Feasibility Study and Technical Report - Pretivm

…costs not directly attributable to the completion of an activity, which are typicallyallocated or spread across all activities on a predetermined basis. In construction,(field) indirects are costs which do not become a final part of the installation, but whichare required for the orderly completion of the installation and may include, but are notlimited to, field administration, direct supervision, capital tools, startup costs,contractor's fees, insurance, taxes, etc.The total indirect cost for the Project is estimated to be $125.0 million.OWNER’S COSTSOwner’s costs are costs assumed by the Owner to support and execute the Project.The Project execution strategy involves an EPCM organization, supervising one or moregeneral contractors. The allowance for Owner’s costs was provided by Tetra Tech andconfirmed by Pretivm. Some items included in the Owner’s costs are home officestaffing, home office travel, home office general expenses, field staffing, field travel,general field expenses, and Owner’s contingency.The total Owner’s cost for the Project is estimated to be $22.3 million.CONTINGENCYWhen estimating costs for a project, there is always uncertainty as to the precise contentof all items in the estimate, how work will be performed, what work conditions will be likewhen the project is executed, etc. These uncertainties are risks to a project. These risksare often referred to as “known-unknowns”; the estimator is aware of them and, basedon experience, can estimate the probable costs. The estimated costs of the knownunknownsare referred to by cost estimators as “cost contingency.”Tetra Tech estimated a contingency for each activity or discipline based on the level ofengineering effort as well as experience on past projects.The total allowance contingency for the Project is $64.4 million.The overall contingency for the Project is 14.3% of the direct costs.21.1.8 METHODOLOGYThis estimate was developed based largely on first principles. The work to complete theestimate can be broken down into three categories:• design basis• planning basis• cost basis.Pretium Resources Inc. 21-4 1291990200-REP-R0012-02.1Feasibility Study and Technical Report on the BrucejackProject, Stewart, BC