(Pretium has a US$1.8B market cap and the borrow is in the low single digits. I have written about this stock previously.)
Back in 2013, Strathcona resigned from the Brucejack gold project due to disagreements over what Pretium was telling investors. Graham Farquharson (Strathcona’s head honcho) was being a gentleman and allowed Pretium to disclose on their own terms (with their own PR spin). Unfortunately, Pretium instead tried to discredit Strathcona.
So, Farquharson did an interview with The Northern Miner, a trade publication. You can read the interview on the website (no paywall):
Yes, and we told them that it has an excellent chance of being a small-tonnage, high-grade mine in the Cleopatra vein, and a couple of other similar occurrences that they found in the last drilling program. If they lined all those up, there’s an excellent chance that they could have a small-tonnage, high-grade gold mine. But they will not have a mine producing 425,000 oz. a year for the next 20 years, as they have been advertising so far.
Here’s the crazy part. This is 2017 and Pretium is almost finished building that mine.
In 2013, Altisource was the best performing long position in my portfolio. In 2014, I unfortunately made it the largest position in my portfolio. Because of that, I am badly lagging the market.
Here is Pretium’s press release. Silver Standard seems to be in a strong financing position given that the company has around $671M in current assets (versus $333M in total liabilities), a producing mine, and a book value of $837M. Instead of investing this capital in producing assets, the company is selling a mining asset (part of its stake in Pretium) for cash. In my opinion, Silver Standard is not making a mistake.
*Disclosure: I am short Pretium common shares and will be holding onto my position. I don’t follow Silver Standard and have no interest in it.
This is yet another post on Pretium. It’s not a particularly important one unless you are interested in following the on-going Pretium saga.
Today, Pretium issued a press release: Pretium Resources Inc.: Mineral Resource Estimate Adds Measured Gold Resources, Increases Grade at Valley of the Kings
Basically, Snowden is pretty much going to stick with its aggressive approach in modeling the VOK deposit.
The press release also contains some information aimed at invalidating Strathcona’s competing theory about how the resource should be modeled.
This is a chronological summary of everything that’s happened to make the story easier to follow, plus my updated thoughts on this strange saga.
Read the article “Strathcona Minerals responds to Pretium’s bulk sample result” if you haven’t already.
Originally I thought that there was either (A) fraud or (B) Strathcona screwed up. In a totally bizarre and unexpected turn of events, Strathcona is right but there is no fraud*.