With the incessant investment in gold exploration and development process, Pershing Gold Corporation (OTCBB: PGLC) has perhaps exhausted all of its working capital. According to SEC filing by the company, “For the year ended December 31, 2011, we reported a net loss of approximately ($24.6) million. We reported a net loss of approximately ($5.1) million for the quarter ended September 30, 2012 and approximately ($45.6) million for the nine months ended September 30, 2012. We expect to incur significant losses into the foreseeable future and our monthly “burn rate” for general and administrative costs (including all employee salaries, public company expenses and consultants) is approximately $500,000. Our monthly burn rate for all costs during each month of the fourth quarter 2012 was approximately $700,000 (including exploration and facilities re-commissioning). We will need to obtain additional funding to fund operations and exploration in February 2013”.
Is the company doing a big deal for better outcome from the above investment? A common feature of mining business is that it requires huge investment in initial stage. Perhaps the initial investment has pressured on PGLC’s cash balance. Is there any possibility to gain? Under this platform, investors are whispering whether PGLC is successfully coming back after making a huge investment at initial stage. PGLC is a new born baby in the gold industry, as why we may observe it carefully. I would love to predict 50-50 chance if PGLC was nothing but a simple exploration company; rather it is dealing with gold-one of the most valued natural resource we have. Thus, I am a little bit optimistic for PGL’s future betterment. The company has issued a press release that they are currently focused on exploration at their Relief canyon properties in Pershing County in northwestern Nevada. Let us look forward.
The S1 states a need for $13 million to fund this years operation including drilling and plant prep. Delays in vesting RSUs for Alfers and Alexander is interesting. Cash must be near zero and no funding source announced. This is really crunch time for PGLC. Make or break over the next few weeks. I think they will get it done but dilution has to be back on the table as the biggest risk we have to face. Getting this far and failing for a few $ million doesn't make any sense to me. Honig put his hand in his pocket last time but I don't think he will again or will Frost. Franco Nevada is my best guess. Any thoughts anyone?
This downturn will remove most of the faint of heart from the rolls .45 is just around the corner. I could see them do some sort of royalty deal essentially getting an advance on the gold before it comes out of ground since there seems to be plenty of evidence its in the ground.