Shares in Vancouver precious miner Pretium Resources (TSX:PVG) fell more than eight percent Tuesday in both Toronto and New York despite it announcing increased gold production at its Brucejack gold mine in British Columbia.
The company said output at the gold mine climbed 13% in the third quarter of the year to 92,641 ounces, compared to 82,203 ounces in the same period last year. While milling went down to 240,122 tonnes, from 261,262 tonnes, the grade improved to 12.4 g/t and the gold recovery rate increased to 97.4%, it noted.
President and chief executive Joseph Ovsenek said the company added $48 million to its cash on hand during the period, adding it was on track to meeting gold production guidance of 200,000 to 220,000 ounces for the second half of 2018.
The company’s stock dropped 8.71 percent in Toronto after the news to C$9.64 at 11:46 a.m., while the New York traded shares were down 8.44 percent to $7.38 by 12:01 p.m. EDT.
Pretium was hammered in January after announcing disappointing production and cost forecasts.
Doubts about the hit the company’s shares again last month, as short-seller Viceroy Research said the asset had less gold than claimed and that the company would run into problems with its debt payments within 12 months.
Since short sellers make money from bets that a company’s stock price will fall, many investors remain skeptical, trusting in the treasures hidden at BC’s Golden Triangle, a remote mountainous region near the province’s northern coast.
The area, mined for more than a century, has been the target of recent upgrades, including a paved highway, deep-water port and a $700 million electric transmission line, all of which is transforming a not-long-ago isolated area.
Even though Pretium’s Brucejack mine has been operating since mid-2017 and has already produced more than 200,000 ounces of gold in 2018, questions about the deposit were raised even before the mine was built.
In 2013, Pretrium hired Strathcona Mineral Services Limited — the consultancy that spotted fraud at Bre-X Minerals in 1997 — to confirm the grade of gold from a bulk sample. Strathcona disagreed about the quality of the grades and resigned, something short-seller Viceroy played well in its 47-page report against the Vancouver miner.
Pretrium is scheduled to release full third-quarter operational and financial results on November 8.