Breaking #Gold Stock News; Pershing
Gold (NASDAQ: $PGLC; TSX: $PGLC) Announces Positive Preliminary Feasibility
Study for
Relief Canyon
LAKEWOOD, Colo., June 5, 2017 — ( www.investorideas.com newswire) Pershing Gold Corporation
(NASDAQ:PGLC)
(TSX:PGLC) (FWB:7PG1) ("Pershing
Gold" or the "Company"), the emerging Nevada gold producer, today
announces the completion of a NI 43-101 compliant
resource and Preliminary Feasibility
Study (“PFS”) on its Relief Canyon Mine in Pershing County, Nevada.
Mine Development Associates (“MDA”),
Kappes Cassidy & Associates, of Reno, NV and Jorgensen Engineering and
Technical Services, of Centennial, CO, completed the PFS for the Company’s
Relief Canyon gold mine with an effective date of May 26, 2017. The positive PFS by MDA recommends that Pershing
Gold advance the Relief Canyon Project to a production decision. Highlights
from the PFS include a pre-tax net present value (“NPV”)
of $144.6 million, an internal rate of return (“IRR”) of 89% and Net Cash Flow of $192.7 million. This NPV, IRR and Net Cash Flow
assume pre-tax economics using $1,250 per ounce (“/oz”) of gold (“Au”), $16.75/oz of silver (“Ag”) and a
5% discount rate. Further
highlights from the PFS are listed below in Table 1 (showing updates to the
Preliminary Economic Assessment (“PEA”) the Company announced on June 24,
2016), and PFS
gold price sensitivities are listed below in Table 2.
Read this release
in full at http://www.investorideas.com/CO/PGLC/news/2017/06051FeasibilityStudy.asp
“The PFS is a major milestone for
Pershing Gold. We announced an upgraded mineral resource that includes proven
and probable reserves of approximately 635,000 ounces of gold and 1.6 million
ounces of silver,” stated Stephen D. Alfers, Pershing Gold’s Chairman and CEO.
“The PFS is based on a mine plan and financial model with an annual average
production of over 90,000 ounces of gold per year over a mine life of
approximately six years. The Relief Canyon deposit remains open in three
directions, presenting the opportunity for continued expansion and extension of
this mine,” Alfers explained.
Table 1: Relief Canyon PFS vs. PEA Highlights
|
||
|
PFS
|
PEA
|
Life of mine (“LOM”)
|
5.6 years
|
5.8 years
|
Average LOM production
|
93,900 oz Au/year
|
88,500 oz Au/year
|
Cash Cost
|
$770/oz Au
|
$772/oz Au
|
AISC
|
$802/oz Au
|
$804/oz Au
|
Initial CAPEX
|
$23.6 million
|
$12.2 million
|
Sustaining CAPEX
|
$22.8 million
|
$16.6 million
|
Working Capital
|
$11.0 million
|
$14.9 million
|
Pre-tax NPV, 5%
|
$145 million
|
$159 million
|
Pre-tax IRR
|
89%
|
125%
|
Pre-tax Net Cash Flow
|
$192.7 million
|
$206 million
|
After-tax NPV, 5%
|
$126 million
|
$121 million
|
After-tax IRR
|
85%
|
109%
|
After-tax Net Cash Flow
|
$167.7 million
|
$157.6 million
|
*The PEA
evaluated the economics of two alternative mining scenarios: self-mining by the
Company with its own manpower and equipment, and mining through mine
contractors who supply the manpower and equipment to deliver material to the
Company’s processing facilities. The results shown are based on the contractor
mining estimates.
"The Company will be reviewing
various options to cover future capital needs, including debt, royalty or
stream financing, gold off-take agreements, investment from strategic
investors, or combinations of those approaches," said Alfers.
“Pershing Gold thanks MDA, its
staff, and its associated engineering and metallurgical groups assisting in the
development of this PFS. The quality of the work and effort put into this study
is apparent in the excellent report they have produced,” stated Alfers.
