pretium_6k-16875.htm

0001199835-16-000817.txt : 20160513 0001199835-16-000817.hdr.sgml : 20160513 20160513110459 ACCESSION NUMBER: 0001199835-16-000817 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20160513 FILED AS OF DATE: 20160513 DATE AS OF CHANGE: 20160513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Pretium Resources Inc. CENTRAL INDEX KEY: 0001508844 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 000000000 STATE OF INCORPORATION: A1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-35393 FILM NUMBER: 161646663 BUSINESS ADDRESS: STREET 1: SUITE 2300, 1055 DUNSMUIR STREET STREET 2: PO BOX 49334 CITY: VANCOUVER STATE: A1 ZIP: V7X 1L4 BUSINESS PHONE: 604-558-1784 MAIL ADDRESS: STREET 1: SUITE 2300, 1055 DUNSMUIR STREET STREET 2: PO BOX 49334 CITY: VANCOUVER STATE: A1 ZIP: V7X 1L4 6-K 1 pretium_6k-16875.htm PRETIUM RESOURCES, INC. 6K pretium_6k-16875.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of May 2016

Commission File Number: 001-35393

PRETIUM RESOURCES INC

(translation of registrant’s name into English)

1055 Dunsmuir Street, Suite 2300

Vancouver, British Columbia

Canada V7X 1L4

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ¨ Form 40-F x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes ¨ No x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ¨ No x

Exhibit Index

Exhibit Number	Description of Exhibit
99.1	Condensed Financial Statements for the Three Months Ended March 31, 2016
99.2	Management's Discussion and Analysis for the Three Months Ended March 31, 2016

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PRETIUM RESOURCES INC.

	By:	/s/ Alicia Milne
Date: May 13, 2016	Name:	Alicia Milne
	Title:	Corporate Secretary

EX-99.1 2 exhibit_99-1.htm CONDENSED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2016 exhibit_99-1.htm

EXHIBIT 99.1

PRETIUM RESOURCES INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015

(Expressed in Canadian Dollars)

Suite 2300, Four Bentall Centre

1055 Dunsmuir Street, PO Box 49334

Vancouver, BC V7X 1L4

Phone: 604-558-1784

Email: invest@pretivm.com

PRETIUM RESOURCES INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Unaudited - Expressed in thousands of Canadian dollars)

		March 31,			December 31,
	Note	2016			2015

ASSETS

Current assets
Cash and cash equivalents		$	479,994		$	387,925
Receivables and other	3		17,154			20,406
			497,148			408,331
Non-current assets
Mineral properties, plant and equipment	4		1,118,368			1,021,415
Other assets	6		39,559			41,504
Restricted cash			8,495			8,495
			1,166,422			1,071,414
Total assets		$	1,663,570		$	1,479,745

LIABILITIES

Current liabilities
Accounts payable and accrued liabilities	5	$	41,304		$	48,004
			41,304			48,004
Non-current liabilities
Long-term debt	6		451,610			428,829
Decommissioning and restoration provision	7		7,348			7,253
Deferred income tax			19,189			28,018
			519,451			512,104

EQUITY

Share capital	8		1,176,230			986,579
Contributed surplus	8		59,114			57,369
Deficit			(91,225	)		(76,307	)
			1,144,119			967,641
Total liabilities and equity		$	1,663,570		$	1,479,745

Contingencies	11

On behalf of the Board:
“Ross A. Mitchell”		“George N. Paspalas”
Ross A. Mitchell (Chairman of Audit Committee)		George N. Paspalas (Director)

The accompanying notes are an integral part of these consolidated financial statements.

PRETIUM RESOURCES INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Unaudited - Expressed in thousands of Canadian dollars, except for share data)

		For the three months ended
		March 31,			March 31,
	Note	2016			2015

EXPENSES

Share-based compensation	8	$	1,206		$	2,388
Salaries			837			902
Investor relations			470			272
Office			403			302
Listing and filing fees			170			264
Professional fees			157			158
Insurance			131			130
Travel and accommodation			75			119
Amortization	4		34			15
Consulting			12			12

Operating loss			(3,495	)		(4,562	)

Foreign exchange gain			6,280			603
Interest income			271			274
Financing and interest costs			(18	)		-
Accretion of decommissioning and restoration provision	7		(56	)		(9	)
Loss on financial instruments at fair value	6		(23,894	)		-

Loss before taxes			(20,912	)		(3,694	)

Deferred income tax recovery			5,994			164

Net loss and comprehensive loss for the period		$	(14,918	)	$	(3,530	)


Basic and diluted loss per common share		$	(0.10	)	$	(0.03	)

Weighted average number of common shares outstanding			154,470,603			129,615,991

The accompanying notes are an integral part of these consolidated financial statements.

PRETIUM RESOURCES INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited - Expressed in thousands of Canadian dollars)

		For the three months ended
		March 31,			March 31,
	Note	2016			2015

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period		$	(14,918	)	$	(3,530	)
Items not affecting cash:
Accretion of decommissioning and restoration provision			56			9
Amortization			34			15
Loss on financial instruments at fair value	6		23,894			-
Deferred income tax recovery			(5,994	)		(164	)
Share-based compensation	8		1,206			2,388
Unrealized foreign exchange gain			(6,483	)		-
Changes in non-cash working capital items:
Receivables and other			290			(512	)
Accounts payable and accrued liabilities			(1,542	)		(301	)
Net cash used in operating activities			(3,457	)		(2,095	)

CASH FLOWS FROM FINANCING ACTIVITIES
Common shares issued	8		195,318			99,126
Share issue costs			(10,395	)		(3,470	)
Proceeds from exercise of stock options			1,659			120
Net cash generated by financing activities			186,582			95,776

CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures on mineral properties, plant and equipment	4		(86,074	)		(23,759	)
Restricted cash			-			(1,006	)
Net cash used in investing activities			(86,074	)		(24,765	)

Change in cash and cash equivalents for the period			97,051			68,916

Cash and cash equivalents, beginning of the period			387,925			34,495
Effect of foreign exchange rate changes on cash and cash equivalents
			(4,982	)		-
Cash and cash equivalents, end of the period		$	479,994		$	103,411

The accompanying notes are an integral part of these consolidated financial statements.

PRETIUM RESOURCES INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
(Unaudited - Expressed in thousands of Canadian dollars, except for share data)


	Note	Number of common shares		Share capital			Contributed surplus			Deficit			Total
Balance - December 31, 2014			116,828,081	$	795,034		$	59,970		$	(75,773	)	$	779,231

Shares issued under private placement			15,734,316		99,126			-			-			99,126

Share issue costs			-		(3,470	)		-			-			(3,470	)

Deferred income tax on share issue costs			-		902			-			-			902

Shares issued upon exercise of options			20,000		186			(66	)		-			120

Value assigned to options vested			-		-			4,068			-			4,068

Loss for the period			-		-			-			(3,530	)		(3,530	)

Balance - March 31, 2015			132,582,397	$	891,778		$	63,972		$	(79,303	)	$	876,447

Balance - December 31, 2015			145,068,405	$	986,579		$	57,369		$	(76,307	)	$	967,641

Shares issued under marketed offering	8		31,923,755		195,318			-			-			195,318

Share issue costs	8		-		(10,967	)		-			-			(10,967	)

Deferred income tax on share issue costs			-		2,835			-			-			2,835

Shares issued upon exercise of options	8		272,000		2,465			(806	)		-			1,659

Value assigned to options vested	8		-		-			2,551			-			2,551

Loss for the period			-		-			-			(14,918	)		(14,918	)

Balance - March 31, 2016			177,264,160	$	1,176,230		$	59,114		$	(91,225	)	$	1,144,119

The accompanying notes are an integral part of these consolidated financial statements.

PRETIUM RESOURCES INC.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended March 31, 2016 and 2015

(Expressed in thousands of Canadian dollars, except for share data)

1. NATURE OF OPERATIONS

Pretium Resources Inc. (the "Company") was incorporated under the laws of the Province of British Columbia, Canada on October 22, 2010. The address of the Company’s registered office is Suite 2300, Four Bentall Centre, 1055 Dunsmuir Street, PO Box 49334, Vancouver, BC, V7X 1L4.

The Company is in the business of acquiring, owning, evaluating and developing gold/silver/copper mineral interests and owns the Brucejack and Snowfield Projects located in Northwest British Columbia, Canada. The Company is in the process of developing the Brucejack Project and exploring the Snowfield Project.

The Company’s continuing operations and the underlying value and recoverability of the amount shown for mineral properties, plant and equipment is entirely dependent upon the existence of economically recoverable mineral reserves and resources, the ability of the Company to obtain the necessary financing to complete exploration and development, the ability to obtain the necessary permits to mine for exploration and evaluation assets, and future profitable production or proceeds from the disposition of the projects.

2. SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”). The accounting policies and methods of application in these financial statements are consistent with those applied by the Company in its most recent annual consolidated financial statements. Accordingly, these financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2015, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the IASB.

These condensed consolidated interim financial statements are expressed in thousands of Canadian dollars (unless otherwise stated) which is the Company’s functional currency.

