UPDATE 1-Pretium Resources' sample gold output tops target, shares jump

Fri Nov 22, 2013 2:29pm EST
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(Adds analyst comment, background, updates shares)

By Sneha Banerjee and Garima Goel

Nov 22 (Reuters) - Shares of Pretium Resources Inc nearly doubled after the Canadian miner said output from an ore sampling program at its flagship gold exploration project topped its target.

Pretium said it produced 4,215 ounces of gold from processing 8,090 tonnes of ore from the program, dubbed "Valley of the Kings", at Brucejack in British Columbia.

The company had targeted an output of 4,000 ounces from the 10,000-tonne sampling program.

Vancouver-based Pretium said it would process the remaining bulk sample by the first week of December.

Pretium shares rose as much as 97 percent to their highest since Oct. 9, when the company said independent consultant Strathcona Mineral Services had resigned from the project.

"The news should definitely be important for the company, as the market had earlier punished the company on negative speculation, which drove the stock in half," Cowen and Co analyst Adam Graf said.

The results imply average gold grades of 16.20 grams per ton of sample ore, higher than the 4.03 grams based on data announced in late October, Graf said, adding that total results available so far were more in line with expected overall grade to be mined.   Continued...