Recently released drill results confirm deep mineralization under the Valley of the Kings resource.
Though mineralization is positive, we see nothing exciting about these results that would add value to the existing resources.
Deep drilling will resume in September with results probably to be released later in the fourth quarter so no real catalysts for the company until then.
Pretium Resources (NYSE:PVG) recently issued drill results that confirmed continuity of the gold and silver mineralization under the Valley of the Kings. Holes SU-627 through SU-630 (though hole SU-627 was previously drilled) all encountered mineralization at depth, with hole SU-629 ending in mineralization.
In our previous piece on Pretium, we were looking forward to some of these deep drill results to show exceptional mineralization that hopefully contained longer, homogenous intercepts. Unfortunately, the drill results weren't bad but they also were not significant enough to add much value to the current resources. Drilling will continue in September and we hope to see more exciting results from the company.
In the meantime, the share issuance that we expected occurred as the company closed a $60 million share offering (though only about $50 million was newly issued shares). This takes one of the expected short-term negative catalysts off the table as the company will probably not need to raise more money any time soon. At this point we believe Pretium shares will simply track gold and the rest of the mining shares until drill results are released in the fourth quarter since we see no upcoming catalysts that would excite us.
Disclosure: The author is long PVG. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.