Pretium Resources : Condensed Consolidated Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020

PRETIUM RESOURCES INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

PRETIUM RESOURCES INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(Unaudited - Expressed in thousands of United States dollars)

				March 31,			December 31,			January 1,
		Note		2021			2020			2020
							Restated - note 2			Restated - note 2
ASSETS
Current assets
Cash and cash equivalents				$	208,934			$	174,753			$	23,174
Receivables and other		3			10,685				12,883				17,431
Inventories		4			22,844				19,437				21,458
					242,463				207,073				62,063
Non-current assets
Mineral properties, plant and equipment		5			943,151				949,934				1,225,180
Restricted cash					56				55				54
Deferred income tax asset					17,460				19,505				48,840
Total assets				$	1,203,130			$	1,176,567			$	1,336,137
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities		6		$	67,086			$	64,828			$	62,688
Current portion of long-term debt		7			161,342				66,667				66,667
					228,428				131,495				129,355
Non-current liabilities
Other liabilities		6			6,585				4,954				8,932
Long-term debt		7			86,368				195,958				397,253
Decommissioning and restoration provision		8			23,164				25,956				21,239
Deferred income tax liability					62,235				51,713				-
					406,780				410,076				556,779
EQUITY
Share capital		12			1,177,502				1,172,545				1,152,567
Other reserves		12			(63,156	)			(61,463	)			(55,322	)
Deficit					(317,996	)			(344,591	)			(317,887	)
					796,350				766,491				779,358
Total liabilities and equity				$	1,203,130			$	1,176,567			$	1,336,137
Contingencies		15

On behalf of the Board of Directors:
'David S. Smith'		'Richard T. O'Brien'
David S. Smith (Chair of the Audit Committee)		Richard T. O'Brien (Chair of the Board)

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

INTERIM FINANCIAL STATEMENTS FIRST QUARTER 2021

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PRETIUM RESOURCES INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS

(Unaudited - Expressed in thousands of United States dollars, except for share data)

				For the three months ended
				March 31,			March 31,
		Note		2021			2020
							Restated - note 2
Revenue		9		$	142,428			$	126,560
Cost of sales		10			93,796				84,141
Earnings from mine operations					48,632				42,419
Corporate administrative costs					4,445				5,576
Exploration and evaluation costs					271				1,094
Operating earnings					43,916				35,749
Interest and finance expense		11			(3,953	)			(7,722	)
Foreign exchange gain					298				1,098
Interest and finance income					345				90
Earnings before taxes					40,606				29,215
Current income tax expense					(1,444	)			(1,327	)
Deferred income tax expense					(12,567	)			(19,118	)
Net earnings and comprehensive earnings for the period				$	26,595			$	8,770
Earnings per common share
Basic				$	0.14			$	0.05
Diluted		12		$	0.14			$	0.05
Weighted average number of common shares outstanding
Basic					187,730,921				185,402,860
Diluted		12			187,888,643				186,093,416

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

INTERIM FINANCIAL STATEMENTS FIRST QUARTER 2021

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PRETIUM RESOURCES INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(Unaudited - Expressed in thousands of United States dollars)

				For the three months ended
				March 31,			March 31,
		Note		2021			2020
							Restated - note 2
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings for the period				$	26,595			$	8,770
Items not affecting cash:
Current income tax expense					1,444				1,327
Deferred income tax expense					12,567				19,118
Depreciation and depletion					23,846				19,413
Interest and finance expense, net					3,505				7,533
Share-based compensation expense					753				(1,060	)
Unrealized foreign exchange loss					(1,008	)			(765	)
Changes in non-cash working capital items:
Receivables and other					2,198				5,491
Inventories					(2,881	)			(2,006	)
Accounts payable and accrued liabilities					(4,312	)			(5,243	)
Income taxes paid					(1,444	)			(1,294	)
Net cash generated by operating activities					61,263				51,284
CASH FLOWS USED IN FINANCING ACTIVITIES
Payment of lease obligations					(1,979	)			(1,614	)
Proceeds from exercise of share options					3,274				1,009
Repayment of loan facility		7			(16,667	)			(16,667	)
Interest paid					(2,268	)			(5,669	)
Net cash used in financing activities					(17,640	)			(22,941	)
CASH FLOWS USED IN INVESTING ACTIVITIES
Expenditures on mineral properties, plant and equipment					(13,460	)			(9,571	)
Proceeds from government incentive programs					2,821				-
Interest received					345				90
Net cash used in investing activities					(10,294	)			(9,481	)
Increase in cash and cash equivalents for the period					33,329				18,862
Cash and cash equivalents, beginning of the period					174,753				23,174
Effect of foreign exchange rate changes on cash and cash equivalents					852				(1,470	)
Cash and cash equivalents, end of the period				$	208,934			$	40,566

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

INTERIM FINANCIAL STATEMENTS FIRST QUARTER 2021

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PRETIUM RESOURCES INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

(Unaudited - Expressed in thousands of United States dollars, except for share data)

