Shares of Pretium Resources (PVG) slumped on Tuesday and were down 20% at 10:30 a.m. EST after the gold miner announced a production update for its Brucejack mine and issued 2018 guidance.
Pretium Resources said that it produced 70,281 ounces of gold during the fourth quarter of last year. That's a decline from 82,203 ounces of gold in the third quarter, which was the first full one of ramping up production at this mine. Driving the drop was a lower gold recovery rate, which was 95.8% in the quarter after totaling 96.5% in the third quarter.
In addition to providing that production update, Pretium unveiled its guidance for the first half of 2018. It said that gold production should be between 150,000 and 200,000 ounces, which would be flat to slightly higher than the second half of 2017. The company also said that its all-in sustaining costs (AISC) would be in a range of $700 to $900 per ounce. That range is a bit of a disappointment: AISC was $788 per ounce in the third quarter, when the company said that it expected this metric to decrease.
Pretium Resources is six month into ramping up production at Brucejack. The company is transitioning from a gold mine developer to a producer, and eventually investors should reap the value it created in building this mine. That said, with just one mine, it's among the riskier gold stocks, which is why investors might want to consider a safer option.