Pershing Gold Corp. (PGLC:NASDAQ; PGLC:TSX) has a couple of irons in the fire, with its flagship Relief Canyon mine progressing closer to production and a new sublease that will expand the Blackjack project, which the company terms as highly prospective.
On April 4 Pershing Gold announced it has entered into "a Mining Sublease with Newmont USA Limited which further consolidates the Antelope Springs mining district in the Pershing Pass area south of the Relief Canyon Mine." Stephen Alfers, chairman, CEO, and president of Pershing Gold stated, "The Blackjack Project is comprised of seven historic mercury and antimony mines. The consolidation of this historic mining district for the first time is the crucial catalyst for the Company's district-wide gold exploration efforts."
With the sublease, Pershing Gold now controls 100% of the prospective ground in its Blackjack project area, according to the company.
Under the terms of the agreement, Pershing Gold has "the exclusive right to prospect, explore for, develop, and mine minerals in all areas [with] an initial term of ten years and may be extended by Pershing Gold until December 3, 2034."
"Blackjack is important to the Company because it presents a very real opportunity to extend the life of the entire project through the discovery of satellite deposits," CEO Alfers noted. "This Sublease is important to Pershing Gold because it unlocks the Blackjack Project. The Sublease is centrally located and, as private land, it strengthens Pershing Gold's control over the entire project."
Heiko Ihle of Rodman & Renshaw, in an April 5 report, noted, "Importantly, the signing of the land agreement with Newmont consolidates the district for the first time. . .we feel the consolidated land package could serve as a crucial component with respect to Pershing's exploration efforts outside of Relief Canyon. In our view, any additional discoveries made at Blackjack could be processed at Relief Canyon's existing facilities ultimately providing an extended mine life."
The analyst also stressed that "the key near term catalyst for Pershing is the release of a Pre-Feasibility Study on Relief Canyon. Importantly, we expect the PFS to provide an update on capital and operating costs, including the decision to employ a contract-mining scenario or self-mining scenario at the site. . .we expect management to make a production decision following the release of the PFS."
Ihle highlighted that with extensive infrastructure already at Relief Canyon, the project "should be quickly advanced following the announcement of a positive production decision and note the project could be in production by late 2017 or early 2018."
On February 28, Pershing announced that it had "successfully completed the environmental permitting process and has secured all of the permits necessary to restart and expand the Relief Canyon Mine."
In a March 16 report Bhakti Pavani, an analyst with Euro Pacific Capital, stated that Pershing Gold "is only a few steps away from re-starting production at the Relief Canyon mine, in our opinion. . .the company has obtained all the necessary permits to restart production at the Relief Canyon mine [and] awaits the results from the Pre-Feasibility Study, following which it plans to make a production decision. . .the Company has estimated an approximate lead time of 6 to 9 months to restart production following the production decision."
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