Ramping Up the High-Grade Brucejack Mine

Transcription

1 VALUE THROUGH GOLD Ramping Up the High-Grade Brucejack Mine BMO Capital Markets Global Metals & Mining Conference February 25-28,

2 Cautionary Statement Forward-Looking Information This Presentation contains forward-looking information and forward looking statements within the meaning of applicable Canadian and United States securities legislation. Forward-looking information may include, but is not limited to, the anticipated production and developments in our operations in future periods, information with respect to our planned exploration and development activities, the adequacy of our financial resources, the estimation of mineral reserves and resources including the 2016 Valley of the Kings Mineral Resource estimate, realization of mineral reserve and resource estimates and timing of development of our Brucejack Project, costs and timing of future exploration, results of future exploration and drilling, production and processing estimates, capital and operating cost estimates, timelines and similar statements relating to the economic viability of the Brucejack Mine, timing and receipt of approvals, consents and permits under applicable legislation, our executive compensation approach and practice, the composition of our board of directors and committees and adequacy of financial resources. Wherever possible, words such as plans, expects, projects, assumes, budget, strategy, scheduled, estimates, forecasts, anticipates, believes, intends, targets and similar expressions or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved, or the negative forms of any of these terms and similar expressions, have been used to identify forward-looking statements and information. Statements concerning mineral reserve and resource estimates may also be deemed to constitute forward-looking information to the extent that they involve estimates of the mineralization that will be encountered if the property is developed. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance are not statements of historical fact and may be forward-looking information. Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking information, including, without limitation, those risks identified in our Annual Information Form dated March 30, 2017 filed on SEDAR at and in the United States on Form 40-F through EDGAR at the SEC s website at Forward-looking information is based on the expectations and opinions of our management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise. We do not assume any obligation to update forward-looking information, whether as a result of new information, future events or otherwise, other than as required by applicable law. For the reasons set forth above, prospective investors should not place undue reliance on forward-looking information. Currency Unless otherwise indicated, all dollar values herein are in US $. 2

3 Notes to Investors National Instrument Technical and scientific information contained herein relating to the Projects is derived from National Instrument ( NI ) compliant technical reports ( Reports ), Measured, Indicated, and Inferred Mineral Resource Update dated July 21, 2016, Feasibility Study and Technical Report on the Brucejack Project, Stewart, BC dated June 19, 2014, Mineral Reserve Update dated December 15, 2016, capital cost update dated February 3, 2017, and. We have filed the Reports and Update under our profile at Technical and scientific information not contained within the Reports for the Projects have been prepared under the supervision of Mr. Ivor W.O. Jones, M.S.c., FAusIMM, Cpgeo, Mr. Kenneth C. McNaughton, P.Eng., Ian Chang, P.Eng., Mr. Russell Pennel, B.A.S.c., P.Eng., and Mr. Lyle Morgenthaler, B.A.S.c., P.Eng. each of whom is an independent qualified person under NI This presentation uses the terms measured resources, indicated resources (together M&I ) and inferred resources. Although these terms are recognized and required by Canadian regulations (under NI ), the United States Securities and Exchange Commission does not recognize them. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. There is no guarantee that all or any part of the mineral resource will be converted into mineral reserves. In addition, inferred resources have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre feasibility studies, or economic studies, except for a Preliminary Assessment as defined under NI Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable. Non-IFRS Financial Performance Measures The Company has included certain non-ifrs measures in this presentation. The Company believes that these measures, in addition to measures prepared in accordance with IFRS, provide investors an improved ability to evaluate the underlying performance of the Company and to compare it to information reported by other companies. The non-ifrs measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers. The non-ifrs financial measures included in this presentation include: cash costs per ounce of gold sold, all-in sustaining cost per ounce of gold sold, adjusted earnings or loss, adjusted earnings or loss per share, and average realized price per ounce of gold sold. Please refer to the Non-IFRS Performance Measures section of the Company s MD&A filed on SEDAR at and in the United States on Form 40-F through EDGAR at the SEC s website at for a detailed discussion and reconciliation of the non-ifrs measures to the most directly comparable IFRS measures. The Company believes that in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors and analysts use this information to evaluate the Company s performance. In particular, management uses these measures for internal valuation for the period and to assist with planning and forecasting of future operations. The presentation of non- IFRS measures is not meant to be a substitute for the information presented in accordance with IFRS. 3

