Resource World Magazine

54 www.resourceworld.com J U N E / J U L Y 2 0 1 9 Going from exploration to building and operating a mine Transitioning from an exploration company to developing and then to operating an underground mine is a task that very few companies try, and few succeed. Building an underground mine is a complex and capital intensive undertaking with not much room for error as there are no revenues until your mineral commodity is produced and sold. Some of the tasks are to design a suitable mining plan based on the deposit's particu- lar geometry and grade; building ventilation and ore/waste recovery systems, installing a communications system; building a mill based on the deposit's metallurgy for economic optimi- zation; building employee accommodations (if remote); constructing an assay lab; and building access roads. RESOURCEWORLD: What are the main hurdles Pretium Resources had to overcome to achieve this transition? JOE OVSENEK: There are two essential elements – starting with the right property and then building up the right team with the diverse range of skills and experience needed to maximize that property's potential, and then developing a safety culture and putting effective systems in place – these are all required to take the company to the higher operating level required for production. RW: what are the steps involved to get there? JO: The first step is building an effective and experienced team that has the ability to work together and to work with the sense of urgency required to get things done. Once you have the right team in place the other steps fall in place. Management needs a clear and logical strategy, the right tactics to effectively implement that strategy and, importantly, focus. Management needs to stay focused on execution and delivering on what they say they will do. You often hear companies talk about what needs to be done; however, finding a management team that clearly lays out what they plan to do and then delivers is what separates successful teams from the others. RW: Is this skill set the same with respect to the size of a mine or does it become exponentially more difficult as the operation gets larger and more expensive? JO: As projects get larger, the ability of a single asset company to finance construction gets more difficult. Otherwise, the same skill sets are required no matter the size of the project. RW: I would suspect that finding good people to implement the transi- tion plan is just as important. How difficult has it become to find the right people for the job and how do you get them to join your team? JO: First off, we were fortunate to have a project like Brucejack – long life and low cost/high margin. As a result, Pretium was and is an attractive company to join from a project perspective. Second is culture. We have a strong culture focused on delivering, which drew like-minded people to us. I don't think you can over emphasize the importance of culture, which has to be driven by senior management. If you have a good project and have a culture that is attractive to people who know how to deliver, you will always be able to build a good team. You must build up your core people that work well together and that's what makes you successful. RW: Are there any other things that you feel are important in the explorer/producer transition? JO: I would add that it's important to have a board of directors that understands risk and is willing to give management the backing required to take on the risk inherent with building a mine. Also, you need to earn the support of community. They must be a con- sideration in every decision, so we have to keep them well-informed about the risks and opportunities of the project. Joe Ovsenek, President & CEO of Pretium Resources. them to proven and probable reserves. Drilling in the early stages of the pro- gram targeted mineralization below the 1,200-metre level of the mine and westward towards the Brucejack fault. Exploration drilling will continue throughout the year and will test zones for additional reserve expansion to the east and below the cur - rently defined reserves. Exploration drilling 1 km east of the Valley of the Kings intersected high-grade gold below the Flow Dome Zone. Later this year, Pretium plans to drive underground 200 metres towards the east to commence resource expansion drilling. This year's exploration drill program also includes two deep holes to test for the source por - phyry of Brucejack mineralization. The first of the two holes was two km long and intersected multiple sections of Valley of the Kings style carbonate stockworks. The second hole is currently being drilled towards the northeast. Assay results and an update are expected by mid-year. Pretium will continue grassroots exploration on claims surrounding the Brucejack Mine to follow-up on progress made last year. For the rest of 2019, Pretium provides guidance that it will deliver higher tonnes and grade from Brucejack with cash flow paying down debt. "Our primary focus remains on the operational execution required to deliver on guidance," said Ovsenek. "We are confident that with a strong start to the year we will succeed." n

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