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Pretivm Repurchases 100% of Gold Offtake Agreement

Mining News - Published on Thu, 19 Sep 2019

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Pretium Resources Inc has reached an agreement to repurchase 100% of its gold offtake, on September 30, 2019. With the repurchase of the Offtake Agreement, all components of the 2015 construction financing package will be extinguished. Joseph Ovsenek, President and CEO of Pretivm, said “Brucejack’s robust cash flow has enabled us to pay down the construction financing package quickly. In 2018, the first year after the start of commercial production, we repurchased 100% of the precious metals stream for CAD 237 million and refinanced the construction credit facility with a CAD 480 million bank debt facility. Now, we are repurchasing 100% of the offtake agreement for roughly CAD 80 million. With the construction financing package cleaned up, we have set our sights on paying off the bank debt facility as rapidly as possible”

The Offtake Agreement, dated September 15, 2015, was entered into by Pretivm as part of the construction financing package for the Brucejack Mine. The Offtake Agreement applied to sales from the first 7,067,000 ounces of refined gold, which were to be sold to the offtake purchasers, in each case, at a price based on a market referenced gold price in U.S. dollars per ounce during a defined pricing period before and after the date of each sale. Pursuant to the terms of the Offtake Agreement, Pretivm had the option to reduce its offtake obligation on December 31, 2019 to 25% in exchange for a payment equal to US$13 per ounce of refined gold for 75% of the ounces of refined gold remaining to be delivered under the agreement. Under the terms of the Offtake Repurchase Agreement, Pretivm will eliminate 100% of the offtake obligation.

Under the Offtake Repurchase Agreement, the Offtake Agreement and Pretivm’s obligations thereunder will terminate on September 30, 2019. In exchange, Pretivm will pay the offtake purchasers, Triple Flag Mining Finance Bermuda Ltd. and Osisko Bermuda Limited, an aggregate amount of approximately US$80 million, representing USD 13 per ounce for 100% of the refined gold remaining to be delivered under the Offtake Agreement. The purchase price will be paid in two tranches, with approximately USD 60 million payable on September 30, 2019 and approximately USD 20 million payable in the fourth quarter.

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Posted By : Rabi Wangkhem on Thu, 19 Sep 2019
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