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Pershing Gold reaches major milestone with Relief Canyon pre-feasibility study

The project was given a pre-tax net present value (NPV) of $144.6 million.
Pershing Gold reaches major milestone with Relief Canyon pre-feasibility study
The Relief Canyon mine in Nevada

Pershing Gold Corporation's (NASDAQ:PGLC, TSE: PGLC) plans for the Relief Canyon Mine in Nevada got a huge boost today - as it today unveiled an NI 43-101 resource and preliminary feasibilty study (PFS) for the project.

Notably, the consultants who completed the PFS have recommended that the site is advanced to a production decision stage.

The project is given a pre-tax net present value (NPV), or in other words, an overall value,  of $144.6 million.

"The PFS is a major milestone for Pershing Gold," Stephen D. Alfers, Pershing Gold's chairman and chief executive told investors.

"We announced an upgraded mineral resource that includes proven and probable reserves of approximately 635,000 ounces of gold and 1.6 million ounces of silver," he said.

"The PFS is 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.

Open in three directions...

"The Relief Canyon deposit remains open in three directions, presenting the opportunity for continued expansion and extension of this mine," he added.

Initial capital spend is put at $23.6mln - up from $12.2mln in the preliminary economic assessment (PEA), while the all in sustaining costs (AISC) are stated as $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 company will be reviewing various options to cover future capital needs, including debt, royalty or stream financing, gold off-take agreements, investment from strategic investors, or combinations of those approaches," added Alfers.

Favorable economics reinforced...

The favorable economics of Relief Canyon are reinforced throughout the PFS, the group also told investors.

The report points to the viability of contract-mining and conveyor stacking to bring the project into production.

The PFS categories around 80% of the gold ounces and 73% of the tons within the NI 43-101 measured and indicated resource at Relief Canyon as proven and probable reserves.

So far, more than 1,100 holes and approximately 500,000 feet of drilling have been completed at Relief Canyon. 

This includes 430 core holes and nearly 290,000 feet of drilling completed by the company.

The total measured (the highest confidence category) gold ounces is put at 327,000 ounces, while the measured silver ounces is put at 1.325mln ounces.

Shares in Toronto added 2.65% to $3.87 each.

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