(New throughout, adds CEO comments, closing stock price)
By Nicole Mordant
VANCOUVER, Oct 9 (Reuters) - Shares in Pretium Resources Inc lost more than a quarter of their value on Wednesday after the resignation of the independent consultant conducting a gold sampling program on the company’s flagship exploration project in Western Canada.
Pretium said Strathcona Mineral Services Ltd, which was conducting a 10,000 tonne bulk sample program at its Brucejack project in northern British Columbia, had quit.
Pretium’s early morning press release gave no reason for the resignation, but the company’s CEO later said it involved a difference of opinion between two consulting groups and that the other group offered a “better outcome” for Pretium.
Strathcona President Graham Farquharson declined to comment.
By late afternoon, Pretium’s stock was down 28.7 percent, or C$2.01, at C$5 on the Toronto Stock Exchange in heavy trading of more than 3.1 million shares.
Although still at an early stage of development, the Brucejack project has garnered investor and industry attention due to its high gold grades and Pretium’s well-known management team.
Pretium Chief Executive Robert Quartermain said there had been a “difference of opinion” between Strathcona and Snowden Mining Industry Consultants, on what method to use to estimate how much gold the project could contain.
He said the method proposed by Snowden was “a better outcome” for Pretium.
“We are actually processing all the rock and we will get the gold that is in the rock,” he told Reuters. Strathcona had proposed a different sampling technique that did not involve processing all the ore.
Adam Graf, an analyst with Cowen and Company, said the market was perhaps drawing the wrong conclusion from Strathcona’s resignation.
“You have a QP (Qualified Person) resign and everybody’s going to be saying, ‘something must be wrong,'” he said. “My understanding is that this is no reflection on the project. Snowden is a perfectly good and reputable QP, and they are continuing on.”
Snowden Mining, which prepared the 2012 resource estimate at the project, will now take over as the independent Qualified Person and issue the final report on the program, Pretium said in a news release on Wednesday morning.
Quartermain said Pretium expects to complete the current phase of test work “probably by the end of November”.
“We continue to go forward with some underground and surface drilling, which will go to Snowden to provide us with a new resource update for the project,” he said.
Brucejack’s Valley of the Kings area hosts a probable mineral reserve of 6.6 million ounces and the project is expected to produce an average of 321,500 ounces of gold annually over its life, according to a feasibility study released in June. Pretium is targeting 2016 for the start of commercial production at the planned underground mine.
Quartermain was previously president of Silver Standard Resource Inc., owner of one of the world’s largest silver mines.
Before Wednesday’s slide, Pretium stock was already down 46 percent so far this year, in line with other small gold stocks. The sector has been hurt by a weaker gold price and a dearth of industry funding. (Additional reporting Julie Gordon in Vancouver and Euan Rocha in Toronto; Editing by Kenneth Barry and David Gregorio)