Marketwired

Pretium Resources Inc.: US$540 Million Construction Financing; Production Decision for Brucejack Project

Marketwired

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sep 15, 2015) - Pretium Resources Inc. (PVG)(PVG) ("Pretivm" or the "Company") is pleased to announce a US$540 million construction financing package (the "Financing") with the Orion Mine Finance Group and Blackstone Tactical Opportunities ("Orion and Blackstone"). The Financing, which provides for immediate access to US$340 million at closing, will fund a substantial portion of the costs to develop an underground mine at Pretivm's Brucejack Project. The Financing is comprised of a credit facility for US$350 million, a US$150 million prepayment under a callable gold and silver stream agreement and a private placement of Pretivm common shares for US$40 million. The Financing is expected to close on or about September 18, 2015.

Credit Facility

  • Credit Agreement:

    • Senior Secured Loan facility of US$350 million;

    • US$150 million will be advanced at closing, and the remaining US$200 million will be drawn within 18 months;

    • Fixed interest rate of 7.5%;

    • Principal and accrued interest is due at maturity on December 31, 2018, or Pretivm can exercise an option to extend maturity to December 31, 2019 on payment of 2.5% of the principal amount outstanding.

  • Offtake Agreement (1):

    • Applies to sales from first 7.067 million ounces of refined gold;

    • Orion and Blackstone will pay Pretivm for refined gold based on prevailing market prices; and

    • Option for Pretivm to repurchase 50% or 75% of the gold offtake on December 31, 2018 for $11 per ounce for remaining gold to be produced; or on December 31, 2019 for $13 per ounce for remaining gold to be produced.

Stream Agreement (1)

  • US$150 million in cash will be advanced to Pretivm at closing as prepayment in consideration of a callable stream that applies to 8% of the total precious metals production of 7.067 million ounces of refined gold and 26.279 million ounces of refined silver (the "Refined Precious Metals");

  • Pretivm may elect to repurchase all or a portion of the Refined Precious Metals stream by one of the following options:

    • On December 31, 2018, Pretivm can elect to repurchase the entire 8% stream by paying US$237 million or can elect to reduce the stream to 3% of Refined Precious Metals by paying US$150 million, in which case the stream deliveries would commence January 1, 2019; and

    • On December 31, 2019, Pretivm can elect to repurchase the entire 8% stream by paying US$272 million or can elect to reduce the stream to 4% of Refined Precious Metals by paying US$150 million, in which case the stream deliveries would commence January 1, 2020.

  • If Pretivm does not exercise its right to reduce or repurchase the Refined Precious Metals stream by December 31, 2019, US$20 million will be payable and an 8% stream will apply to the Refined Precious Metals beginning January 1, 2020, with payment of $400 per ounce of gold and $4.00 per ounce of silver.

  • In the event of a change of control at Pretivm or the sale of the Brucejack Project by Pretivm prior to the earlier of (a) Pretivm's reduction or repurchase of the Refined Precious Metals stream or (b) January 1, 2020, Pretivm has the right to repurchase the stream and Orion and Blackstone have the right to sell the stream to Pretivm for consideration equal to the greater of: (i) 13.6% of the consideration received by Pretivm's shareholders or Pretivm in such a transaction, or (ii) an amount of cash that generates a 15% rate of return on the $150 million stream payment.

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