October 22, 2013 / 5:03 PM / 4 years ago

UPDATE 1-Pretium shares fall as consultant questions gold project

3 Min Read

(Adds quote from CEO, context on Strathcona.)

Oct 22 (Reuters) - The independent consultant that recently quit Pretium Resources Inc's flagship gold exploration project accused the company of making "erroneous and misleading" claims, the company said in a release on Tuesday.

Pretium shares plunged more than 26 percent in morning trade on the Toronto Stock Exchange.

Strathcona Mineral Services Ltd, the independent consultant best known for its role exposing problems at Bre-X, where investors lost billions after a massive gold find was found to be fake, said before it quit Pretium's "Valley of the Kings" program that there were "no valid gold mineral resources".

Strathcona added that recent press releases from Pretium "about probable mineral reserves and future gold production...over a 22-year mine life are erroneous and misleading."

Pretium's management and another independent consultant on the project, Snowden Mining Industry Consultants, have "significant concerns" with Strathcona's conclusions.

Pretium is processing a 10,000-tonne bulk sample, dubbed the "Valley of the Kings" program, at its Brucejack project in northern British Columbia.

Pretium's Chief Executive Robert Quartermain said the Brucejack project has substantial, visible gold. The question is mainly how best to mine it.

"What we want to do is fully understand for our shareholders the extent (of what) we have there, and the best methodology to apply in order to be able to mine the high-grade mineralization that we've outlined," he said.

Preliminary Results

Pretium said Strathcona saw preliminary assay results from a very small part of the material before it withdrew, and Strathcona had not seen any results from the bulk sample processing.

Early processing results suggest there may be more gold in the material than the preliminary assay results showed, Pretium said. It said its other consultant, Snowden, has advised it that no part of the 10,000-tonne sample should be considered in isolation.

"We believe that the true test of the bulk sample - and its representativity of the Valley of the Kings overall - is to determine the actual amount of gold contained within the 10,000 tonnes of material we extracted," Pretium said in a release.

Officials at Strathcona and Snowden were not immediately available for comment.

Pretium shares have fallen by about 50 percent since Oct. 9, when Pretium first said Strathcona had resigned from the project. The shares were at C$3.48 late on Tuesday morning, down 27 percent. (Reporting by Allison Martell; Editing by Janet Guttsman, Andrew Hay and Leslie Gevirtz)

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