Energy & Mining

Pershing Gold Corp (NASDAQ:PGLC) Eyes Positive Cash Flow



Pershing Gold Corp (NASDAQ:PGLC) has reported positive Preliminary Feasibility results for its Relief Canyon Project in Pershing County Nevada. According to chief executive officer Stephen Alfers, the positive results indicate strong opportunities for growth on the deployment of contract mining as opposed to self-mining.

Feasibility Study Results

The feasibility study indicates that the mine could have up to 634,000 ounces of gold and 1.6 million ounces of silver reserves. Strong Measured and Indicated (M+1) resources indicate potential reserve growth according to the executive. The study also suggests a mining plan to produce up to 90k oz/year over six years. Estimated cash cost per ounce should be $770 and all-in sustaining costs of $802 per oz.

Pershing Gold Corp (NASDAQ:PGLC)’s board of directors is to deliberate on when to begin production at the mine based on detailed economics and engineering needs. Pershing Gold has already secured all the permits needed to start mining.

“We’re considering right now the program for the pre-production work plans that will lead up to and through the construction decision itself and then the start-up. I won’t speak for my board of directors until they’ve had every opportunity to make the decisions on the timing,” said MR. Alfers.

Capital Expenditure

Relief Canyon is Pershing Gold Corp (NASDAQ:PGLC)’s primary asset, sitting on 25,000 acres of landholdings in Pershing County. The size of the landholdings provides the company an opportunity to expand the size of the minefield in pursuit of new mine deposits. The fact that a good amount of infrastructure is already in place from mining operations in 1980’s and 1990’s should allow the company to enjoy operation efficiencies.

Pushing Relief Canyon to produce positive cash flow is the company’s core objective. The company expects the project to generate up to $20M in NPV on every $50 increase in gold prices. There are also plans to pursue satellite opportunities and new discoveries in the 40 square mile land position.

Pershing Gold Corp (NASDAQ:PGLC) is projecting initial capital expenditure of about $23.6 million. A good chunk of the amount is to be used on conveyor systems, a crusher, grade and construction of pads, and waste dump facilities. The company plans to finance initial operations with cash in hand, as it continues to explore other financing alternatives.

Pershing Gold Corp (NASDAQ:PGLC) stock was down by 3.42% in Tuesday’s trading session to end the day at $2.82 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Marc has a Bachelor’s degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant. Currently Marc lives on the Texas coast with his family and can frequently be found fishing with his two boys.

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Marc has a degree in economics and a MSc. in Finance. Marc worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

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