Pershing Gold, the precious mineral developer with an established acreage footprint in Pershing County, at the heart of mining-friendly Nevada, which has the second largest gold reserves on earth (only South Africa has more and it’s far easier to do business in NV), reported securing a huge private placement deal today, totaling $4M in gross proceeds.
The deal has two primary components:
• A purchase by Coeur d’Alene Mines Corp. of 10.937M shares of PGLC at $0.32/share
• And a purchase by existing PGLC shareholder, Dr. Phillip Frost, in conjunction with the Coeur purchase and executed via Frost Gamma Investment Trust (FGIT), of another 1.5625M shares of PGLC common stock under similar material terms and conditions
As a result of the transaction, Coeur and FGIT will both obtain participatory rights in any future financing arrangements (so as to maintain their relevant ownership interests).
Executive Chairman and CEO of PGLC, Stephen Alfers, emphasized the logistical synergy and hailed this really encouraging private placement by major mineral sector player Coeur as a clear sign of the future of Pershing’s Relief Canyon properties. Alfers indicated that the proceeds would be directly applied to development of the site and that particular attention would be paid to the Pershing Packard exploration.
Looking at the localized topology, it is hard to miss the alignment of the noted geophysical anomalies, the Pershing Packard project, and then Coeur’s Nevada Packard Mine further north along the western side of range. The pit for the Relief Canyon Mine is at the base of the range further south and the on-site processing facility, just west of the pit, already has many of the essential elements to support expansion of prospective acreage to the north (like Packard) and south (five heap leach pads, two solution ponds, and an ADR solution processing circuit). With historic production over 110k ounces, excellent mineralization targets to go after, and extant processing capacity already on the mill site claims, PGLC is now well-equipped with the CAPEX muscle to get some serious work done.
Stretching out over 24k acres on a mix of private lands and unpatented mining claims, the entire PGLC acreage footprint encompasses some very interesting geology, much of it analogous to Coeur’s position. Control of the Relief Canyon Mine property and its surrounding lands, in conjunction with the owned claims and untested targets mentioned, as well as additional targets like the southerly Pershing Pass area, offer PGLC a rich menu of development choices.
Shareholders are really pleased by PGLC’s ability to nail down this kind of private placement and investors in general are starting to see the potential of the company’s emphasis on under-explored Nevada mineralization.
Despite near-term price pullbacks in gold as investors settle around no new easing from the federal reserve, we are over the $1550 support level today at just over $1600 an ounce (1-year low of $1486, 5-year low of $641) as the sovereign debt crisis, especially in Europe, simply will not go away. Tack on the obvious move by central banks around the world to increase holdings of gold by multiples of two to three; pulling more tons of supply off the market than ever before, it is a very good environment for PGLC to be developing domestic precious metals.
For more information on the deal announced today, or to learn more about Pershing Gold Corp., please visit the company’s website at: www.PershingGold.com
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