade as in the case of something like Seabridge. Or in the case of a Northern Dynasty, not only is production MANY years away, there could be political/environmental opposition that will prevent the mine from ever being built. So even though they have more "gold resources" than anyone, they don't command a high price. On the other hand, current producers with cash flow can command a much stronger price even with much smaller resources.

PVG looks to have the best of both worlds. The ultra-high grade is what is coveted, and the high-grade Brucejack zone is something that could be turned into a large robust mine relatively quickly, and at a lower cost than a multimillion ton bulk tonnage operation. And later the ability to use that to build out the huge low-grade assets, which will only get more lucrative and economic as the gold price continues to rise.

[Strawboss]

Show me another miner ANYWHERE getting these tyes of drill results.

http://www.pretivm.com/News/News-Det...3/default.aspx

Selected highlights include:



-- Hole SU-260 intersected 0.5 meters with uncut grades of 17,750 grams of
gold and 7,780 grams of silver per tonne (1.6 feet averaging 517.7
ounces gold and 226.9 ounces of silver per ton);
-- Hole SU-249 intersected 0.5 meters with uncut grades of 3,880 grams of
gold and 1,745 grams of silver per tonne (1.6 feet averaging 113.2
ounces gold and 50.9 ounces silver per ton);
-- Hole SU-239 intersected 1.0 meter with uncut grades of 3,460 grams of
gold and 1,515 grams of silver per tonne (3.3 feet averaging 100.9
ounces gold and 44.2 ounces silver per ton).


The bonanza-grade interval in hole SU-260 noted above was intersected at a depth of 68.4 meters down-hole, demonstrating the proximity of high-grade, visible gold to surface. Hole SU-260 was drilled 25 meters east of hole SU-115, which also intercepted near-surface high-grade gold with an interval of 0.5 meters with uncut grades of 18,755 grams of gold and 9,312 grams of silver per tonne at a down-hole depth of approximately 60 meters (see news release dated June 8, 2011).

The high-grade interval from hole SU-249 noted above is located approximately 100 meters above the high-grade interval from hole SU-12, drilled in 2009, with uncut grades of 16,948 grams of gold and 8,696 grams of silver per tonne over 1.5 meters.

The high-grade interval from hole SU-239 noted above is located on section with high-grade intervals from holes SU-135 and SU-150. Hole SU-135 intersected 0.5 meters with an uncut grade of 1,070 grams of gold, and SU-150 intersected two 0.5 meter intervals with uncut grades of 6,670 grams of gold and 1,640 grams of gold per tonne (see news releases dated July 27, 2011 and August 11, 2011).

Also of note from the results is hole SU-237, which intersected 3.0 meters grading 377 grams per tonne gold and 248 grams per tonne silver, located on the same section as SU-195 and SU-230.

And another...


http://www.pretivm.com/News/News-Det...0/default.aspx

Selected highlights include:



-- Hole SU-266 intersected 0.56 meters with uncut grades of 13,600 grams of
gold and 6,910 grams of silver per tonne (1.8 feet averaging 396.7
ounces gold and 201.5 ounces of silver per ton);
-- Hole SU-269 intersected 0.68 meters with uncut grades of 6,110 grams of
gold and 2,220 grams of silver per tonne (2.2 feet averaging 178.2
ounces gold and 64.7 ounces silver per ton).


The bonanza-grade intercept in hole SU-266, which ended in mineralization, was intersected in an interval of 5.5 meters with cut grades of 36.8 grams of gold and 261.9 grams of silver per tonne (uncut grades of 1,414.6 grams of gold and 751.6 grams of silver per tonne.)

Also of note from drilling in the West Zone footwall is hole SU-282, which intersected 0.65 meters grading 395.0 grams of gold and 435.0 grams of silver per tonne in a wider mineralized intersection of 209.18 meters grading 2.5 grams of gold and 29.5 grams of silver per tonne.

No wonder everyone left Silver Standard to form Pretium...

[Strawboss]

There is a challenge to this that people should be aware of - namely, there isnt infrastructure currently in place to support operations. That would be an expensive undertaking.

The good news is management is working on this problem with Rudy over at Seabridge and I am confident that it will get done. Between Pretium and Seabridge there is an aweful lot of gold to be dug up. The advantage that Pretium has over Seabridge is they have highly concentrated very high grade drill results in Brucejack that are very close to the surface so they will be able to get that gold rather easily and then use that money to finance construction to get their lower grade stuff.

