Shares of Pretium Resources Inc (NYSE:PVG) rocketed 20% by 11:00 a.m. EDT on Wednesday after the gold miner updated investors on first-quarter production at its Brucejack Mine.
Pretium Resources produced 75,689 ounces of gold during the first quarter, with output steadily increasing throughout the period, culminated by 32,910 ounces in March. The company attributed this result to the "successful implementation of a number of operational improvement initiatives," according to CEO Joseph Ovsenek. As a result, the company remains on track to achieve its first-half production guidance of 150,000 to 200,000 ounces as well as its cost guidance of $700 to $900 an ounce.
This result helps ease concerns from earlier in the year that the company's new mine wasn't delivering as much gold as hoped after production dipped from the third quarter to the fourth. The company noted that its strong results in March reflect the first impact of grade control integration into the mining process, which helps a miner know the quality of the ore it's mining. With full integration occurring in the second quarter, Pretium expects its results to improve.
Pretium Resources is still working to ramp up its Brucejack mine, which it brought online last year. It's not uncommon to see hiccups during that phase. However, given that the company only operates this mine, its stock is highly sensitive to these fits and starts and will likely remain quite volatile. Because of that, investors need to be unabashedly bullish on gold and have a high risk tolerance to invest in this gold mining stock.