Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of precious metals explorer Pretium Resources (PVG) crashed 27% today after reporting preliminary processing results for the material excavated from its Valley of the Kings (VOK) Bulk Sample Program.
So what: The stock plummeted earlier this month after independent consultant Strathcona Mineral Services resigned from the project, and Pretium's report today included part of the reason why: Strathcona found "no valid gold resources for the VOK zone." Although the first portion of the bulk sample was actually pretty solid -- a total of 281 ounces of gold and 532 ounces of silver were produced -- Strathcona's conclusion reinforces Wall Street's worst fears about the project's potential (or lack thereof).
Now what: Naturally, Pretium backed the sampling methodology of Snowden Mining, the other industry consultant it hired for VOK. "Preliminary figures from the processing of the 426585E cross-cut show the contained metal included 281 ounces of gold," wrote Pretium in a statement. "It is the opinion of both Pretivm and Snowden that there is a significant difference in the contained gold estimated by the selective sampling of the 426585E cross-cut by the sample tower and the actual contained gold determined by milling the total 2,167 tonnes of material excavated from the 426585E cross-cut." So while the stock is certainly too risky for average investors, the extreme pessimism surrounding Pretium might be providing resource-savvy Fools with an enticing entry point.
