LAKEWOOD, Colo., Nov. 19, 2015 /PRNewswire/ -- Pershing Gold Corporation (NASDAQ:PGLC) (FWB:7PG1) ("Pershing Gold" or the "Company"), an emerging Nevada gold producer, announces preliminary internal economics for the Relief Canyon project in Pershing County, Nevada.
Preliminary internal economics on the Relief Canyon project are based on the NI 43-101 resource estimate published in June 2015 and use assumed prices of $1,100 per ounce ("/oz") of gold ("Au") and $14.25/oz of silver. Based on these assumptions, the Company estimates that Relief Canyon will have an initial capital expenditures ("CAPEX") of approximately $11 million, cash costs in the range of approximately $695-745/oz Au, and all in sustaining costs ("AISC") in the range of approximately $725-775/oz Au, on a constrained in-pit resource over an initial estimated mine life of six years. The Company anticipates an approximately 3:1 strip ratio over the life-of-mine for this project. Initial CAPEX principally includes costs to construct leach pad space for near-term operations, plant upgrades, optimization and relocation of the crusher facility, mobilization of contract mining equipment and start-up equipment and supplies.
"We are pleased to report preliminary internal economics for Relief Canyon. The open-pit, low strip ratio and low CAPEX nature of this project validate our belief that Relief Canyon has the potential to be one of the lowest-cost, near-term gold producers in North America. These initial economics do not incorporate the results of our 2015 drilling program, where we continue to encounter multiple high-grade intercepts in all target areas," stated Stephen D. Alfers, Pershing Gold's Chairman and CEO.
Pershing Gold is currently in the process of finishing its approximately 177 hole, 95,000 foot, 2015 drilling program, which is more than 90% complete. The Company intends to publish an updated NI 43-101 resource estimate incorporating these drilling results in the second quarter of 2016.
"Building on the success of our previous drilling programs, an increased resource estimate based on this years' drilling should significantly enhance what we already believe are robust economics for Relief Canyon," commented Alfers.
Pershing Gold intends to publish a third-party Preliminary Economic Assessment ("PEA") on Relief Canyon in the second quarter of 2016 using this new resource estimate. The Company is currently conducting detailed mine planning and additional metallurgical testing for the project and intends to announce a decision on start-up and when to commence commercial mining and processing activities at Relief Canyon after the release of the third-party PEA.
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.
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 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 under the symbol PGLC and the Frankfurt Stock Exchange under the symbol 7PG1.
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 preliminary internal economic estimates of certain cost and metal output assumptions; expectations regarding the results of the 2015 drilling program, the potential update of and expansion of the Relief Canyon resource and publication of an updated NI 43-101 resource estimate and third party PEA in the second quarter 2016 and the planned announcement of a date for commencement of commercial mining and processing activities at Relief Canyon following the PEA release; management's belief that the economics of mining Relief Canyon are robust and will be enhanced by the anticipated increased NI 43-101 resource based on the 2015 drilling program; 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, less favorable results from and impact on Relief Canyon economics of results from the 2015 exploration program than currently anticipated; insufficient or insufficiently favorable information to include portions of the deposit in the Jasperoid and Southwest target areas in the Company's next updated resource; interpretations or reinterpretations of geologic and metallurgical information or unfavorable exploration results that could negatively affect estimates of resources of project economics; delays in publishing the updated NI 43-101 resource estimate, PEA and date for commencement of commercial activities at Relief Canyon; less favorable results of the 43-101 resource estimate update and PEA than currently anticipated; the availability of additional external financing to fund the Company's ongoing business and commencement of mining and processing activities on acceptable terms or at all; 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. 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, 2014. The Company assumes no obligation to update any of the information contained or referenced in this press release.
SOURCE Pershing Gold Corporation