Pretium Resources Misses Q3 Expectations

Pretium Resources (PVG) reported weaker-than-expected Q3 results, missing both earnings and revenue estimates.

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However, shares of the Canadian gold producer have gained 24.2% over the past six months.

Quarterly Performance

In Q3, adjusted earnings of $0.13 per share fell short of analysts’ expectations of $0.15 per share. The company reported earnings of $0.17 per share in the prior-year period.

Further, revenues declined 5.2% year-over-year to $146.8 million, missing consensus estimates of $170.7 million. The decrease in revenues reflects a 7% reduction in average realized gold price to $1,799 per ounce.

The company reported gold production of 90,673 ounces during the third quarter of 2021, against 86,136 ounces in the prior-year period. Growth in production was driven by increased tonnes milled in the period, and the reduction in gold remaining in-circuit.

Pretium to Be Acquired by Newcrest Mining

Last week, Newcrest Mining Limited agreed to acquire Pretium for C$18.50 in cash or shares for a total consideration of $2.8 billion.

Pretium CEO, Jacques Perron, commented, “The acquisition of Pretivm by Newcrest is an outstanding opportunity for Pretivm and its shareholders, employees, First Nations partners and the local communities in northwest British Columbia.”

He added, “The transaction delivers an immediate and compelling premium for Pretivm shareholders that reflects the excellent work of our employees and contractors in developing and operating the Brucejack gold mine, while also offering an opportunity to benefit from potential upside as Newcrest shareholders.”

The acquisition is expected to close in the first quarter of 2022, subject to certain regulatory approvals.

Reaffirms 2021 Outlook

The company reaffirmed its 2021 guidance and continues to expect gold production of 325,000 to 365,000 ounces at an all-in sustaining cost (AISC) between $1,060 and $1,190 per ounce of gold.

Wall Street’s Take

The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on three Buys and five Holds. The average Pretium Resources price target is $14.67, which implies that the shares are fairly valued at current levels.