VALUE THROUGH GOLD. Brucejack Mine - Delivering Profitability

Transcription

1 VALUE THROUGH GOLD Brucejack Mine - Delivering Profitability CIBC Whistler Institutional Investor Conference January 23,

2 Cautionary Statement Forward-Looking Information This Presentation contains forward-looking information and forward looking statements future oriented financial information and/or financial outlooks within the meaning of applicable Canadian and United States securities legislation (collectively herein referred to as forwardlooking statements or forward-looking information ). The purpose of disclosing future oriented financial information and financial outlooks is to provide a general overview of management s expectations regarding the anticipated results of operations and costs thereof and readers are cautioned that future oriented financial information and financial outlook may not be appropriate for other purposes. Wherever possible, words such as plans, expects, guidance, projects, assumes, budget, strategy, scheduled, estimates, forecasts, anticipates, believes, intends, modeled, 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 forwardlooking statements and information. 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 statements. Forward-looking information may include, but is not limited to, information with respect to: production and cost guidance; the refinancing of the Company s construction debt facility; the repurchase of the Company s precious metals stream; anticipated results of our operations; source of funds for future operating and debt settlement requirements; our planned mining, exploration and development activities; our operational grade control program, including plans with respect to our infill drill program and our local grade control model; capital and operating cost estimates; production and processing estimates; the future price of gold and silver; our liquidity and the adequacy of our financial resources; our intentions with respect to our capital resources; our financing activities, including plans for the use of proceeds thereof; the estimation of mineral reserves and resources including the 2016 Valley of the Kings Mineral Resource estimate and the Brucejack Mineral Reserve estimate; realization of mineral reserve and resource estimates; timing of further development of our Brucejack Mine; costs and timing of future exploration and development; results of future exploration and drilling; statements relating to the economic viability of the Brucejack Mine, including mine life, total tonnes mined and processed and mining operations; timing, receipt, and anticipated effects of, and anticipated capital costs in connection with approvals, consents and permits under applicable legislation; our executive compensation approach and practice; our relationship with community stakeholders; litigation matters; environmental matters; our effective tax rate and the recognition of our previously unrecognized income tax attributes; new accounting standards applicable to the Company, including the effects of adoption of such standards; and statements regarding USD cash flows, currency fluctuations and the recurrence of foreign currency translation adjustments. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to materially differ from those expressed or implied by the forward-looking statements, including, without limitation, those related to: the accuracy of our mineral resource and reserve estimates (including with respect to size, grade and recoverability) and the geological, operational and price assumptions on which they are based; uncertainties relating to inferred mineral resources being converted into measured or indicated mineral resources; commodity price fluctuations, including gold price volatility; general economic conditions; the inherent risk in the mining industry; significant governmental regulations, and such other risks uncertainties and factors as are identified in Pretivm s Annual Information Form dated March 28, 2018, Form 40-F dated March 28, 2018, MD&A and other disclosure documents as filed in Canada on SEDAR at and in the United States through EDGAR at the SEC s website at (collectively, the Pretivm Disclosure Documents ). Our forward-looking statements are based on the assumptions, beliefs, expectations and opinions of management on the date the statements are made, including those set out in the Pretivm Disclosure Documents, many of which may be difficult to predict and beyond our control. Although we believe that the assumptions inherent in the forward-looking statements are reasonable as of the date the statements are made, forward-looking statements are not guarantees of future performance and, accordingly, undue reliance should not be put on such statements due to the inherent uncertainty therein. We do not assume any obligation to update forward-looking statements, 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 statements. 2

3 Notes to Investors 3 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, and capital cost update dated February 3, 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., Warwick Board, Ph.D., P.Geo, Pr.Sci.Nat., 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 new release. Refer to the Company s MD&A for an explanation and discussion of non-ifrs measures. 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 International Financial Reporting IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures presented by other issuers. The non-ifrs financial measures included in this presentation include: total cash costs and total cash costs per ounce of gold sold, all-in sustaining cost ( AISC ) and AISC per ounce of gold sold, adjusted earnings or loss, adjusted earnings or loss per share, earnings from mine operations, 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 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 bea substitute for the information presented in accordance with IFRS. Currency Unless otherwise indicated, all dollar values herein are in US $.

