The Brucejack mine in northwestern B.C. exceeded production targets in 2019.
Pretivm, which has offices in Smithers, announced in a press release Feb. 12 the mine, 65 km north of Stewart produced 354,405 ounces of gold at an all in sustaining cost (AISC) of $888. The AISC is a gold industry reporting standard now adopted by most gold mining companies that gives a comprehensive and transparent measure of production costs.
“In 2019, we beat the upper end of our revised gold production guidance and the lower end of our AISC guidance of 350,000 ounces and $900 per ounce of gold sold,” said Joseph Ovsenek, president and CEO of Pretivm. “In addition, we substantially exceeded our debt reduction target. Brucejack continues to be consistently profitable and a strong cash generator.”
In December the company announced it had completed the repurchase of its 2015 offtake agreement, which provided construction financing for the mine.
READ MORE: Pretivm buys back offtake
An offtake agreement is a financial instrument that basically amounts to a pre-purchase of future production at a fixed price—in this case the mine’s first seven million ounces of gold—with an option to buy it back for a fee.
Pretivm paid US$80 million to complete the transaction. In 2018, the company was also able to buy back its precious metals stream (another pre-purchase instrument) for US$237 million.
With gold selling at an average price of 1,405 per ounce and an AISC of $888 in 2019 Pretivm generated $184 million in free cash flow (a measure of profitability that excludes changes in working capital and capital expenditures.
The company forecasts production between 325,000 and 365,000 ounces in 2020 at a price of $1,450 per ounce for a free cash flow of between $100 and $170 million. It also wants to reduce its debt by $80 to $150 million this year.
OTHER MINING NEWS: Brucejack makes big progress at Red Chris mine
In the same press release, Pretivm announced they are looking for a replacement for Ovsenek, who has been president since 2015, CEO since 2017 and was executive vice-president and chief development officer from 2011 to 2015.
“The Board offers its deepest thanks to Joe for his critical role in advancing Brucejack to production as a safe and profitable mine,” said Richard O’Brien, chair of the board. “We are grateful that Joe will assist with the transition process by remaining in place until a new president and CEO is appointed, and on behalf of the entire Pretivm team, we wish him well in his next endeavour.”
Ovsenek also expressed gratitude.
“I would like to thank the members of Pretivm’s team and its contractors for all that they have accomplished in making Brucejack an outstanding mine.”
editor@interior-news.com
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