4 Brucejack Mine An Emerging High-Grade Gold Producer Underground gold mine in British Columbia, Canada Ramping up production 150,000+ ounces gold produced in first 6 months Healthy cash position Local and regional exploration potential 4

5 Brucejack Mine An Emerging High-Grade Gold Producer 5

6 Strategic Focus Primary: Optimizing Operations Operational Grade Control Delivering on Guidance 6

7 Strategic Focus Secondary: Balance Sheet Strategy Organic Growth Opportunities 7

8 Optimizing Operations Brucejack Ramp-Up Gold Production First 6 Months Q Q TOTAL Gold Produced 82,203 oz 70,281 oz 152,484 oz Mill Feed Grade g/t 8.24 g/t 9.36 g/t Gold Recovery Rate % 95.8 % % Ore Milled 261,262 t 271,501 t 532,763 t Average Milled Per Day 2,840 t/d 2,951 t/d 2,895 t/d Source: See News Releases dated Nov 10, 2017 and Jan 23,

9 Optimizing Operations Improve Long-hole Drill Availability Third long-hole drill on site Increase Stope Inventory Underground development rate increased to 700 meters per month Target stopes for mining by mid

10 Optimizing Operations Increasing Accessibility Valley of Kings Mineral Reserve Estimate (LOM) 1 Category Tonnes (mil) Gold (g/t) Silver (g/t) Contained Gold (mil oz) Silver (mil oz) Proven Meters ASL (1) Mineral Reserve Update, see news release dated December 15, 2016 Valley of Kings Block Model Meters N Grade 20 g/t 15 g/t 10 g/t 5 g/t 10

11 Operational Grade Control Grade Control System Sample splitting station commissioned Development round and long-hole stope ring sampling program underway Development round and ring assays successfully feeding back into the short-term mine planning cycle Reverse Circulation Drilling for Stope Definition Underway Infill drilling to 5 to 7-meter centers Replaces planned infill diamond drilling Lower cost, quicker, and bigger sample size than diamond drilling 11

12 Delivering on Guidance H Guidance 1 Gold Production 150, ,000 oz All-in Sustaining Cost 2 $900 - $700 /oz sold All-in Sustaining Cost includes all costs (site and head office), other than costs related to the increase in production rate (estimated US$25 million) Full-year Guidance mid-2018 (1) See News Release dated Jan 23, (2) All-in Sustaining Cost (AISC) is non-ifrs performance measure. For reconciliation to IFRS measures refer to the Company s MD&A. 12

13 Delivering on Guidance Robust Margin 1, Low-range 9.8 g/t Gold Head Grade H Gold Production Guidance 1 AISC 2 (US$) High-range 13 g/t Gold Head Grade , , , , , Gold Production (oz) (1) See News Release dated Jan 23, Currency US$ (2) All-in Sustaining Cost (AISC) is non-ifrs performance measure. For reconciliation to IFRS measures refer to the Company s MD&A. 13

14 Delivering on Guidance 2018 Potential Impacts to AISC Strategic Decisions Additional development to build stope inventory Contract miner during ramp-up and construction financing payback Cost Control Opportunities Optimize mining operations Reduce binder use for paste backfill Evaluate material and supply contracts Assess grind size increase Potential snow removal savings 14

15 Balance Sheet Strategy 2018 Build Cash Position Refinance/Pay Down Credit Facility (1) US$350M at 7.5% interest due Dec 31, 2018 Extendable to Dec 31, 2019 with payment of 2.5% of principal and interest Buy Back Precious Metals Stream (1,2) 1 st opportunity US$237M on Dec 31, 2018 Invest in low-cost, high-return production rate increase (1) See News Release dated Sept 15, 2015 (2) Capped at M oz and M oz refined gold and silver, less production to Dec 31, Based on refined gold and silver that were estimated to be available for sale in the June 2014 Feasibility Study for the Brucejack Project 15

16 Balance Sheet Strategy Low Capital Investment of ~US$25M: 40% Increase in Production Rate (1) 3,800 t/d 96.7% GOLD RECOVERY (LOM) (1) Increase production rate to 3,800 t/d from 2,700 t/d. Pending permit application approval; see News Release dated Dec 21,