4 Brucejack Mine Underground, High-grade Gold Mine 4 Airstrip

5 Brucejack Mine First Full Year Source: See News Releases dated Nov 8, 2018, Dec 14, 2018, Dec 18, 2018 & Jan 9, 2019 and refer to Company s Financial Statements and MD&A. (1) Non-IFRS performance measure. For reconciliation to IFRS measures refer to the Company s MD&A Milestones Achieved steady state production at the high-grade gold, underground Brucejack Mine Received amended permits to increase production to 3,800 tonnes per day Repurchased 100% of precious metals stream for US$237M Closed US$480M bank debt facility to refinance construction credit facility Cash margin 1 over US$600/oz (9 months) 376,012 ounces gold produced

6 Brucejack Mine Source: See News Releases dated Nov 8, 2018, Jan 9, 2019 and refer to Company s Financial Statements and MD&A. (1) Non-IFRS performance measure. For reconciliation to IFRS measures refer to the Company s MD&A. 6 Q3 & First Nine Months 2018 Financial Highlights Q3 Q1-Q Revenue $110.1 M $346.0 M AISC per ounce sold 1 $709/oz $758/oz Adjusted Earnings 1 $26.3 M $79.2M Cash Margin per ounce $600/oz $612/oz Q3 & Q4 Gold Production Q3 Q4 Gold Produced 92,641 oz 96,342 oz

7 Production Profile Brucejack 2018 Gold Production 1 Gold Ounces Produced 120, ,000 80,000 60,000 40,000 20,000 0 Q Q Q Q Gold Ounces 12.9 g/t gold average with grade control implemented Gold Grade (g/t) Gold Grade (g/t) (1) See News Release dated Jan 23, 2018, Apr 11, 2018, July 9, 2018, Oct 9, 2018 & Jan 9, 2019 and refer to Company s Financial Statements and MD&A. 7

8 Low-cost Gold Production 400, Gold Production (oz) 376,012 oz 2018 All-in Sustaining Cost (AISC per oz sold) 1 H Guidance $ /oz 350, , , ,983 oz H Production First Nine Months 2018 US$758/ oz 200, , ,000 50, ,029 oz H Production AISC includes: Total Cash Cost 1 Sustaining Capital Expenditures Treatment & Refinery Charges Accretion on DRP (reclamation obligation) Site share based compensation Corporate and admin costs Source: See News Release dated Jan 9, 2019, Nov 10, 2017, Mar 8, 2018, May 10, 2018, Aug 9, 2018 & Nov 8, 2018 and refer to Company s Financial Statements and MD&A. (1) Non-IFRS performance measure. For reconciliation to IFRS measures refer to the Company s MD&A 8

9 Significant Cash Generation Since Startup $80.0 Cash Flow from Operations 120,000 Millions USD $60.0 $40.0 $20.0 Average US$47 M per Quarter 100,000 80,000 60,000 40,000 20,000 Ounces Sold $0.0 Q Q Q Q Q Ounces Sold Cash Flow From Operations Source: See News Releases dated Aug 10, 2017 Nov 10, 2017, Mar 8, 2018, May 10, 2018, Aug 9, 2018 & Nov 8, 2018 and refer to Company s Financial Statements and MD&A. 9

10 Consistently Profitable $180.0 Working Capital 1 Sept US$180.4 M Millions USD $130.0 $80.0 $30.0 $0.0 -$20.0 June US$12.9M Q Q Q Q Q Q Working Capital 1 Source: See News Releases dated Aug 10, 2017 Nov 10, 2017, Mar 8, 2018, May 10, 2018, Aug 9, 2018 & Nov 8, 2018 and refer to Company s Financial Statements and MD&A. (1) Working Capital excludes current portion of credit facility, stream obligation and offtake obligation 10

11 High-Grade Gold: Ubiquitous but variable Valley of Kings Systematic Mining Meters ASL (1) Illustrative representation of approximate mine stope location and shape Mined Stopes 1 Underground Development 11

12 Brucejack Mine 3,800 tonnes per day 12 Additional equipment mobilizing to site Ramp-up through 2019 Mill modifications during scheduled shut downs Updated mine plan early Q Updated technical report expected Q2 2019

13 Mill Throughput Increase to 3,800 tpd Low Capital Investment of ~US$25M : 40% Increase in Production Rate (1) One Third of Total Gold Production Two Thirds of Total Gold Production 96.7% GOLD RECOVERY (LOM) (1) Increase production rate to 3,800 t/d from 2,700 t/d. See News Release dated Dec 14,

14 Reserve Expansion N Mineral Resource 1 Mineral Reserve 2 Exploration Potential Drill Intercepts 3 SU g/t Au 16.9 g/t Au 2,100 g/t Au (Inc 8,600 g/t Au) g/t Au (Inc 203 g/t Au) SU 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-654 SU

