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Rodman upbeat on Pershing Gold Corp’s Relief Canyon Mine, which could be producing this year

Thursday, April 6, 2017 7:09
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(Before It's News)

Pershing Gold Corp’s (NASDAQ:PGLC, TSE: PGLC) Relief Canyon Mine in Nevada is ‘shovel ready’  and should be quickly advanced when a production decision is made.

That’s the view of broker Rodman & Renshaw, which has recently visited the site, and says the gold project could be in production by late 2017 or early 2018.

It reiterates a ‘buy’ on the shares and a $9.75 price target, which is a hefty distance from the current price of $2.91.

Heiko F. Ihle, analyst, says he reckons the key near term catalyst for the firm is the release of a pre-feasibility study (PFS) for 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. As we have mentioned in the past, we are supporters of the modestly higher CapEx self-mining scenario, primarily due to the longer-term cost savings on a per ounce basis.

“That said, we expect the firm to utilize a combination of the two, beginning with contract-mining gradually shifting to self-mining once Relief Canyon is cash flow positive.”

The site already hosts permitted leach pads,  crushing, and a processing facility, which the broker reckons should help to keep capital expenditure at around $20 million.

Earlier this week, Pershing said it had struck a land agreement with Newmont Mining over a mining sublease for a parcel of land close to the Blackjack Project, south of Relief Canyon.

Importantly,  this consolidates the district for the first time,” notes Ihle.

“The Blackjack project hosts seven historic mercury and antimony mines, and we feel the consolidated land package could serve as a crucial component with respect to Pershing’s exploration efforts outside of Relief Canyon.”

The analyst reckons that any further discoveries made at Blackjack could be processed at Relief Canyon’s existing facilities and provide an extended mine life.

Story by ProactiveInvestors


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