The Conversation (0)
Feb. 04, 2015 02:45PM PST
Pershing Gold reported excellent drill results from its Relief Canyon mine in Nevada. Specifically, it released its highest-grade gold intercept drilled to date at the property.
The step-out hole hit a whopping 76.8 grams per tonne of gold over 4.7 feet, or 2.24 ounces per tonne of the yellow metal. Furthermore, that intercept came within a wider zone of 10.12 grams per tonne of gold over 39 feet.
Certainly, Stephen D. Alfers, chairman and CEO of Pershing Gold, believes that the drill hole that made the intercept is “an order of magnitude higher than other high-grade intercepts” that are listed as highlights of new drill results from the North Target area at Relief Canyon.
“Hole RC15-264 indicates the discovery of a new zone of mineralization on the western edge of Pershing’s North Target Area,” he said. “This zone is open to the north, and to the west, and is perhaps the best of several new high-grade zones discovered in the North Target Area in the 2014 – early 2015 drilling program.”
In total, eight holes returned high-grade intercepts, with six returning intercepts of over 4.35 grams per tonne of gold. Other notable intercepts include:
- 3.03 grams per tonne of gold over 77.9 feet
- 2.19 grams per tonne of gold over 114.6 feet
- 2.65 grams per tonne of gold over 59.8 feet
Assays are still pending for roughly 30 holes from Pershing’s 2014/early 2015 drill program.
Rob Chang, senior analyst and head of metals and mining for Canada at Cantor Fitzgerald, sees the news as fairly straightforward. ”Certainly, the results are very positive in that the grade is very high,” he said. “Putting out results of 76.8 grams per tonne is impressive. That’s the highest grade we’ve seen from any [gold] project lately.”
Explaining further, Chang pointed out that other market watchers see Pershing’s Relief Canyon project as low-grade and have questioned the economics of the project. However, he noted that he does not hold that view, and suggested that Wednesday’s results may help “dispel the notion that Relief Canyon is a low-grade deposit.”
As for what’s next, the company expects to release an updated resource estimate for April 2015. The most recent estimate from March 2014 does not include roughly 135 holes and 75,000 feet of drilling conducted in the recent 2014/early 2015 drill program, and as such, Chang “[expects] numbers to increase significantly” with the updated report.
All in all, Chang has given the company a “buy” rating and a target price of $0.50. On Wednesday, shares of Pershing were selling for $0.33.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