Just imagine what these resources are going to be worth when the POG is over $4000...

[Fiat Metaler]

i have followed both stocks for years and while i'm no expert here are some things to consider.

pretium does have an area of higher grade, and higher grade can be mined more quickly and cheaply, but its not that high of a grade and its a relatively small portion. PVG is trying to make the case that the will be pulling gold out of the ground quickly which i think is largely misleading.

both PVG and SA need massive infrasstructure - roads, power, and probably a tunnel throough the mountains to the port. they have enough money to make their metal in the ground economic, and Canada has plans to build roads and power, but it all adds up to additional risk.

if i understand the story correctly, SA bought KSM claims about 10 years ago. after they had some good drilling results, SSRI bought or staked a bunch of land adjacent to SA. Pretty smart, but SSRI didn't do anything with it. they drilled it very slowly. SA was fairly aggressive and has drilled a ton of holes and gotten the metal moved over to proven and probable. SSRI was a few years behind SA, but should have mostly caught up by now. what to do with it was a big issue for SSRI becuase they are a silver miner, not a gold developer, so they spun it off. At 6 i tought PVG was undervalued, and it may still be at 12-13, but SA should probably be trading at 1.5X PVG. Instead, PVG's market cap is about 1.5X SA.

anyone who buys either company (M&A) will realistically need the other company. why these 2 companies are not working together, especially now that PVG has drilled out most of its project to a level of thoroghness that SA did, is beyond me. This will be far more economic as a single project. back when PVG (SSRI) merely had inferred resources, SA had a good argument to merge on an equal basis but they are nearly equally drilled out.

[Lore]

i have followed both stocks for years and while i'm no expert here are some things to consider.

pretium does have an area of higher grade, and higher grade can be mined more quickly and cheaply, but its not that high of a grade and its a relatively small portion. PVG is trying to make the case that the will be pulling gold out of the ground quickly which i think is largely misleading.

both PVG and SA need massive infrasstructure - roads, power, and probably a tunnel throough the mountains to the port. they have enough money to make their metal in the ground economic, and Canada has plans to build roads and power, but it all adds up to additional risk.

if i understand the story correctly, SA bought KSM claims about 10 years ago. after they had some good drilling results, SSRI bought or staked a bunch of land adjacent to SA. Pretty smart, but SSRI didn't do anything with it. they drilled it very slowly. SA was fairly aggressive and has drilled a ton of holes and gotten the metal moved over to proven and probable. SSRI was a few years behind SA, but should have mostly caught up by now. what to do with it was a big issue for SSRI becuase they are a silver miner, not a gold developer, so they spun it off. At 6 i tought PVG was undervalued, and it may still be at 12-13, but SA should probably be trading at 1.5X PVG. Instead, PVG's market cap is about 1.5X SA.

anyone who buys either company (M&A) will realistically need the other company. why these 2 companies are not working together, especially now that PVG has drilled out most of its project to a level of thoroghness that SA did, is beyond me. This will be far more economic as a single project. back when PVG (SSRI) merely had inferred resources, SA had a good argument to merge on an equal basis but they are nearly equally drilled out.

You may be on to something. The shares just got slammed for no publicly apparent reason. In my experience, such events are suggestive of a shakeout prior to a run based on substantive change in business. New results are due to be released before end Q1, and corporate changes may follow.

I don't think you're being fair by downplaying the drill results, never mind measured and indicated. They have proven up a superior mine project, even at today's 'depressed' prices (hahaha).

[Fiat Metaler]

i think you are putting too much stock in PVG's hype. yes, they have some narrow zones that are medium high grade, but most of their metal is the same grade as SA and all of its in the middle of nowhere just like SA.

these 2 stocks are trading on promotion and speculation. the serious money knows they have to partner or sell out to a big operator to build a mine. SA is candid about this and says they are not a mine builder. PVG to their credit has structured their holdings to build a bite size mine of the best resources. Quartermain might pull that off, but its not the most efficient way. the most efficient thing is to combine both projects and build a single mine and a single set of infrastructure. Previously, the different stages of drilling were a legit excuse. now, its just the egos in the way.

you can't expect these stocks to move much anymore based on drill results, feasability studies, or promises. the cloud hanging over both is the enormous infrastructure hurdle. Its economic to build it all, its just a question of how and by whom.

i'm a fan of both companies, but right now SA is on sale. 6 months ago it was the other way around. There is huge value here in the ground which offers tremendous leverage to the price of gold. if you like these sorts of plays, also look at NAK. On the plus side, NAK has a major partner and more gold. They also are a little less isolated - not tucked away in the mountains. On the minus side, they are close to environmentally sensitive areas and will also need to build a lot of infrastructure.

