The initial capital expenditure of $23.6mln for Pershing Gold Corporation's (NASDAQ:PGLC, TSE: PGLC) Relief Canyon project in Nevada, according to a preliminary feasibility study (PFS), puts it among one of the least expensive projects in its class.
So said Jack Perkins, vice president of investor relations, speaking to Proactive's Andrew Scott.
Often, the capital spend for a project is $100,000 or up to $200,000 he says.
"Even at $24mln this is the lowest capex of any project in its class. It's just extraordinarily low."
"We see that as very reasonable," said Perkins, adding the firm is debt free, and has a lot of flexibility when it comes to financing options.
Last week, shares in Pershing advanced as it unveiled a NI 43-101 resource and preliminary feasibility study (PFS) for the project.
The project has 789,000 ounces of gold in the higher confidence measured and indicated category, and 45,200 in inferred.
"That is 99% oxide material so leached very well - we are getting more than 83% recoveries on it," said Perkins.
Significantly, 80% of the resource made it into the reserve category, meaning it is economically viable to exploit.
"That just speaks to the quality of the resource itself," said Perkins.
Also a maiden silver resource was stated for the project - at 2mln ounces.
The consultants who completed the PFS on the Nevada project have recommended that the site is advanced to a production decision stage, and Perkins says the board is now looking at that decision now.
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.
Stephen D. Alfers, Pershing Gold's chairman and chief executive said last week: "The PFS is a major milestone for Pershing Gold. 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 Relief Canyon deposit remains open in three directions, presenting the opportunity for continued expansion and extension of this mine," he added.
"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."
Perishing Gold shares are changing hands at $3.80 in Toronto.