Pretium Resources Inc. (TSX:PVG) (NYSE: PVG) announces that it, along with its wholly-owned subsidiary, Pretium Exploration Inc., has entered into an agreement with KSM Mining ULC a wholly-owned subsidiary of Seabridge Gold Inc. to sell its Snowfield property located in northwest British Columbia (the “Transaction”).
Under the terms of the Agreement, Pretivm will receive consideration comprised of the following:
“This Transaction provides us the opportunity to immediately realize the value of Snowfield, an undeveloped asset that we believe is not reflected in our share price,” said Jacques Perron, President and Chief Executive Officer of Pretivm. “The cash proceeds will significantly strengthen our balance sheet and allow us to reduce our debt while the royalty will provide long-term participation in the progress of Snowfield.”
The cash proceeds of the Transaction will be applied to the revolving portion of Pretivm’s credit facility, which as of September 30, 2020 had an outstanding principal balance of US$198.0 million.
The Transaction is expected to close in the fourth quarter of 2020 and is subject to completion of a financing by Seabridge and customary closing conditions.
The transaction will result in a non-cash impairment loss to be recorded in the fourth quarter of 2020. Complete financial results, including the non-cash impairment loss will be disclosed in the Company’s fourth quarter 2020 operational and financial results. As of September 30, 2020, the book value of Snowfield was US$232.1 million.
Pretivm is an intermediate gold producer with the high-grade gold underground Brucejack Mine.
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We acknowledge the [financial] support of the Government of Canada.