[Lore]

Thanks for posting about NAK. It's an interesting comparison, and I haven't looked at it for a while.

For starters, NAK is in Alaska, which is admittedly mine-friendly, but I have frankly lost enough money investing in promising US-based projects over the years. Capital is scared of America's debt and potential repercussions for operators. The point is particularly important as America supposedly faces a currency crisis. NAK production is set for 2019. A lot could happen between then and now. That by itself tilts the risk scale, though I recognize that all Western economies are vulnerable.

Coverage seems pretty cool toward NAK (example).

The PVG site is accessible from Highway 35. I see no problem with that. I've driven it many times.

NAK chart looks positive intermediate-term, but look at PVG.

"Assuming US $1235.00/oz Au (August 2010), the pre-tax NPV is US$5.95Billion" (Resource World magazine, April 2011, p. 31). They've done lots of drilling since then.

No offense, but if PVG drill results are "not that high of a grade" in your book, what is "high?"

Disclaimor: I am independent, not an advisor, and have a relatively small position in PVG.

Rgds

[Fiat Metaler]

Thanks for posting about NAK. It's an interesting comparison, and I haven't looked at it for a while.

For starters, NAK is in Alaska, which is admittedly mine-friendly, but I have frankly lost enough money investing in promising US-based projects over the years. Capital is scared of America's debt and potential repercussions for operators. The point is particularly important as America supposedly faces a currency crisis. NAK production is set for 2019. A lot could happen between then and now. That by itself tilts the risk scale, though I recognize that all Western economies are vulnerable.

Coverage seems pretty cool toward NAK (example).

The PVG site is accessible from Highway 35. I see no problem with that. I've driven it many times.

NAK chart looks positive intermediate-term, but look at PVG.

"Assuming US $1235.00/oz Au (August 2010), the pre-tax NPV is US$5.95Billion" (Resource World magazine, April 2011, p. 31). They've done lots of drilling since then.

No offense, but if PVG drill results are "not that high of a grade" in your book, what is "high?"

Disclaimor: I am independent, not an advisor, and have a relatively small position in PVG.

Rgds

not an expert, but a little over 1 gram of gold per ton is decent. PVG and SA are not single areas - they are collections of different areas. PVG has one area that is above 1 gram per ton, but its not all of their ounces, maybe a third. its been a while since i looked at this so check what my impressions are.

my point is simply this - PVG now costs more than SA. But SA has more ounces. PVG justifies this by saying they are higher grade. That is true, but only for a portion, and they are literally right next door to SA so equally remote. Also, i think the road stop 20 miles from PVG and is not all season. i say that because their feasability study has them sharing a tunnel through the mountain for 20 km to the port of Stewart. Also, they will need electricity among other things.

I think PVG becomes a mine someday, but only after combining with SA and i think Quartermain believes this too. I think PVG's statements about higher grade and quicker to have a mine is just puffing or positioning. And for new money, i like SA at a 2/3rds the cost of PVG.

Its hard to compare SA/PVG to NAK, but NAK has more ounces but potentially more issues (environmental). On the other hand, they have a partner who can build a mine and pay for all the infrastructure. Quartermain at PVG has built mines but he doesn't ahve the billions to build a full mine - his idea is to do a mini mine, and use the funds to pay for the rest. I guess that is one strategy, but I think what makes most sense is to combine both properties, so i'm skeptical of this positioning.

[Lore]

Appreciate the thoughtful response. You're right - the drill tells the story.

Coming soon (from the website):
• Update to high-grade PEA Q1
• Grid proposal Q1
• Joint study with Seabridge Gold for Snowfield + KSM bulk tonnage opportunity anticipated Q1
• Feasibility study on high-grade underway and anticipated Q4
• All-season road to highway complete Q4

Sprott's positions in different funds are a nice vote of confidence. Looking at this, I want to add, but pretty sure I missed the dip.

Rgds

[Fiat Metaler]

Appreciate the thoughtful response. You're right - the drill tells the story.

