PRETIVM Resources has announced the official start of construction of an underground gold mine near Stewart in northwestern B.C.
The Sept. 15 announcement follows a deal to secure approximately 70 per cent of the (US) $747 million needed to fully construct the Brucejack mine which will begin operations in 2017 and have an operating life of nearly 18 years.
Pretivm had earlier this year received federal and provincial environmental and regulatory approvals for the project and had been doing preliminary work leading to a construction decision.
The (US) $540 million financing comes in three parts – borrowing (US) $350 million, receiving (US) $150 million in advance for gold and silver to be mined and the purchase of (US) $40 million in company common shares, the company said in a statement yesterday.
Two companies, Orion Mine Finance Group and Blackstone Tactical Opportunities, will provide the financing to Pretivm.
The company will receive (US) $340 million upon closing which is to be on Sept. 18.
"Having immediate access to (US) $340 million enables us to keep to our construction schedule,” said company CEO Robert Quartermain.
The company said the financing deal was sufficient for it to begin construction and that it is re-examining remaining capital costs.
“As a significant portion of capital expenditures are sourced in Canadian dollars, the decline in the Canadian dollar is expected to be beneficial,” the company said.
“In addition, certain of the capital expenditures contemplated in the June 2014 feasibility study have already been incurred with the advance of the project, and Pretivm has begun to examine the opportunities to optimize the project as engineering advances.”
Earlier financing for exploration and development came from a (US) $75 million deal reached in 2014 with the Chinese Zijin Mining Group.
A contract for 330-person camp has already been let and there is a road from the site leading east to Hwy37 North north of Meziadin Junction.
Power is to come from a line running north of the Long Lake hydro project to the site which will then connect the mine to the provincial grid.
In April of this year Pretivm signed an economics benefits deal with the Nisga'a Nation to provide jobs and contracting opportunities, education and training and financial payments in return for supporting the project.