		Note		Number of common shares			Share capital			Other reserves			Deficit			Total
Balance - January 1, 2020 Restated - note 2					185,372,800			$	1,152,567			$	(55,322	)		$	(317,887	)		$	779,358
Shares issued upon exercise of options		12			150,000				1,575				(566	)			-				1,009
Value assigned to options vested		12			-				-				319				-				319
Earnings for the period					-				-				-				8,770				8,770
Balance - March 31, 2020 Restated - note 2					185,522,800			$	1,154,142			$	(55,569	)		$	(309,117	)		$	789,456
Balance - December 31, 2020 Restated - note 2					187,432,572			$	1,172,545			$	(61,463	)		$	(344,591	)		$	766,491
Shares issued upon exercise of options		12			400,512				5,013				(1,739	)			-				3,274
Value assigned to options vested		12			-				-				46				-				46
Withholding taxes related to settlement of restricted share units ('RSUs')					-				(56	)			-				-				(56	)
Earnings for the period					-				-				-				26,595				26,595
Balance - March 31, 2021					187,833,084			$	1,177,502			$	(63,156	)		$	(317,996	)		$	796,350

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

INTERIM FINANCIAL STATEMENTS FIRST QUARTER 2021

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1.	NATURE OF OPERATIONS

Pretium Resources Inc. (the 'Company') was incorporated under the laws of the Province of British Columbia ('BC'), 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 was formed for the acquisition, exploration, development and operation of precious metal resource properties in the Americas. The Company's primary asset is its wholly-owned underground Brucejack Mine located in northwestern BC.

Management actively managed the effects of an outbreak of the novel coronavirus ('COVID-19') at its Brucejack Mine during the first quarter 2021. The outbreak was declared over by BC Northern Health on March 21, 2021. Any future impacts of COVID-19 remain uncertain, and COVID-19 could have a significant impact on production and liquidity if the Company or its suppliers, contractors or customers are not able to maintain operations. As at March 31, 2021, the Company has available liquidity of $369,264 (2020 - $335,104) which includes cash and cash equivalents of $208,934 and the undrawn portion of the revolving facility of $160,330.

2. SIGNIFICANT ACCOUNTING POLICIES

(a)	Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting using accounting policies consistent with International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards Board.

The Company's significant accounting policies applied in these condensed consolidated interim financial statements are the same as those applied in note 3 of the Company's annual consolidated financial statements as at and for the years ended December 31, 2020 and 2019, except for the voluntary change in its accounting policy for exploration and evaluation ('E&E') expenditures, effective January 1, 2021. Refer to note 2b for further details on the change in accounting policy. These condensed consolidated interim financial statements should be read in conjunction with the Company's most recent annual consolidated financial statements.

These condensed consolidated interim financial statements are presented in United States dollars ('USD'), which is the Company's functional currency. All dollar amounts are expressed in thousands of USD, except for share data, unless otherwise noted as Canadian dollars ('CAD' or 'C').

These condensed consolidated interim financial statements were authorized for issue by the Board of Directors on May 4, 2021.

(b)	Change in accounting policy - E&E expenditures

The Company adopted a voluntary change in its accounting policy for E&E expenditures, effective January 1, 2021 applying the change fully retrospectively. As a result, balances of comparative periods have been restated. Under the new policy, the Company recognizes these expenditures as E&E costs in the statement of earnings in the period incurred until management concludes the technical feasibility and commercial viability of a mineral deposit has been established. Costs that represent the acquisition of rights to explore a mineral deposit continue to be capitalized. Prior to January 1,2021, the policy was to capitalize E&E expenditures as E&E assets.

INTERIM FINANCIAL STATEMENTS FIRST QUARTER 2021

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2.	SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

Management believes this change in accounting policy results in a more relevant and reliable policy as it is better aligned with the IFRS conceptual framework with respect to the definition of an asset and more consistent with its peer group.

This change in accounting policy has resulted in the adoption of the following accounting policies effective January 1, 2021.

Mineral properties

Mineral properties are measured at cost less accumulated depletion and accumulated impairment losses. Mineral properties include the fair value attributable to mineral reserves and resources acquired in a business combination or asset acquisition. Upon the achievement of commercial production, a mineral property is depleted using the unit-of-production method. Unit-of-production depletion rates are determined using gold ounces mined over the estimated proven and probable reserves of the mine.

E&E expenditures

The costs of acquiring exploration stage properties, including transaction costs, in a business combination or asset acquisition are capitalized as an E&E asset at cost.

Exploration expenditures are the costs incurred in the initial search for mineral deposits with economic potential or in the process of obtaining more information about existing mineral deposits. Exploration expenditures typically include costs associated with prospecting, sampling, mapping, diamond drilling and other work involved in searching for Mineral Resources, as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ('NI 43-101').

Evaluation expenditures are the costs incurred to establish the technical feasibility and commercial viability of developing mineral deposits identified through exploration activities, business combination or asset acquisition. Evaluation expenditures include the cost of: (i) further defining the volume and grade of deposits through drilling of core samples and other sampling techniques, trenching and sampling activities in an ore body or other forms or data acquisition; (ii) determining the optimal methods of extraction and metallurgical and treatment processes; (iii) studies related to surveying, transportation and infrastructure requirements; (iv) permitting activities; and (v) economic evaluations to determine whether development of mineralized material is commercially justified including preliminary economic assessments, pre-feasibility and final feasibility studies.