Coming soon (from the website):
• Update to high-grade PEA Q1
• Grid proposal Q1
• Joint study with Seabridge Gold for Snowfield + KSM bulk tonnage opportunity anticipated Q1
• Feasibility study on high-grade underway and anticipated Q4
• All-season road to highway complete Q4

Sprott's positions in different funds are a nice vote of confidence. Looking at this, I want to add, but pretty sure I missed the dip.

Rgds

spott is a good indicator, but remember that sprott would have bought in the IPO a year ago at $6. I'm not negative on PVG, just think SA or NAK are better value relative to PVG's current price.

[Strawboss]

Highlights (base case using US$1,100/oz gold, US$21/oz silver and exchange rate of US$0.93:C$1.00)

-- Base Case pre-tax Net Present Value (5% discount) of US$2.262 billion;
-- Mine life of 24 years producing an estimated 6.9 million ounces of gold and 17.0 million ounces of silver;
-- Average annual production of 325,000 ounces of gold over the first 12 years and 287,000 ounces of gold over the life of mine;
-- Base Case pre-tax Net Cash Flow over the proposed mine life of US$5.133 billion;
-- Base Case pre-tax Internal Rate of Return of 29.8%, with payback estimated at 4.1 years;
-- Estimated initial capital cost, including contingencies, of US$436.3 million;
-- Average operating costs of C$170.90/tonne milled over mine life.

http://finance.yahoo.com/news/Pretiu...09721.html?x=0

And this is ONLY for Brucejack - it doesnt even include their higher tonnage open pit planned operation...

[Fiat Metaler]

net present value is great but its not the only story. you have to look at the current market value relative to NPV, among other things.

PVG market cap - 1.42B; NPV - $2.6B; NPV to Market ratio - 1.83 times.
SA market cap - 1.03B; NPV - $3.5B; NPV to Market ratio - 3.6 times.
NAK market cap - 0.69B; NPV - $6.1B; NPV to Market ratio - 9.84 times.

[Strawboss]

Do either SA or NAK have high grade near surface deposits that can be quickly and relatively cheaply mined? I think that more than anything explains the disparity that you are highlighting.

net present value is great but its not the only story. you have to look at the current market value relative to NPV, among other things.

PVG market cap - 1.42B; NPV - $2.6B; NPV to Market ratio - 1.83 times.
SA market cap - 1.03B; NPV - $3.5B; NPV to Market ratio - 3.6 times.
NAK market cap - 0.69B; NPV - $6.1B; NPV to Market ratio - 9.84 times.

[Fiat Metaler]

Do either SA or NAK have high grade near surface deposits that can be quickly and relatively cheaply mined? I think that more than anything explains the disparity that you are highlighting.

none of those 3 have metal that can be mined cheaply. a portion of PVG is slightly higher grade, but they have no roads electricity etc. its a misnomer to call 1.3 g per TON high grade.

[Strawboss]

none of those 3 have metal that can be mined cheaply. a portion of PVG is slightly higher grade, but they have no roads electricity etc. its a misnomer to call 1.3 g per TON high grade.

1.3 g/ton huh?

"slightly higher grade" huh?

The "road" connecting to the highway will be completed before the end of this year and the electrical connections to the grid will only cost about $40 million. Did you even bother reading the updated PEA?

I dont usually call people trolls - but, you are pushing it.

[Fiat Metaler]

1.3 g/ton huh?

The "road" connecting to the highway will be completed before the end of this year and the electrical connections to the grid will only cost about $40 million. Did you even bother reading the updated PEA?

I dont usually call people trolls - but, you are pushing it.

if you are investing in PVG and never heard of SA that speaks for itself.

$40 million is a fraction of the cost to get this show on the road. PVG says they need to spend capex of $288 million which they don't have just to do a baby mine. To get all the metal out of the ground is capex (not operating costs) of 10X that.

Also, 80%+ of PVG's gold is counted at an average of .34 grams per ton. Look at page 25 of this slide. Add that to Brucejack and it averages out to about 1.3.

http://www.pretivm.com/Theme/Pretium...on_2%20web.pdf

i am a long time shareholder of SSRI which owned PVG and spun it off. I am familiar with Quartermain, who quit SSRI over PVG. I think his strategy of taking baby steps is a good one because it will minimize dilution but more dilution is coming.

