The Gold Report - Thu, Mar 1, 2018

Analyst Sees Four Times Upside on Emerging Producer with Nevada Gold Project

H.C. Wainwright & Co., whose target price on this emerging producer is a quadruple, relayed the latest developments at this Nevada project.

Pershing Map

In a Feb. 27 research note, analyst Heiko Ihle with H.C. Wainwright & Co. reported that Pershing Gold Corp. (PGLC:NASDAQ; PGLC:TSX) started preconstruction at Relief Canyon in Nevada on Feb. 13, specifically the clearing of about 165 acres of land that will house the project's heap-leach pads, haul roads and waste rock storage facilities.

Once the company finalizes financing for Relief Canyon, which is currently in progress, it will start the six- to nine-month-long "construction of the heap-leach pads, overland conveyors, crushing facilities, contractor yards and optimization of the processing plant," Ihle indicated. During that period, contract mining staff should begin arriving at the property.

The analyst also noted that given the existing infrastructure there, the company can likely advance Relief Canyon to production, likely by sometime in Q1/19 or even sooner should financing details be ironed out quickly. "We expect substantial news flow regarding this throughout the year," he said.

Simultaneously, Pershing is conducting its 2018 drill program, which will focus on primarily four areas "to add near-term ounces to the current mine plan," explained Ihle. He went on to say that such a possibility exists, "given that several of the target areas were selected for follow-up drilling based on prior results that suggested potential for additional discoveries." The targets are the West Step-Out area, which remains open; the North East pit; the Main zone; and the South East Lightbulb pit. Drilling, which commenced in January and is expected to cost about $2.9 million, is slated to encompass 48 holes totaling 11,330 meters.

Additionally, Pershing's significant land package "offers the potential for additional satellite discoveries in proximity to Relief Canyon, namely areas that have seen no drilling thus far," Ihle wrote.

He reiterated H.C. Wainwright's Buy rating and $8.75 per share target price on Pershing, which represents nearly four times' upside from where the stock is currently trading, around $2.15 per share.

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