These condensed consolidated interim financial statements were authorized for issue by the Board of Directors on May 12, 2016.

Critical accounting estimates and judgments

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying its accounting policies. Estimates and other judgments are regularly evaluated and are based on management’s experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. The following discusses the most significant accounting judgments and estimates that the Company has made in the preparation of these condensed consolidated interim financial statements that could result in a material effect in the next financial year on the carrying amounts of assets and liabilities:

PRETIUM RESOURCES INC.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended March 31, 2016 and 2015

(Expressed in thousands of Canadian dollars, except for share data)

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Impairment of exploration and evaluation assets

The application of the Company’s accounting policy for impairment of exploration and evaluation assets requires judgment to determine whether indicators of impairment exist including factors such as, the period for which the Company has the right to explore, expected renewals of exploration rights, whether substantive expenditures on further exploration and evaluation of resource properties are budgeted and results of exploration and evaluation activities up to the reporting date. Management has assessed impairment indicators on the Company’s exploration and evaluation assets and has concluded that no impairment indicators exist as of March 31, 2016.

Impairment of mineral properties, plant and equipment

The application of the Company’s accounting policy for impairment of mineral properties, plant and equipment requires judgment to determine whether indicators of impairment exist. The review of impairment indicators includes consideration of both external and internal sources of information, including factors such as market and economic conditions, metal prices and forecasts, commercial viability and technical feasibility and estimated project economics. Management has assessed impairment indicators on the Company’s mineral properties, plant and equipment and has concluded that no impairment indicators exist as of March 31, 2016.

Fair value of derivatives and other financial liabilities

The fair value of financial instruments that are not traded in an active market are determined using valuation techniques. Management uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period. Refer to Note 10 for further details on the methods and assumptions associated with the construction financing.

3. RECEIVABLES AND OTHER

	March 31,		December 31,
	2016		2015

Taxes receivable	$	8,634	$	4,790
BC Mineral Exploration Tax Credit receivable		6,406		13,207
Prepayments and deposits		2,087		2,386
Other receivables		27		23
	$	17,154	$	20,406

PRETIUM RESOURCES INC.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended March 31, 2016 and 2015

(Expressed in thousands of Canadian dollars, except for share data)

4. MINERAL PROPERTIES, PLANT AND EQUIPMENT

	Mineral properties		Construction in progress			Plant and equipment		Exploration and evaluation assets		Total
Cost
Balance, beginning of period	$	513,306	$	175,247		$	20,337	$	319,216	$	1,028,106
Additions		-		95,835			2,284		62		98,181
Transfer from construction in
progress to plant and equipment		-		(3,900	)		3,900		-		-
Balance, end of period	$	513,306	$	267,182		$	26,521	$	319,278	$	1,126,287

Accumulated depreciation and depletion
Balance, beginning of period	$	-	$	-		$	6,691	$	-	$	6,691
Amortization and depletion		-		-			1,228		-		1,228
Balance, end of period	$	-	$	-		$	7,919	$	-	$	7,919

Net book value - March 31, 2016	$	513,306	$	267,182		$	18,602	$	319,278	$	1,118,368

Mineral properties

Mineral properties consist solely of the Brucejack Project. The Company and the Nisga’a Nation have entered into a comprehensive Cooperation and Benefits Agreement in respect of the Brucejack Project. Under the terms of the Agreement, the Nisga’a Nation will provide ongoing support for the development and operation of Brucejack with participation in its economic benefits.

The Brucejack Project is subject to a 1.2% net smelter returns royalty on production in excess of 503,386 ounces of gold and 17,907,080 ounces of silver.

Plant and equipment

During the three months ended March 31, 2016, $34 (2015 - $15) of amortization was recognized in the statement of loss and $1,194 (2015 - $414) was capitalized within construction in progress.

5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	March 31,		December 31,
	2016		2015

Accrued liabilities	$	24,881	$	20,501
Trade payables		16,204		27,436
Restricted share unit liability		219		67
	$	41,304	$	48,004

PRETIUM RESOURCES INC.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended March 31, 2016 and 2015

(Expressed in thousands of Canadian dollars, except for share data)

6. LONG-TERM DEBT

As at March 31, 2016, the Company’s long-term debt consisted of the following:

	Senior secured term credit facility			Offtake obligation		Stream obligation		Total long-term debt
Balance, December 31, 2015	$	177,301		$	64,706	$	186,822	$	428,829
Interest expense including amortization of discount		6,013			-		-		6,013
Loss on financial instruments at fair value		-			7,381		20,853		28,234
Foreign exchange gain		(11,466	)		-		-		(11,466	)
Balance, March 31, 2016	$	171,848		$	72,087	$	207,675	$	451,610

(a)

Senior secured term credit facility

Pursuant to the terms of the senior secured term credit facility, the Company can borrow up to US$350,000, which bears interest at a stated rate of 7.5%, compounded quarterly and payable upon maturity. The credit facility is secured by substantially all of the assets of the Company and its subsidiaries.

Subsequent advances are available starting six months following the September 21, 2015 closing date and ending 18 months following the closing date. Each subsequent advance shall be for a minimum of US$5,000 and a maximum of US$50,000 and is subject to a 3% arrangement fee at the time of draw. The undrawn portion of the credit facility at March 31, 2016 was US$200,000.

The credit facility matures December 31, 2018 and is subject to an extension for one year, at the Company’s option upon payment of an extension fee of 2.5% of the principal amount, including accumulated interest. The Company has the right to repay at par plus accrued interest after the second anniversary of closing and upon payment of 2.5% of principal prior to the second anniversary.

The embedded derivatives associated with the prepayment and extension options are recorded on the statement of financial position as other assets. For the three months ended March 31, 2016, the change in fair value of these embedded derivatives was a fair value loss of $1,945.

The credit facility, excluding the embedded derivative, is recorded at amortized cost. For the three months ended March 31, 2016, the Company capitalized $6,013 of interest on the credit facility to mineral properties, plant and equipment.

(b)

Offtake obligation

The Company has entered into an agreement pursuant to which it will sell 100% of refined gold (in excess of any delivered ounces pursuant to the stream obligation) up to 7,067,000 ounces. The final purchase price to be paid by the purchaser will be, at the purchaser’s option, a market referenced gold price in US dollars per ounce during a defined pricing period before and after the date of each sale.

The Company has the option to reduce the Offtake obligation by up to 75% by paying (a) US$11 per remaining ounce effective December 31, 2018 or (b) US$13 per ounce effective December 31, 2019 on the then remaining undelivered gold ounces.

PRETIUM RESOURCES INC.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended March 31, 2016 and 2015

(Expressed in thousands of Canadian dollars, except for share data)

6. LONG-TERM DEBT (Cont’d)

The Offtake obligation is recorded at fair value at each statement of financial position date. For the three months ended March 31, 2016, the change in fair value of the Offtake obligation was a fair value loss of $7,381.

(c)

Stream obligation

Pursuant to the stream, the Company is obligated to deliver, subject to prepayment options, 8% of up to 7,067,000 ounces of refined gold and 8% of up to 26,297,000 ounces of refined silver commencing on January 1, 2020 (less gold and silver sold to date) and a payment of US$20,000. Upon delivery, the Company is entitled to (a) for gold, the lesser of US$400 per ounce and the gold market price and (b) for silver, the lesser of US$4 per ounce and the silver market price. Any excess of market over the fixed prices above are credited against the deposit. Any remaining uncredited balance of the deposit is repayable, without interest, upon the earlier of the date (i) the aggregate stated gold and silver quantities have been delivered and (ii) 40 years.

The Company has the option to repurchase the stream obligation for US$237,000 on December 31, 2018 or US$272,000 on December 31, 2019. Alternatively, the Company may reduce the stream obligation to (a) 3% on December 31, 2018 (and accelerate deliveries under the stream to January 1, 2019) or (b) 4% on December 31, 2019 (in which case deliveries will commence on January 1, 2020) on payment of US$150,000.

The stream obligation is recorded at fair value at each statement of financial position date. For the three months ended March 31, 2016, the change in fair value of the stream obligation was a fair value loss of $20,853.

As the stream is in substance a debt instrument, the effective interest on the debt host is capitalized as a borrowing cost during the development of the Brucejack Project. For the three months ended March 31, 2016, the Company capitalized $6,285 of interest on the stream debt to mineral properties, plant and equipment. The capitalized interest was reclassified from the loss on financial instruments at fair value recorded in the statement of loss.

7. DECOMMISSIONING AND RESTORATION PROVISION

The Company has a liability for remediation of current and past disturbances associated with the exploration and development activities at the Brucejack and Snowfield Projects. The decommissioning and restoration provision is as follows:

	March 31,		December 31,
	2016		2015
Opening balance	$	7,253	$	2,096
Change in discount rate		39		(696	)
Change in amount and timing of cash flows		-		5,768
Accretion of decommissioning and restoration provision		56		85
Ending balance	$	7,348	$	7,253

For the three months ended March 31, 2016, the provision increased due to a change in discount rate and the passage of time. The Company used an inflation rate of 1.9% (2015 – 1.9%) and a discount rate of 2.3% (2015 – 2.4%) in calculating the estimated obligation. The liability for retirement and remediation on an undiscounted basis before inflation is $8,062 (2015 - $8,062).