Operating Cost and
CAPEX
The
favorable economics of Relief Canyon are reinforced throughout the PFS. The PFS
indicates the viability of contract-mining
and conveyor stacking to bring
the project into production. Under the PFS, 525,790 oz Au are expected to be
produced with average life of mine (“LOM”) production
of 93,900 oz Au/year over the 5.6 year LOM. The PFS highlights the low cost nature of this project with an
average cash cost of $770/oz Au and
All in Sustaining Cost (“AISC”) of
$802/oz Au. The modest capital expense (“CAPEX”) nature of this project is
reaffirmed with the PFS Initial CAPEX of
$23.6 million. The full PFS will be posted within
the next 45 days on the Company’s website at www.pershinggold.com/relief-canyon/technical-reports.
Table 2: PFS Gold Price Sensitivity Analysis,
Before Tax
|
||
Gold Price / oz Au
|
PFS Plan NPV, 5%
|
PFS IRR
|
$1,450
|
$226 million
|
140%
|
$1,400
|
$206 million
|
127%
|
$1,350
|
$185 million
|
114%
|
$1,300
|
$165 million
|
102%
|
$1,250
|
$145 million
|
89%
|
$1,200
|
$124 million
|
77%
|
$1,150
|
$104 million
|
65%
|
$1,100
|
$84 million
|
53%
|
Mineral Reserve and
Resource Estimate
The PFS also allows for the
categorization of approximately 80% of
the gold ounces and 73% of the tons
within the NI 43-101 measured and indicated resource at Relief Canyon as proven
and probable reserves (Table 3). This conversion percentage from resource
to reserve highlights
the quality and quantity of work in 2016 to upgrade the Relief Canyon deposit. To date more than 1,100 holes and approximately
500,000 feet of drilling have been completed at Relief Canyon. This includes 430 core holes and nearly 290,000
feet of drilling completed by Pershing Gold.
Table 3: 2017 Relief Canyon Oxide Reserve
|
|||||
Classification
|
Cutoff
|
Tons
|
Gold Grade
|
Total Gold
|
|
(opt Au)
|
000's
|
(opt)
|
(gpt)
|
(Ounces)
|
|
Proven
|
0.005
|
13,095,400
|
0.024
|
0.822
|
308,500
|
Probable
|
0.005
|
17,434,300
|
0.019
|
0.651
|
326,500
|
|
|
|
|
|
|
Proven & Probable
|
|
30,529,700
|
0.021
|
0.719
|
634,900
|
This
PFS has calculated Proven and Probable reserves for the deposit based on the
estimated resources that have an effective date of November 1, 2016. A designed
PFS three-phase pit contains the Measured and Indicated material shown in Table
3, which constitute the reserves for the property using a gold price of $1,250
per ounce, a cutoff grade of 0.005 ounces per ton (“opt”) Au, and the detailed
mine economics outlined in the PFS. In addition, a silver reserve grade can be
reported for a portion of the deposit shown in Table 4 below.
Table 4: 2017 Relief Canyon Reserve with
Silver Grade
|
||||
Classification
|
Tons
|
Silver Grade
|
Total Silver
|
|
|
000's
|
(opt)
|
(gpt)
|
(Ounces)
|
Proven
|
4,123,900
|
0.095
|
3.253
|
391,300
|
Probable
|
10,268,600
|
0.121
|
4.144
|
1,241,300
|
|
|
|
|
|
Proven & Probable
|
14,392,500
|
0.113
|
3.87
|
1,632,600
|
The
Mineral Reserves have an effective date of May 26, 2017. The Proven and
Probable reserves are contained in the designed PFS final pit and include only
oxide materials. The Measured and Indicated oxide resources are inclusive of
the estimated PFS reserves.
