LAKEWOOD, Colo., Jan. 19, 2015 /PRNewswire/ -- Pershing Gold Corporation (OTCQB:PGLC) ("Pershing" or the "Company") is pleased to announce that it has acquired from Newmont USA Limited ("Newmont") (NYSE: NEM) the exclusive mining and surface use rights to approximately 1,600 acres of new long-term mining leases and 74 unpatented lode mining claims comprising approximately 1,300 acres. The purchase price paid to Newmont was US $6 million. This transaction also includes the acquisition of a new 20-year mining lease from New Nevada Lands, LLC, and New Nevada Resources, LLC.
These mining leases and claims cover lands located adjacent to Pershing's Relief Canyon Mine in Pershing County, Nevada. Pershing formerly held these lands and claims under a Minerals Lease and Sublease with Newmont. The transaction involved the conversion of a portion of the mineral sublease to new long-term mining leases that substantially upgrades Pershing's mining rights and surface use rights. The transaction consolidates Pershing's 100% owned Relief Canyon Mine with Newmont's mineral interests in adjacent properties. In addition, the deal reduces the potential royalty and terminates Newmont's back-in joint venture rights and other contract rights to the land.
As shown in Figure 1, the acquired lands and claims are adjacent to and near the Relief Canyon gold deposit, which is mainly located on mining claims owned by Pershing's wholly owned subsidiary, Gold Acquisition Corp. The Gold Acquisition Corp. mining claims are not affected by this deal.
The transaction gives Pershing increased control over ground adjacent to the Relief Canyon Mine that the Company believes is prospective. Pershing estimates that about 27% of its existing NI 43-101 resource estimate occurs on the lands acquired in this transaction. The Relief Canyon deposit is open and largely untested on the acquired lands west and south of the current open-pit mine. The Company believes that future exploration core drilling on these lands has significant potential to increase the size of the Relief Canyon gold deposit. In the transaction Pershing acquires surface rights to areas suitable for new and expanded mine support facilities, including waste rock storage areas.
As part of this transaction, Newmont and Pershing amended the 2006 Minerals Lease and Sublease, which now covers only the lands and claims shown in blue on Figure 1. Pershing remains the lessee of the mining claims and the sublessee of the lands leased by Newmont under a new long-term mining lease. The amended Minerals Lease and Sublease establishes a new US $2.6 million exploration work commitment to be completed by the seventh anniversary of the effective date of the amendment. Pershing has already satisfied approximately US $2.4 million of this work commitment.
"With this transaction, Pershing paves the way to significantly expand the Relief Canyon Mine," stated Stephen D. Alfers, Pershing's Chairman and CEO. "Not only did we gain complete control of the gold discovered to date on the acquired lands, we know that the original Relief Canyon deposit extends into the acquired lands, and with additional drilling we expect to expand the gold resource on these lands." Alfers added, "Moreover, our new 20-year mining lease secures our mining rights well into the future and achieves control over where we can locate future mine facilities and optimize expanded mine plans. We appreciated working with Newmont and our new lessor, New Nevada Lands, in consummating this landmark deal and look forward to continuing to develop our strong working relationships with both companies."
About Pershing Gold Corporation
Pershing Gold is an emerging Nevada gold producer on a fast-track to re-open the Relief Canyon Mine, which includes three 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
Cautionary Note to United States Investors Regarding Estimates of Resources
We use certain terms, or refer to reports that use these terms, in this press release such as "resource", that are defined in Canadian National Instrument 43-101; however these terms are not recognized under the U.S. SEC Industry Guide 7. U.S. investors are cautioned not to assume that any or all of any resource is economically or legally mineable or that this resources will ever be converted into reserves. U.S. investors are urged to consider closely the disclosure in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q 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.
Legal Notice and Safe Harbor Statement
This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including, without limitation, those with respect to the objectives, plans and strategies of the Company set forth herein including the planned reopening and recommissioning of the Relief Canyon mine and processing facilities, anticipated additional drilling and other exploration on Pershing Gold's Relief Canyon properties including properties newly acquired from Newmont and under new long-term mining leases, belief that the newly acquired and leased properties are prospective, anticipated expansion and upgrade of the Relief Canyon deposit as a result of drilling, increased control over mining and surface uses on lands adjacent to the Relief Canyon mine, improved rights to lands subject by new mining leases, potential for expanded and optimized mine plans resulting from the reported transactions, interpretations of exploration results and other geologic information at Relief Canyon, further development of strong working relationships with Newmont and the Company's new lessor, and those preceded by or that include the words "believes," "expects," "given," "targets," "intends," "anticipates," "plans," "projects," "forecasts" or similar expressions, 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, inability to obtain external financing to fund the development of plans for and the reopening and commencement of production at the Relief Canyon Mine, planned exploration, or to maintain property rights; unfavorable results of future drilling on the newly acquired and leased lands; interpretations or reinterpretations of geologic information or unfavorable exploration results that could negatively affect estimates of resources or future mine plans; delay or inability to obtain permits required for planned production, including permits to mine the deposit below the water table, for exploration and for potential surface uses and other activities; failures to comply with mining lease requirements; general economic conditions and conditions affecting the industries in which the Company operates; the uncertainty of regulatory requirements and approvals; decreases in gold and other mineral and commodity prices; risks of junior exploration and pre-production activities; and maintenance of important business relationships including those with Newmont and the Company's new lessor. 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 SEC including the Annual Report on Form 10-K for the year ended December 31, 2013. The Company assumes no obligation to update any of the information contained or referenced in this press release.
SOURCE Pershing Gold Corporation