Anyway, i'm not saying Bob won't pull it off, only that PVG has tripled since its IPO (which I bought in). I bought a little over 6, sold in the 13's, then bought it again in the 6s or 7s and sold in the 12s. I doubled my money on this one twice. also had more than doubles on SA and NAK. my only point is its hard to do well when you don't get a good value, and at current prices NAK is the best value. its also hard to do well when you get emotionally tied to a stock - i don't care which one pays off.

[Fiat Metaler]

You may be on to something. The shares just got slammed for no publicly apparent reason. In my experience, such events are suggestive of a shakeout prior to a run based on substantive change in business. New results are due to be released before end Q1, and corporate changes may follow.

I don't think you're being fair by downplaying the drill results, never mind measured and indicated. They have proven up a superior mine project, even at today's 'depressed' prices (hahaha).

the shares got slammed because they issued more of them.

the drill results speak for themselves but what you have to understand is its not one mine or one resource. the drill results behing hyped is one mountain top - Brucejack. 20% of the gold is there, and yes its higher grade. The other 80% of the metal is on a different mountain top, snowfield. I'm not downplaying the drill results - just pointing out that PVG is hyping Brucejack and glossing over the rest of the company. those drill results are representative of Brucejack but not the entire resource.

[Strawboss]

the shares got slammed because they issued more of them.

the drill results speak for themselves but what you have to understand is its not one mine or one resource. the drill results behing hyped is one mountain top - Brucejack. 20% of the gold is there, and yes its higher grade. The other 80% of the metal is on a different mountain top, snowfield. I'm not downplaying the drill results - just pointing out that PVG is hyping Brucejack and glossing over the rest of the company. those drill results are representative of Brucejack but not the entire resource.

Brucejack (high grade) will pay for the development of Snowfield (open pit - lower grade) many times over. Also - the PEA uses 5.0g/ton cut off not to mention the gold/silver prices they are using are far, far below current prices and by the time they actually start building the mine, gold could be 3x higher than the PEA is accounting for.

Nice to see Pretium up on a day like today...nice.

[StateofJefferson]

Pretium up 2.2% today. Nice performance especially when it makes a new 12 month high and every other stock I have is red.

[Fiat Metaler]

Pretium up 2.2% today. Nice performance especially when it makes a new 12 month high and every other stock I have is red.

not surprised PVG is doing well, because i agree its a good resource, but SA has tripled its return in the past month which is roughly when this thread was started. that is not surprising at all because SA was much cheaper than PVG.

http://finance.yahoo.com/echarts?s=P...rce=undefined;

[StateofJefferson]

not surprised PVG is doing well, because i agree its a good resource, but SA has tripled its return in the past month which is roughly when this thread was started. that is not surprising at all because SA was much cheaper than PVG.

http://finance.yahoo.com/echarts?s=P...rce=undefined;

Facts - Seabridge Gold down 31% over 12 months while PVG up 65% over 12 months.

[Fiat Metaler]

Facts - Seabridge Gold down 31% over 12 months while PVG up 65% over 12 months.

yes, but i didn't tell you to buy seabridge 12 months ago and not buy PVG.


I picked the time frame of when the OP said to buy PVG and I said to buy SA.

there is no rule that says you have to buy and hold it forever or even continously for 12 months.

roughly 12 months ago i bought PVG after its IPO, sold after a double, bought it back around 7 and sold again for another almost double.

there are 2 big things to understand about PVG. 1. its more expensive because they have gotten gotten a lot of press about Brucejack. 2. Brucejack is only 20% of the resources - the other 80% is just like SA or NAK.

A corrolary to this is that either PVG dilutes to build the BJ mine itself or sells BJ off. BQ's style is to do it himself so expect a slow, dilutive slog. the premium price for BJ actually makes it less likely PVG gets taken out in an M&A transaction.

[phideaux]

Study sees little benefit in Pretium/Seabridge mega gold project

Pretium and Seabridge Gold have investigated the benefits of bringing together some 60 million gold ounces into a single project, but no advantage seen in the merger of these huge deposits.

Posted: Thursday , 08 Mar 2012

HALIFAX, NS (MINEWEB) -

A joint study of Pretium Resources' (TSX: PVG, NSYE: PVG), Snowfield and Seabridge Gold's (TSX: SA, AMEX: SA) KSM deposits as a single project did not bear especially ripe fruit.