PRETIUM RESOURCES INC.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended March 31, 2016 and 2015

(Expressed in thousands of Canadian dollars, except for share data)

8. CAPITAL AND RESERVES

(a)

Authorized share capital

At March 31, 2016, the authorized share capital consisted of an unlimited number of common shares without par value and an unlimited number of preferred shares with no par value.

On March 1, 2016, the Company completed a marketed offering of 28,384,000 common shares at a price of US$4.58 per common share for aggregate gross proceeds of $174,289 (US$129,999) which includes the exercise of the full amount of the over-allotment option of 2,174,000 common shares. As a result of this offering, the Company entered into additional subscription agreements with shareholders who wished to maintain their respective pro-rata interest in the Company. Thus, on March 31, 2016, the Company issued an additional 3,539,755 common shares at US$4.58 per share for gross proceeds of $21,029 (US$16,212). The combined gross proceeds of these two offerings was $195,318 (US$146,211), before share issue costs of $10,967.

(b)

Share Option Plan

The following table summarizes the changes in stock options for the three months ended March 31:

	2016					2015
	Number of options			Weighted average exercise price		Number of options			Weighted average exercise price
Outstanding, January 1,		9,442,950		$	8.48		10,810,950		$	8.48
Granted		710,000			6.75		1,556,000			8.23
Exercised		(272,000	)		6.10		(20,000	)		6.00
Forfeited		(795,000	)		10.44		-			-
Outstanding, March 31,		9,085,950		$	9.03		12,346,950		$	8.45

The following table summarizes information about stock options outstanding and exercisable at March 31, 2016:

	Stock options outstanding				Stock options exercisable
Exercise prices	Number of options outstanding		Weighted average years to expiry		Number of options exercisable		Weighted average exercise price
$5.85 - $7.99		4,580,000		3.73		3,037,500	$	6.55
$8.00 - $9.99		1,705,250		3.04		1,343,000		8.97
$10.00 - $11.99		1,330,700		0.73		1,330,700		11.78
$12.00 - $13.99		1,325,000		1.66		1,325,000		13.69
$14.00 - $15.99		20,000		1.02		20,000		14.67
$16.00 - $17.99		125,000		0.83		125,000		16.48
Outstanding, March 31, 2016		9,085,950		2.81		7,181,200	$	9.48

The total share option compensation expense for the three months ended March 31, 2016 was $2,227 (2015 - $4,068) of which $900 (2015 - $2,312) has been expensed in the statement of loss and $1,327 (2015 - $1,756) has been capitalized to mineral properties, plant and equipment.

PRETIUM RESOURCES INC.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended March 31, 2016 and 2015

(Expressed in thousands of Canadian dollars, except for share data)

8. CAPITAL AND RESERVES (Cont’d)

The following are the weighted average assumptions employed to estimate the fair value of options granted for the three months ended March 31, 2016 and 2015 using the Black-Scholes option pricing model:

	For the three months ended
	March 31, 2016			March 31, 2015
Risk-free interest rate		0.51	%		1.02	%
Expected volatility		63.58	%		66.80	%
Expected life	5 years			5 years
Expected dividend yield	Nil			Nil

Option pricing models require the input of subjective assumptions including the expected price volatility, and expected option life. Changes in these assumptions may have a significant impact on the fair value calculation.

(c)

Restricted Share Unit (“RSU”) Plans

2014 RSU Plan

The following table summarizes the changes in the 2014 RSU’s for the three months ended March 31, 2016 and 2015:

	2016					2015
	Number of RSU's			Weighted average fair value		Number of RSU's			Weighted average fair value
Outstanding, January 1,		215,698		$	7.01		330,992		$	6.84
Granted		-			-		-			-
Settled		-			-		(1,433	)		8.24
Forfeited / expired		(30,356	)		6.92		(5,146	)		8.24
Outstanding, March 31,		185,342		$	6.97		324,413		$	6.38

At March 31, 2016, a liability of $219 (2015 - $223) was outstanding and included in accounts payable and accrued liabilities. For the three months ended March 31, 2016, $83 (2015 - $76) has been recorded to share-based compensation expense and $69 (2015 - $97) has been capitalized to mineral properties, plant and equipment.

PRETIUM RESOURCES INC.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended March 31, 2016 and 2015

(Expressed in thousands of Canadian dollars, except for share data)

8. CAPITAL AND RESERVES (Cont’d)

2015 RSU Plan

Under the 2015 RSU Plan, subject to shareholder approval, the awards will be treated as equity-settled transactions. The following table summarizes the changes in the 2015 RSU’s for the three months ended March 31:

	2016					2015
	Number of RSU's			Weighted average fair value		Number of RSU's		Weighted average fair value
Outstanding, January 1,		861,344		$	7.01		-	$	-
Granted		-			-		-		-
Settled		-			-		-		-
Forfeited / expired		(100,000	)		6.85		-		-
Outstanding, March 31,		761,344		$	6.97		-	$	-

For the three months ended March 31, 2016, $223 (2015 - nil) has been recorded to share-based compensation expense and $101 (2015 - nil) has been capitalized to mineral properties, plant and equipment.

9.	RELATED PARTIES

Transactions with key management

Key management includes the Company’s directors (executive and non-executive) and executive officers including its Chairman and CEO, its President, its Chief Operating Officer (its “COO”) and Vice President, its Chief Financial Officer and Chief Exploration Officer and Vice President. On February 16, 2016, the COO left the Company.

Directors and key management compensation:

	For the three months ended
	March 31,		March 31,
	2016		2015
Salaries, benefits and management fees	$	1,999	$	547
Share-based compensation		1,013		2,828
	$	3,012	$	3,375

PRETIUM RESOURCES INC.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended March 31, 2016 and 2015

(Expressed in thousands of Canadian dollars, except for share data)

10.	FAIR VALUE MEASUREMENTS

The Company’s financial assets and liabilities are measured and recognized according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy are as follows:

	Level 1:	Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

	Level 2:	Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

	Level 3:	Inputs for the asset or liability that are not based on observable market data

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy. Each of these financial instruments are classified as Level 3 as their valuation includes significant unobservable inputs.

	March 31,		December 31,
	2016		2015
Assets
Financial assets at fair value through profit or loss
Embedded derivatives under the senior secured term credit facility	$	8,029	$	9,974
	$	8,029	$	9,974

Liabilities
Financial liabilities at fair value through profit or loss
Offtake obligation	$	72,087	$	64,706
Stream obligation		207,675		186,822
	$	279,762	$	251,528

The embedded derivative assets were valued using Monte Carlo simulation valuation models with principal inputs related to the credit facility including the risk-free interest rate, the Company’s and lender’s credit spread and foreign exchange rates.

The offtake and stream obligations were valued using Monte Carlo simulation valuation models. The key inputs used by the Monte Carlo simulation in valuing both the offtake and stream obligations include: the gold forward curve based on Comex futures, long-term gold volatility, call option exercise prices, risk-free rate of return and spot USD/CAD foreign exchange rates.

In addition, in valuing the stream obligation, management used the following significant observable inputs: the silver forward curve based on Comex futures and the long-term silver volatility and gold/silver correlation.

The valuation of the offtake and stream obligations also require estimation of the Company’s non-performance or credit risk and the anticipated production schedule of gold and silver ounces delivered over the life of mine.

PRETIUM RESOURCES INC.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended March 31, 2016 and 2015

(Expressed in thousands of Canadian dollars, except for share data)

11.	CONTINGENCIES

a) Canadian Class Actions

On October 29, 2013, David Wong, a shareholder of the Company, filed a proposed class action against the Company, Robert Quartermain (a director, the President and the CEO of the Company) and Snowden Mining Industry Consultants Ltd. (the “Wong Action”).

A similar proposed class action was filed by Roksana Tahzibi, a shareholder of the Company, on November 1, 2013 (the “Tahzibi Action”). The defendants in the Tahzibi Action are the Company, Mr. Quartermain, Joseph Ovsenek (an officer and director of the Company), Kenneth McNaughton (an officer of the Company), Ian Chang (an officer of the Company) and Snowden Mining Industry Consultants Ltd.

The Wong Action and Tahzibi Action (together, the “Ontario Actions”) were filed in the Ontario Superior Court of Justice.

The plaintiffs in the Ontario Actions seek certification of a class action on behalf of a class of persons, wherever they reside, who acquired the Company’s securities. In the Wong Action, the class period is between November 22, 2012 and October 22, 2013. In the Tahzibi Action, the class period is between July 23, 2013 and October 22, 2013.