15 Reserve Expansion East, West and at Depth Valley of the Kings Flow Dome Zone Drilling 3 N Mineral Resource 1 Mineral Reserve 2 Exploration Potential Open SU-657 g/t Au (Inc 203 g/t Au 2018 Exploration Drill Holes 4 SU-666 g/t Au (Inc 8,600 g/t Au Anomalous Cu and Mo Au (g/t) > 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) 2015 Regional Drill program; see News Release dated Oct 8, (4) 2018 Underground Exploration Drilling; see News Release dated June 18,

16 Regional exploration program; see News Release dated Nov 27, Bowser Regional Exploration N Brucejack Mine Upper Kirkham Zone 30 km Haimila Zone Koopa Zone Bluffy Zone American Creek Zone Pretivm Claim Outline 2018 Drill Hole Collar 5 km

17 Community Engagement 17 Collaborative training and employment initiatives with local First Nations and regional community development offices Promote resource sharing to address common community challenges and successful approaches Focus on removing barriers to employment, supporting skills development and employment preparedness

18 High Level of Local Employment Brucejack Mine Pretivm Brucejack Mine Workforce: 93% British Columbia 54% Northwest British Columbia 30% First Nations Pretivm Employees as of Oct

19 Low-Cost Producer Cost of Production Relative to Peers 1300 ) Pretivm vs Peers Month Gold Production and AISC (1) 1200 Tahoe Detour AISC 2 (US$) Guyana Asanko Semafo Torex Argonaut Alacer Pretivm Alamos Eldorado Oceana Kirkland Endeavour Iamgold B2 Gold Yamana Randgold Gold Production (000 s oz) (1) Source: Company websites Nine Months YTD 2018 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. 19

20 Coming Months 20 Fourth quarter financial results (Feb 14/19) 2019 production & cost guidance (Q1) 2018 reconciliation (Q1) Updated mineral reserve and resource (Q1/Q2) Complete ramp-up to 3,800 tonnes per day (2019) Resource expansion (2019)

21 Appendix pretivm.com PVG : TSX/NYSE 21

22 Shareholding & Analyst Coverage 22 Equity Structure (1) (shares in millions) Issued & Outstanding Market Cap (Jan 21, 2019) Analyst Coverage Alliance Global Partners BMO Canaccord Genuity CIBC Citi Cormark Securities Global Mining Research H.C. Wainwright Numis RBC Roth Capital Partners Scotiabank Fully Diluted (1) As of January 21, 2019; ownership calculated on an undiluted basis. (2) As of January 21, Source: IPREO, Morningstar Inc. & SEDAR. US$1.25 B Bhakti Pavani Andrew Kaip Rahul Paul Anita Soni Alexander Hacking Richard Gray David Radclyffe Heiko F. Ihle Jonathan Guy Dan Rollins Joseph Reagor Ovais Habib Top Shareholders (2)` (% S/O) Van Eck Associates 13.6 BlackRock Asset Management 10.9 Letko, Brosseau & Associates 7.0 BMO Asset Management 3.8 Rothschild Asset Management 3.5 JP Morgan Securities 2.9 Orion Mine Finance 2.5 The Vanguard Group 2.3 Franklin Advisors 2.2 Pretivm Management 1.8

23 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,

24 Mineral Resource Estimate (LOM) 24 Category (1) See News Release dated July 21, 2016 (2) See News Release dated June 19, 2014 Tonnes (mil) Gold (g/t) Silver (g/t) Valley of the Kings July 2016 (1) Gold (mil oz) Contained Silver (mil oz) Measured Indicated M&I Inferred West Zone Dec 2013 (2) Measured Indicated M&I Inferred

25 Longhole Grade Control: Drill Pattern Plan View: Longhole Stope Example Cross Section: Ring R7 Longhole Rings Current Fan Method Longhole Drill Trace Updated Vertical Method Expansion Slot Rings 25

26 Debt Structure Loan Facility (1) US$480M loan US$250M non-revolving credit facility US$230M revolving credit facility Variable interest LIBOR + 2.5% to 3.5% Administrative agent base rate + 1.5% to 2.5% Non-revolving repaid in equal quarterly instalments (start June 2019) Revolving reduced to US$200M in June 2019 with remainder repayable at maturity Maturity date of Dec 2022 Offtake Agreement (2) Option to repurchase 50% or 75% Dec 2019 for $13/oz Capped at 7.067M oz gold Convertible Notes (3) US$100M offering at 2.25% due 2022 Conversion price of US$16.00 (1) See News Release dated Dec 18, 2018 (2) See News Release dated Sept 15, 2015 (3) See News Release dated Feb 14,