Table 5: 2016 Relief Canyon Gold Resource
|
|||||
Classification
|
Cutoff
|
Tons
|
Gold Grade
|
Total Gold
|
|
(opt Au)
|
|
(opt)
|
(gpt)
|
(Ounces)
|
|
Measured-Oxide
|
0.005
|
14,232,000
|
0.022
|
0.753
|
312,000
|
Measured-Mixed
|
0.010
|
259,000
|
0.058
|
1.990
|
15,000
|
Measured-Total
|
variable
|
14,491,000
|
0.023
|
0.788
|
327,000
|
|
|
|
|
|
|
Indicated-Oxide
|
0.005
|
26,854,000
|
0.016
|
0.548
|
439,000
|
Indicated-Mixed
|
0.010
|
162,000
|
0.033
|
1.130
|
5,000
|
Indicated-Sulfide
|
0.020
|
369,000
|
0.050
|
1.712
|
18,000
|
Indicated-Total
|
variable
|
27,385,000
|
0.017
|
0.582
|
462,000
|
|
|
|
|
|
|
Meas. + Ind Total
|
variable
|
41,876,000
|
0.019
|
0.651
|
789,000
|
|
|
|
|
|
|
Inferred-Oxide
|
0.005
|
5,238,000
|
0.009
|
0.308
|
45,000
|
Inferred-Mixed
|
0.010
|
4,000
|
0.018
|
0.616
|
100
|
Inferred-Sulfide
|
0.020
|
4,000
|
0.028
|
0.959
|
100
|
Inferred-Total
|
variable
|
5,246,000
|
0.009
|
0.308
|
45,200
|
*
Mineral resources that are not mineral reserves do not have demonstrated
economic viability.
The
mineral resources at Relief Canyon were modeled and estimated by evaluating the
drill data statistically, utilizing the geologic interpretations provided by
Pershing Gold to interpret mineral domains on cross sections spaced at 50-foot
intervals, rectifying the mineral-domain interpretations on long sections
spaced at 10-foot intervals, analyzing the modeled mineralization
geostatistically to establish estimation parameters, and estimating grades into
a three-dimensional block model.
The
Relief Canyon gold mineral resource is listed in Table 5 using a cutoff grade
of 0.005 opt Au for oxide material, 0.01 opt Au for mixed material, and 0.02
opt Au for sulfide material. The oxide and mixed cutoffs were chosen to capture
mineralization potentially available to open-pit extraction and heap-leach
processing, with the higher cutoff for mixed material reflecting the expected
reduction in recovered gold. The sulfide cut-off was chosen to reflect the
potentially higher costs associated with sulfide processing. The effective date
of the mineral resources estimate is November 1, 2016, and these Measured and
Indicated resources are inclusive of the estimated PFS reserves.
Table 6: 2016 Relief Canyon Silver Resource
|
||||
Classification
|
Tons
|
Silver Grade
|
Total Silver
|
|
(opt)
|
(gpt)
|
(Ounces)
|
||
Measured-Oxide
|
10,550,000
|
0.119
|
4.075
|
1,260,000
|
Measured-Mixed
|
259,000
|
0.251
|
8.600
|
65,000
|
Measured-Total
|
10,809,000
|
0.123
|
4.212
|
1,325,000
|
|
|
|
|
|
Indicated-Oxide
|
6,236,000
|
0.094
|
3.219
|
584,000
|
Indicated-Mixed
|
162,000
|
0.206
|
7.055
|
33,000
|
Indicated-Sulfide
|
369,000
|
0.313
|
10.720
|
115,000
|
Indicated-Total
|
6,767,000
|
0.108
|
3.700
|
732,000
|
|
|
|
|
|
Meas. + Ind Total
|
17,576,000
|
0.117
|
4.007
|
2,057,000
|
|
|
|
|
|
Inferred-Oxide
|
781,000
|
0.066
|
2.260
|
52,000
|
Inferred-Mixed
|
4,000
|
0.125
|
4.281
|
1,000
|
Inferred-Sulfide
|
4,000
|
0.164
|
5.616
|
1,000
|
Inferred-Total
|
789,000
|
0.068
|
2.323
|
54,000
|
Metallurgical
Testing
Additional
metallurgical testing incorporated into the PFS resulted in average gold recovery rates of approximately
83% on crushed and agglomerated material, an improvement from the recovery
rate of 80% identified in the PEA. The Relief Canyon ore deposit contains an
oxidized and partially oxidized gold mineral resources and reserves that
metallurgical testing and historical mining experience indicate are amenable to
cyanide heap-leach processing. In 2015 and 2016, Pershing Gold conducted
metallurgical test work on drill core and bulk samples to confirm heap-leach
processing on additional resources and reserves that have been identified
within the existing pit. The metallurgical test work was based on identifying
three distinct zones on cross-section identified as the Main, Lower, and Jasperoid
zones.
