May 28, 2014 Initiating Coverage
Rob Chang, MBA Associate: Michael Wichterle, MBA
email@example.com firstname.lastname@example.org (416) 849-5008 (416) 849-5005
(416) 363-5757, (866) 442-4485
See disclosure and a description of our recommendation structure at the end of this report.
Pershing Gold is a near term gold producer with assets in Nevada. Pershing has a fully operational and permitted processing facility along with a consolidated land position of over 25,000 acres.
E q u i t y R e s e a r c h
PERSHING GOLD CORP.
Near-term gold producer with a turn-key facility and pedigreed management
Pershing Gold Corp is a near-term, Nevada-based gold development company with pedigreed management that will soon re-start production at the Relief Canyon Mine.
We are initiating coverage on Pershing Gold Corp. with a Buy recommendation and a $0.55/share target price. Our target price reflects a 1.0× multiple to our $0.54 per share NAV valuation.
Relief Canyon mine –
Pershing’s Relief Canyon Mine is located in a known gold and silver trend in North-central Nevada. The mine itself has previously been in production (131,000 oz gold, 111,000 oz silver) in the late eighties. ▪
Blue sky potential –
Pershing controls a total consolidated land position of 25,000 acres located adjacent to established mines. Of which less than 10% has been explored to date. ▪
Permitted processing facility
– As a key asset, Pershing Gold has a fully permitted processing plant with a capacity to treat 8M tons per year. Moreover, the permitted leach pad has a 21M ton capacity. The facility itself is ideally positioned to process future discoveries from satellite deposits. ▪
Permits & production –
The company is on track to be fully permitted by 2015. We anticipate production to begin in 2016. ▪
Chairman and CEO Stephen Alfers was the former Chief of U.S. Operations at Franco-Nevada and has developed several notable gold projects including Long Canyon, Sandman, and Northumberland.
Symbol/Exchange: PGLC/OTCQB Sector: Metals & Mining
All dollar values in USD$ unless otherwise noted.
Current price: $0.35 One-year target: $0.55 Return target: 57% Cash on hand $5.5M
Shares O/S (M)280.3 52-week range$0.34 - 0.41Market cap ($M)$98.1Avg. weekly vol. (000)2,898Market float ($M)$95.0Fiscal year-end31-Dec
Measured & IndicatedTons (K)Au (g/t)Au (Koz)
Total26,9470.6552.0InferredTons (K)Au (g/t)Au (Koz)
(0.156g/t Oxide & 0.633g/t Sulfide cut-off)
Source: Company Reports and Cantor Fitzgerald