The plaintiffs in the Ontario Actions allege that certain of the Company’s disclosures contained material misrepresentations or omissions regarding Brucejack, including statements with respect to probable mineral reserves and future gold production at Brucejack. The plaintiffs further allege that until October 22, 2013 the Company failed to disclose alleged reasons provided by Strathcona Mineral Services Ltd. for its resignation as an independent qualified person overseeing the bulk sample program. According to the plaintiffs in the Ontario Actions, these misrepresentations and omissions are actionable under Ontario’s Securities Act, other provincial securities legislation and the common law.

The Wong Action claims $60 million in general damages. The Tahzibi Action claims $250 million in general damages. The plaintiffs in the Ontario Actions have asked for the appointment of a case management judge. There have been no further steps in the Ontario Actions.

The Company believes that the allegations made against it in Ontario Actions are meritless and will vigorously defend them, although no assurance can be given with respect to the ultimate outcome of the Ontario Actions. The Company has not accrued any amounts for these class actions.

b) United States Class Actions

Between October 25, 2013 and November 18, 2013, five putative class action complaints were filed in the United States against the Company and certain of its officers and directors, alleging that defendants violated the United States securities laws by misrepresenting or failing to disclose material information concerning the Brucejack Project. All five actions were filed in the United States District Court for the Southern District of New York.

In January 2014, the Court ordered that these actions be consolidated into a single action, styled In re Pretium Resources Inc. Securities Litigation, Case No. 13-CV-7552 (PGG). The Court has appointed as lead plaintiffs in the consolidated action three individuals who are suing on behalf of a putative class of shareholders who purchased or otherwise acquired the Company’s common shares between June 11, 2013 and October 21, 2013.

PRETIUM RESOURCES INC.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended March 31, 2016 and 2015

(Expressed in thousands of Canadian dollars, except for share data)

11.	CONTINGENCIES (Cont’d)

In March 2014, the plaintiffs filed a consolidated amended class action complaint, which the Company moved to dismiss in May 2014. In July 2014, the plaintiffs filed a second consolidated amended class action complaint (“Second Amended Complaint”). The Company moved to dismiss the Second Amended Complaint on September 5, 2014. Plaintiffs filed their Opposition to the Company’s Motion to Dismiss on October 20, 2014, and the Company filed a reply brief on November 19, 2014. The Court has not yet issued a decision on the motion.

The Company believes that the allegations made against it in these actions are meritless and will vigorously defend the matter, although no assurance can be given with respect to the ultimate outcome of such proceedings. The Company has not accrued any amounts for these class actions.

EX-99.2 3 exhibit_99-2.htm MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS ENDED MARCH 31, 2016 exhibit_99-2.htm

EXHIBIT 99.2

PRETIUM RESOURCES INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED MARCH 31, 2016

This Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with the condensed consolidated interim financial statements of Pretium Resources Inc. (“Pretivm”, the “Company”, “we” or “us”) for the three months ended March 31, 2016 as publicly filed on the System for Electronic Document Analysis and Retrieval (SEDAR) website.

All dollar amounts are expressed in thousands of Canadian Dollars unless otherwise specified.

We have prepared the condensed consolidated interim financial statements in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The Company’s significant accounting policies are set out in Note 3 of the audited consolidated financial statements for the year ended December 31, 2015.

This MD&A is prepared as of May 12, 2016 and includes certain statements that may be deemed “forward-looking statements”. We direct investors to the section “Risks and Uncertainties” and “Statement on forward-looking information” included within this MD&A.

Additional information relating to us, including our Annual Information Form and Form 40-F, is available on the SEDAR website at www.sedar.com and on the EDGAR section of the SEC website at www.sec.gov.

Our Business

Pretivm was incorporated on October 22, 2010 under the laws of the Province of British Columbia. We are an exploration and development company that was formed for the acquisition, exploration and development of precious metal resource properties in the Americas.

We have a 100% interest in the Brucejack Project and the Snowfield Project, both of which are located in northwestern British Columbia.

The Brucejack Project is our material mineral project. Our focus is on advancing the Brucejack Project to production as a high-grade gold underground mine, with engineering and construction in progress.

The mineral claims for the Snowfield Project are in good standing until 2026 and we continue to conduct baseline environmental studies for potential future development.

1st Quarter Highlights

·	During the quarter the underground definition drill program continued to confirm the style and grade distribution of the Valley of the Kings gold mineralization and continued to intersect high grade and visible gold (see news releases dated January 12, 2016 and March 8, 2016).

On February 17, 2016, we announced an updated cost and working capital estimate for the Brucejack Project. The estimated total project capital cost to complete design, construction, installation and commissioning, including contingencies and working capital, is US$696.8 million. The working capital included for the three-month period of post-plant commissioning and initial gold production covers the cost of operations, but does not take into account any revenue generated during this period.

On February 22, 2016, we announced the filing of a preliminary prospectus supplement to our short form base shelf prospectus in connection with a US$120 million marketed offering of our common shares through a syndicate of underwriters. On February 23, 2016, we announced the underwriters had agreed to purchase 26,210,000 of our common shares at US$4.58 per share, for gross proceeds of approximately US$120 million. The underwriters were also granted an over-allotment option to purchase an additional 2,174,000 common shares at US$4.58 per share, exercisable for a period of 30 days following closing. On March 1, 2016, we announced the closing of the marketed offering of our common shares for gross proceeds of approximately US$130 million, which included the exercise of the over-allotment option.

Subsequent to the closing of the marketed offering on March 1, 2016, Orion Co-Investments (ED) Limited (“Orion”) and Zijin Mining Group Co., Ltd (“Zijin”) exercised their participation rights to maintain their respective proportionate ownership interests in the Company in connection with the marketed offering. Orion agreed to subscribe for 752,906 common shares and Zijin agreed to subscribe for 2,786,849 common shares at a price of US$4.58 per share in a non-brokered private placement. On March 31, 2016, we announced the closing of the non-brokered private placement of 3,539,755 common shares for gross proceeds of approximately US$16.2 million. The total number of common shares issued in connection with the marketed offering and private placement was 31,923,755 for aggregate gross proceeds of approximately US$146.2 million.

Subsequent to the end of the quarter, on April 15, 2016, we announced the Board of Directors updated our shareholders rights plan. The purpose of the Plan is to provide Pretivm’s Board of Directors and shareholders with sufficient time to fully consider any unsolicited take-over bid for the Company, to ensure that Pretivm’s Board of Directors has sufficient time to explore alternative transactions that would maximize value for shareholders, and to encourage the fair treatment of all Pretivm shareholders.

·	On April 18, 2016, we reported on the progress of site construction activities at the Brucejack Project including the camp, mill site, portal excavation and transmission line.

·	On May 2, 2016, we announced that we had filed a preliminary short form base prospectus with the securities commissions in each of the provinces and territories of Canada, except Quebec, and a corresponding shelf registration statement on Form F-10 with the U.S. Securities and Exchange Commission.

On April 5, April 26 and on May 12, 2016, we announced additional results from the underground infill program at the Brucejack Project’s Valley of the Kings. Results continue to demonstrate high-grade gold mineralization, including hole VU-722 which intersected 37,117 grams of gold per tonne uncut over 0.50 meters.

Operations

Brucejack Project

The Brucejack Project is located approximately 950 km northwest of Vancouver, British Columbia and 65 km north-northwest of Stewart, British Columbia and is comprised of 4 mining leases and 6 mineral claims totaling 3,304 hectares in area. The Brucejack Project forms part of our contiguous claims package that comprises over 122,095 hectares.

Construction Progress

The foundation for the 330-person camp at Brucejack is complete and the installation of prefabricated modules for the camp is underway. The camp is expected to be operational early in the third quarter of this year.

Excavation to level the site for the mill facility has been completed, and concrete works are well underway. The structural steel installation for the mill building is scheduled to begin in June, with full enclosure of the mill building expected in the third quarter. Installation of internal structural steel and mechanical equipment will commence prior to full enclosure.

Surface excavation for the Valley of the Kings portal pad advanced during the quarter. The portal will serve as the primary access point to convey the gold ore from the underground crusher to the mill.

Underground development remains on schedule and crews are advancing at a rate of over 20 meters a day. Current underground activity at the Valley of the Kings includes excavation of the 1260-meter level ramp, development of the 1320-meter level, installation of ladderways and platforms in the fresh air raise and the excavation of headings for infrastructure.

The transmission line towers have begun arriving at site from the fabricator and installation will be ongoing throughout the second and third quarters, with connection to the BC Hydro power grid expected in the fourth quarter.

Project Engineering and Procurement

Detailed project engineering is ongoing. All long lead-time items have been ordered, including the ball and SAG mills which are scheduled to arrive on site in the third quarter.

Project Permitting

During 2015, the Company received all major federal and provincial regulatory permits required to begin development work towards commercial production at the Brucejack Project. An Environmental Assessment Certificate for the Brucejack Project was issued by the British Columbia Minister of the Environment and Minister of Energy and Mines on March 27, 2015. On July 30, 2015, we received a positive Environmental Assessment Decision Statement from the Federal Minister of the Environment. On September 1, 2015, we announced that we had received a Mines Act Permit and Environmental Management Act Permit from the British Columbia Minister of Energy and Mines and Ministry of Environment approving our mine plan and reclamation program allowing commercial production at the Brucejack Project.