Results
from column leach testing demonstrate that the major Relief Canyon ore types
(limestone breccia, clay matrix breccia, and jasperoid) contained in the Main
Zone, as well as the Jasperoid and Lower Zones, generally would be amenable to
heap-leach cyanidation treatment.
The
column-leach and permeability tests indicate that agglomeration is required in
order to achieve hydraulic conductivity and a corresponding gold recovery on a
consistent basis. There is also evidence that blending of low and high fines
content material will aid hydraulic conductivity.
The
planned processing method is heap-leach cyanidation of primary crushed ore (80%
passing three inch) that has been agglomerated using eight pounds per ton of
cement as a binder.
Permitting
Currently, Pershing Gold has all of the state and federal
permits necessary to start the Phase I mining and heap-leach
processing operations. Pershing Gold is planning a two-phase permitting and
development scenario for the project. Phase I, which has been approved, is the
re-purposing of previously approved disturbance for expanded mining to a pit
bottom elevation of 5,080 feet, partial backfilling of the Phase I pit to
approximately 20 feet above the historical groundwater elevation
to eliminate a pit lake, expanded exploration operations, full build-out
of the heap leach pad to accommodate leaching of the
Phase I ore, and construction of a new waste rock storage facility.
Phase II will include additional mine expansion activities and allow mining
further below the water table. Pershing Gold will use the mine plan in the
PFS as the basis for the Phase II permit application, and anticipates it will
submit the Phase II permit applications in the second half of 2017.
Resource
growth opportunities remain available through additional exploration and/or
development drilling. The deposit is open to the west, and offers opportunity
for growth. Additional opportunities could include:
·
Converting inferred resource tons to
measured and indicated resource or proven and probable reserves
·
Utilizing historic low-grade stockpile
·
Expanding and/or demonstrating continuity
of the high-grade gold grade shells
·
Expanding on the 2016 Phase 2 drilling that
identified new zones of mineralization southeast of the Lightbulb Pit, with
potential to elevate these zones of mineralization to a mineral resource status
·
Increasing silver credit
Greenfields
exploration activity has taken place over approximately 20% of the 40 square
miles of Pershing Gold’s land package. It has already identified growth opportunities
including the Blackjack Project, which is a potential satellite deposit southeast
of the Relief Canyon Mine. Drilling is currently in progress at Blackjack.
About Pershing Gold Corporation
Pershing Gold is an emerging gold producer
whose primary asset is the Relief Canyon Mine in Pershing County,
Nevada. Relief Canyon includes three historic open-pit mines and a
state-of-the-art, fully permitted and constructed heap-leach processing
facility. Pershing Gold is currently permitted to resume mining at Relief
Canyon under the existing Plan of Operations.
Pershing Gold's landholdings cover
approximately 25,000 acres that include the Relief Canyon Mine asset and lands
surrounding the mine in all directions. This land package provides Pershing Gold
with the opportunity to expand the Relief Canyon Mine deposit and to explore
and make new discoveries on nearby lands.
Pershing Gold is listed on the NASDAQ Global
Market and the Toronto Stock Exchange under the symbol PGLC and on the
Frankfurt Stock Exchange under the symbol 7PG1.