E&E expenditures are expensed until it has been determined that a property is technically feasible and commercially viable, in which case, subsequent evaluation costs incurred to develop a mineral property are capitalized.

Once the technical feasibility and commercial viability of the extraction of mineral reserves or mineral resources from a particular mineral property has been determined, the asset balance is reclassified to mineral properties within mineral properties, plant and equipment.

The establishment of technical feasibility and commercial viability of a mineral property is assessed based on a combination of factors, including:

■	The extent to which Mineral Reserves and Mineral Resources as defined in NI 43-101 have been identified through a feasibility study or similar document;

■	The results of optimization studies and further technical evaluation carried out to mitigate project risks identified in the feasibility study;

■	The status of environmental permits; and

■	The status of mining leases or permits

INTERIM FINANCIAL STATEMENTS FIRST QUARTER 2021

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2.	SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

E&E assets are tested for impairment immediately prior to reclassification to mineral properties.

Government incentive tax credits

The Company incurs expenditures where government incentive tax credits are available to offset specific expenditures incurred. These tax credits are recorded as a receivable when the amount is reliably measurable, and it is considered probable that the tax credit will be recovered. If the Company receives the benefit of a tax credit prior to satisfying requirements under the government program, it will be deferred as a liability and recorded in accounts payable and accrued liabilities.

Impact of the change in accounting policy

The Company reclassified all post acquisition E&E expenditures that were capitalized as E&E assets and reported in mineral properties, plant and equipment prior to the demonstration of technical feasibility and commercial viability as E&E costs. Initial acquisition costs of the Brucejack Mine and the Snowfield Property were unaffected by the change in accounting policy. All capitalized amounts for E&E assets associated with other projects, including regional drilling and exploration work on the Bowser Claims and the Porphyry Potential Deep Hole Drilling Project, were retrospectively expensed.

All BC mineral exploration tax credits associated with exploration costs that were offset against E&E assets, have been reclassified through E&E costs.

As a result of the accounting policy change, the Company recorded the following adjustments to specific account balances, increasing (decreasing) amounts previously recognized in the annual and interim consolidated financial statements.

Consolidated statements of financial position

		As at January 1, 2020
		Previously reported			Policy change adjustment			Restated balance
Inventory		$	21,945			$	(487	)		$	21,458
Mineral properties, plant and equipment			1,500,512				(275,332	)			1,225,180
Deferred income tax asset			10,051				38,789				48,840
Total assets		$	1,573,167			$	(237,030	)		$	1,336,137
Deferred income tax liabilities		$	62,086			$	(62,086	)		$	-
Other reserves			(128,926	)			73,604				(55,322	)
Deficit			(69,339	)			(248,548	)			(317,887	)
Equity			954,302				(174,944	)			779,358
Total liabilities and equity		$	1,573,167			$	(237,030	)		$	1,336,137

INTERIM FINANCIAL STATEMENTS FIRST QUARTER 2021

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2.	SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

		As at December 31, 2020
		Previously reported			Policy change adjustment			Restated balance
Inventory		$	19,757			$	(320	)		$	19,437
Mineral properties, plant and equipment			1,207,629				(257,695	)			949,934
Deferred income tax asset			15,737				3,768				19,505
Total assets		$	1,430,814			$	(254,247	)		$	1,176,567
Deferred income tax liability		$	142,750			$	(91,037	)		$	51,713
Other reserves			(135,067	)			73,604				(61,463	)
Deficit			(107,777	)			(236,814	)			(344,591	)
Equity			929,701				(163,210	)			766,491
Total liabilities and equity		$	1,430,814			$	(254,247	)		$	1,176,567

Consolidated statements of earnings (loss) and comprehensive earnings (loss)

		For the three months ended March 31, 2020
		Previously reported			Policy change adjustment			Restated balance
Cost of sales		$	89,505			$	(5,364	)		$	84,141
Earnings from mine operations			37,055				5,364				42,419
E&E costs			-				1,094				1,094
Operating earnings			31,479				4,270				35,749
Earnings before taxes			24,945				4,270				29,215
Deferred income tax expense			(17,381	)			(1,737	)			(19,118	)
Net earnings and comprehensive earnings for the period		$	6,237			$	2,533			$	8,770
Earnings per common share - basic and diluted		$	0.03			$	0.02			$	0.05

		For the year ended December 31, 2020
		Previously reported			Policy change adjustment			Restated balance
Cost of sales		$	396,304			$	(23,792	)		$	372,512
Earnings from mine operations			221,281				23,792				245,073
E&E costs			-				7,955				7,955
Operating earnings			200,076				15,837				215,913
Loss on sale of E&E asset			(132,149	)			1,968				(130,181	)
Earnings before taxes			43,025				17,805				60,830
Deferred income tax expense			(75,081	)			(6,071	)			(81,152	)
Net loss and comprehensive loss for the year		$	(38,438	)		$	11,734			$	(26,704	)
Loss per common share - basic and diluted		$	(0.21	)		$	0.07			$	(0.14	)

If the Company's accounting policy for E&E expenditures was unchanged, our earnings before taxes for the current period would have been negatively impacted by $5,088 for additional depreciation and depletion and positively impacted by $271 for reduced E&E costs.

