What: Shares of precious metals explorer Pretium Resources (NYSE:PVG) sank as low as 10.9% in early Tuesday trading after announcing the details of its common share offering.

So what: Pretium's underwriters have agreed to purchase 26,210,000 common shares at a price of $4.58 per share, representing a 9.5% discount to Monday's closing price. Given that wide of a discount, as well as the sheer size of the offering -- roughly 20% of shares outstanding -- investors are obviously concerned about the sale's dilutive potential.

Now what: Pretium plans to use the net proceeds for working capital and general purposes, but most importantly to fund the development of its 100%-owned Brucejack Gold Project. "The focus of the Project is the Valley of the Kings, which is comprised of high-grade visible gold stringers within a lower grade gold quartz stockwork system," Pretium wrote on its Brucejack information page. "A feasibility study completed in June 2014 has outlined Proven and Probable mineral reserves in the Valley of the Kings of 6.9 million ounces of gold (13.6 million tons grading 15.7 grams per ton gold)." When you couple Pretium's ongoing operating losses with its exposure to highly volatile resource prices, however, the stock is probably best left to more speculative investors to play with.

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