Cautionary
Note to United States Investors Regarding Estimates of Measured, Indicated, and
Inferred Resources
This press release uses
the terms "Measured," "Indicated" and "Inferred”
mineral resources, which are defined in Canadian Institute of Metallurgy
guidelines, the guidelines widely followed to comply with Canadian National
Instrument 43-101-- Standards of Disclosure for Mineral Projects (“NI
43-101”). We advise U.S. investors that these terms are not recognized by
the United States Securities and Exchange Commission (the "SEC"). The
estimation of measured and indicated resources involves greater uncertainty as
to their existence and economic feasibility than the estimation of proven and
probable reserves. Mineral resources are not mineral reserves. Mineral resources that are not mineral
reserves do not have demonstrated economic viability. U.S.
investors are cautioned not to assume that measured or indicated mineral
resources will be converted into reserves. Inferred mineral resources have a
high degree of uncertainty as to their existence and their economic and legal
feasibility. It cannot be assumed that all or any part of an inferred mineral
resource exists, or is economically or legally viable. Under Canadian
rules, estimates of "inferred mineral resources" may not form the
basis of feasibility studies, pre-feasibility studies or other economic
studies, except in prescribed cases, such as in a preliminary economic
assessment under certain circumstances.
Pershing is a
reporting issuer in the United States and is required to discuss mineralization
estimates in accordance with US reporting standards. The estimates of proven
and probable mineral reserves used in this press release are in reference to
the mining terms defined in the Canadian Institute of Mining, Metallurgy and
Petroleum Standards, which definitions have been adopted by NI 43-101. The definitions of proven and probable
reserves used in NI 43-101 differ from the definitions in the United States
Securities and Exchange Commission's Industry Guide 7. In the United States, a
mineral reserve is defined as a part of a mineral deposit, which could be
economically and legally extracted or produced at the time the reserve
determination is made. Accordingly, information contained in this press release
containing descriptions of our mineral deposits in accordance with NI 43-101
may not be comparable to similar information made public by other U.S.
companies under the United States federal securities laws and the rules and
regulations thereunder. Moreover, the SEC normally only permits
issuers to report mineralization that does not constitute "reserves"
as in-place tonnage and grade without reference to unit measures. US investors are urged to consider closely the disclosure
in our Form 10-K for the year
ended December 31, 2016 and other SEC filings. You can review and obtain copies of
these filings from the SEC's website at http://www.sec.gov/edgar.shtml.
Scientific
and Technical Data
All
scientific and technical information related to drill and surface samples,
resource estimate, mineral processing, metallurgy and recovery methods, and
mining for the Relief Canyon project has been reviewed and approved by either
Paul Tietz, Certified Professional Geologist #11720, Neil Prenn, P.E. #7844,
Carl Defilippi, registered member SME#775870RM, or Mark Jorgensen, MMSA#01202QP
who are each Qualified Persons under the definitions established by Canadian
National Instrument 43-101. Drill core at Relief Canyon is boxed and sealed at
the drill rig and moved to the Relief Canyon logging and sample preparation
facilities by trained personnel. The core is logged and split down the center
using a typical table-fed circular rock saw. One half of the core is sent for
assay while the other half is returned to the core box and stored at Relief
Canyon in a secure, fenced-off, area. Pershing Gold quality assurance/quality
control (QA/QC) procedures include the regular use of blanks, standards, and
duplicate samples.
Non-GAAP Measures
Cash costs is a non-GAAP financial
measure calculated by the Company as set forth below, and may not be comparable
to similar measures reported by other companies. Cash costs include all direct
and indirect costs that would generate gold ounces for sale to customers,
including mining of mineralized materials and waste, leaching, processing,
refining and transportation costs, on-site administrative costs and royalties,
net of by-product credits for silver ounces sold. Cash costs do not include
depreciation, depletion, amortization, exploration expenditures, reclamation
and remediation costs, sustaining capital, financing costs, income taxes, or
corporate general and administrative costs not directly or indirectly related
to the Relief Canyon project. Cash costs are divided by the number of gold
ounces produced for the period to arrive at cash costs per gold ounce produced.
