Chinese backer helps Canadian gold mining
Canadian mining company Pretium Resources is using proceeds from an $81 million investment by a Chinese mining company to help fund a gold-mining project in northern British Columbia.
A private placement investment by Zijin Mining Group Co Ltd, China’s largest gold miner, based in Shanghang county, Fujian province, closed in January. Zijin now owns just under 10 percent of Pretium shares. Shaoyang Shen of Zijin was named to the Pretium board of directors as part of the deal.
Pretium, which also uses the name Pretivm, said the proceeds from the Zijin investment would go toward capital expenditures at the Brucejack Project.
“Pretivm is advancing its 100%-owned Brucejack Project in northern British Columbia to production as a high-grade gold underground mine,” Pretium said in a release. “Based on the results of the June 2014 Feasibility Study, Brucejack is expected to produce an average of 504,000 ounces of gold a year over the first eight years and 404,000 ounces of gold a year over the 18-year mine life.
“Brucejack’s Valley of the Kings hosts proven and probable reserves totaling 6.9 million ounces of gold (13.6 million ton grading 15.7 grams of gold per ton), the statement said. Commercial production at Brucejack is targeted for 2017.”
In an interview published Wednesday with energyandgold.com, Pretium CEO Robert Quartermain discussed the gold market as it pertains to China.
“I continue to be a longterm gold bull,” Quartermain said. “What I think is key to the gold market, is this movement of the physical metal from the West to the East. We continue to see China as one of the world’s largest consumers of physical gold. I was recently to China a few times over the last few months.
Quartermain told the website: “In these two visits, I took a wander around jewelry stores, and what I noticed in both Hong Kong and Shanghai, was a lot of people were buying physical gold, either gold jewelry, small bars of gold or figurines. So we continue to see strong gold demand in China and also India, and at some point I think we’ve got to see the physical market align with the paper market.”
Zijin is also China’s secondlargest producer of copper and mines iron ore, tungsten and zinc. Shares of Zijin trade on both the Hong Kong and Shanghai stock exchanges, and the company has a market capitalization of more than $9 billion. Pretium reported a loss of $1.7 million, or 2 cents a share, in its fourth-quarter earnings report, which was released on Tuesday. Shares of Pretium, which trade on the New York Stock Exchange, closed Wednesday at $5.62, down 18 cents, or 3.1 percent.