INTERIM FINANCIAL STATEMENTS FIRST QUARTER 2021

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2.	SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

Consolidated statements of cash flows

		For the three months ended March 31, 2020
		Previously reported			Policy change adjustment			Restated balance
Net cash generated by operating activities		$	52,538			$	(1,254	)		$	51,284
Net cash used in investing activities		$	(10,735	)		$	1,254			$	(9,481	)

		For the year ended December 31, 2020
		Previously reported			Policy change adjustment			Restated balance
Net cash generated by operating activities		$	317,309			$	(8,382	)		$	308,927
Net cash generated by investing activities		$	51,893			$	8,382			$	60,275

3.	RECEIVABLES AND OTHER

					March 31,			December 31,
					2021			2020
Trade receivables						$	6,794			$	8,377
Prepayments and deposits							1,930				3,045
Tax receivables							1,511				1,133
Other receivables							450				328
						$	10,685			$	12,883

4.	INVENTORIES

					March 31,			December 31,
					2021			2020
								Restated - note 2
Materials and supplies						$	15,614			$	14,689
Finished metal							5,437				3,885
In-circuit							1,793				863
						$	22,844			$	19,437

As at March 31, 2021, depreciation and depletion of $1,501 (2020 - $1,272) and site share-based compensation of $28 (2020 - $32) was included in inventory.

INTERIM FINANCIAL STATEMENTS FIRST QUARTER 2021

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5.	MINERAL PROPERTIES, PLANT AND EQUIPMENT

		Mineral properties			Construction in progress			Plant and equipment			Right of use ('ROU') assets			E&E assets			Total
Year ended December 31, 2020
Cost
Balance - January 1, 2020 Restated - note 2		$	532,214			$	25,378			$	573,247			$	19,300			$	230,181			$	1,380,320
Additions			-				41,952				5,066				677				-				47,695
Transfer from construction in progress to plant and equipment			-				(22,772	)			22,772				-				-				-
Transfer from construction in progress to mineral properties			3,651				(3,651	)			-				-				-				-
Transfer from inventory to plant and equipment			-				-				232				-				-				232
Transfer from construction in progress to ROU assets			-				(39	)			-				39				-				-
Disposals			-				-				(26	)			-				(230,181	)			(230,207	)
Lease modifications			-				-				-				(482	)			-				(482	)
Balance - December 31, 2020 Restated - note 2		$	535,865			$	40,868			$	601,291			$	19,534			$	-			$	1,197,558
Accumulated depreciation and depletion
Balance - January 1, 2020 Restated - note 2			59,330				-				90,393				5,417				-				155,140
Depreciation and depletion			37,854				-				49,268				5,398				-				92,520
Disposals			-				-				(9	)			-				-				(9	)
Lease modification			-				-				-				(27	)			-				(27	)
Balance - December 31, 2020 Restated - note 2		$	97,184			$	-			$	139,652			$	10,788			$	-			$	247,624
Net book value - December 31, 2020 Restated - note 2		$	438,681			$	40,868			$	461,639			$	8,746			$	-			$	949,934

		Mineral properties			Construction in progress			Plant and equipment			ROU assets			E&E assets			Total
Cost
Balance - December 31, 2020 Restated - note 2		$	535,865			$	40,868			$	601,291			$	19,534			$	-			$	1,197,558
Additions			-				15,399				(2,832	)			4,515				-				17,082
Transfer from construction in progress to plant and equipment			-				(16,814	)			16,814				-				-				-
Transfer from construction in progress to ROU assets			-				(20	)			-				20				-				-
Lease modifications			-				-				-				210				-				210
Balance - March 31, 2021		$	535,865			$	39,433			$	615,273			$	24,279			$	-			$	1,214,850
Accumulated depreciation and depletion
Balance - December 31, 2020 Restated - note 2		$	97,184			$	-			$	139,652			$	10,788			$	-			$	247,624
Depreciation and depletion			10,178				-				12,166				1,731				-				24,075
Balance - March 31, 2021		$	107,362			$	-			$	151,818			$	12,519			$	-			$	271,699
Net book value - March 31, 2021		$	428,503			$	39,433			$	463,455			$	11,760			$	-			$	943,151

(a)	Depreciation and depletion

For the three months ended March 31, 2021, $24,075 (2020 - $21,345) of depreciation and depletion was recognized in the statement of earnings.