"The study indicates that developing the KSM and Snowfield deposits together could produce marginally better economics at base case metal prices than developing KSM as a stand-alone project, although no property acquisition costs or allocation of initial KSM capital have been considered," Pretium said in a year end update on Tuesday.

Pretium and Seabridge embarked on the joint study last year, the impetus being, as Pretium President and CEO Bob Quartermain put it, "to see what these two resources would do together." The raw numbers are certainly compelling with near 40 million ounces gold in reserves at KSM and 27 million ounces gold in resources at Snowfield. Combined the two might be mined via a super pit; thus it made sense for Pretium and Seabridge to co-operate and look at the economics of mining them as a single operation.

It would seem, however, the advantages of piecing them together are not so awesome as to shift either Pretium or Seabridge's focus. While a spokesperson for Pretium could not be reached Wednesday - much of management were in transit following the closing of the PDAC convention in Toronto - Seabridge President and CEO Rudi Fronk said that it was fair to say the study findings were not material to Seabridge.

As for Pretium, it looks as if Snowfield too remained very much on the back burner as compared to its nearby high grade Brucejack gold project. Pretium noted that it did not have to spend more money on Snowfield for another decade. And a bit cryptically it added that "we will be opportunistic to realize value for Snowfield as we focus our corporate resources on advancing the high-grade opportunity at our Brucejack Project."

Exactly what opportunities are on the table was not made explicit.

http://www.mineweb.com/mineweb/view/...ail&pid=110649

[Fiat Metaler]

Study sees little benefit in Pretium/Seabridge mega gold project

Pretium and Seabridge Gold have investigated the benefits of bringing together some 60 million gold ounces into a single project, but no advantage seen in the merger of these huge deposits.

Posted: Thursday , 08 Mar 2012

HALIFAX, NS (MINEWEB) -

A joint study of Pretium Resources' (TSX: PVG, NSYE: PVG), Snowfield and Seabridge Gold's (TSX: SA, AMEX: SA) KSM deposits as a single project did not bear especially ripe fruit.

"The study indicates that developing the KSM and Snowfield deposits together could produce marginally better economics at base case metal prices than developing KSM as a stand-alone project, although no property acquisition costs or allocation of initial KSM capital have been considered," Pretium said in a year end update on Tuesday.

Pretium and Seabridge embarked on the joint study last year, the impetus being, as Pretium President and CEO Bob Quartermain put it, "to see what these two resources would do together." The raw numbers are certainly compelling with near 40 million ounces gold in reserves at KSM and 27 million ounces gold in resources at Snowfield. Combined the two might be mined via a super pit; thus it made sense for Pretium and Seabridge to co-operate and look at the economics of mining them as a single operation.

It would seem, however, the advantages of piecing them together are not so awesome as to shift either Pretium or Seabridge's focus. While a spokesperson for Pretium could not be reached Wednesday - much of management were in transit following the closing of the PDAC convention in Toronto - Seabridge President and CEO Rudi Fronk said that it was fair to say the study findings were not material to Seabridge.

As for Pretium, it looks as if Snowfield too remained very much on the back burner as compared to its nearby high grade Brucejack gold project. Pretium noted that it did not have to spend more money on Snowfield for another decade. And a bit cryptically it added that "we will be opportunistic to realize value for Snowfield as we focus our corporate resources on advancing the high-grade opportunity at our Brucejack Project."

Exactly what opportunities are on the table was not made explicit.

http://www.mineweb.com/mineweb/view/...ail&pid=110649

one (nice to have problem) of PVG is that brucejack is very different from the rest of snowfield. BJ is 20% of PVG's metal. they could sell the other 80% to SA and get all the money they need to build the mine for BJ. or they could spin the rest off into a new JV with a major, allow the major to earn a 50% interest in the rest by building the infrastructure for both projects but PVG might keep BJ for itself.

[Fiat Metaler]

one (nice to have problem) of PVG is that brucejack is very different from the rest of snowfield. BJ is 20% of PVG's metal. they could sell the other 80% to SA and get all the money they need to build the mine for BJ. or they could spin the rest off into a new JV with a major, allow the major to earn a 50% interest in the rest by building the infrastructure for both projects but PVG might keep BJ for itself.

looks like the market got wind of PVG's plan to issue more shares - i guess all that infrastructure is expensive. shares are down almost 25% from recent highs. PVG is still priced about a third higher in market cap than larger SA.

