Pershing Gold: Mining Without The Exploration Risk
Patrick MontesDeOca | Jan 14, 2013 01:18AM ET
Finding gold in the ground is always a gamble. Even the most certain geologic reports and surveys still might lead to a mine filled with nothing but worthless rocks. Pershing Gold (PGLC) avoids the uncertainty by buying gold mines that have proven reserves but are no longer being worked for non-technical reasons, such as bankruptcy.
Pershing Gold’s first major purchase was the Relief Canyon Mine in Nevada, which it bought at a very low price out of bankruptcy. Relief Canyon Gold Mine produced gold intermittently since 1984, but was abandoned when the parent company ran into financial problems. Pershing has bought some land around the mine and is preparing to resume drilling and expanding the mine with a goal of production in early 2014, if not sooner. The company is also debt free and they have obtained almost all of the permits necessary to go back into production.
I like Pershing Gold’s low-risk, potentially high-payoff business model and their acquisition of the Relief Canyon Gold Mine. But I’m not the only one who thinks Pershing Gold is an excellent investment with a possible high rate of return. Coeur d’Alene Mines Corporation (CDE), the largest U.S.-based silver producer with a market cap of $2 billion, made a strategic investment in Pershing Gold at $0.32 a share about 6 months ago (page 19 of the Investor Presentation on the company’s website:
Many experts expects Pershing Gold to uplist to AMEX within the next 9 months, if the company is still independent at that time and has not been bought by one of the big mining conglomerates, which should lead to a nice return on any investment in Pershing Gold.
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