INTERIM FINANCIAL STATEMENTS FIRST QUARTER 2021

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6.	ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

		March 31,			December 31,
		2021			2020
Trade payables		$	38,231			$	42,975
Accrued liabilities			13,227				9,902
Lease obligations			11,800				8,806
Deferred share unit liability			3,306				2,980
Government incentive program liability			2,845				-
RSU liability			2,322				2,766
Royalty payable			1,628				1,675
Accrued interest on loan facility			222				18
Accrued interest on convertible notes			90				660
		$	73,671			$	69,782
Non-current portion of lease obligations			(5,637	)			(3,822	)
Non-current portion of RSU liability			(948	)			(1,132	)
Current portion of accounts payable and accrued liabilities		$	67,086			$	64,828

(a)	Lease obligations

As at March 31, 2021, the Company's undiscounted lease obligations consisted of the following:

		March 31,			December 31,
		2021			2020
Gross lease obligation - minimum lease payments
1 year		$	6,549			$	5,320
2-3 years			5,833				3,755
4-5 years			9				292
		$	12,391			$	9,367
Future interest expense on lease obligations			(591	)			(561	)
		$	11,800			$	8,806

For the three months ended March 31, 2021, interest expense on lease obligations was $132 (2020 - $188). Total cash payments on lease obligations and short-term leases were $1,979 (2020 - $1,614) and $498 (2020 - $160), respectively.

7.	LONG-TERM DEBT

As at March 31, 2021, the Company's long-term debt consisted of the following:

		Term facility			Revolving facility			Convertible notes			Total long-term debt
Balance - December 31, 2020		$	131,945			$	37,378			$	93,302			$	262,625
Accretion of convertible notes			-				-				1,373				1,373
Repayment of loan facility			(16,667	)			-				-				(16,667	)
Amortization of loan facility transaction costs			303				76				-				379
Balance - March 31, 2021		$	115,581			$	37,454			$	94,675			$	247,710
Current portion of long-term debt			(66,667	)			-				(94,675	)			(161,342	)
Non-current portion of long-term debt		$	48,914			$	37,454			$	-			$	86,368

INTERIM FINANCIAL STATEMENTS FIRST QUARTER 2021

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7.	LONG-TERM DEBT (Cont'd)

(a)	Senior secured loan facility

On December 18, 2018, the Company closed a $480,000 senior secured loan facility (the 'loan facility') with a syndicate of financial institutions arranged by The Bank of Nova Scotia, ING Capital LLC and SG Americas Securities, LLC. The loan facility consisted of a $250,000 senior secured amortizing non-revolving credit facility (the 'term facility') and a $230,000 senior secured revolving credit facility (the 'revolving facility'). In 2019, the Company reduced the size of the revolving facility to $200,000 as required by the terms of the loan facility. The loan facility is secured by substantially all of the assets of the Company and its subsidiaries.

The term of the loan facility is four years, maturing on December 18, 2022. The undrawn portion of the loan facility at March 31, 2021 was $160,330 with $1,670 (C$2,100) used for a letter of credit supporting a reclamation deposit requirement.

Each borrowing under the term and revolving facilities is available by way of USD London Inter-Bank Offered Rate ('LIBOR') loans or USD base rate loans. The revolving facility is also available in Canadian prime loans, bankers' acceptances, bankers' acceptance equivalent loans, and letters of credit.

Borrowings comprising USD LIBOR loans bear interest at LIBOR plus an applicable margin of 2.5% to 3.5% based on the Company's net leverage ratio. Borrowings comprising USD base rate loans bear interest at the administrative agent's base rate plus an applicable margin of 1.5% to 2.5% based on the Company's net leverage ratio. For the three months ended March 31, 2021, $1,348 (2020 - $4,542) of interest expense was included in interest and finance expense in the statement of earnings.

The term facility is required to be repaid in equal installments of principal until maturity. The Company paid one quarterly installments on the term facility in the amount of $16,667 (2020 - $16,667), reducing the outstanding balance on the term facility to $116,667 as at March 31, 2021.

The outstanding principal balance on the revolving facility is $38,000 as at March 31, 2021. Any amounts due under the revolving facility are required to be repaid in full on the maturity date. Any unused portion of the revolving facility is subject to an annual standby fee. Subsequent to March 31, 2021, the Company made a voluntary repayment on the revolving facility in the amount of $38,000.

Transaction costs associated with the loan facility were recorded as a loan discount and will be amortized over the term of the loan. For the three months ended March 31, 2021, $379 (2020 - $856) of amortization of the loan facility transaction costs were expensed to interest and finance expense in the statement of earnings.

The effective interest rate for the loan facility as at March 31, 2021 is 3.6%. The Company is subject to financial covenants under the terms of the loan facility including a minimum interest coverage ratio, a maximum leverage ratio, a minimum tangible net worth covenant and a minimum liquidity covenant. As at March 31, 2021, the Company was compliant with all financial and non-financial covenants.

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8.	DECOMMISSIONING AND RESTORATION PROVISION

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

		For the three months ended			For the year ended
		March 31,			December 31,
		2021			2020
Opening balance		$	25,956			$	21,239
Accretion of decommissioning and restoration provision			63				262
Change in amount and timing of cash flows			(367	)			2,812
Change in discount rate			(2,488	)			1,643
Ending balance		$	23,164			$	25,956

For the three months ended March 31, 2021, the provision decreased due to an increase in the discount rate. The Company used an inflation rate of 1.5% (2020 - 1.6%) and a real discount rate of 1.6% (2020 - 0.9%) in calculating the estimated obligation. The liability for retirement and remediation on an undiscounted basis before inflation is $24,687 (C$31,044) (2020 - $24,618 (C$31,344)). Most of the expected expenditures to settle the decommissioning and restoration provision are anticipated to commence in 2033 after the end of the current mine life.