Project Financing

On September 21, 2015, we completed a US$540 million construction financing with Orion Mine Finance Group and Blackstone Tactical Opportunities. The financing was comprised of a credit facility for US$350 million, a US$150 million prepayment under a callable gold and silver stream agreement and a private placement of our common shares for US$40 million (see “Liquidity and Capital Resources” below).

During the first quarter, on March 1, 2016, we closed a marketed offering of 28,384,000 common shares at a price of US$4.58 per common share for gross proceeds of US$130 million. Subsequent to the close of the marketed offering, certain holders exercised their participation rights to maintain their proportionate ownership interest in the Company. This resulted in additional gross proceeds of US$16.2 million. The net proceeds will be used (i) to fund development of the Brucejack Project, (ii) for working capital during start-up and (iii) for general corporate purposes.

With the US$540 million construction financing, available cash on hand and the completion of the equity offering of US$146.2 million, the US$696.8 million estimated development cost of the Brucejack Project is fully funded.

Revised Brucejack Project Capital Costs and Economics

On February 17, 2016, we announced an updated cost estimate and project update for the Brucejack Project.

Based on the achievement of the 60% engineering milestone, a capital cost estimate was carried out in late 2015 (the “Updated Estimate”) to update the June 2014 Feasibility Study cost estimate (the “Feasibility Study Estimate”) for the Brucejack Project. The estimated total project capital cost to complete design, construction, installation and commissioning, including contingencies and working capital, is US$696.8 million. Working capital for the three-month period of post-plant commissioning and initial gold production covers the cost of operations, but does not take into account any revenue generated during this period. The working capital estimate also covers the costs for prepayments related to electrical power and permitting, including US$9 million in government fees and bonds.

Updated Capital Costs

Underground development is projected to cost US$17.7 million less than estimated in the Feasibility Study Estimate. Underground mining equipment of US$23.4 million has been deferred to sustaining capital due to the use of the third party mining contractor’s equipment.

The mill building design-build contract is US$9.5 million less than estimated in the Feasibility Study Estimate. In addition to construction savings, the lower assumed Canadian dollar exchange rate resulted in a favorable foreign exchange difference of approximately US$145 million.

Owner’s costs, excluding working capital, increased by US$46.7 million, primarily as a result of additional environmental monitoring costs of US$18.6 million, additional winter construction costs of US$14.5 million due to receipt of permits in September and additional camp support costs of US$10.8 million to cover an increase in overall man-hours during construction. The engineering, procurement and construction management contractor increased its costs by US$18.4 million.

A summary of capital costs from the Updated Estimate in comparison with the Feasibility Study Estimate is shown below.

Table 1: Capital Costs Summary Comparison

	Updated Estimate (US$ million) (1)	Feasibility Study Estimate (US$ million) (2) (3)
Mine underground	101.4	151.7
Mine site(4)	165.3	183.6
Offsite Infrastructure	81.0	85.9
Total Direct Costs	347.7	421.2
Indirect Costs	97.5	106.7
Owner's Costs	160.3	150.0
Contingency(5)	35.3	69.0
Total Capital Cost	640.8	746.9
Working Capital	56.0	---(6)
Total Construction Cost	696.8	746.9

(1)	US$0.75:C$1
(2)	US$0.92:C$1
(3)	Certain costs were re-classified to conform to updated estimate categories/presentation.
(4)	Includes mine site, mine site process, mine site utilities, mine site facilities, tailings facilities, mine site temporary facilities and surface mobile equipment.
(5)	Contingency has been reduced to US$35.3 million based on 60% level of engineering and significant commitments now in place.
(6)	Working capital was included in the financial model, but not in capital cost estimate.

As part of the capital cost estimate update, a third party review and evaluation of the plans, budget and schedule for the Brucejack Project was completed by Martyn Creaney. Mr. Creaney has been actively involved in the development of projects in Australia, Asia and the Americas including 25 years with Placer Dome, where from 2000 to 2006 he served as Vice President of Design & Construction, overseeing all design and construction activities. For the past ten years he has provided advisory services to consulting clients, and is OceanaGold’s Senior Project Advisor for the development of the Haile Gold Mine in South Carolina.

Updated Economic Evaluation

An updated summary of Brucejack economic results by metal price is shown below.

Table 2: Summary of Brucejack Economic Results by Metal Price – February 2016 Update (7,8)

	Low Case	Base Case	High Case
Gold Price (US$/ounce)	$800	$1,100	$1,400
Silver Price (US$/ounce)	$10.00	$14.00	$18.00
Net Cash Flow (US$)	$2.21 billion (pre-tax) $1.53 billion (post-tax)	$4.31 billion (pre-tax) $2.88 billion (post-tax)	$6.42 billion (pre-tax) $4.23 billion (post-tax)
Net Present Value(9) (5.0% discount) (US$)	$1.09 billion (pre-tax) $0.72 billion (post-tax)	$2.36 billion (pre-tax) $1.55 billion (post-tax)	$3.63 billion (pre-tax) $2.36 billion (post-tax)
Internal Rate of Return	20.2% (pre-tax) 16.8% (post-tax)	33.0% (pre-tax) 27.4% (post-tax)	43.8%(pre-tax) 36.3% (post-tax)
Payback(from start of production period)	4.9 years (pre-tax) 5.0 years (post-tax)	3.4 years (pre-tax) 3.5 years (post-tax)	2.7 years (pre-tax) 2.8 years (post-tax)
Exchange Rate (US$:C$)	0.75	0.75	0.75

(7)		Includes impact from financing announced September 15, 2015.
(8)		Financing impact assumes repayment of debt facility at maturity, exercise of maximum buyout options for offtake and stream facilities at December 31, 2018.
(9)		NPV is discounted to December 31, 2015.

The National Instrument 43-101 compliant Feasibility Study for the Brucejack Project titled Feasibility Study and Technical Report Update on the Brucejack Project, Stewart BC, dated June 19, 2014 was filed on SEDAR on June 30, 2014 (see news release dated June 19, 2014).

2015/2016 Underground Infill Drill Program

The Valley of the Kings underground infill drill program, which had commenced in 2015, continued through the first quarter. The program was designed to target stope areas in years 1 through 3 of the current mine plan (1320-meter level to 1200-meter level) and was subsequently expanded to include extensions of Domain 20 which are adjacent to areas planned to be mined in the early years of the 2014 Feasibility Mine Plan.

The primary purpose of the drilling was grade control, with the additional benefit of infill drilling inferred and non-stop indicated resources in the same area. Results from the program confirmed the style and grade distribution of the gold mineralization in the area being tested, and included the intersection of high grade and visible gold.

The infill drill program has now been completed. The program drilled an area of roughly 200 vertical meters over a strike length of 250 meters at 7.5 to 10-meter centers.

An updated resource estimate for the Valley of the Kings is underway and expected to be completed in the third quarter of this year. On completion of the resource estimate, the mine plan for the Valley of the Kings will be updated.

Snowfield Project

The Snowfield Project borders the Brucejack Project to the north and is comprised of one mineral claim with an area of 1,267.4 hectares. Since we acquired the Snowfield Project in 2010, we have continued to carry out environmental studies in conjunction with the Brucejack Project. Our previous efforts focused on completing an updated mineral resource estimate for the project, examining alternatives for advancing the project and negotiating cooperation agreements with Seabridge Gold Inc. (“Seabridge”).

Joint Snowfield/ KSM Engineering Studies

We have entered into a confidentiality and cooperation agreement with Seabridge that, amongst other things, provided for the completion of an engineering study examining the economics of combining our Snowfield Project and Seabridge’s KSM Project as a single operation. The internal engineering study was finalized during the first quarter of 2012 and indicated that developing the KSM and Snowfield deposits together could produce better economics than developing KSM as a stand-alone project, although no property acquisition costs or allocation of initial KSM capital were considered.

We have also entered into a mutual access agreement with Seabridge that (a) gives Seabridge access to our Snowfield Project and us access to Seabridge’s KSM Project for the stripping of overburden and (b) provides us with road access to the Brucejack and Snowfield Projects over Seabridge’s KSM Project lands.

Snowfield represents a longer term gold opportunity for our shareholders.

Additional Claims

Our contiguous claims, including the mining leases comprising the Brucejack Project total over 122,096 hectares, providing further exploration potential to supplement the value we are creating at Brucejack. A claim boundary map is available on our website.

Results of Operations

Our operations and business are not driven by seasonal trends, but rather the achievement of project milestones such as the achievement of various technical, environmental, socio-economic and legal objectives, including obtaining the necessary permits, completion of final feasibility studies, preparation of engineering designs, as well as receipt of financings to fund these objectives.

Selected Financial Information

Basis of Presentation

The following financial data has been extracted from the Company’s unaudited condensed consolidated interim financial statements, which have been prepared in accordance with IFRS, as issued by the IASB, applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. Our significant accounting policies are outlined in Note 3 to our audited consolidated financial statements for the year ended December 31, 2015.

