Pershing Gold's Alfers keen to get cracking at Relief Canyon

Stephen Alfers, chief executive and executive chairman of Pershing Gold Corp (NASDAQ:PGLC, TSE: PGLC), said the group’s current main aim was to push its Relief Canyon mine to ‘positive cash flow in the near term’.

Speaking in an interview with Investorideas.com, he said the Nevada property, which was successfully mined in the late 1980s, was in one of the most attractive locations for gold miners, with good access and infrastructure.

“One can operate in Nevada 24/7, 12 months a year…,” he told the podcast.

His comments come after the group posted a NI 43-101 resource estimate and preliminary feasibility study (PFS) for the project.

The new resource shows 789,000 ounces of gold in the higher confidence measured and indicated category, and 45,200 in inferred. A first resource of silver was also outlined – at 2mln ounces.

Alfers said that the strong measured and indicated (M+I) resources indicated the potential for reserve growth.

“The fact that we have a nice healthy M+I resource that backs up the reserve indicates there’s some low-hanging fruit for significant growth as we continue to convert resources to reserves,” he said.

He added: “Relief Canyon has received all the permits we need to start this mine. We’re planning to submit permits for still another major expansion of the project, and we’ll do that fairly soon.”

The PFS was based on a mine plan and financial model with an annual average production of over 90,000 ounces of gold per year over a mine life of approximately six years.

The pre-tax net present value (NPV), or in other words, an overall value, was put at a tidy $144.6 million.

Initial capital spend was put at $23.6mln – up from $12.2mln in the preliminary economic assessment (PEA), but still very low for a project in its class.

The all in sustaining costs (AISC) stand at $802 per ounce ($804 per ounce in the PEA).

The life of mine is 5.6 years, down  a tad from 5.8 years in the PEA, but average production over that time is put at 93,900 ounces, compared to 88,500 ounces in the earlier PEA.

The PFS also highlighted the benefits of contract mining as opposed to self mining.

“We needed to make a decision about whether we would procure mining equipment ourselves and operate the mine as a self-mining scenario, or whether we would pursue a contract mining situation that essentially outsources a limited amount of the mining work but mainly to the procurement of the equipment,” Alfers said.

“What we’ve been able to do is, because of a very attractive contract mining situation today in Nevada, we’ve been leaning towards contract mining,” he said.

Pershing shares nudge 0.26% higher in Toronto, to $3.81.

Story by ProactiveInvestors