Gold Producer Repurchases Precious Metals Stream on Own Project

In a Dec. 18, 2018, research note, BMO Capital Markets analyst Andrew Kaip reported that Pretium Resources Inc. (PVG:TSX; PVG:NYSE) bought back the 8% gold and silver stream on the Brucejack mine for US$237 million and refinanced the company's existing construction credit facility, both made possible by the closing on a US$480 million debt vehicle. Pretium owns and operates Brucejack.

The new debt facility has two components. One is a US$250 million senior secured amortizing term facility, which Pretium is to repay in equal quarterly installments starting at the end of Q2/19. The other is a US$230 million senior revolving facility, which will be lowered to US$200 million in June 2019.

Kaip explained that "both facilities are available in the form of U.S. dollar LIBOR loans with an interest rate from LIBOR of +2.5–3.5% based on the company's net leverage ratio or USD base rate loans with a 1.5–2.5% interest rate over the administrative base rate."

BMO has an Outperform rating and has a target price of CA$17.50 per share. The company's stock is currently trading at around CA$11.13 per share.

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