Pretium Resources - 1st-Quarter Earnings Review

| About: Pretium Resources (PVG)

Summary

On May 12, 2016, Pretium Resources released its 1Q'16. Net loss was 0.10 per share or $14.918 million.

The strong momentum in gold price has been the main event here. Will it continue?

I recommend to take profit off the table, between $8.40 to $8.60. At least 40% of your holding and keep the rest for the longer term.

Pretium Resources (NYSE:PVG)

This article is an update of my preceding article published on March 14, 2016.

Pretium Resources released its last presentation on April 19-20 , 2016.

1Q'16 Financial snapshot:

1Q'16 4Q'15 3Q'15 2Q'15 1Q'15

Cash and cash equivalent

$ million

479.994 387.925 453.233 68.871 103.412

Account receivable and other

$ million

17.154 20.406 17.019 16.200 15.690

Account payable

$ million

41.304 48.004 38.452 23.263 15.453

Consulting

$ million

0.012 0.025 0.039 0.0501 0.012
Salaries/Professional fees 0.994 2.046 0.755 0.738 1.060

Net loss

in $ million

(14.918) (9.825) (3.335) (2.426) (3.530)

EPS

in $

(0.10) (0.07) (0.02) (0.02) (0.03)

Net cash generated by financing

$ million

186.582 569.657 546.865 103.130 95.776

Long-term debt

$ million

451.610 428.829 434.911 0 0

Total liabilities

$ million

519.451 512.104 500.047 - -

Shares outstanding end of year

in million

177.264 145.068 134.246 132.815 129.616
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  • On March 1, 2016, PVG closed a marketed offering of 28,384,000 common shares at a price of US$4.58 per common share for gross proceeds of US$130 million. Subsequent to the close of the marketed offering, certain holders exercised their participation rights to maintain their proportionate ownership interest in the Company. The total number of common shares issued in connection with the marketed offering and private placement was 31,923,755 for aggregate gross proceeds of approximately US$146.2 million.
  • Working capital at March 31, 2016 was $455.8 million.

Here is a quick table of the last three equity financing done by PVG.

Recent Offerings Date Share Amount PPS agreed
Zinjin Deal 1/16/2015 12.837 million ~$60 million 4,7565
Complete financing Orion & Blackstone 9/16/2015 See Details ~$540 million 5,1975
New offering 2/23/2016 28.384 million ~$130 million 4,5800
Orion suscribing to new offering. 3/11/2016 752,906 shares ~$3.45 million 4,5800
Zeijin suscribing to new offering 3/14/2016 2.787 million ~$12.76 million 4.58
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It is important to remind investors about the actual project.

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Conclusion:

On May 12, 2016, Pretium Resources released its 1Q'16. Net loss was 0.10 per share or $14.918 million.

The most significant event in this quarter was not really about the balance sheet or the nature and potential of the project, which is now fully funded and apparently on schedule for commercial production targeted for the end of 2017.

Even the increasing attractiveness of Snowfield (the other project), was not really a factor.

It was primarily related to the gold rally, and the positive effect on the price per share for most of the gold miners, including the promising startups such as Pretium Resources. A quick look at the chart since early January demonstrates it, without any ambiguity.

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The question is how long this rally can possibly continue before we will experience a meaningful and needed retracement?

The answer is probably deeply embedded into the future of the gold prices. So far, the momentum has been strong, however, $1,320/ Oz seems difficult to overcome, and I am not ultra-bullish for the next few months, at least.

In my preceding article, I was bullish and recommended to buy the stock:

"I have bought back PVG in the low 4's and will be willing to double down around $3.75 which is a possible technical low, in my opinion. Most of the large investors have committed a large amount of cash around $4.50/$5 and it is logical to imagine that the stock may have bottomed around $4/$4.50?"

Today, I recommend to take profit off the table, between $8.00 to $8.60. At least 40% of your holding and keep the rest for the longer term. Buying back the stock could make sense in the 6's area.

Note: Do not forget to follow me on PVG and get updated regularly.

Disclosure: I am/we are long PVG.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.