9.

REVENUE

Revenue by metal was:

		For the three months ended
		March 31,			March 31,
		2021			2020
Gold revenue		$	145,277			$	125,122
Silver revenue			2,216				1,812
Revenue from contracts with customers		$	147,493			$	126,934
Loss on trade receivables at fair value			(5,065	)			(374	)
		$	142,428			$	126,560

Revenue from contracts with customers by product was:

		For the three months ended
		March 31,			March 31,
		2021			2020
Gold revenue - doré		$	105,370			$	84,375
Gold revenue - concentrate			39,907				40,747
Silver revenue - concentrate			1,336				1,110
Silver revenue - doré			880				702
		$	147,493			$	126,934

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10.	COST OF SALES

Total cost of sales were:

		For the three months ended
		March 31,			March 31,
		2021			2020
						Restated - note 2
Production costs		$	67,396			$	61,688
Depreciation and depletion			23,856				21,147
Royalties and selling costs			4,878				4,980
Site share-based compensation			148				(339	)
Change in inventories			(2,482	)			(3,335	)
		$	93,796			$	84,141

Production costs by nature of expense were:

		For the three months ended
		March 31,			March 31,
		2021			2020
Consultants and contractors		$	25,687			$	23,063
Salaries and benefits			20,853				19,384
Supplies and consumables			8,971				9,004
Travel and camp accommodation			4,402				2,340
Energy			4,342				4,568
Camp administrative costs			1,377				1,359
Freight			993				1,088
Insurance			517				454
Rentals			254				428
		$	67,396			$	61,688

11.	INTEREST AND FINANCE EXPENSE

		For the three months ended
		March 31,			March 31,
		2021			2020
Interest expense on convertible notes		$	1,928			$	1,948
Interest expense on loan facility			1,727				5,398
Interest expense on leases			132				188
Other interest expense			103				99
Accretion of decommissioning and restoration provision			63				89
		$	3,953			$	7,722

12.	CAPITAL AND RESERVES

(a)	Share capital

At March 31, 2021, 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.

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12.	CAPITAL AND RESERVES (Cont'd)

(b)	Other reserves

As at March 31, 2021, the Company's other reserves consisted of the following:

		Contributed surplus			Equity component of convertible notes			Accumulated other comprehensive loss			Total other reserves
Balance - December 31, 2020 Restated - note 2		$	41,327			$	17,603			$	(120,393	)		$	(61,463	)
Shares issued upon exercise of options			(1,739	)			-				-				(1,739	)
Value assigned to options vested			46				-				-				46
Balance - March 31, 2021		$	39,634			$	17,603			$	(120,393	)		$	(63,156	)

(c)	Share options

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

		2021			2020
		Number of share options			Weighted average exercise price (in CAD)			Number of share options			Weighted average exercise price (in CAD)
Outstanding, January 1,			936,102			$	11.53				3,468,310			$	10.01
Exercised			(400,512	)			10.39				(150,000	)			9.52
Forfeited			-				-				(34,795	)			10.99
Expired			-				-				(73,568	)			10.92
Outstanding, March 31,			535,590			$	12.38				3,209,947			$	10.00

For options exercised during the period, the related weighted average share price at the time of exercise was C$14.54 (2020 - C$10.53).

The following table summarizes information about share options outstanding and exercisable at March 31, 2021:

		Share options outstanding			Share options exercisable
Exercise prices (in CAD)		Number of share options outstanding			Weighted average years to expiry			Number of share options exercisable			Weighted average exercise price (in CAD)
$8.00 - $9.99			27,500				0.65				27,500				9.73
$10.00 - $11.99			55,000				0.57				55,000				10.73
$12.00 - $13.99			443,090				1.97				342,440				12.83
$14.00 - $15.99			10,000				0.36				10,000				15.17
			535,590				1.73				434,940			$	12.42

The total share-based compensation expense for the three months ended March 31, 2021 was $46 (2020 - $319), which was expensed in the statement of earnings as share-based compensation.

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12.	CAPITAL AND RESERVES (Cont'd)

(d)

RSU's

The following table summarizes the changes in RSU's for the three months ended March 31:

		2021			2020
		Number of RSU's			Weighted average fair value (in CAD)			Number of RSU's			Weighted average fair value (in CAD)
Outstanding, January 1,			412,365			$	14.55				404,523			$	14.44
Granted			401,623				12.27				-				-
Settled			(88,983	)			12.59				(98,963	)			14.44
Forfeited			(22,499	)			13.45				(10,466	)			12.14
Outstanding, March 31,			702,506			$	13.11				295,094			$	8.84

At March 31, 2021, a liability of $1,986 (2020 - $2,535) was outstanding and included in accounts payable and accrued liabilities. For the three months ended March 31, 2021, $312 (2020 - recovery of $527) was recognized in the statement of earnings as share-based compensation.