Quarterly information

Selected consolidated financial information is presented as follows (in $000’s):

	2016			2015		2015			2015			2015			2014			2014			2014
		Q1			Q4		Q3			Q2			Q1			Q4			Q3			Q2
Total revenue	$	-		$	-	$	-		$	-		$	-		$	-		$	-		$	-

Earnings (loss) per share -
basic and diluted	$	(0.10	)	$	0.06	$	(0.02	)	$	(0.02	)	$	(0.03	)	$	(0.02	)	$	(0.04	)	$	(0.03	)

Income (loss) and
comprehensive
income (loss)	$	(14,918	)	$	8,757	$	(3,335	)	$	(2,426	)	$	(3,530	)	$	(2,094	)	$	(4,668	)	$	(3,306	)

Total assets	$	1,663,570		$	1,479,745	$	1,433,292		$	931,111		$	915,153		$	816,816		$	811,896		$	749,142

Long-term liabilities	$	478,147		$	464,100	$	461,298		$	24,336		$	23,252		$	24,308		$	23,379		$	20,303

Cash dividends	$	-		$	-	$	-		$	-		$	-		$	-		$	-		$	-

Cash and cash equivalents	$	479,994		$	387,925	$	453,233		$	68,871		$	103,412		$	34,495		$	63,981		$	19,739

Mineral properties, plant
and equipment	$	1,118,368		$	1,021,415	$	919,522		$	841,691		$	793,349		$	768,072		$	736,526		$	717,247

Quarter ended March 31, 2016 compared to the quarter ended March 31, 2015

Net loss and comprehensive loss for the three months ended March 31, 2016 was $14,918 compared to $3,530 for the comparable period ended March 31, 2015. The increase in the loss was mainly attributed to the change in fair value of the elements of the construction financing including the offtake obligation and stream obligation which resulted in a loss of $23,894. This was offset by an increased foreign exchange gain and deferred income tax recovery which largely resulted from the elements of the construction financing.

Loss on financial instruments at fair value

The September 2015 construction financing includes prepayment and term extension options, the offtake obligation and the stream obligation which are recorded on our statement of financial position at fair value. In the quarter, the changes in fair value of the offtake obligation and stream obligation were a function of increases in the gold price, increase in market expectations of future gold price, gold price volatility and a decrease in interest rate which resulted in losses of $7,381 and $20,853 respectively. The prepayment and extension options in the senior secured term credit facility decreased in value due to a decrease in interest rate and the passage of time resulting in a loss of $1,945.

As the stream is in substance a debt instrument, the effective interest on the debt host is capitalized as a borrowing cost during the development of the Brucejack Project. We capitalized $6,285 of interest on the stream obligation to mineral properties, plant and equipment. The capitalized interest was reclassified from the loss on financial instruments at fair value recorded in the statement of loss.

Foreign exchange gain

The foreign exchange gain of $6,280 compared to a foreign exchange gain of $603 for the comparable period was the result of the subsequent translation of the US denominated senior secured term credit facility into CAD resulting in a gain of $11,466 offset by the translation of US denominated cash and cash equivalents to CAD resulting in a loss of $4,982. In the comparable period, we had not executed the construction financing.

Share-based compensation expense

During the quarter ended March 31, 2016, stock option expense decreased to $900 as compared to $2,312 during the comparable period. This was due mainly to the decreased number of options granted in the period and by the timing of stock option grants. We hire individuals with the required skills to advance our business and stock options may be granted to employees and consultants as part of their overall compensation. Depending on the nature of the awarded recipient’s role, we expense or capitalize to mineral properties, plant and equipment the fair value of these stock option issuances over the vesting period.

During the quarter ended March 31, 2016, the 2014 Restricted Share Unit Plan (the “2014 RSU Plan”) resulted in $83 being recorded to share-based compensation expense compared to $76 for the quarter ended March 31, 2015.

During the quarter ended March 31, 2016, the 2015 Restricted Share Unit Plan (the “2015 RSU Plan”) resulted in $223 being recorded to share-based compensation expense compared to nil for the comparable period.

Other expenses

Investor relation costs for the quarter ended March 31, 2016 were $470 as compared to $272 incurred for the quarter ended March 31, 2015. Investor relations cost increases were mainly due to marketing and communication activities conducted within the investment community and community relations with First Nations.

Office related costs increased to $403 for the quarter ended March 31, 2016 compared to $302 in the comparable period. The Company moved its head office location in mid-2015 which resulted in an increase in monthly rent costs.

Professional fees were $157 for the quarter ended March 31, 2016 compared to $158 for the comparable period. We are currently engaged in two class action lawsuits filed against us in the Ontario Superior Court of Justice and one filed against us in the United States District Court for the Southern District of New York. For details on the class action lawsuits, please see the “Commitments, Contingencies and Off-Balance Sheet Arrangements” section below. We reached our deductible limit with our insurers in 2015; future legal expenses associated with the class action lawsuits will be provided for in accordance with our insurance policy.

We earned interest income on our cash and cash equivalents balance for the quarter ended March 31, 2016 of $271 compared to $274 for the quarter ended March 31, 2015 which was directly attributable to cash balances held by the Company. Interest income earned on proceeds from the construction financing were capitalized to mineral properties, plant and equipment.

During the quarter ended March 31, 2016, we recorded a deferred income tax recovery of $5,994 compared to a deferred income tax recovery of $164 for the comparable period. The difference is related to the unrealized loss on financial instruments at fair value including the senior secured term credit facility, offtake obligation and stream obligation and the realization of 2016 non-capital losses.

Liquidity and Capital Resources

Our cash and cash equivalents as at March 31, 2016 totaled $479,994 increasing $92,069 from $387,925 at December 31, 2015. The increase in cash is largely attributable to the marketed offering closed on March 1, 2016 and the private placement closed on March 31, 2016 offset by continued costs incurred associated with the construction of the Brucejack mine.

Our working capital as at March 31, 2016 was $455,844 as compared to $360,327 as at December 31, 2015. Working capital items other than cash and cash equivalents consisted of receivables and other of $17,154 and accounts payable and accrued liabilities of $41,304. Receivables and other is comprised primarily of $8,634 of Goods and Services Tax refunds, and $6,406 accrued for BC Mineral Exploration Tax Credits receivable from the Province of BC.

On March 1, 2016, we closed a marketed offering of 28,384,000 common shares at a price of US$4.58 per common share for gross proceeds of US$130 million. Subsequent to the close of the marketed offering, third parties exercised their participation rights to maintain proportionate ownership interest in the Company. This resulted in additional gross proceeds of US$16.2 million.

In 2015, we completed the US$540 million construction financing with Orion and Blackstone. The financing was comprised of a credit facility for US$350 million, a US$150 million prepayment under a callable gold and silver stream agreement and a private placement of our common shares for US$40 million. As at March 31, 2016, there remains US$200 million undrawn on the credit facility.

During the quarter ended March 31, 2016, the exercise of share options awards provided us with additional liquidity.

Cash used in investing activities for the quarter ended March 31, 2016 was $86,074 (2015 - $24,765). For the quarter ended March 31, 2016, the expenditure increase is due to the continuation of project construction and engineering and mine development. In the comparable period, costs were incurred mainly in respect of exploration and evaluation activities at the Projects.

We are a development stage company and as such, we do not generate revenues from operations, except for periodic proceeds from our exploration program gold sales. We rely on equity and/or debt funding for our continuing financial liquidity. Our access to financing is always uncertain. There can be no assurance of continued access to significant equity and/or debt funding.

Short form base shelf prospectus financings – Use of proceeds

On March 1, 2016, we closed a marketed offering of 28,384,000 common shares at a price of US$4.58 per common share for gross proceeds of US$130 million. The actual use of proceeds, as at March 31, 2016 in comparison to the proposed use of proceeds included in the Company’s prospectus supplement dated February 23, 2016 (the “2016 Supplement”) to the Company’s short form base shelf prospectus dated July 16, 2014 is outlined below:

	Proposed use of proceeds (2)		Actual use of proceeds		Remaining to be spent / difference(2,3)
Principal purpose	(US$)		(US$)		(US$)
Development of Brucejack Project	$	44,000	$	-	$	44,000
Working capital during start-up		56,000		-		56,000
General corporate purposes (1)		12,900		-		22,200
Total	$	112,900	$	-	$	122,200

Funds included in general corporate purposes may be allocated to corporate expenses, business development, potential future acquisitions, and to other purposes.

The Company estimated the net proceeds from the offering to be US$112,940, before the over-allotment option, at the time of the 2016 Supplement. The over-allotment option was exercised in full and actual gross proceeds were US$129,999. Share issuance costs were US$7,840 for actual net proceeds of US$122,159.

As at March 31, 2016, the marketed offering of common shares has not been expended.

The differences noted in the table above are not expected to have a material impact on the Company’s ability to achieve its business objectives and milestones as set out in the 2016 Supplement.

Commitments, Contingencies and Off-Balance Sheet Arrangements

Class Action Lawsuits

Following the announcement on October 9, 2013 of the resignation of Strathcona Mineral Services Ltd. (“Strathcona”), the consultant responsible for overseeing and reporting on the 10,000-tonne bulk sample, and the announcement of Strathcona’s reasons for resigning on October 22, 2013, the price of our shares on the TSX and the NYSE had a significant drop in value.

