The price of the yellow metal crossing $1770 per troy ounce coupled with an optimistic view of re-opening the Relief Canyon Mine with minimum delays and capital investment saw the shares of Pershing Gold (OTC: PGLC) take an upward trajectory to hit a high of $0.44 last week. However, as gold corrected itself on selling pressure, Pershing Gold, scheduled to start production in 2014, lost sheen and fell back to around the three-month average of $0.32 per share in the opening hours of trading. As the precious metal recovered from the low of $1735 per troy ounce to $1755, Pershing Gold traced back its losses at the end of the day and ended on a positive note.
The Colorado-based Sagebrush Gold Ltd. changed its name to Pershing Cold through a certificate of amendment made on February 27, 2012. The company focuses on acquiring, exploring and developing gold deposits in Pershing County and elsewhere in Nevada. Through its subsidiary, GAC, Pershing Gold owns the abandoned Relief Canyon properties, which consist of 981 unpatented mining claims covering approximately 24,000 acres. With heap leaching facilities at Relief Canyon, Pershing Gold hopes to emulate the success of Allied Nevada Gold (NYSE: ANV) at the Hycroft Mine in Winnemucca. By 2014, Pershing hopes to see the Relief Canyon Mine up and running again.
On July 12, 2012, the company announced results from the first 12 holes of its Phase II 2012 drilling program. On July 24, 2012, Pershing Gold announced that it has completed the annual work commitment to Newmont USA (NYSE: NEM). The work completed at a cost of approximately $1.4 million involved drilling 23 core holes on private lands, as well as performing geophysical surveys on private lands and mining claims leased from Newmont.
On September 17, 2012, Pershing Gold updated its achievements in its first year of owning the Relief Canyon Mine property. The company claimed that the fully permitted and built heap leach processing facility will enable reopening the mine and resuming gold production with minimal delays and capital investment. Apart from an equipment test planned for before the end of 2012, the company also has initiated the necessary design and permitting work to add a gold refinery to the existing facilities. In its update, Pershing Gold cautioned investors that recommissioning and reopening of the Relief Canyon Mine is dependent on external funding, the completion of certain permitting activities and expansion of the resource.
Stephen Alfers, Chairman, CEO and President of Pershing Gold, commented, “We are in a position to be Nevada’s next new gold producer. We have a target date to be producing gold in 2014 from newly mined ore, gold-bearing materials on the dumps, and possibly toll ores from other properties. We believe we are ideally situated to emulate the production history at Hycroft where Allied Nevada Gold refurbished an existing heap leach facility and reactivated the Hycroft Mine in 2008 in record time and with limited additional capital investment.”
The company hogged the limelight when a Seeking Alpha report published on June 15, 2012, urged investors to consider buying shares of Pershing Gold after necessary research. It might be noted that billionaire investor Dr. Phillip Frost has invested $9.8 million in Pershing Gold through the Frost Gamma Investment Trust. The company also has a strategic relationship with Coeur D’Alene, which has purchased 10.9 million shares of Pershing’s stock.
Pershing Gold ended the day at $0.375 per share, up $0.025 or 7.1% on a volume of 1,246,383 shares.