(e)	Performance share units ('PSU's')

The following table summarizes the changes in PSU's for the three months ended March 31:

		2021			2020
		Number of PSU's			Weighted average fair value (in CAD)			Number of PSU's			Weighted average fair value (in CAD)
Outstanding, January 1,			100,972			$	14.55				166,085			$	14.44
Granted			137,896				12.27				-				-
Forfeited			-				-				(5,624	)			13.12
Outstanding, March 31,			238,868			$	13.11				160,461			$	8.84

At March 31, 2021, a liability of $336 (2020 - $231) was outstanding and included in accounts payable and accrued liabilities. For the three months ended March 31, 2021, $101 (2020 - recovery of $272) was recognized in the statement of earnings as share-based compensation.

(f)

DSU's

The following table summarizes the changes in DSU's for the three months ended March 31:

		2021			2020
		Number of DSU's			Weighted average fair value (in CAD)			Number of DSU's			Weighted average fair value (in CAD)
Outstanding, January 1,			260,009			$	14.59				156,825			$	14.45
Granted			58,810				12.48				-				-
Outstanding, March 31,			318,819			$	13.04				156,825			$	8.03

At March 31, 2021, a liability of $3,306 (2020 - $2,980) was outstanding and included in accounts payable and accrued liabilities. For the three months ended March 31, 2021, $290 (2020 - recovery of $748) was expensed in the statement of earnings as share-based compensation.

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12.	CAPITAL AND RESERVES (Cont'd)

(g)	Earnings per share

The calculation of diluted earnings per share was based on earnings attributable to ordinary shareholders and the weighted-average number of shares outstanding after adjustments for the effect of potential dilutive shares. For the three months ended March 31, 2021 and 2020, potential share issuances arising from the exercise of share options and the settlement of RSU's and PSU's in common shares were included in the calculation of diluted weighted average shares outstanding as well as their impact on earnings attributable to shareholders of the Company. Potentially dilutive shares associated with the convertible notes and share options were not included in the diluted earnings per share calculation as their effect was anti-dilutive.

The following table summarizes the calculation of basic and diluted earnings per share:

		For the three months ended
		March 31,			March 31,
		2021			2020
						Restated - note 2
Net earnings for the period		$	26,595			$	8,770
Basic weighted average number of common shares outstanding			187,730,921				185,402,860
Effective impact of dilutive securities:
Share options			80,432				593,520
RSU's			77,290				97,036
Diluted weighted average number of common shares outstanding			187,888,643				186,093,416
Earnings per share
Basic		$	0.14			$	0.05
Diluted		$	0.14			$	0.05

13.	RELATED PARTIES

Transactions with key management

Key management includes the Company's directors and officers including its President and Chief Executive Officer ('CEO'), its Vice President and Chief Operating Officer and its Vice President and Chief Financial Officer.

For the three months ended March 31, 2020, it also included the Company's former officers, including its CEO, Executive Vice President and Chief Financial Officer ('EVP, CFO'), Vice President, Operations ('VP Ops'), its Executive Vice President, Corporate Affairs and Vice President and Chief Exploration Officer.

Directors and key management compensation:

		For the three months ended
		March 31,			March 31,
		2021			2020
Salaries and benefits		$	1,008			$	1,583
Share-based compensation			520				(1,078	)
Termination costs			-				2,234
		$	1,528			$	2,739

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13.	RELATED PARTIES (Cont'd)

For the three months ended March 31, 2020, termination costs include $2,234 (C$3,170) associated with the departure of the former CEO. These costs were recorded to corporate administrative costs in the statement of earnings.

14.	FINANCIAL RISK MANAGEMENT

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 carrying values of cash and cash equivalents, non-trade receivables and other, restricted cash and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these financial instruments.

The carrying value of the loan facility approximates fair value due to the floating rate basis of the interest charges and insignificant changes in credit risk. The carrying value of the debt portion of convertible note approximates its fair value.

The following tables present the Company's financial assets and liabilities by level within the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

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14.	FINANCIAL RISK MANAGEMENT (Cont'd)

As at March 31, 2021		Carrying value			Fair value
		FVTPL			Amortized cost			Level 1			Level 2			Level 3
Financial assets
Cash and cash equivalents		$	-			$	208,934			$	-			$	-			$	-
Trade receivables			6,794				-				-				6,794				-
Non-trade receivables and other			-				3,891				-				-				-
Restricted cash			-				56				-				-				-
		$	6,794			$	212,881			$	-			$	6,794			$	-
Financial liabilities
Accounts payable and accrued liabilities		$	-			$	56,021			$	-			$	-			$	-
Lease obligations			-				11,800				-				-				-
RSU liability			2,322				-				-				2,322				-
DSU liability			3,306				-				-				3,306				-
Loan facility			-				153,035				-				-				-
Debt portion of convertible note			-				94,675				-				-				-
		$	5,628			$	315,531			$	-			$	5,628			$	-