[phideaux]

Holy Smokes, Batman!

Latest drill results:

0.5 meters with uncut grades of 41,582 grams of gold per tonne (1.6 feet averaging 1,212.8 ounces gold per ton); http://finance.yahoo.com/news/pretiu...090000944.html

A ton of that rock is worth almost $2 million. A ton of rock is roughly the same physical size as a household refrigerator.

[Strawboss]

Holy Smokes, Batman!

Latest drill results:

0.5 meters with uncut grades of 41,582 grams of gold per tonne (1.6 feet averaging 1,212.8 ounces gold per ton); http://finance.yahoo.com/news/pretiu...090000944.html

A ton of that rock is worth almost $2 million. A ton of rock is roughly the same physical size as household refrigerator.

Now those are what I call drill results.

Very nice.

[StateofJefferson]

I would buy some shares of PVG if I did not already own my fair share.

[Master_Ho]

Me too.........best results I've heard in a very long time if ever!!

[Fiat Metaler]

Holy Smokes, Batman!

Latest drill results:

0.5 meters with uncut grades of 41,582 grams of gold per tonne (1.6 feet averaging 1,212.8 ounces gold per ton); http://finance.yahoo.com/news/pretiu...090000944.html

A ton of that rock is worth almost $2 million. A ton of rock is roughly the same physical size as a household refrigerator.

another way to look at that is that the drill result intersected a rich vein, but it crapped out after 18 inches.

still, PVG does have higher grades than most, but its remoter than most and will have higher infrastructure than most.

the other odd thing about it is that PVG has multiple zones, and its just this one zone that is high grade. there is nothing wrong with that, and quartermain may try to develop the project on his own by mining the highgrade stuff first to finance the rest if he pulls that off it will be amazing because the infrastructure costs there are so large. most folks would try to sell it, but the problem is PVG is a mix of high and low grade, and the high grade part is not large enough by itself to justify the capex.

PVG and SA have very different management. BQ is more likely to try to develop the thing; SA is just sitting on it to flip it.

I think because of the high infrasctructure costs, they hoopla over the high grade portion of PVG is a bit overblown. This mine will get built when someone can justify the capex, and to do that you have to buy the whole thing. the numbers get better if they fold SA into it as well.

right now, PVG commands a nice price (higher than SA and NAK) in part because of the excitement about the high grades and the (in my opinion incorrect) expectation that PVG will be developed soon. Comparing the market caps of PVG and SA is a good way to judge the richness of the prices. if you want a bargain play, look at NAK. Presently, PVG's market cap is twice SA's and 5 times NAK's. Of all of these, NAK imho is most likely to be built. yes, it has environmental hurdles but it is located in Alaska, not Canada, and the enviromental hurdles were known when Anglo put up the money to partner with them. The fact that they have a partner who will build the mine, not to mention the low market price relative to PVG and relative to ounces in the ground, make NAK a much better speculation imho.

[phideaux]

another way to look at that is that the drill result intersected a rich vein, but it crapped out after 18 inches.

Looking at the other drill holes, that bonanza vein is no thicker than 1 meter anywhere it has been found. I guess the "hope" is that it will broaden out somewhere and become 10 or 20 meters thick. Or that other similar veins will be found. I'm no geologist, but to me at least it is hard to think that it is the only such vein on the property.

Hell, at $2 million a ton, you could helicopter the ore 500 miles to the nearest mill and process it there and still make a spectacular profit margin.

[Fiat Metaler]

Looking at the other drill holes, that bonanza vein is no thicker than 1 meter anywhere it has been found. I guess the "hope" is that it will broaden out somewhere and become 10 or 20 meters thick. Or that other similar veins will be found. I'm no geologist, but to me at least it is hard to think that it is the only such vein on the property.

Hell, at $2 million a ton, you could helicopter the ore 500 miles to the nearest mill and process it there and still make a spectacular profit margin.

$2 million a ton is extrapolating a very small sample when its not reasonable to do so. do you think they drilled down .5 meters and stopped? No, they kept drilling and the rest of the stuff was not as rich, so its not touted in the press release.

don't get me wrong - i'm certain the press release is accruate about those 18 inches of drill results. the problem is that press release misleads you into thinking the rest of the property is similarly rich, when it is not. its really a shady practice and reeks of hucksterism.