17 Balance Sheet Strategy Robust Margin with Increased Production Rate (- 25% Grade) AISC 2 (US$) Projected 2019 Production Window at 3,800 t/d 1 Reserve Grade , , , , ,000 Annual Gold Production (oz) (1) Projected production range for 2019 based on 3,800 t/d. Pending permit application approval; see News Release dated Dec 21, (2) All-in Sustaining Cost (AISC) is non-ifrs performance measure. For reconciliation to IFRS measures refer to the Company s MD&A. AISC Guidance excludes capex required for production increase to 3,800 t/d. 17

18 Organic Growth Opportunities Brucejack Reserve Expansion Exploration Drill Program for Source Porphyry - underway Bowser Regional Exploration Potential summer

19 Organic Growth Opportunities Reserve Expansion N Mineral Resource1 Mineral Reserve2 Exploration Potential Drill Intercepts3 SU g/t Au 16.9 g/t Au 2,100 g/t Au (Inc 8,600 g/t Au) 250 m (1) Outline of Measured, Indicated, and Inferred Mineral Resource as at 21 July (2) Outline of Proven and Probable Mineral Reserve, based on June 19, 2014 Feasibility Study. (3) Regional exploration drill results; see News Release dated Oct 8, 2015 SU g/t Au (Inc 203 g/t Au) 137 g/t Au SU-661 SU

20 Organic Growth Opportunities Exploration Drilling for Source Porphyry W Flow Dome Zone E Valley of the Kings Development SU g/t Au (Inc 203 g/t Au) 2018 Exploration Drill Holes SU ,100 g/t Au (Inc 8,600 g/t Au) (1) Regional exploration drill results; see News Release dated Oct 8, m 20

21 Organic Growth Opportunities Bowser Regional Exploration Brucejack N Boulder Zone Koopa Zone Surface Sampling /13 Pre km Regional exploration program; see News Release dated Dec 5, 2017 American Creek Zone 5 km 21

22 Positioning Relative to Peers Emerging Low-cost Producer in ) Pretium Guidance Range at 3,800 t/d vs Peers Production (1) 1100 Detour IAM Gold 1000 TMAC Alamos AISC 2 (US$) Argonaut Alacer Guyana Asanko Leagold Pretium Projected 2019 (3) Oceana Kirkland Semafo B2 Gold Randgold Agnico Gold Production (000 s oz) (1) Source: Company websites and Scotiabank estimates guidance for AISC and gold production. (2) All-in Sustaining Cost (AISC) is non-ifrs performance measure. For reconciliation to IFRS measures refer to the Company s MD&A. (3) Pretium projected production range for 2019 based on 3,800 t/d. AISC Guidance excludes capex required for production increase to 3,800 t/d. Pending permit approval; see News Release dated Dec 21,

23 2018 Catalysts for Success Grade Control Program Delivering on Guidance 3,800 t/d Production Rate Increase Exploration Drilling for Source Porphyry Grass Roots Exploration 23

24 APPENDIX VOK Portal Mill Camp West Zone Portal Contact Water Pond 24

25 Shareholding & Analyst Coverage Equity Structure (1) (shares in millions) Issued & Outstanding Fully Diluted Market Cap (Feb 22, 2018) Analyst Coverage BMO Canaccord Genuity CIBC Citi Cormark Securities Credit Suisse Global Mining Research H.C. Wainwright Numis RBC Roth Capital Partners Scotiabank (1) As of February 22, 2018; ownership calculated on an undiluted basis. (2) As of February 22, Source: IPREO, Morningstar Inc. & SEDAR. US$1.18 B Andrew Kaip Rahul Paul David Haughton Alexander Hacking Richard Gray Robert Reynolds David Cotterell Heiko F. Ihle Jonathan Guy Dan Rollins Joseph Reagor Ovais Habib Top Shareholders (2)` (% S/O) Black Rock Asset Management 15.8 Van Eck Associates 9.9 M&G Investment Management 3.8 SSR Mining 3.0 BMO Asset Management 2.7 Orion Mine Finance 2.5 Sun Valley Gold 2.2 Anchor Bolt Capital 1.9 Pretivm Management 1.9 The Vangaurd Group