27 Fourth Quarter 2018 Select Operating Results Three months ended December 31, Twelve months ended December 31, (1) Ore milled t 267, ,501 1,003, ,763 Head grade g/t Au Recovery % Mill throughput tpd 2,903 2,951 2,755 2,895 Gold ounces produced oz 96,342 70, , ,484 The following abbreviations were used above: t (tonnes), tpd (tonnes per day), g/t (grams per tonne), Au (gold) and oz (ounces). (1) Data for the twelve months ended December 31, 2017 covers the period commencing from July 1, 2017, the date the Brucejack Mine achieved commercial production,to September 30, Source: See News Releases dated Jan 9, 2019 and refer to Company s Financial Statements and MD&A. 27

28 Third Quarter 2018 Select Operating Results Three months ended September 30, Nine months ended September 30, (1) Ore mined t 255, , , ,534 Mining rate tpd 2,774 2,951 2,828 2,951 Ore milled t 240, , , ,262 Head grade g/t Au Recovery % Mill throughput tpd 2,610 2,840 2,705 2,840 Gold ounces produced oz 92,641 82, ,670 82,203 Silver ounces produced oz 95,741 83, ,676 83,233 Gold ounces sold oz 94,458 55, ,417 55,413 Silver ounces sold oz 87,110 19, ,710 19,846 The following abbreviations were used above: t (tonnes), tpd (tonnes per day), g/t (grams per tonne), Au (gold) and oz (ounces). (1) Data for the nine months ended September 30, 2017 covers the period commencing from July 1, 2017, the date the Brucejack Mine achieved commercial production,to September 30, Source: See News Releases dated Nov 8, 2018 and refer to Company s Financial Statements and MD&A. 28

29 Third Quarter 2018 Select Financial Results In thousands of USD, Three months ended September 30, Nine months ended September 30, except for per ounce data (1) Revenue $ 110,060 70, ,960 70,875 Earnings from mine operations (2) $ 37,608 25, ,512 25,963 Net earnings (loss) for the period $ 10,734 (6,975) 33,773 (13,733) Per share - basic $/share 0.06 (0.04) 0.19 (0.08) Per share - diluted $/share 0.06 (0.04) 0.19 (0.08) Adjusted earnings (2) $ 26,327 13,951 79,172 4,684 Per share - basic (2) $/share Total cash and cash equivalents $ 190,318 53, ,318 53,774 Cash generated from operating activities 52,364 47, ,358 39,913 Total assets $ 1,771,543 1,673,601 1,771,543 1,673,601 Long-term debt (3) $ 59, ,975 59, ,975 Total cash costs (2) $/oz All-in sustaining costs (2) $/oz Average realized price (2) $/oz 1,169 1,281 1,239 1,281 Average realized cash margin (2) $/oz (1) Data for the nine months ended September 30, 2017 covers the period commencing from July 1, 2017, the date the Brucejack Mine achieved commercial production, to September 30, (2) Refer to the "Non-IFRS Financial Performance Measures" section for a reconciliation of these amounts. (3) Long-term debt does not include the current portion of the Company s senior secured Credit Facility and the Stream Obligation in the amount of $641,468 as at September 30, Source: See News Releases dated Nov 8, 2018 and refer to Company s Financial Statements and MD&A. 29

30 All-In Sustaining Cost (AISC 1 ) Q Q Q Gold Ounces Sold 55,413 oz 115,309 oz 94,458 oz Total Cash Costs 1 $36.4 M $63.2 M $53.7 M Sustaining Capital Expenditures Treatment and Refinery Charges Accretion on DRP and Site Share Based Compensation Corporate and Administrative AISC Components $3.5 M $3.2 M $5.2 M $1.0 M $4.2 M $4.3 M $0.3 M $0.8 M $0.7 M $2.5 M $3.4 M $3.1 M Total AISC 1 $43.7 M $74.7 M $67.0 M Per Ounce Sold $788/oz $648/oz $709/oz Source: See News Releases dated Aug 9, 2018 & Nov 8, 2018 and refer to Company s Financial Statements and MD&A. (1) Non-IFRS performance measure. For reconciliation to IFRS measures refer to the Company s MD&A. (2) May not add due to rounding. 30

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32 Brucejack Mine pretivm.com Phone: Fax: Toll-free: Pretium Resources Inc. Suite Dunsmuir St. Four Bentall Centre PO Box Vancouver, BC, Canada V7X 1L4 PVG : TSX/NYSE 32