[phideaux]

$2 million a ton is extrapolating a very small sample when its not reasonable to do so. do you think they drilled down .5 meters and stopped? No, they kept drilling and the rest of the stuff was not as rich, so its not touted in the press release.

don't get me wrong - i'm certain the press release is accruate about those 18 inches of drill results. the problem is that press release misleads you into thinking the rest of the property is similarly rich, when it is not. its really a shady practice and reeks of hucksterism.

I have been reading and analyzing exploration company press releases for 10+ years. Pretium's releases are clearer and less ambiguous than many other company's releases. I am not being mislead. I am only extrapolating data from the 0.5 meters of that one drill hole.

All that I said was that the gold in that killer vein is worth $2 million a ton. Obviously more drilling is needed to determine how many tons of that stuff there is in that vein and on that property overall.

Statistically, it is not reasonable to conclude that the latest drill hole hit the absolute maximum gold content on the property. Other holes will likely find more, others less.

All that I am saying is that even just a few thousand tons of that super-rich ore could generate extraordinary profits.

[Strawboss]

It strikes me that there is a layer of superconcentrated gold in the ground around there and they keep drilling through it from multiple locations. Not sure what the depth of it is - perhaps 50-100 feet deep. Almost like a 12-24 inch thick blanket of gold saturated ore. Thicker in some places - thinner in others (although "thin" is relative").

[phideaux]

It strikes me that there is a layer of superconcentrated gold in the ground around there and they keep drilling through it from multiple locations. Not sure what the depth of it is - perhaps 50-100 feet deep. Almost like a 12-24 inch thick blanket of gold saturated ore. Thicker in some places - thinner in others (although "thin" is relative").

The drill results so far show that "blanket" to be anywhere from 75 to 300 meters down.

It is certainly a "freak of nature." It is arguably the richest gold ore on the planet. Because it is so unusual, there aren't many if any similar geological structures to compare it to.

There's no telling how wide and how thick it is in its entirety until they do A LOT more definition and infill drilling. Certainly it's possible that they may have already found the bulk of its potential, or maybe there's an elephant zone of 20 or 30 meters of it somewhere in the structure.

But if you're gonna poke a lot of holes in the ground, this kind of target is a lot more exciting than a typical property that shows 50 meters of 1 gram a ton gold.

[Fiat Metaler]

The drill results so far show that "blanket" to be anywhere from 75 to 300 meters down.

It is certainly a "freak of nature." It is arguably the richest gold ore on the planet. Because it is so unusual, there aren't many if any similar geological structures to compare it to.

There's no telling how wide and how thick it is in its entirety until they do A LOT more definition and infill drilling. Certainly it's possible that they may have already found the bulk of its potential, or maybe there's an elephant zone of 20 or 30 meters of it somewhere in the structure.

But if you're gonna poke a lot of holes in the ground, this kind of target is a lot more exciting than a typical property that shows 50 meters of 1 gram a ton gold.

i would rather have 50 meters at a gram than bonanza grade for 18 inches.

i would rather have half of that close to port than double 20 miles and $4 billion from the smelter/port.

anyway ole bob quartermain is pretty smart. he knows if he partners with a major he'll lose half. so he'll sell some stock to fund a mini mine. but that stock is dilutive, so he needs to talk the stock up. the problem is that relative to comparable investments - NAK, SA, Tower Hill - he's already got a pretty rich valuation.

you know, the irony is that 5 years ago i was in SSRI and was telling the SSRI board that this area could be as valuable as all of SA, and now you have PVG selling for twice SA and folks think it should be higher.

Trade the ratio between the market caps of SA and PVG.

[Strawboss]

Here is an updated chart that shows the relative performance of PVG, SA and NAK. I used the start date of this thread as the beginning of the evaluation.

Definitely not impressive, but, considering the environment - not too shabby. I dont really follow NAK - anyone know why its been smashed so much? Is it simply a belief that the grades are too small and the costs too great for it to ever get mined?

[phideaux]

Here is an updated chart that shows the relative performance of PVG, SA and NAK. I used the start date of this thread as the beginning of the evaluation.

Definitely not impressive, but, considering the environment - not too shabby. I dont really follow NAK - anyone know why its been smashed so much? Is it simply a belief that the grades are too small and the costs too great for it to ever get mined?

NAK has enormous problems with the EPA and other "environmentalists" over their Pebble deposit. IT is arguably the largest gold deposit on the planet, but it may never get build, at least not in our lifetimes.