26 Third Quarter 2017 Financial Summary 3 rd Quarter 2017 Gold Sold Revenue Earnings from Mine Operations Working Capital Adjusted Earnings Per Share Adjusted Earnings Total Cash Costs All-in Sustaining Cost 55,413 oz $70.9 M $26.0 M $7.2 M $8.3 M $0.05/share $656/oz sold $788/oz sold Source: See News Release dated Nov 10, Currency US$ 26

27 Local Employment Brucejack Mine Workforce 83% British Columbia 51% NW British Columbia 35% First Nations As of Dec

28 Longhole Stoping Active Stopes 12 stopes in the mining and backfill cycle at all times Dimensions 30 meter level spacing 45 meter maximum length 15 meter widths 30 M SPACING Dilution Factors Primary Stopes Target: 7% To Date: 10-12% Secondary Stopes: Target: 15% 28

29 Underground Development Ventilation Raise Ventilation Raise Ventilation Raise Valley of The Kings Portal Truck Dump to Crusher Asbuilt September LVL Stopes 1230 LVL Stopes 1260 LVL Stopes 1320 LVL Stopes 1350 LVL Stopes 1380 LVL Stopes View facing North West Ore Flow Direction 29

30 Debt Structure Credit Facility (1) US$350M loan 7.5% fixed interest Due Dec 2018 Option to extend to 2019 with payment of 2.5% of principal and accrued interest Offtake Agreement (1) Option to repurchase 50% or 75% Dec 2018 for $11/oz or Dec 2019 for $13/oz Capped at 7.067M oz gold Callable 8% Stream (1,2) US$150M advance payment 100% buyout option Dec 2018 for $237M or Dec 2019 for $272M Capped at 7.067M oz gold (2) Convertible Notes (3) US$100M offering at 2.25% due 2022 Conversion price of US$16.00 (1) See News Release dated Sept 15, 2015 (2) Capped at M oz and M oz refined gold and silver, less production to Dec 31, Based on refined gold and silver that were estimated to be available for sale in the June 2014 Feasibility Study for the Brucejack Project (3) See News Release dated Feb 14,

31 Brucejack Feasibility Study Profile Mine Life 18 years Feasibility Study Gold Production 7.27 million oz Average Annual Gold Production 504,000 oz (years 1-8) 404,000 oz (life of mine) Gold and Silver Recoveries 96.7% and 90.0% Processing Rate 2,700 tonnes per day Source: Feasibility Study and Technical Report Update on the Brucejack Project, dated June 19, 2014; Mineral Reserve Update, see news release dated Dec. 15,

32 Mineral Reserve Estimate (LOM) 1 Valley of the Kings Category Tonnes (mil) Gold (g/t) Silver (g/t) Contained Gold (mil oz) Silver (mil oz) Proven Probable Total P&P West Zone Category Tonnes (mil) Gold (g/t) Silver (g/t) Contained Gold (mil oz) Silver (mil oz) Proven Probable Total P&P (1) Source: Mineral Reserve Update, see news release dated December 15,

33 Brucejack - Robust Economics Economic Results by Metal Price (1) Low Case Base Case High Case Gold Price (US$/oz) $800 $1,100 $1,400 Silver Price (US$/oz) $10 $14 $18 NPV (2) (5% US$M) Pre-Tax $1,050 $2,340 $3,620 After Tax $690 $1,530 $2,360 Internal Rate of Return Pre-Tax 19.9% 34.4% 47.5% After-Tax 16.5% 28.5% 39.1% Net Cash Flow (US$M) Pre-Tax $2,110 $4,220 $6,320 After-Tax $1,470 $2,820 $4,170 Payback Pre-Tax After-Tax Exchange Rate (US$:C$) (1) Based on updated forecast of capital cost (see News Release dated February 3, 2017) and operating cost assumptions from the Feasibility Study and Technical Report Update on the Brucejack Project, with an effective date of June 19, 2014 (2) NPV is discounted to Dec 31,

34 Brucejack Mine Phone: Fax: Toll-free: Pretium Resources Inc. Suite Dunsmuir St. Four Bentall Centre PO Box Vancouver, BC, Canada V7X 1L4 pretivm.com PVG : TSX/NYSE 34