Canadian Class Actions

We are aware of two proposed class actions filed against us and certain of our officers and directors in the Ontario Superior Court of Justice: the first on October 29, 2013 by David Wong (the “Wong Action”) and the second on November 1, 2013 by Roksana Tahzibi (the “Tahzibi Action”) (collectively, the “Ontario Actions”). The plaintiffs seek certification of a class action on behalf of a class of persons, wherever they reside, who acquired our securities. In the Wong Action, the class period is between November 22, 2012 and October 22, 2013. In the Tahzibi Action, the class period is between July 23, 2013 and October 22, 2013.

The plaintiffs allege that certain of our continuous disclosure documents filed in Canada contained material misrepresentations or omissions regarding our Brucejack Project, including statements with respect to probable mineral reserves and future gold production at Brucejack, and failed to communicate alleged information from Strathcona. The plaintiffs allege these misrepresentations and omissions are actionable as negligent misrepresentations or misrepresentations under various provincial Securities Acts. The plaintiffs seek general damages of $60 million in the Wong Action and $250 million in the Tahzibi Action as well as pre- and post-judgment interest and costs.

There have been no further steps in the Ontario Actions. The Company believes that the allegations made against it in the Ontario Actions are meritless and will vigorously defend them, although no assurance can be given with respect to the ultimate outcome of the Ontario Actions. The Company has not accrued any amounts for these class actions.

United States of America Class Actions

Between October 25, 2013 and November 18, 2013, five putative class action complaints were filed in the United States against us and certain of our officers and directors, alleging that we violated the United States securities laws by misrepresenting or failing to disclose material information concerning the Brucejack Project. All five actions were filed in the United States District Court for the Southern District of New York.

In January 2014, the Court ordered that these actions be consolidated into a single action, styled In re Pretium Resources Inc. Securities Litigation, Case No. 13-CV-7552. The Court has appointed as lead plaintiffs in the consolidated action three individuals who are suing on behalf of a putative class of shareholders who purchased our shares between June 11, 2013 and October 21, 2013.

In March 2014, the plaintiffs filed a consolidated amended class action complaint, which we moved to dismiss in May 2014. In July 2014, the plaintiffs filed a second consolidated amended class action complaint (“Second Amended Complaint”). We moved to dismiss the Second Amended Complaint on September 5, 2014. The plaintiffs filed their Opposition to our Motion to Dismiss on October 20, 2014 and we filed our reply brief on November 19, 2014. The Court has not yet issued a decision on the motion.

We believe the allegations made against us in these actions are meritless and will vigorously defend the matter, although no assurance can be given with respect to the ultimate outcome of such proceedings. The Company has not accrued any amounts for these class actions.

In general, litigation claims can be expensive and time consuming to bring or defend and could result in settlements or damages that could significantly affect our financial position. We intend to contest any such litigation claims to the extent of any available defenses. However, it is not possible to predict the final outcome of any current litigation or additional litigation to which we may become party to in the future, and the impact of any such litigation on our business, results of operations and financial condition, could be material.

Contractual Obligations

The following table provides our gross contractual obligations as of March 31, 2016 (in $000’s):

	Less than 1 year		1 – 3 years		3 – 5 years		More than 5 years		Total
Operating activities:
Decommissioning and restoration provision	$	11	$	81	$	-	$	7,256	$	7,348
Office lease		693		1,369		-		-		2,062
Financing activities:(1)(2)
Repayment of credit facility (US$192,029)		-		249,081		-		-		249,081
	$	704	$	250,531	$	-	$	7,256	$	258,491

Pursuant to the stream arrangement, we are obligated to deliver, subject to prepayment options, 8% of up to 7,067,000 ounces of refined gold and 8% of up to 26,297,000 ounces of refined silver commencing on January 1, 2020 and a payment of US$20,000.

Under the Offtake agreement, we are obligated to sell 100% of refined gold (in excess of any delivered ounces pursuant to the stream obligation) up to 7,067,000 ounces. The final purchase price to be paid by the purchaser will be, at the purchase’s option, a market referenced gold price in US dollars per ounce during a defined pricing period before and after the date of each sale.

Related Party Transactions

We have entered into employment agreements with each of our Chairman and CEO (our “CEO”), our President (our “President”), our Chief Financial Officer (our “CFO”), and our Chief Exploration Officer and Vice President (our “CExO”).

Under the employment agreements, the CEO currently receives a base salary of $550 per year, benefits, an annual performance bonus of 0.25% of the annual increase in the market capitalization of the Company, provided the increase in market capitalization is 10% or more, and the Board of Directors may award a discretionary amount. The President receives a base salary of $450 per year, the CFO receives a base salary of $375 per year and the CExO receives a base salary of $350 per year. Each of the President, CFO and CExO are entitled to extended benefits and are eligible for an annual bonus determined at the discretion of our Board. The CEO, President, CFO and CExO are also entitled, on termination without cause, to twenty-four months’ salary and twice the average annual performance bonus earned in the three years immediately preceding termination.

On February 17, 2016, we announced the departure of our Vice President and Chief Operating Officer who left the Company.

Critical Accounting Estimates and Judgments

Our significant accounting policies are presented in Note 3 to the consolidated financial statements for the year ended December 31, 2015. The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The consolidated financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which an estimate is revised and future periods if the revision affects both current and future periods.

Significant judgments about the future and other sources of estimation uncertainty at the financial position reporting date, that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made include, but are not limited to, the following:

1) Impairment of exploration and evaluation assets

2) Impairment of mineral properties, plant and equipment

3) Fair value of derivatives and other financial liabilities

Financial Instruments and Other Instruments

Financial assets

We have the following financial assets: cash and cash equivalents, receivables, embedded derivatives associated with the senior secured term credit facility and restricted cash.

Cash and cash equivalents and restricted cash are classified as loans and receivables and are recorded at amortized cost. Interest income is recognized by applying the effective interest rate.

Receivables are classified as loans and receivables and accordingly are recorded initially at fair value and subsequently measured at amortized cost using the effective interest rate method, less any impairment losses.

Derivative instruments, including embedded derivatives, are recorded at fair value through profit or loss and, accordingly, are recorded on the statement of financial position at fair value. Fair values for derivative instruments are determined using valuation techniques, with assumptions based on market conditions existing at the statement of financial position date or settlement date of the derivative.

Financial liabilities

We have the following financial liabilities: accounts payable and accrued liabilities and debt instruments including the senior secured term credit facility, offtake obligation and stream obligation.

Accounts payable and accrued liabilities and debt are classified as other financial liabilities and are recognized initially at fair value, net of any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are held at amortized cost using the effective interest method.

Derivative instruments, including embedded derivatives, such as the offtake obligation and stream obligation are recorded at fair value through profit or loss and, accordingly, are recorded on the statement of financial position at fair value. Fair values for derivative instruments are determined using valuation techniques, with assumptions based on market conditions existing at the statement of financial position date or settlement date of the derivative.

Financial Risk Management

We are exposed to a variety of financial risks: market risk (including currency risk, interest rate risk and commodity price risk), credit risk and liquidity risk from its use of financial instruments.

Our Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

Market Risk

Currency risk

We are subject to currency risk on financial instruments which are denominated in currencies that are not the same as the functional currency of the entity that holds them. We are exposed to currency risk through cash and cash equivalents, accounts payable and accrued liabilities and long-term debt which are denominated in US dollars. The Company has not hedged its exposure to currency fluctuations at this time.

Interest rate risk

We are subject to interest rate risk with respect to our investments in cash and cash equivalents and restricted cash. Our current policy is to invest cash at floating rates of interest and cash reserves are to be maintained in cash and cash equivalents in order to maintain liquidity, while achieving a satisfactory return for shareholders. Fluctuations in interest rates when cash and cash equivalents mature impact interest income earned.

We are also subject to interest rate risk with respect to the fair value of long-term debt, in particular, the fair value of the embedded derivatives under the senior secured term credit facility, the offtake obligation and the stream obligation which are accounted for at fair value through profit or loss.

Commodity price risk

We are subject to commodity price risk from fluctuations in the market prices for gold and silver. Commodity price risks are affected by many factors that are outside the Company’s control including global or regional consumption patterns, the supply of and demand for metals, speculative activities, the availability and costs of metal substitutes, inflation and political and economic conditions.

The Company has not hedged the price of any commodity at this time.

The financial instruments impacted by commodity prices are the offtake obligation (a derivative liability) and the stream obligation.

Credit risk

Credit risk is our risk of potential loss if the counterparty to a financial instrument fails to meet its contractual obligations. Our credit risk is primarily attributable to our liquid financial assets including cash and cash equivalents and restricted cash. We limit our exposure to credit risk on financial assets by investing our cash and cash equivalents with financial institutions of high credit quality.

The carrying value of our cash and cash equivalents and restricted cash represent our maximum exposure to credit risk.

