Recent estimates of 463K oz. of indicated / measured gold in PGLC mines translate to around $750M in value which is huge for a company of this size. In addition, more significant discoveries in the gold and silver trend near relief canyon may be expected. The 25,000 acres land in Relief Canyon Mine and the Heap leach processing facility are the main assets of Pershing. These are located in Nevada which is number two in gold reserves in the world after Witwatersrand in South Africa. This is a under-explored area and recently the estimates of gold in Pershing mines were revised upwards significantly. Mining in the Nevada region is increasing at a good pace (41% increase last year). The market cap of $117M is reasonable compared with the indicated and inferred amount of gold in its mines. The interest costs are expected to remain low and a low D/E ratio of 2:1 is likely to make the company more stable and less dependent on external funding. As per guidance, an average of 50K oz. of gold is expected to be produced next year onwards with the heap leach facility going online around that time. Even at current prices, this translates into a revenue of ~$80M. This may translate in $12M net profit even after factoring expenditure related to exploration in other areas. If one takes a P/E of 20, this may translate into a share price much higher than the present $0.44. So in two years from now, we can look at reasonable growth in price or dividends. At current stock price levels, the 2014 production values are perhaps not factored at all. All this put together, alongwith the fact that the stock is near support levels, makes it a good buy now. The horizon has to be long term, i.e. around two to three years. At least, returns better than the indices can be expected.
Dont worry about the 13 mil. external financing , that is a drop in the to Dr. Frost . He will just end up with a bigger peice of the pie . You would think with the swop the price would be down on friday . Barry Honig and Dr. Frost seem to be buying and supporting the price . Good luck to all longs . PGLC is a no brainer wait untill they finding gold on the other 97% of there land they havent cored . I am sure dirlling will start soon with the weather change .
Sentiment: Strong Buy
They will have no problem getting the $13M they need and do you think Dr. Frost and the Honigs are dumb? They've made a lot of money investing in small companies. this co. will be producing gold in 2014, not to mention the silver that they know is on their property. Silver may only be about $30/ounce but we're talking about a lot of silver. The value of the silver is not mentioned very often but it will add a lot of cash to their bottom line. PGLC is making a lot of smart moves and I see them adding more assets soon. Consolidation will hit the miners hard and PGLC will be waiting for a deal they can't refuse.
yep, thats gotta be settled sooner than later. Hate to take a dilution hit but id still hold. Its a necessary pain if you hold a junior for a long time. I have ahunch they will be released at the same time or same week anyway. The PEA will come out then the dilution/financing.
The main PEA is coming out by late march. pglc needs a bit of a jump start after its big fall from 60 cents. Id like to see this boy at 55 cents or so to reflect the hoops it has jumped through in 2013.
Very well written. You forgot to mention that silver (which has a history of coming out of the ground in the Relief Canyon area of 3 oz silver : 1 oz gold) is not included in the companies future revenue projections.