Cost of sales is the most comparable
financial measure, calculated in accordance with GAAP, to cash costs. As compared
to cash costs, cost of sales includes adjustments for changes in inventory and
excludes net revenue from by-product, refining and transportation costs, which
are reported as part of revenue in accordance with GAAP.
AISC is a non-GAAP financial measure
calculated by the Company as set forth below, and may not be comparable to
similar measures reported by other companies. AISC includes cash costs, as
defined above, plus exploration costs at the Relief Canyon project and
sustaining capital expenditures (including additional leach pads, permitting
and customary improvements to the operations over the life of the project).
AISC are divided by the number of gold ounces produced for the period to arrive
at all-in sustaining costs per gold ounce produced.
Legal Notice and Safe Harbor Statement
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including the timing of the release of the full PFS and those statements with respect to the expected project economics for Relief Canyon, such as estimates of life of mine, average production, cash costs, AISC, initial CAPEX, sustaining CAPEX, working capital, pre-tax IRR, pre-tax NPV, net cash flows and recovery rates, the viability of contract mining and conveyor stacking, gold price sensitivity analysis, the timing to obtain necessary permits, the submission of the project for final investment approval and the timing of initial gold production after investment approval and full financing, metallurgy and processing expectations, the gold and silver mineral reserve (including proven and probable reserves) and resource estimates, assumptions regarding available processing methods, plans regarding additional permitting and phased development of the mine, expectations regarding the ability to expand the mineral resource through future exploration or drilling and the anticipated results of further drilling, and development potential of satellite areas , are "forward-looking statements." Although the Company's management believes that such forward-looking statements are reasonable, it cannot guarantee that such expectations are, or will be, correct. These forward-looking statements involve a number of risks and uncertainties, which could cause the Company's future results to differ materially from those anticipated. Potential risks and uncertainties include, among others, interpretations or reinterpretations of geologic information, unfavorable exploration results, inability to obtain permits required for future exploration, development or production, general economic conditions and conditions affecting the industries in which the Company operates; the uncertainty of regulatory requirements and approvals; fluctuating mineral and commodity prices, final investment approval and the ability to obtain necessary financing on acceptable terms or at all. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in the Company's filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2016. The Company assumes no obligation to update any of the information contained or referenced in this press release.
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including the timing of the release of the full PFS and those statements with respect to the expected project economics for Relief Canyon, such as estimates of life of mine, average production, cash costs, AISC, initial CAPEX, sustaining CAPEX, working capital, pre-tax IRR, pre-tax NPV, net cash flows and recovery rates, the viability of contract mining and conveyor stacking, gold price sensitivity analysis, the timing to obtain necessary permits, the submission of the project for final investment approval and the timing of initial gold production after investment approval and full financing, metallurgy and processing expectations, the gold and silver mineral reserve (including proven and probable reserves) and resource estimates, assumptions regarding available processing methods, plans regarding additional permitting and phased development of the mine, expectations regarding the ability to expand the mineral resource through future exploration or drilling and the anticipated results of further drilling, and development potential of satellite areas , are "forward-looking statements." Although the Company's management believes that such forward-looking statements are reasonable, it cannot guarantee that such expectations are, or will be, correct. These forward-looking statements involve a number of risks and uncertainties, which could cause the Company's future results to differ materially from those anticipated. Potential risks and uncertainties include, among others, interpretations or reinterpretations of geologic information, unfavorable exploration results, inability to obtain permits required for future exploration, development or production, general economic conditions and conditions affecting the industries in which the Company operates; the uncertainty of regulatory requirements and approvals; fluctuating mineral and commodity prices, final investment approval and the ability to obtain necessary financing on acceptable terms or at all. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in the Company's filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2016. The Company assumes no obligation to update any of the information contained or referenced in this press release.
Contact
Information
For more information, please contact:
Stephen Alfers, Executive Chairman, President and CEO
Jack Perkins, Vice President, Investor Relations
720.974.7254
Pershing Gold Corporation (NASDAQ:PGLC) (TSX:PGLC) is a
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