Liquidity risk

Liquidity risk is the risk that we will not be able to meet our financial obligations as they fall due. We try to ensure that there is sufficient capital in order to meet short term business requirements, after taking into account cash flows from operations and our holdings of cash and cash equivalents. Our cash and cash equivalents are currently invested in business and savings accounts with financial institutions of high credit quality which are available on demand by us for our programs. To the extent we do not believe there is sufficient liquidity to meet obligations, we will consider securing additional equity or debt funding.

Capital Management

Our objectives in the managing of the liquidity and capital are to safeguard our ability to continue as a going concern and provide financial capacity to meet our strategic objectives. Our capital structure consists of debt instruments and equity attributable to common shareholders, comprised of issued share capital, contributed surplus, accumulated comprehensive loss and accumulated deficit.

We manage our capital structure and make adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, we may attempt to issue new shares, issue new debt, and acquire or dispose of assets to facilitate the management of our capital requirements. We prepare annual expenditure budgets that are updated as necessary depending upon various factors, including successful capital deployment and general industry conditions. The annual and updated budgets are approved by the Board of Directors. The Company has sufficient funds to meet its current operating, exploration and development obligations.

Outstanding Share Data

At May 12, 2016, we had the following common shares and share purchase options outstanding.

	Number of securities		Exercise price ($)	Weighted average remaining life (years)
Common shares		177,749,660
Share purchase options		8,525,450	$5.85 - $17.46		2.68
Fully diluted		186,275,110

Risks and Uncertainties

Natural resources exploration and development involves a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties include, without limitation, the risks discussed elsewhere in this MD&A and those identified in our Annual Information Form dated March 28, 2016 and filed on SEDAR, which are incorporated by reference in this MD&A.

Internal Control over Financial Reporting and Disclosure Controls and Procedures

Internal Control over Financial Reporting

Management assessed the effectiveness of our internal control over financial reporting (“ICFR”) as of December 31, 2015. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (COSO 2013).

Management is responsible for establishing and maintaining adequate internal controls over financial reporting. Any system of internal control over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. There has been no change in our internal control over financial reporting during the quarter ended March 31, 2016 that has materially affected, or is reasonably likely to affect our internal control over financial reporting.

Disclosure Controls and Procedures

Management assessed the effectiveness of our disclosure controls and procedures as of March 31, 2016. Based upon the results of that evaluation, management concluded that our disclosure controls and procedures were effective to provide reasonable assurance that the information disclosed by us in the reports that we file were appropriately recorded, processed, summarized and reported to allow timely decisions regarding required disclosure.

Statement Regarding Forward-Looking Information

In connection with the forward-looking statements contained in this MD&A, we have made certain assumptions about our business, including about our planned exploration and development activities; the accuracy of our mineral resource estimates; capital and operating cost estimates; production and processing estimates; the results, costs and timing of future exploration and drilling; timelines and similar statements relating to the economic viability of the Brucejack Project; timing and receipt of approvals, consents and permits under applicable legislation; and the adequacy of our financial resources. We have also assumed that no significant events occur outside of our normal course of business. Although we believe that the assumptions inherent in the forward-looking statements are reasonable as of the date of this MD&A, forward-looking statements are not guarantees of future performance and, accordingly, undue reliance should not be put on such statements due to the inherent uncertainty therein.

This MD&A contains ‘‘forward-looking information’’ and ‘‘forward looking statements’’ within the meaning of applicable Canadian and United States securities legislation.

Forward-looking information may include, but is not limited to, risks related to information with respect to our planned exploration and development activities, the adequacy of our financial resources, the estimation of mineral resources and reserves, realization of mineral resource and reserve estimates, timing of development of the Brucejack Project, costs and timing of future exploration, results of future exploration and drilling, production and processing estimates, capital and operating cost estimates, timelines and similar statements relating to the economic viability of the Brucejack Project, timing and receipt of approvals, consents and permits under applicable legislation, our executive compensation approach and practice, and adequacy of financial resources. Wherever possible, words such as ‘‘plans’’, ‘‘expects’’, ‘‘projects’’, ‘‘assumes’’, ‘‘budget’’, ‘‘strategy’’, ‘‘scheduled’’, ‘‘estimates’’, ‘‘forecasts’’, ‘‘anticipates’’, ‘‘believes’’, ‘‘intends’’ and similar expressions or statements that certain actions, events or results ‘‘may’’, ‘‘could’’, ‘‘would’’, ‘‘might’’ or ‘‘will’’ be taken, occur or be achieved, or the negative forms of any of these terms and similar expressions, have been used to identify forward-looking statements and information.

Statements concerning mineral resource estimates may also be deemed to constitute forward-looking information to the extent that they involve estimates of the mineralization that will be encountered if the property is developed. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance are not statements of historical fact and may be forward-looking information. Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking information, including, without limitation, risks related to:

uncertainty as to the outcome of legal proceedings including certain class action proceedings in the U.S. and Canada;

our ability to repay indebtedness;

the effect of indebtedness on cash flow and business operations;

our ability to satisfy commitments under stream and offtake agreements and the effect of restrictive covenants in such agreements;

our ability to raise enough capital to fully fund the capital costs required to complete construction at the Brucejack Project;

assumptions regarding expected operating costs and expenditures, production schedules, economic returns and other projections, including the 2016 cost update and the project economics update (refer to the “Revised Brucejack Project Capital Costs and Economics” section of this MD&A);

our production estimates, including the accuracy thereof;

the fact that we have no mineral properties in production and no history of production or revenue;

the exploration, development and operation of a mine or mine property, including the potential for undisclosed liabilities on our mineral projects;

our ability to obtain adequate financing for our planned exploration and development activities and to complete further exploration programs;

our ability to achieve commercial production at the Brucejack Project in the timeline we anticipate;

the operation and economic viability of the development of the Brucejack Project;

dependency on the Brucejack Project for our future operating revenue;

the accuracy of our resource and reserve estimates (including, with respect to size, grade and recoverability) and the geological, operational and price assumptions on which they are based;

our mineral resource estimates, including accuracy thereof and our ability to upgrade such mineral resource estimates and establish mineral reserve estimates;

uncertainties relating to the interpretation of drill results and the geology, grade and continuity of our mineral deposits;

commodity price fluctuations, including gold price volatility;

our history of negative operating cash flow, incurred losses and accumulated deficit;

failure of counterparties to perform their contractual obligations;

market events and general economic conditions;

the inherent risk in the mining industry;

the commercial viability of our current and any acquired mineral rights;

availability of suitable infrastructure or damage to existing infrastructure;

governmental regulations, including environmental regulations;

delay in obtaining or failure to obtain required permits, or non-compliance with permits that are obtained;

increased costs and restrictions on operations due to compliance with environmental laws and regulations;

compliance with emerging climate change regulation;

uncertainties relating to additional claims and legal proceedings;

adequate internal control over financial reporting;

increased costs of complying with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”);

potential opposition from non-governmental organizations;

uncertainty regarding unsettled First Nations rights and title in British Columbia;

uncertainties related to title to our mineral properties and surface rights;

land reclamation requirements;

our ability to identify and successfully integrate any material properties we acquire;

currency fluctuations;

competition in the mining industry for properties, qualified personnel and management;

our ability to attract and retain qualified management;

some of our directors’ and officers’ involvement with other natural resource companies;

potential inability to attract development partners or our ability to identify attractive acquisitions;

potential liabilities associated with our acquisition of material properties;

our ability to comply with foreign corrupt practices regulations and anti-bribery laws;

changes to relevant legislation, accounting practices or increasing insurance costs;

our anti-takeover provisions could discourage potentially beneficial third party takeover offers;

significant growth could place a strain on our management systems;

future sales or issuance of our debt or equity securities;

the trading price of our common shares is subject to volatility due to market conditions;

share ownership by our significant shareholders;

certain actions under U.S. federal securities laws may be unenforceable;

we do not intend to pay dividends in the near future; and

our being treated as a passive foreign investment company for U.S. federal income tax purposes.

This list is not exhaustive of the factors that may affect any of our forward-looking statements. Although we have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Forward-looking statements involve statements about the future and is inherently uncertain, and our actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in our Annual Information Form dated March 28, 2016 which is filed on SEDAR and in the United States on Form 40-F through EDGAR at the SEC’s website at www.sec.gov.

Our forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made. In connection with the forward-looking statements contained in this MD&A, we have made certain assumptions about our business, including about our planned exploration, development and production activities; the accuracy of our mineral resource estimates; capital and operating cost estimates; production and processing estimates; the results, costs and timing of future exploration and drilling; timelines and similar statements relating to the economic viability of the Brucejack Project; timing and receipt of approvals, consents and permits under applicable legislation; and the adequacy of our financial resources. We have also assumed that no significant events will occur outside of our normal course of business. Although we believe that the assumptions inherent in the forward-looking statements are reasonable as of the date hereof, forward-looking statements are not guarantees of future performance and accordingly, undue reliance should not be put on such statements due to the inherent uncertainty therein. We do not assume any obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law. For the reasons set forth above, prospective investors should not place undue reliance on forward-looking statements.

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