Shares in the company were down 25% Wednesday at C$9.14, valuing the company at $1.7 billion.
Reporting its results for the third quarter to September 30, the company said it produced 88,227oz in the quarter, 2.9% less than the 90,761oz produced in the second quarter, bringing its total for the first nine months of the year to 258,168oz. Fourth quarter production is expected to be similar to third-quarter production.
Its all-in sustaining cost guidance was also modified upwards to US$900-950/oz. it was $896/oz in the first nine months of the year.
"Brucejack generated $77.8 million in cash from operating activities, our highest cash flow quarter yet. During the third quarter, we continued to focus on opening up the mine while increasing grade to the mill. Pursuing both objectives simultaneously while stope inventory was constrained proved to be more challenging than anticipated, and we ended the quarter with gold production below our own expectations," said president and CEO Joseph Ovsenek.
Pretium achieved revenue of $132.7 million in the quarter, a 14.7% increase over the $113.2 million in the second quarter. Cash generated from operations increased 47% to $77.8 million from $41.2 million in the previous quarter, but net earnings fell 39.4% to $6.3 million from $10.4 million.
The company paid $62.4 million as the first of two tranches to repurchase an offtake obligation and repaid $16.7 million of its $480 million loan facility. It said it was on track to repay $180 million of debt in 2019 compared with its initial target of $140 million. It currently has $398.7 million outstanding on the loan.
The company said limited stope inventory and operational issues with two stopes in September saw it substitute lower grade tonnage for expected higher-grade ore. It processed 4% less ore in the quarter than in the second quarter, at a throughput rate of 3,367 tonnes per day.
Mining during the quarter focused on advancing development to provide sufficient stope access to operate at 3,800tpd on a steady state basis. It also sought to increase grade to the mill by limiting internal dilution through optimisation of stope design to reduce the amount of lower-grade tonnes processed. However, the reduction in stope tonnage reduced the overall tonnage available for processing.
Production in the fourth quarter will focus on maximising tonnes to the mill and all stopes above the 5 grams per tonne cut-off grade will be mined and processed as they become available.
Pretium aims to release an updated life-of-mine plan in the first quarter of 2020, which will include a stope inventory plan for steady state production at a rate of 3,800tpd, with longitudinal longhole stoping in areas where high-grade gold mineralisation has been defined.