As at December 31, 2020		Carrying value			Fair value
		FVTPL			Amortized cost			Level 1			Level 2			Level 3
Financial assets
Cash and cash equivalents		$	-			$	174,753			$	-			$	-			$	-
Trade receivables			8,377				-				-				8,377				-
Non-trade receivables and other			-				4,506				-				-				-
Restricted cash			-				55				-				-				-
		$	8,377			$	179,314			$	-			$	8,377			$	-
Financial liabilities
Accounts payable and accrued liabilities		$	-			$	55,212			$	-			$	-			$	-
Lease obligations			-				8,806				-				-				-
RSU liability			2,766				-				-				2,766				-
DSU liability			2,980				-				-				2,980				-
Loan facility			-				169,323				-				-				-
Debt portion of convertible note			-				93,302				-				-				-
		$	5,746			$	326,643			$	-			$	5,746			$	-

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15.	CONTINGENCIES

The Company is involved in various claims, litigation and other matters in the ordinary course and conduct of business. Some of these pending matters may take a number of years to resolve. While it is not possible to determine the ultimate outcome of such actions at this time, and inherent uncertainties exist in predicting such outcomes, it is the Company's belief that the ultimate resolution of such actions is not reasonably likely to have a material adverse effect on its consolidated financial position or results of operations.

(a)	Canadian class action

On October 29, 2013, David Wong, a shareholder of the Company, filed a proposed class action claim (the 'Wong Action') against the Company, Robert Quartermain (a director, and the President and CEO of the Company at such time) and Snowden Mining Industry Consultants Ltd. ('Snowden'). The Wong Action was filed in the Ontario Superior Court of Justice.

The Wong Action alleges that the price of the Company's shares on the TSX and NYSE suffered a significant drop in value 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 Wong Action claims C$60,000 in general damages on behalf of a class of persons who acquired the Company's securities between July 23, 2013 and October 21, 2013. Snowden is no longer a defendant in the Wong Action.

The plaintiff in the Wong Action brought a motion for leave to commence an action under the secondary market provisions in Part XXIII.1 of the Securities Act (Ontario). The motion was heard on May 29 and 30, 2017. The Court allowed the plaintiff's motion on July 20, 2017. The Company was denied leave to appeal this decision. The Company and Robert Quartermain consented to, and on January 23, 2019 the Court granted, an order certifying the Wong Action as a class proceeding pursuant to the Class Proceedings Act (Ontario). In 2020, the plaintiff brought a motion to amend the statement of claim to plead additional misrepresentations. On July 22, 2020, the Court refused to permit these new allegations. The plaintiff appealed this refusal to the Court of Appeal for Ontario, and subsequently abandoned this appeal on February 18, 2021.

On December 7 and 8, 2020, the Court heard the Company's and Robert Quartermain's motion for summary judgment to dismiss the Wong Action and the plaintiff's cross-motion for summary judgment to allow the Wong Action. On February 2, 2021 the Court allowed the defendants' motion for summary judgment, dismissed the plaintiff's cross-motion for summary judgment, and dismissed the Wong Action. The Court ruled that the Company did not make a misrepresentation in its continuous disclosure and that, in any event, the defendants were relieved of liability on the basis that they conducted a reasonable investigation pursuant to section 138.4(6) of the Securities Act (Ontario). On March 1, 2021, the plaintiff filed a Notice of Appeal with the Court of Appeal for Ontario, appealing the Court's decision.

The Company believes that the allegations made against it in the Wong Action are meritless and it will continue to vigorously defend them, although no assurance can be given with respect to the ultimate outcome. The Company has not accrued any amounts for this action.

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15.	CONTINGENCIES (Cont'd)

(b)	Construction claims

On April 24, 2017, Bear Creek Contracting Ltd. ('Bear Creek') filed a Notice of Civil Claim against the Company (the 'Bear Creek Action') alleging that the Company owes Bear Creek C$14,563 in general damages in connection with work undertaken at the Brucejack Mine transmission line. The Bear Creek Action was filed in the Supreme Court of BC.

The Company filed a Response to Civil Claim on July 31, 2017, opposing all of the claims and allegations made. Notices of Civil Claim have also been filed by Blue Max Drilling Inc. (April 24, 2017), More Core Diamond Drilling Services Ltd. (March 27, 2017), and Lakelse Air Ltd. (February 23, 2018) who were subcontractors working under Bear Creek. Responses to Civil Claim have been filed in those actions and the claims are understood to be subsumed in the amount claimed by Bear Creek. In October 2020, the Supreme Court of BC partially allowed an application from Bear Creek to add parties to the Bear Creek Action and amend its pleadings, including with respect to the Company. In February 2021, Bear Creek filed a notice of intention to make a proposal under the Bankruptcy and Insolvency Act. The Company is participating in those proceedings as a creditor of Bear Creek.

The Company is of the view that any liability it may have is within the limits of the lien holdback it continues to hold in trust with respect to these claims. The Company believes that all other allegations made against it in the Bear Creek Action, and the other 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 any of the actions.

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