Written by: James Fraser via CEO.ca
A look at some of my favourite news releases out this morning.
Pretium Resources (PVG:TSX) – Pretium has provided an update on the Brucejack Project in northwestern British Columbia. 2015 plans for the uber high grade project have been released this morning.
Pretium has a large land package of over 254,518 acres at Brucejack but the focus is on the Valley of the Kings. Valley of Kings is one of the highest grade sizeable undeveloped gold projects in the world.
A 2014 Feasibility Study showed Proven + Probable reserves of 6.9 million ounces at 15.7 grams per tonne.
Brucejack plans for 2015 include:
- Underground development with a first ventilation raise currently under development.
- Detailed mine engineering (ongoing) bids have been received for long lead items.
- Transmission line engineering is almost complete with power expected to be in place for construction.
- Awaiting final permits for construction to begin expected this summer.
- A 40,000 metre infill drill program for the primary purpose of grade control.
- A 10,000-15,000 metre grass-roots exploration program east of the Brucejack project.
Pretium stock has been as high as $16 in the last 3 years and under $3. The stock currently sits in the $7 range as the next major catalyst will be permits and if received the commencement of construction.
The economics of the project are top notch with an internal rate of return before tax of 34.7% using $1100 gold. The CAPEX is still significant though at $746.9 million and PVG will need to find a partner.
Pretium is a popular stock at CEO Chat and you can find all comments in the $PVG roomhere.
A live audio broadcast will be available this morning discussing the project at 9 am at http://services.choruscall.ca/links/pretivm150609.htm
Read: Pretium Resources Inc.: Brucejack Project Update
Related: Pretivm (PVG.TO) intends to be a dividend payer: CEO Robert Quartermain
Oban Mining (OBM:TSXV) – 5 way mining merger – (Oban Mining, Ryan Gold, Corona Gold, Eagle Hill Exploration, and Temex Resources)
Something I have never seen before in the mining sector is a merger of five different companies. Oban Mining (OBM:TSXV) has launched supported share exchange takeover bids of the other 4 companies.
The combination of the 5 companies will create a leading gold development company with a strong cash position.
The new company looks like it will still be called Oban.
Osisko Gold Royalties (OR:TSX) likes what they see and will be investing up to $20 million in a private placement at a price of 11 cents per share. Osisko will have the right of first refusal on any of the new Oban projects as well as a one time right to provide first financing if Oban raises.
“This is an exciting new chapter in Canadian mining,” stated John Burzynski, chairman of Oban. “Postconsolidation, New Oban brings together major exploration assets in Ontario and Quebec under experienced management in a well-capitalized vehicle, with over $65-million in cash and a significant global gold resource. We are particularly excited to have Dundee Corp. and Osisko as key shareholders in the resultant company, by virtue of their respective existing holdings in four of the companies involved in the combination and Osisko’s investment in this new vehicle.”
New Oban will have approximately 1,105.9 million common shares outstanding on a postconsolidation basis and will have an estimated market capitalization of approximately $122-million (based on postconsolidation trading price of 11 cents per share, which corresponds to the deemed net asset value per share value of Oban agreed for the purposes of the transactions). Upon closing of the transactions, and prior to giving effect to the private placement by Osisko, the ownership percentages of each group will be as follows: Eagle Hill (28 per cent), Temex (16 per cent), Ryan Gold (24 per cent) and Corona Gold (19 per cent). Following the combination, it is estimated that Osisko and Dundee will own approximately 18 per cent and 15 per cent of New Oban, respectively.
Ryan Gold and Corona Gold where basically cash rich shells and Eagle Hill and Temex had high grade gold projects that would need further funding.
Assets of the new Oban will include:
- Over $65 million in cash.
- The high grade 1.5 million ounce Windfall Lake deposit in Quebec (PEA complete) .
- Juby Gold project ~4 million ounces of gol in the measured+indicated categories.
- Whitney Gold project high grade gold located in Timmins (~880,000 ounces)
This will be a very interesting company to watch post merger with $65 million in cash it will give management lots of options. I would expect management to be aggressive when the deal closes and look at buying other assets.
This is not investment advice. All facts are to be checked and verified by reader. As always please do your own due diligence.