I've been watching Pretium Resources for a while and am looking to buy some more in the near future. I thought I'd share a few thoughts and am open to criticism. As always, do you own due diligence.

What is Pretium?

Pretium Resources owns the Brucejack gold deposit located in Northern BC. Brucejack is among the largest high grade gold deposits on earth.

What makes it attractive?

Brucejack will be capable of a high level of gold production with a low capital cost. This is extremely desirable in the current markets because all of the high capex projects are being plagued by overruns. For example, Pascua Lama will cost $8.5B and Oyu Tolgoi will cost $13.2B. By comparison, Brucejack will cost less than $600M (my estimate).

What is holding the share price back?

One of the problems with the Brucejack deposit is the high grade gold occurs quite randomly. Rather than occuring in predictable veins, the gold occurs randomly in very short lengths but in extremely high grades. A typical gold deposit elsewhere might have an intersection of 14 g/t over 35m. Brucejack has an intersection of 42,000 g/t over 0.5m. This random distribution makes it very difficult to quantify the amount of gold actually in the ground. A lot of shareholders were burned when Pretium released a Resource Estimate that significantly reduced the Inferred resource. In order to validate the Resource Estimate, Pretium has a bulk sample planned for 2013 that will involve 10,000 tonnes of ore. This sample will prove with certainly that the estimates are accurate. The results of the bulk sample are the primary catalyst behind my purchase of Pretium. I'm counting on the Resource Estimate being conservative because it's easier for the QPs to approve conservative numbers and err on the side of caution.

How will I trade this stock?

The share price of Pretium has sold off lately just like all the other miners. The next main catalyst will be the feasibility results in Q2. The results will be incredible but the markets already know this. I figure there are potentially 3 months of a stale share price. The current share price ($11.32) is very attractive but I'm going to save some cash in case it drops down to $10. I'll be holding this stock at least until the bulk sample results. I may hold longer because I'm confident that this management team is capable of getting Brucejack to production.

Summary

I'll be buying Pretium Resources in the next few months with the theory that the bulk sample results will provide some credibility to their resource estimate and move the share price up.